Document:

Exhibit 10.49

 

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT (as amended, restated, supplemented or
otherwise modified from time to time, this “Agreement”)
dated as of October 31, 2007 among AVERION INTERNATIONAL
CORP., a Delaware corporation (the “Company”),
IT&E INTERNATIONAL, a California corporation (“IT&E”)
and AVERION INC., a Delaware corporation (“Averion Inc.”
and together with the Company, IT&E and each other person or entity who
becomes a party to this hereto by
execution of a joinder in the form attached as Exhibit A
(each individually a “Debtor” and,
collectively, the “Debtors”) and
Cumulus Investors, LLC, in its capacity as Collateral Agent (as set forth in Section 5.12
hereof, together with its successors and assigns in such capacity, the “Secured Party”) for the benefit of itself and each of the
Buyers (as hereinafter defined).

 

W I T N E S S E T H:

 

WHEREAS, on the date hereof, Cumulus Investors, LLC (“Cumulus”), ComVest Investment Partners II LLC (“ComVest”) and Dr. Philip T. Lavin (“Lavin,” together with Cumulus and ComVest, and their
respective successors and assigns, individually and collectively, the “Buyers”) have purchased certain Senior Secured Notes of the
Company in the aggregate original principal amount of up to $26,000,000 (such
notes, together with any promissory notes or other securities issued in
exchange or substitution therefor or in replacement thereof, and as any of the
same may be amended, restated, modified or supplemented and in effect from
time to time, being herein referred to individually and collectively as the “Notes”);

 

WHEREAS, the Notes are being acquired by the Buyers and the Buyers have
made certain financial accommodations to the Company pursuant to a Securities
Purchase Agreement of even date herewith among the Company and the Buyers (as
the same may be amended, restated, supplemented or otherwise modified from
time to time, the “Purchase Agreement”);

 

WHEREAS, each Debtor (other than the Company) from time to time party
hereto is a direct or indirect subsidiary of the Company and, as such, will
derive substantial benefit and advantage from the financial accommodations to
the Company set forth in the Purchase Agreement and the Notes, and it will be
to each such Debtor’s direct interest and economic benefit to assist the
Company in procuring said financial accommodations from Buyers; and

 

WHEREAS, to induce the Buyers to enter into the Purchase Agreement and
purchase the Notes, (i) each Debtor (other than the Company) has agreed to
guaranty the Liabilities (as hereinafter defined) of the Company pursuant to
the terms of a guaranty (such guaranty(ies), as they may be amended,
restated, modified or supplemented and in effect from time to time,
individually and collectively, the “Guaranty”) by
each such Debtor in favor of Secured Party (on its behalf and on behalf of the
Buyers) and (ii) each Debtor has agreed to pledge and grant a security
interest in all of its right, title and interest in and to the Collateral (as
hereinafter defined) to Secured Party, for the benefit of itself and the
Buyers, as security for the Liabilities.

 

NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

 

Section 1.                                            Definitions.
Capitalized terms used herein without definition and defined in the Purchase
Agreement are used herein as defined therein. In addition, as used herein:

 

“Accounts” means any “account,” as such term is defined in
the Uniform Commercial Code, and, in any event, shall include, without
limitation, “supporting obligations” as defined in the Uniform Commercial
Code.

 

“As-extracted Collateral” means any “as-extracted collateral,”
as such term is defined in the Uniform Commercial Code.

 

“Chattel Paper” means any “chattel paper,” as such term is
defined in the Uniform Commercial Code.

 

“Collateral” shall have the meaning ascribed thereto in Section 3
hereof.

 

“Commercial Tort Claims” means “commercial tort claims”, as
such term is defined in the Uniform Commercial Code.

 

“Contracts” means all contracts, undertakings, or other
agreements (other than rights evidenced by Chattel Paper, Documents or
Instruments) in or under which a Debtor may now or hereafter have any
right, title or interest, including, without limitation, with respect to an
Account, any agreement relating to the terms of payment or the terms of
performance thereof.

 

“Copyrights” means any copyrights, rights and interests in
copyrights, works protectable by copyrights, copyright registrations and
copyright applications, including, without limitation, the copyright
registrations and applications listed on Schedule III attached
hereto (if any), and all renewals of any of the foregoing, all income,
royalties, damages and payments now and hereafter due and/or payable under or
with respect to any of the foregoing, including, without limitation, damages
and payments for past, present and future infringements of any of the foregoing
and the right to sue for past, present and future infringements of any of the
foregoing.

 

“Deposit Accounts” means all material “deposit accounts” as
such term is defined in the Uniform Commercial Code, now or hereafter held
in the name of a Debtor.

 

“Documents” means any “documents,” as such term is defined in
the Uniform Commercial Code, and shall include, without limitation, all
documents of title (as defined in the Uniform Commercial Code), bills of
lading or other receipts evidencing or representing Inventory or Equipment.

 

“Equipment” means any “equipment,” as such term is defined in
the Uniform Commercial Code and, in any event, shall include, Motor
Vehicles.

 

“Event of Default” shall have the meaning set forth in the
Notes.

 

“General Intangibles” means any “general intangibles,” as
such term is defined in the Uniform Commercial Code, and, in any event,
shall include, without limitation, all

 

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right, title and interest in or under any Contract, models, drawings, materials
and records, claims, literary rights, goodwill, rights of performance,
Copyrights, Trademarks, Patents, warranties, rights under insurance policies
and rights of indemnification.

 

“Goods” means any “goods”, as such term is defined in the Uniform Commercial
Code, including, without limitation, fixtures and embedded Software to the
extent included in “goods” as defined in the Uniform Commercial Code.

 

“Instruments” means any “instrument,” as such term is defined
in the Uniform Commercial Code, and shall include, without limitation,
promissory notes, drafts, bills of exchange, trade acceptances, letters of
credit, letter of credit rights (as defined in the Uniform Commercial
Code), and Chattel Paper.

 

“Inventory” means any “inventory,” as such term is defined in
the Uniform Commercial Code.

 

“Investment Property” means any “investment property”, as
such term is defined in the Uniform Commercial Code.

 

“Liabilities” shall mean all obligations, liabilities and
indebtedness of every nature of Debtors from time to time owed or owing under
or in respect of this Agreement, the Purchase Agreement, the Notes, the
Registration Rights Agreement, the Guaranty, any of the other Security
Documents and any of the other Transaction Documents, as the case may be,
including, without limitation, the principal amount of all debts, claims and
indebtedness, accrued and unpaid interest and all fees, costs and expenses,
whether primary, secondary, direct, contingent, fixed or otherwise, heretofore,
now and/or from time to time hereafter owing, due or payable whether before or
after the filing of a bankruptcy, insolvency or similar proceeding under
applicable federal, state, foreign or other law and whether or not an allowed
claim in any such proceeding.

 

“Lien” shall have the meaning set forth in the Purchase
Agreement.

 

“Motor Vehicles” shall mean motor vehicles, tractors,
trailers and other like property, whether or not the title thereto is governed
by a certificate of title or ownership.

 

“Patents” means any patents and patent applications,
including, without limitation, the inventions and improvements described and
claimed therein, all patentable inventions and those patents and patent
applications listed on Schedule IV attached hereto (if any), and
the reissues, divisions, continuations, renewals, extensions and continuations-in-part of
any of the foregoing, and all income, royalties, damages and payments now or
hereafter due and/or payable under or with respect to any of the foregoing,
including, without limitation, damages and payments for past, present and
future infringements of any of the foregoing and the right to sue for past,
present and future infringements of any of the foregoing.

 

“Permitted Lien” shall have the meaning set forth in the
Purchase Agreement.

 

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“Proceeds” means “proceeds,” as such term is defined in the
Uniform Commercial Code and, in any event, includes, without limitation, (a) any
and all proceeds of any insurance, indemnity, warranty or guaranty payable with
respect to any of the Collateral, (b) any and all payments (in any form whatsoever)
made or due and payable from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of
the Collateral by any governmental body, authority, bureau or agency (or any
person acting under color of governmental authority), and (c) any and all
other amounts from time to time paid or payable under, in respect of or in
connection with any of the Collateral.

 

“Representative” means any Person acting as agent,
representative or trustee on behalf of the Secured Party from time to time.

 

“Requisite Buyers” means buyers having a majority of the sum
of the aggregate outstanding principal balance of the Notes.

 

“Software” means all “software” as such term is defined in
the Uniform Commercial Code, now owned or hereafter acquired by a Debtor,
other than software embedded in any category of Goods, including, without
limitation, all computer programs and all supporting information provided in
connection with a transaction related to any program.

 

“Trademarks” means any trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade styles,
service marks, logos, other business identifiers, prints and labels on which
any of the foregoing have appeared or appear, all registrations and recordings
thereof, and all applications in connection therewith, including, without
limitation, the trademarks and applications listed in Schedule V
attached hereto (if any) and renewals thereof, and all income, royalties,
damages and payments now or hereafter due and/or payable under or with respect
to any of the foregoing, including, without limitation, damages and payments
for past, present and future infringements of any of the foregoing and the
right to sue for past, present and future infringements of any of the
foregoing.

 

“Uniform Commercial Code” shall mean the Uniform Commercial
Code as in effect from time to time in the State of New York; provided, that to
the extent that the Uniform Commercial Code is used to define any term
herein and such term is defined differently in different Articles or Divisions
of the Uniform Commercial Code, the definition of such term contained in Article or
Division 9 shall govern.

 

Section 2.                                            Representations,
Warranties and Covenants of Debtors. Each Debtor represents and warrants
to, and covenants with, the Secured Party as follows:

 

(a)                                  Such
Debtor has rights in and the power to transfer the Collateral in which it
purports to grant a security interest pursuant to Section 3 hereof
(subject, with respect to after acquired Collateral, to such Debtor acquiring
the same) and no Lien other than Permitted Liens exists or will exist upon such
Collateral at any time.

 

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(b)                                 This
Agreement is effective to create in favor of Secured Party a valid security
interest in and Lien upon all of such Debtor’s right, title and interest in and
to the Collateral, and upon (i) the filing of appropriate Uniform Commercial
Code financing statements in the jurisdictions listed on Schedule I
attached hereto, and (ii) each Deposit Account being subject to an Account
Control Agreement (as hereinafter defined) between the applicable Debtor and
depository institution and the Secured Party on behalf of the Buyers, such
security interest will be a duly perfected first priority security interest in
all of the Collateral (other than Instruments not constituting Chattel Paper),
and upon delivery of the Instruments to the Secured Party or its Representative,
duly endorsed by such Debtor or accompanied by appropriate instruments of
transfer duly executed by such Debtor, the security interest in the Instruments
will be duly perfected.

 

(c)                                  All
of the Equipment, Inventory and Goods owned by such Debtor is located at the
places as specified on Schedule I attached hereto (except to the
extent any such Equipment, Inventory or Goods is in transit or located at a
Debtor’s job site in the ordinary course of business). Except as disclosed on Schedule I,
none of the Collateral is in the possession of any bailee, warehousemen,
processor or consignee. Schedule I discloses such Debtor’s name as
of the date hereof as it appears in official filings in the state or province,
as applicable, of its incorporation, formation or organization, the type of
entity of such Debtor (including corporation, partnership, limited partnership
or limited liability company), organizational identification number issued by
such Debtor’s state of incorporation, formation or organization (or a statement
that no such number has been issued), such Debtor’s state or province, as
applicable, of incorporation, formation or organization and the chief place of
business, chief executive officer and the office where such Debtor keeps its
books and records. Such Debtor has only one state or province, as applicable,
of incorporation, formation or organization. Such Debtor does not do business
and has not done business during the past five (5) years under any trade
name or fictitious business name except as disclosed on Schedule II
attached hereto.

 

(d)                                 No
Copyrights, Patents or Trademarks listed on Schedules III, IV and V,
respectively, if any, have been adjudged invalid or unenforceable or have been
canceled, in whole or in part, or are not presently subsisting. Each of such
Copyrights, Patents and Trademarks (if any) is valid and enforceable. Such
Debtor is the sole and exclusive owner of the entire and unencumbered right,
title and interest in and to each of such Copyrights, Patents and Trademarks,
identified on Schedules III, IV and V, as applicable, as being owned by
such Debtor, free and clear of any liens, charges and encumbrances, including
without limitation licenses, shop rights and covenants by such Debtor not to
sue third persons. Such Debtor has adopted, used and is currently using, or has
a current bona fide intention to use, all of such Trademarks and Copyrights. Such
Debtor has no notice of any suits or actions commenced or threatened with
reference to the Copyrights, Patents or Trademarks owned by it.

 

(e)                                  Each
Debtor agrees to deliver to the Secured Party an updated Schedule I, II, III,
IV and/or V within five (5) Business Days of any change thereto.

 

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(f)                                    All
depositary and other accounts including, without limitation, Deposit Accounts,
securities accounts, brokerage accounts and other similar accounts, maintained
by each Debtor are described on Schedule VI hereto, which
description includes for each such account the name of the Debtor maintaining
such account, the name, address and telephone and telecopy numbers of the
financial institution at which such account is maintained, the account number
and the account officer, if any, of such account. No Debtor shall open any new
Deposit Accounts, securities accounts, brokerage accounts or other accounts
unless such Debtor shall have given Secured Party ten (10) Business Days’
prior written notice of its intention to open any such new accounts. Each
Debtor shall deliver to Secured Party a revised version of Schedule VI
showing any changes thereto within five (5) Business Days of any such
change. Upon the occurrence of and during the continuance of an Event of
Default, Secured Party may seek information from financial institutions at
which such Debtor maintains an account with respect to such account as Secured
Party from time to time reasonably may request. In addition, all of such
Debtor’s depositary, security, brokerage and other accounts including, without
limitation, Deposit Accounts shall be subject to the provisions of Section 4.5
hereof.

 

(g)                                 Such
Debtor does not own any Commercial Tort Claim except for those disclosed on Schedule VII
hereto (if any).

 

(h)                                 Such
Debtor does not have any interest in fee interest in real property except as
disclosed on Schedule VIII 
(if any). Each Debtor shall deliver to Secured Party a revised version
of Schedule VIII showing any changes thereto within ten (10) Business
Days of any such change. Except as otherwise agreed to by Secured Party, all
such interests in real property are subject to a mortgage or  deed of trust (in form and substance
satisfactory to Secured Party) in favor of Secured Party (hereinafter, a “Mortgage”).

 

(i)                                     All
Equipment (including, without limitation, Motor Vehicles) owned by a Debtor and
subject to a certificate of title or ownership statute is described on Schedule IX
hereto.

 

Section 3.                                            Collateral.
As collateral security for the prompt payment in full when due (whether at
stated maturity, by acceleration or otherwise) of the Liabilities and the
performance of all Obligations, each Debtor hereby pledges and grants to the
Secured Party, for the benefit of itself and the Buyers, a Lien on and security
interest in and to all of such Debtor’s right, title and interest in the
personal property and assets of such Debtor, whether now owned by such Debtor
or hereafter acquired and whether now existing or hereafter coming into
existence and wherever located (all being collectively referred to herein as “Collateral”), including, without limitation:

 

(a)                                  all
Instruments, together with all payments thereon or thereunder;

 

(b)                                 all
Accounts;

 

(c)                                  all
Inventory;

 

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(d)                                 all
General Intangibles (including payment intangibles (as defined in the Uniform Commercial
Code) and Software);

 

(e)                                  all
Equipment (including Motor Vehicles);

 

(f)                                    all
Documents;

 

(g)                                 all
Contracts;

 

(h)                                 all
Goods;

 

(i)                                     all
Investment Property;

 

(j)                                     all
Deposit Accounts, including, without limitation, the balance from time to time
in all bank accounts maintained by such Debtor;

 

(k)                                  all
Commercial Tort Claims specified on Schedule VII;

 

(l)                                     all
As-extracted Collateral;

 

(m)                               all
Trademarks, Patents and Copyrights;

 

(n)                                 all
other tangible and intangible property of such Debtor, including, without limitation,
all interests in Real Property, Proceeds, tort claims, products, accessions,
rents, profits, income, benefits, substitutions, additions and replacements of
and to any of the property of such Debtor described in the preceding clauses of
this Section 3 (including, without limitation, any proceeds of
insurance thereon, insurance claims and all rights, claims and benefits against
any Person relating thereto), other rights to payments not otherwise included
in the foregoing, and all books, correspondence, files, records, invoices and
other papers, including without limitation all tapes, cards, computer runs,
computer programs, computer files and other papers, documents and records in
the possession or under the control of such Debtor, any computer bureau or
service company from time to time acting for such Debtor;

 

(o)                                 to
the extent not otherwise included, all Proceeds of the foregoing.

 

Section 4.                                            Covenants;
Remedies. In furtherance of the grant of the pledge and security interest
pursuant to Section 3 hereof, each Debtor hereby agrees with the
Secured Party as follows:

 

Section 4.1                                      Delivery
and Other Perfection; Maintenance, etc.

 

(a)                                  Delivery
of Instruments, Documents, Etc. Each Debtor shall, within fifteen (15)
Business Days after the Closing, deliver and pledge to the Secured Party or its
Representative any and all Instruments, negotiable Documents, Chattel Paper
and, if any and only to the extent such certificated securities are customary
under applicable law of the jurisdiction in which the underlying securities
relate, certificated securities (accompanied by stock powers executed in blank)
duly endorsed and/or

 

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accompanied by such instruments
of assignment and transfer executed by such Debtor in such form and
substance as the Secured Party or its Representative may reasonably
request; provided, that so long as no Event of Default shall have
occurred and be continuing, each Debtor may retain for collection in the
ordinary course of business any Instruments, negotiable Documents and Chattel
Paper received by such Debtor in the ordinary course of business, and the
Secured Party or its Representative shall, promptly upon request of a Debtor,
make appropriate arrangements for making any other Instruments, negotiable
Documents and Chattel Paper pledged by such Debtor available to such Debtor for
purposes of presentation, collection or renewal (any such arrangement to be
effected, to the extent deemed appropriate by the Secured Party or its
Representative, against trust receipt or like document).

 

(b)                                 Other
Documents and Actions. Within fifteen (15) Business Days after the Closing,
each Debtor shall give, execute, deliver, file and/or record any financing
statement, notice, instrument, document, agreement, Mortgage or other papers
that may be necessary or desirable (in the reasonable judgment of the
Secured Party or its Representative) to create, preserve, perfect or validate
the security interest granted pursuant hereto (or any security interest or
mortgage contemplated or required hereunder, including with respect to Section 2(h) of
this Agreement) or to enable the Secured Party or its Representative to
exercise and enforce the rights of the Secured Party hereunder with respect to
such pledge and security interest, provided that notices to account
debtors in respect of any Accounts or Instruments shall be subject to the
provisions of clause (e) below. Notwithstanding the foregoing each Debtor
hereby irrevocably authorizes the Secured Party at any time and from time to
time to file in any filing office in any jurisdiction any Uniform Commercial
Code initial financing statements (and other similar filings or registrations
under other applicable laws and regulations pertaining the creation, attachment
or perfection of security interests) and amendments thereto that (a) indicate
the Collateral (i) as all assets of such Debtor or words of similar
effect, regardless of whether any particular asset comprised in the Collateral
falls within the scope of Article 9 of the Uniform Commercial Code of
the State of New York or such jurisdiction, or (ii) as being of an equal
or lesser scope or with greater detail, and (b) contain any other
information required by part 5 of Article 9 of the Uniform Commercial
Code of the State of New York or any other State for the sufficiency or filing
office acceptance of any financing statement or amendment, 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 real
property to which the Collateral relates. Each Debtor agrees to furnish any
such information to the Secured Party promptly upon request. Each Debtor also
ratifies its authorization for the Secured Party to have filed in any
jurisdiction any like initial financing statements or amendments thereto if
filed prior to the date hereof.

 

(c)                                  Books
and Records. Each Debtor shall maintain at its own cost and expense
complete and accurate books and records of the Collateral, including, without
limitation, a record of all payments received and all credits granted with
respect to the Collateral and all other dealings with the Collateral. Upon the
occurrence and during the continuation of any Event of Default, each Debtor
shall deliver and turn over

 

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any such books and records (or
true and correct copies thereof, at the option of the Debtor) to the Secured
Party or its Representative at any time on written demand. Each Debtor shall
permit any Representative of the Secured Party to inspect such books and
records upon reasonable prior written notice and at any time during reasonable
business hours and will provide photocopies thereof at such Debtor’s expense to
the Secured Party upon request of the Secured Party.

 

(d)                                 Motor
Vehicles. Each Debtor shall, promptly upon acquiring same, cause the Secured
Party to be listed as the lienholder on each certificate of title or ownership
covering any items of Equipment, including Motor Vehicles, having a value in
excess of $100,000 in the aggregate for all such items of Equipment of the
Debtor or otherwise comply with the certificate of title or ownership laws of
the relevant jurisdiction issuing such certificate of title or ownership in
order to properly evidence and perfect Secured Party’s security interest in the
assets represented by such certificate of title or ownership.

 

(e)                                  Notice
to Account Debtors; Verification. Upon the occurrence and during the
continuance of any Event of Default (or if any rights of set-off (other than
set-offs against an Account arising under the Contract giving rise to the same
Account) or contra accounts may be asserted), (i) upon request of the
Secured Party or its Representative, each Debtor shall promptly notify each
account debtor in respect of any Accounts or Instruments or other Persons
obligated on the Collateral that such Collateral has been assigned to the
Secured Party hereunder, and that any payments due or to become due in respect
of such Collateral are to be made directly to the Secured Party, and (ii) the
Secured Party and its Representative shall have the right at any time or times
to make direct verification with the account debtors or other Persons obligated
on any and all of the Accounts or other such Collateral, it being understood
that unless and until the occurrence and during the continuation of an Event of
Default, neither Secured Party nor its Representatives shall have any right to
contact, communicate or otherwise interfere with Debtor’s relationship with any
account debtors or other Persons obligated on any such Accounts or other
Collateral.

 

(f)                                    Intellectual
Property. Each Debtor represents and warrants that the Copyrights, Patents
and Trademarks listed on Schedules III, IV and V, respectively (if any),
constitute all of the registered Copyrights and all of the Patents and
Trademarks now owned by such Debtor. If such Debtor shall (i) obtain
rights to any new patentable inventions, any registered Copyrights or any
Patents or Trademarks, or (ii) become entitled to the benefit of any
registered Copyrights or any Patents or Trademarks or any improvement on any
Patent, the provisions of this Agreement above shall automatically apply
thereto and such Debtor shall give to Secured Party prompt written notice
thereof. Each Debtor hereby authorizes Secured Party to modify this Agreement
by amending Schedules III, IV and V, as applicable, to include any such
registered Copyrights or any such Patents and Trademarks. Each Debtor shall
have the duty (i) to prosecute diligently any patent, trademark, or
service mark applications pending as of the date hereof or hereafter, (ii) to
make application on unpatented but patentable inventions and on trademarks,
copyrights and service marks, as appropriate, (iii) to preserve and
maintain all rights in the Copyrights, Patents and Trademarks, to the extent
material to the

 

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operations of the business of
such Debtor and (iv) to ensure that the Copyrights, Patents and Trademarks
are and remain enforceable, to the extent material to the operations of the
business of such Debtor. Any expenses incurred in connection with such Debtor’s
obligations under this Section 4.1(f) shall be borne by such
Debtor. Except for any such items that a Debtor reasonably believes (using
prudent industry customs and practices) are no longer necessary for the on-going
operations of its business, no Debtor shall abandon any right to file a patent,
trademark or service mark application, or abandon any pending patent, trademark
or service mark application or any other Copyright, Patent or Trademark without
the written consent of Secured Party, which consent shall not be unreasonably
withheld.

 

(g)                                 Further
Identification of Collateral. Each Debtor will, when and as often as
reasonably requested by the Secured Party or its Representative, furnish to the
Secured Party or such Representative, statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Secured Party or its Representative may reasonably
request, all in reasonable detail.

 

(h)                                 Investment
Property. Upon the occurrence and during the continuance of an Event of
Default, each Debtor will take any and all actions reasonably required or
requested by the Secured Party, from time to time, to (i) cause the
Secured Party to obtain exclusive control of any Investment Property owned by
such Debtor in a manner reasonably acceptable to the Secured Party and (ii) obtain
from any issuers of Investment Property and such other Persons, for the benefit
of the Secured Party, written confirmation of the Secured Party’s control over
such Investment Property. For purposes of this Section 4.1(h), the
Secured Party shall have exclusive control of Investment Property if (i) such
Investment Property consists of certificated securities and a Debtor delivers
such certificated securities to the Secured Party (with appropriate
endorsements if such certificated securities are in registered form); (ii) such
Investment Property consists of uncertificated securities and either (x) a
Debtor delivers such uncertificated securities to the Secured Party or (y) the
issuer thereof agrees, pursuant to documentation in form and substance
satisfactory to the Secured Party, that it will comply with instructions
originated by the Secured Party without further consent by such Debtor, and (iii) such
Investment Property consists of security entitlements and either (x) the
Secured Party becomes the entitlement holder thereof or (y) the appropriate
securities intermediary agrees, pursuant to the documentation in form and
substance satisfactory to the Secured Party, that it will comply with
entitlement orders originated by the Secured Party without further consent by
any Debtor.

 

(i)                                     Commercial
Tort Claims. Each Debtor shall promptly notify Secured Party of any
Commercial Tort Claim acquired by it that concerns a claim in excess of $50,000
and unless otherwise consented to by Secured Party, such Debtor shall enter
into a supplement to this Agreement granting to Secured Party a Lien on and
security interest in such Commercial Tort Claim.

 

Section 4.2                                      Other
Liens. Debtors will not create, permit or suffer to exist, and will defend
the Collateral against and take such other action as is necessary to remove,
any Lien on the Collateral except Permitted Liens, and will defend the right,
title and interest of the

 

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Secured Party in and to the Collateral and in and to all Proceeds
thereof against the claims and demands of all Persons whatsoever.

 

Section 4.3                                      Preservation
of Rights. Whether or not any Event of Default has occurred or is
continuing, the Secured Party and its Representative may, but shall not be
required to, take any steps the Secured Party or its Representative deems
reasonably necessary or appropriate to preserve any Collateral or any rights
against third parties to any of the Collateral and Debtors shall promptly pay,
or reimburse the Secured Party for, all reasonable expenses incurred in
connection therewith.

 

Section 4.4                                      Formation
of Subsidiaries; Name Change; Location; Bailees.

 

(a)                                  No
Debtor shall form or acquire any Subsidiary unless (i) such Debtor
pledges all of the stock of such subsidiary to the Secured Party pursuant to a
pledge agreement in form and substance acceptable to Secured Party, (ii) such
subsidiary becomes a party to this Agreement, and all other applicable Security
Documents and (iii) the formation or acquisition of such subsidiary is not
prohibited by the terms of the Transaction Documents.

 

(b)                                 No
Debtor shall (i) reincorporate or reorganize itself under the laws of any
jurisdiction other than the jurisdiction in which it is incorporated or
organized as of the date hereof without the prior written consent of Secured
Party, which shall not be unreasonably withheld or delayed, or (ii) otherwise
change its name, identity or corporate structure without the prior written
consent of Secured Party, which shall not be unreasonably withheld or delayed. Each
Debtor will notify Secured Party promptly in writing prior to any such change
in the proposed use by such Debtor of any tradename or fictitious business name
other than any such name set forth on Schedule II attached hereto.

 

(c)                                  Except
for the sale of Inventory in the ordinary course of business, and other sales
of assets as expressly permitted by the terms of the Purchase Agreement, each
Debtor will keep the Collateral at the locations specified in Schedule I.
Each Debtor will give Secured Party ten (10) day’s prior written notice of
any change in such Debtor’s chief place of business or of any new location for
any of the Collateral.

 

(d)                                 If
any Collateral is at any time in the possession or control of any warehousemen,
bailee, consignee or processor, such Debtor shall, upon the request of Secured
Party or its Representative, notify such warehousemen, bailee, consignee or
processor of the Lien and security interest created hereby and shall instruct
such Person to hold all such Collateral for Secured Party’s account subject to
Secured Party’s instructions.

 

(e)                                  Each
Debtor acknowledges that it is not authorized to file any financing statement
or amendment or termination statement with respect to any financing statement
to which Secured Party or any Buyer is a secured party thereunder without the
prior written consent of Secured Party and agrees that it will not do so without
the prior

 

11

 

written consent of Secured
Party, subject to such Debtor’s rights under Section 9-509(d)(2) to
the Uniform Commercial Code.

 

(f)                                    No
Debtor shall enter into any Contract that restricts or prohibits the grant to
Secured Party of a security interest in Accounts, Chattel Paper, Instruments or
payment intangibles or the proceeds of the foregoing.

 

Section 4.5                                      Bank
Accounts and Securities Accounts.

 

(a)                                  Within
fifteen (15) Business Days after Closing, the Secured Party and each Debtor, as
applicable, shall enter into an account control agreement or securities account
control agreement, as applicable, (each an “Account
Control Agreement”), in a form reasonably acceptable to the
Secured Party, with each financial institution with which such Debtor maintains
from time to time any Deposit Accounts (general or special), securities
accounts, brokerage accounts or other similar accounts, which financial
institutions are set forth on Schedule VI attached hereto. Pursuant
to the Account Control Agreements and pursuant hereto, each such Debtor grants
and shall grant to the Secured Party a continuing lien upon, and security
interest in, all such accounts and all funds at any time paid, deposited,
credited or held in such accounts (whether for collection, provisionally or
otherwise) or otherwise in the possession of such financial institutions, and
each such financial institution shall act as the Secured Party’s agent in
connection therewith. Following the Closing Date, no Debtor shall establish any
Deposit Account, securities account, brokerage account or other similar account
with any financial institution unless in connection therewith, the Secured
Party and such Debtor shall have entered into an Account Control Agreement with
such financial institution (in a form reasonably acceptable to the
Security Party) which covers such account. Each Debtor shall deposit and keep
on deposit all of its funds into a Deposit Account which is subject to an
Account Control Agreement.

 

Section 4.6                                      Events
of Default, Etc. During the period during which an Event of Default shall
have occurred and be continuing:

 

(a)                                  each
Debtor shall, at the reasonable request of the Secured Party or its
Representative, assemble the Collateral and make it available to Secured Party
or its Representative at a place or places designated by the Secured Party or
its Representative;

 

(b)                                 the
Secured Party or its Representative may make any reasonable compromise or
settlement deemed desirable with respect to any of the Collateral and may extend
the time of payment, arrange for payment in installments, or otherwise modify
the terms of, any of the Collateral;

 

(c)                                  the
Secured Party shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code (whether
or not said Uniform Commercial Code is in effect in the jurisdiction where
the rights and remedies are asserted) and such additional rights and remedies
to which a secured party is entitled under the laws in effect in any
jurisdiction where any rights and remedies hereunder may be asserted,
including, without limitation, the right, to the maximum

 

12

 

extent permitted by law, to: (i) exercise
all voting, consensual and other powers of ownership pertaining to the
Collateral as if the Secured Party were the sole and absolute owner thereof
(and each Debtor agrees to take all such action as may be appropriate to
give effect to such right) and (ii) the appointment of a receiver or
receivers for all or any part of the Collateral, whether such receivership
be incident to a proposed sale or sales of such Collateral or otherwise and
without regard to the value of the Collateral or the solvency of any person or
persons liable for the payment of the Liabilities secured by such Collateral;

 

(d)                                 the
Secured Party or its Representative in their discretion may, in the name of the
Secured Party or in the name of a Debtor or otherwise, demand, sue for, collect
or receive any money or property at any time payable or receivable on account
of or in exchange for any of the Collateral, but shall be under no obligation
to do so;

 

(e)                                  the
Secured Party or its Representative may take immediate possession and
occupancy of any premises owned, used or leased by a Debtor and exercise all
other rights and remedies which may be available to the Secured Party; and

 

(f)                                    the
Secured Party may, upon reasonable notice to Debtors of the time and place,
with respect to the Collateral or any part thereof which shall then be or
shall thereafter come into the possession, custody or control of the Secured
Party or its Representative, sell, lease, license, assign or otherwise dispose
of all or any part of such Collateral, at such place or places as the Secured
Party deems best, and for cash or for credit or for future delivery (without
thereby assuming any credit risk), at public or private sale, without demand of
performance or notice of intention to effect any such disposition or of the
time or place thereof (except such notice as is required above or by applicable
statute and cannot be waived), and the Secured Party or anyone else may be
the purchaser, lessee, licensee, assignee or recipient of any or all of the
Collateral so disposed of at any public sale (or, to the extent permitted by
law, at any private sale) and thereafter hold the same absolutely, free from
any claim or right of whatsoever kind, including any right or equity of
redemption (statutory or otherwise), of Debtors, any such demand, notice and
right or equity being hereby expressly waived and released. The Secured Party
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and
place fixed for the sale, and such sale may be made at any time or place
to which the sale may be so adjourned.

 

The proceeds of each collection, sale or other disposition under this Section 4.6
shall be applied in accordance with Section 4.9 hereof.

 

Section 4.7                                      Deficiency.
If the proceeds of sale, collection or other realization of or upon the
Collateral are insufficient to cover the costs and expenses of such realization
and the payment in full of the Liabilities, Debtors shall remain liable for any
deficiency.

 

Section 4.8                                      Private
Sale. Each Debtor recognizes that the Secured Party may be unable to
effect a public sale of any or all of the Collateral consisting of securities
by reason of certain prohibitions contained in the Securities Act of 1933, as
amended (the “Act”), and

 

13

 

applicable state securities laws, but may be compelled to resort
to one or more private sales thereof to a restricted group of purchasers who
will be obliged to agree, among other things, to acquire such Collateral for
their own account for investment and not with a view to the distribution or
resale thereof. Each Debtor acknowledges and agrees that any such private sale may result
in prices and other terms less favorable to the seller than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner. The Secured Party shall be under no obligation to delay a sale of any
of the Collateral to permit a Debtor to register such Collateral for public
sale under the Act, or under applicable state securities laws, even if Debtors
would agree to do so. The Secured Party shall not incur any liability as a
result of the sale of any such Collateral, or any part thereof, at any
private sale provided for in this Agreement conducted in a commercially
reasonable manner, and each Debtor hereby waives any claims against the Secured
Party arising by reason of the fact that the price at which the Collateral may have
been sold at such a private sale was less than the price which might have been
obtained at a public sale or was less than the aggregate amount of the
Liabilities, even if the Secured Party accepts the first offer received and
does not offer the Collateral to more than one offeree.

 

Each Debtor further agrees to do or cause to be done all such other
acts and things as may be reasonably necessary to make such sale or sales
of any portion or all of any such Collateral valid and binding and in compliance
with any and all applicable laws, regulations, orders, writs, injunctions,
decrees or awards of any and all courts, arbitrators or governmental
instrumentalities, domestic or foreign, having jurisdiction over any such sale
or sales, all at such Debtor’s expense, provided that Debtors shall be
under no obligation to take any action to enable any or all of such Collateral
to be registered under the provisions of the Act. Each Debtor further agrees
that a breach of any of the covenants contained in this Section 4.8
will cause irreparable injury to the Secured Party, that the Secured Party has
no adequate remedy at law in respect of such breach and, as a consequence,
agrees that each and every covenant contained in this Section 4.8
shall be specifically enforceable against Debtors, and each Debtor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default has
occurred and is continuing.

 

Section 4.9                                      Application
of Proceeds. The proceeds of any collection, sale or other realization of
all or any part of the Collateral, and any other cash at the time held by
the Secured Party under this Agreement, shall be applied in the manner set
forth in the Notes (or, if not so set forth, in a manner acceptable to, and at
the election of, the Secured Party).

 

Section 4.10                                Attorney-in-Fact.
Each Debtor hereby irrevocably constitutes and appoints the Secured Party, with
full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Debtor and in
the name of such Debtor or in its own name, from time to time in the discretion
of the Secured Party, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute and deliver
any and all documents and instruments which may be necessary or desirable
to perfect or protect any security interest granted hereunder or to maintain
the perfection or priority of any security interest granted hereunder, and,
without limiting the generality of the foregoing, hereby gives the Secured
Party the power and right, on behalf of such Debtor, without notice to or
assent by such Debtor, to do the following upon the occurrence and during the
continuation of any Event of Default:

 

14

 

(a)                                  to
take any and all appropriate action and to execute and deliver any and all
documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement;

 

(b)                                 to
ask, demand, collect, receive and give acquittance and receipts for any and all
moneys due and to become due under any Collateral and, in the name of such
Debtor or its own name or otherwise, to take possession of and endorse and
collect any checks, drafts, notes, acceptances or other Instruments for the
payment of moneys due under any Collateral and to file any claim or to take any
other action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Secured Party for the purpose of collecting any and all such
moneys due under any Collateral whenever payable and to file any claim or to
take any other action or proceeding in any court of law or equity or otherwise
deemed appropriate by the Secured Party for the purpose of collecting any and
all such moneys due under any Collateral whenever payable;

 

(c)                                  to
pay or discharge charges or liens levied or placed on or threatened against the
Collateral, to effect any insurance called for by the terms of this Agreement
and to pay all or any part of the premiums therefor;

 

(d)                                 to
direct any party liable for any payment under any of the Collateral to make
payment of any and all moneys due, and to become due thereunder, directly to
the Secured Party or as the Secured Party shall direct, and to receive payment
of and receipt for any and all moneys, claims and other amounts due, and to
become due at any time, in respect of or arising out of any Collateral;

 

(e)                                  to
sign and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts and other Documents
constituting or relating to the Collateral;

 

(f)                                    to
commence and prosecute any suits, actions or proceedings at law or in equity in
any court of competent jurisdiction to collect the Collateral or any part thereof
and to enforce any other right in respect of any Collateral;

 

(g)                                 to
defend any suit, action or proceeding brought against a Debtor with respect to
any Collateral;

 

(h)                                 to
settle, compromise or adjust any suit, action or proceeding described above
and, in connection therewith, to give such discharges or releases as the
Secured Party may deem appropriate;

 

(i)                                     to
the extent that a Debtor’s authorization given in Section 4.1(b) of
this Agreement is not sufficient to file such financing statements with respect
to this Agreement, with or without such Debtor’s signature, or to file a
photocopy of this Agreement in substitution for a financing statement, as the
Secured Party may deem appropriate and to execute in such Debtor’s name
such financing statements and amendments thereto and continuation statements
which may require such Debtor’s signature; and

 

15

 

(j)                                     generally
to sell, transfer, pledge, make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Secured Party
were the absolute owners thereof for all purposes, and to do, at the Secured
Party’s option, or from time to time, all acts and things which the Secured
Party reasonably deems necessary to protect, preserve or realize upon the
Collateral and the Secured Party’s lien therein, in order to effect the intent
of this Agreement, all as fully and effectively as such Debtor might do.

 

Each Debtor hereby ratifies, to the extent permitted by law, all that
such attorneys lawfully do or cause to be done by virtue hereof. The power of
attorney granted hereunder is a power coupled with an interest and shall be
irrevocable until this Agreement is terminated in accordance with Section 4.12
hereof.

 

Each Debtor also authorizes the Secured Party, at any time from and
after the occurrence and during the continuation of any Event of Default, (x)
to communicate in its own name with any party to any Contract with regard to
the assignment of the right, title and interest of such Debtor in and under the
Contracts hereunder and other matters relating thereto and (y) to execute, in
connection with any sale of Collateral provided for in Section 4.6
hereof, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral.

 

Section 4.11                                Perfection.
Within fifteen (15) Business Days after the Closing, each Debtor shall:

 

(a)                                  file
such financing statements, assignments for security and other documents in such
offices as may be reasonably necessary or as the Secured Party or the
Representative may reasonably request to perfect the security interests
granted by Section 3 of this Agreement;

 

(b)                                 at
Secured Party’s reasonable request, deliver to the Secured Party or its
Representative the originals of all Instruments together with, in the case of
Instruments constituting promissory notes, allonges attached thereto showing
such promissory notes to be payable to the order of a blank payee; and

 

(c)                                  deliver
to Secured Party or its Representative, evidence of such Debtor’s compliance of
the notation of Secured Party’s Lien on the certificates of title evidencing
such Debtor’s titled Equipment, to the extent required by Section 4.1(d) hereof.

 

Section 4.12                                Termination.
This Agreement and the Liens and security interests granted hereunder shall not
terminate until the termination of the Notes, the commitments of the Buyers to
lend or make financial accommodations under the Transaction Documents, and the
full and complete performance and indefeasible satisfaction of all the
Liabilities (i) in respect of the Notes (including, without limitation,
the indefeasible payment in full in cash of all such Liabilities) and (ii) with
respect to which claims have been asserted by Collateral Agent and/or Buyers,
whereupon this Agreement shall automatically terminate and the Secured Party
shall forthwith cause to be assigned, transferred and delivered, against
receipt but without any

 

16

 

recourse, warranty or representation whatsoever, any remaining
Collateral (including any certificates of title held by it) to or on the order
of Debtors. The Secured Party shall also execute and deliver to Debtors upon
such termination and at Debtors’ expense such Uniform Commercial Code
termination statements, certificates for terminating the liens on the Motor
Vehicles (if any) and such other documentation as shall be requested by Debtors
to effect the termination and release of the Liens and security interests in
favor of the Secured Party affecting the Collateral.

 

Section 4.13                                Further
Assurances.

 

(a)                                  At
any time and from time to time, upon the written reasonable request of the
Secured Party or its Representative, and at the sole expense of Debtors,
Debtors will promptly and duly execute and deliver any and all such further
instruments, documents and agreements and take such further actions as the
Secured Party or its Representative may reasonably require in order for
the Secured Party to obtain the full benefits of this Agreement and of the
rights and powers herein granted in favor of the Secured Party, including,
without limitation, using Debtors’ best efforts to secure all consents and
approvals reasonably necessary or appropriate for the assignment to the Secured
Party of any Collateral held by Debtors or in which a Debtor has any rights not
heretofore assigned, the filing of any financing or continuation statements
under the Uniform Commercial Code with respect to the liens and security
interests granted hereby, transferring Collateral to the Secured Party’s
possession (if a security interest in such Collateral can be perfected by
possession), placing the interest of the Secured Party as lienholder on the
certificate of title of any Motor Vehicle and obtaining waivers of liens from
landlords and mortgagees. Each Debtor also hereby authorizes the Secured Party
and its Representative to file any such financing or continuation statement
without the signature of such Debtor to the extent permitted by applicable law.

 

(b)                                 Upon
the request of the Secured Party, each Debtor shall procure insurers’
acknowledgments of any assignments of key man life insurance policies which may be
assigned to the Secured Party as additional security for the Liabilities and
will take all such further action as required by any insurer or the Secured
Party in connection with any such assignment.

 

Section 4.14                                Limitation
on Duty of Secured Party. The powers conferred on the Secured Party under
this Agreement are solely to protect the Secured Party’s interest in the
Collateral and shall not impose any duty upon it to exercise any such powers. The
Secured Party shall be accountable only for amounts that it actually receives
as a result of the exercise of such powers and neither the Secured Party nor
its Representative nor any of their respective officers, directors, members,
managers, partners, employees or agents shall be responsible to Debtors for any
act or failure to act, except for willful misconduct. Without limiting the
foregoing, the Secured Party and any Representative shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
their possession if such Collateral is accorded treatment substantially
equivalent to that which the relevant Secured Party or any Representative, in
its individual capacity, accords its own property consisting of the type of
Collateral involved, it being understood and agreed that neither the Secured
Party nor any Representative shall have any responsibility for taking any
necessary steps (other than steps taken in accordance with the

 

17

 

standard of care set forth above) to preserve rights against any Person
with respect to any Collateral.

 

Also without limiting the generality of the foregoing, neither the
Secured Party nor any Representative shall have any obligation or liability
under any Contract or license by reason of or arising out of this Agreement or
the granting to the Secured Party of a security interest therein or assignment
thereof or the receipt by the Secured Party or any Representative of any
payment relating to any Contract or license pursuant hereto, nor shall the
Secured Party or any Representative be required or obligated in any manner to
perform or fulfill any of the obligations of Debtors under or pursuant to
any Contract or license, or to make any payment, or to make any inquiry as to
the nature or the sufficiency of any payment received by it or the sufficiency
of any performance by any party under any Contract or license, or to present or
file any claim, or to take any action to collect or enforce any performance or
the payment of any amounts which may have been assigned to it or to which
it may be entitled at any time or times.

 

Anything herein to the contrary notwithstanding, each Debtor shall
remain liable under each account and each payment in respect of general
intangibles to observe and perform all the conditions and obligations to
be observed and performed by it thereunder, all in accordance with the terms of
any agreement giving rise thereto. The Secured Party shall have no obligation
or liability under any agreement giving rise to an account or a payment in
respect of a general intangible by reason of or arising out of any Transaction
Document or the receipt by the Secured Party of any payment relating thereto,
nor shall the Secured Party be obligated in any manner to perform any
obligation of any Debtor under or pursuant to any agreement giving rise to an
account or a payment in respect of a general intangible, to make any payment,
to make any inquiry as to the nature or the sufficiency of any payment received
by it or as to the sufficiency of any performance by any party thereunder, to
present or file any claim, to take any action to enforce any performance or to
collect the payment of any amounts that may have been assigned to it or to
which it may be entitled at any time or times.

 

Section 5.                                            Miscellaneous.

 

Section 5.1                                      No
Waiver. No failure on the part of the Secured Party or any of its
Representatives to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Secured Party
or any of its Representatives of any right, power or remedy hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or remedy. The rights and remedies hereunder provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights and
remedies provided by law.

 

Section 5.2                                      Governing
Law. This Agreement shall be governed by and construed in accordance with the
internal laws and decisions of the State of New York applicable to contracts
made and to be performed in that State, without regard to conflict of law
principles thereof that would result in the application of the laws of any
jurisdiction other than the State of New York.

 

18

 

Section 5.3                                      Notices.
All notices, approvals, requests, demands and other communications hereunder
shall be delivered or made in the manner set forth in, and shall be effective
in accordance with the terms of, the Purchase Agreement; provided, that, to the
extent any such communication (i) is being made or sent to a Debtor that
is not the Company, such communication shall be effective as to such Debtor if
made or sent to the Company in accordance with the foregoing or (ii) is
being made or sent to Collateral Agent, such communication shall be made to
Collateral Agent at the address set forth below 
Collateral Agent’s signature hereto. Debtors and Collateral Agent may change
their respective notice addresses by written notice given to each other party
five (5) days prior to the effectiveness of such change.

 

Section 5.4                                      Amendments,
Etc. The terms of this Agreement may be waived, altered or amended
only by an instrument in writing duly executed by the Debtor sought to be
charged or benefited thereby and the Secured Party. Any such amendment or
waiver shall be binding upon the Secured Party and the Debtor sought to be
charged or benefited thereby and their respective successors and assigns.

 

Section 5.5                                      Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit
of the respective successors and assigns of each of the parties hereto, provided,
that no Debtor shall assign or transfer its rights hereunder without the prior
written consent of the Secured Party. Secured Party, in its capacity as
collateral agent, may assign its rights hereunder upon written notice to
Debtors, in which event such assignee shall be deemed to be Secured Party
hereunder with respect to such assigned rights.

 

Section 5.6                                      Counterparts;
Headings. This Agreement may be authenticated in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may authenticate this Agreement
by signing any such counterpart. This Agreement may be authenticated by
manual signature or facsimile, .pdf or similar electronic signature, all of
which shall be equally valid. The headings in this Agreement are for
convenience of reference only and shall not alter or otherwise affect the
meaning hereof.

 

Section 5.7                                      Severability.
If any provision hereof is invalid and unenforceable in any jurisdiction, then,
to the fullest extent permitted by law, (a) the other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in favor of the Secured Party and its Representative in
order to carry out the intentions of the parties hereto as nearly as may be
possible and (b) the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction.

 

5.9                               SUBMISSION
TO JURISDICTION; WAIVER OF VENUE; SERVICE OF PROCESS. (A)  EACH DEBTOR
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED
STATES FEDERAL OR NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK, BOROUGH
OF MANHATTAN IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND EACH DEBTOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT
OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT
AND IRREVOCABLY

 

19

 

WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN
SHALL LIMIT THE RIGHT OF SECURED PARTY TO BRING PROCEEDINGS AGAINST ANY DEBTOR
IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY A DEBTOR
AGAINST SECURED PARTY, ANY BUYER OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR IN
CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK,
NEW YORK (AND SECURED PARTY AND BUYERS HEREBY SUBMIT TO THE JURISDICTION OF
SUCH COURT). EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF
PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH ACTION OR PROCEEDING
BY MAILING A COPY THEREOF TO SUCH PARTY AT THE ADDRESS FOR NOTICES TO IT IN
ACCORDANCE WITH SECTION 5.3 OF 
THIS AGREEMENT AND AGREES THAT SUCH NOTICE SHALL CONSTITUTE GOOD AND
SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN
SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER
PERMITTED BY LAW.

 

5.10                        WAIVER
OF RIGHT TO TRIAL BY JURY. EACH DEBTOR AND SECURED PARTY EACH WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH DEBTOR AND SECURED PARTY EACH
AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL
WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT
THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION  OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM
OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY
OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT.

 

5.11                           Joint and Several. The
obligations, covenants and agreements of Debtors hereunder shall be the joint
and several obligations, covenants and agreements of each Debtor, whether or
not specifically stated herein.

 

5.12                           Collateral Agent and
Buyer Indemnification.

 

(a)                                  Each
Buyer hereby irrevocably appoints and authorizes the Secured Party to act as
collateral agent (the “Collateral Agent”)
on its behalf under this

 

20

 

Agreement and to enter into
each of the instruments, documents and agreements, including any pledge
agreement, guaranty, financing statements, mortgage, Account Control Agreement
or any other Security Documents (the “Financing Documents”),
to which Secured Party is a party (including in its capacity as Collateral
Agent) on such Buyer’s behalf and to take such actions as Collateral Agent on
such Buyer’s behalf and to exercise such powers under the Financing Documents
as are delegated to Collateral Agent or Secured Party (as applicable) by the
terms thereof, together with all such powers as are reasonably incidental
thereto. The Collateral Agent shall take such action under this Agreement
and/or any other Transaction Documents as the Collateral Agent shall reasonably
be directed by the Requisite Buyers in accordance with the terms of the
Transaction Documents. Secured Party is authorized and empowered to amend,
modify, or waive any provisions of this Agreement or the other Financing
Documents only with the consent of the Requisite Buyers.

 

(b)                                 Whether
or not the transactions contemplated hereby shall be consummated, upon demand
therefor the Buyers shall indemnify the Collateral Agent (to the extent not
reimbursed by or on behalf of the Company and without limiting the obligation
of the Company to do so), ratably from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind whatsoever, including, for purposes of
clarification, all Taxes, which may at any time (including at any time
following the payment in full of the Notes and the termination or resignation
of the Collateral Agent) be imposed on, incurred by or asserted against the
Collateral Agent in any way relating to or arising out of this Agreement, any
other Financing Document or any document contemplated hereby or referred to
herein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Collateral Agent under or in connection with any of the
foregoing; provided, however, that no Buyer shall be liable for
the payment to the Collateral Agent of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the Collateral Agent’s gross
negligence or willful misconduct. In addition, each Buyer shall reimburse the
Collateral Agent upon demand for its ratable share of any costs or out-of-pocket
expenses (including attorney costs) incurred by the Collateral Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Transaction Document, or any
document contemplated hereby or referred to herein to the extent that the
Collateral Agent is not reimbursed for such expenses by or on behalf of the
Company. Without limiting the generality of the foregoing, if the Internal
Revenue Service or any other governmental authority of the United States or any
other jurisdiction asserts a claim that the Collateral Agent did not properly
withhold tax from amounts paid to or for the account of any Buyer (because the
appropriate form was not delivered, was not properly executed, or because
such Buyer failed to notify the Collateral Agent of a change in circumstances
which rendered the exemption from, or reduction of, withholding tax
ineffective, or for any other reason) such Buyer shall indemnify the Collateral
Agent fully for all amounts paid, directly or indirectly, by the Collateral
Agent as tax or otherwise, including penalties and interest, and including any
taxes imposed by any jurisdiction on the amounts payable to the Collateral
Agent under this Section 5.12(b),

 

21

 

together with all related costs
and  expenses (including attorney costs).
The obligation of the Buyers in this Section 5.12(b) shall
survive the payment of all Liabilities hereunder.

 

(c)                                  The
Collateral Agent shall not be deemed to have knowledge or notice of the
occurrence of any Event of Default or any event that with the giving of notice
or passage of time would constitute an Event of Default unless the Collateral
Agent shall have received written notice from a Buyer describing such Event of
Default or event that with the giving of notice or passage of time would
constitute an Event of Default and stating that such notice is a “notice of
default”. Upon the occurrence and continuance of an Event of Default, or an
event that with the giving of notice or passage of time would constitute an
Event of Default, the Collateral Agent shall take such action under this
Agreement and/or any other Transaction Documents with respect to such Event of
Default or event that with the giving of notice or passage of time would
constitute an Event of Default as Collateral Agent shall reasonably be directed
by the Requisite Buyers in accordance with the terms of the Transaction
Documents, provided that unless and until the Collateral Agent shall have
received such directions, the Collateral Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect of such Event of Default or event that with the giving of notice or
passage of time would constitute an Event of Default as the Collateral Agent
shall deem advisable in the best interests of the Buyers. In taking such action
or refraining from taking such action without specific direction from the
Requisite Buyers, the Collateral Agent shall use the same degree of care and
skill as a prudent person would exercise or use under the circumstances in the
conduct of such person’s own affairs.

 

(d)                                 Nothing
in this Section 5.12 shall be deemed to limit or otherwise affect
the rights of Secured Party or Buyers to exercise any remedy provided in this
Agreement or any other Transaction Document.

 

(e)                                  The
Collateral Agent may resign from the performance of all of its functions
and duties hereunder and/or under the other Financing Documents at any time by
giving thirty (30) Business Days prior written notice to the Buyers. Such
resignation shall take effect upon the appointment of a successor Collateral
Agent pursuant to clause (f) below or as otherwise provided below.

 

(f)                                    Upon
(i) the Buyers’ receipt of a notice of resignation by the Collateral Agent
in accordance with clause (e) above, or (ii) written notice by the
Requisite Buyers to Collateral Agent of the Requisite Buyers’ election to
remove the existing Collateral Agent and appoint a successor Collateral Agent,
the Requisite Buyers shall have the right to appoint a successor Collateral
Agent reasonably acceptable to Debtors. Upon the acceptance of a successor’s
appointment as Collateral Agent hereunder and notice of such acceptance to the
retiring Collateral Agent, such successor shall succeed to and become vested
with all of the rights, powers, privileges and duties of the retiring (or
retired) Collateral Agent, the retiring Collateral Agent’s resignation shall
become immediately effective and the retiring Collateral Agent shall be
discharged from all of its duties and obligations hereunder and under the other
Financing Documents (if such resignation was not already effective and such
duties and obligations not already

 

22

 

discharged, as provided below
in this paragraph). If no such successor shall have been so appointed by
Requisite Buyers and shall have accepted such appointment within thirty (30)
days after the retiring Collateral Agent gives notice of its resignation or the
Requisite Buyers give notice of their election to replace the retiring
Collateral Agent, then the retiring Collateral Agent may, on behalf of the
Buyers (but without any obligation) appoint a successor Collateral Agent
without the consent of any Buyer. From and following the expiration of such
thirty (30) day period, Collateral Agent shall have the exclusive right without
any Person’s consent, upon one (1) Business Days’ notice to the Buyers, to
make its resignation or removal effective immediately. From and following the
effectiveness of such notice, (i) the retiring Collateral Agent shall be
discharged from its duties and obligations hereunder and under the other
Financing Documents and (ii) all actions, payments, communications and
determinations provided to be made by, to or through Collateral Agent shall
instead be made by or to each Buyer directly, until such time as Requisite
Buyers appoint a Collateral Agent as provided for above in this paragraph. The
provisions of this Agreement shall continue in effect for the benefit of any
retiring Collateral Agent and its sub-agents after the effectiveness of its
resignation or removal hereunder and under the other Financing Documents in
respect of any actions taken or omitted to be taken by any of them while the
retiring Collateral Agent was acting or was continuing to act as Collateral
Agent.

 

5.13                           No Strict Construction.
The language used in this Agreement will be deemed to be the language chosen by
the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.

 

5.14                           Entire Agreement. This
Agreement supersedes all other prior oral or written agreements between each
Debtor, Secured Party, the Buyers and their affiliates and persons acting on
their behalf with respect to the matters discussed herein, and this Agreement
and the Transaction Documents and instruments referenced herein and therein
contain the entire understanding of the parties with respect to the matters
covered herein and therein.

 

- Remainder of Page Intentionally
Left Blank; Signature Page Follows -

 

23

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed and delivered as of the day and year first above
written.

 

	
  

  	
  DEBTORS:

  
	
   

  	
   

  
	
   

  	
  AVERION
  INTERNATIONAL CORP., a

  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher G. Codeanne

  	
   

  
	
   

  	
  Name:

  	
   

  	
  Christopher G. Codeanne

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Chief Financial Officer

  	
   

  
	
   

  	
  FEIN:

  	
   

  	
  36-4599174

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AVERION
  INC., a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip T. Lavin, Ph.D.

  	
   

  
	
   

  	
  Name:

  	
   

  	
  Philip T. Lavin, Ph.D.

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Chief Executive Officer

  	
   

  
	
   

  	
  FEIN:

  	
   

  	
  20-5359126

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  IT&E
  INTERNATIONAL, a California

  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip T. Lavin, Ph.D.

  	
   

  
	
   

  	
  Name:

  	
   

  	
  Philip T. Lavin, Ph.D.

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Chief Executive Officer

  	
   

  
	
   

  	
  FEIN:

  	
   

  	
  77-0436157

  	
   

  
							

 

 

[Company Signature Page to Security Agreement]

 

 

	
  

  	
  SECURED PARTY:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Cumulus Investors, LLC, in its capacity as

  Collateral Agent for the Buyers

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Nader C. Kazeminy

  	
   

  
	
   

  	
  Name:  Nader C. Kazeminy

  
	
   

  	
  Title:  Chairman and President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
  8500 Normandale Lake Boulevard

  
	
   

  	
  Suite 650

  
	
   

  	
  Bloomington, MN 55437

  

 

 

[Secured Party Signature Page to Security Agreement]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed and delivered as of the day and year first above
written.

 

	
  

  	
  BUYERS:

  
	
   

  	
   

  
	
   

  	
  Solely
  for the purposes of Section 5.12

  
	
   

  	
   

  
	
   

  	
  COMVEST
  INVESTMENT PARTNERS II,

  LLC, a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  ComVest II Partners LLC

  	
   

  
	
   

  	
  Its: Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Cecilio M. Rodriguez

  	
   

  
	
   

  	
  Name: 
  Cecilio M. Rodriguez

  
	
   

  	
  Title:  CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CUMULUS
  INVESTORS, LLC, a Nevada

  limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nader C. Kazeminy

  	
   

  
	
   

  	
  Name:  Nader C. Kazeminy

  
	
   

  	
  Title:  Chairman and President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Philip T. Lavin, Ph.D.

  	
   

  
	
   

  	
  PHILIP
  T. LAVIN, PH.D., in his individual

  capacity

  
					

 

 

[Buyer Signature Page to
Security Agreement]

 

 

EXHIBIT A

 

Form of Joinder

Joinder to Security Agreement

 

The undersigned,                                                       ,
hereby joins in the execution of that certain Security Agreement dated as of October      ,
2007 (as amended, restated, supplemented or otherwise modified from time to
time, the “Security Agreement”) by Averion
International Corp., a Delaware corporation, the other Debtors (as defined
therein) party thereto, the Buyers (as defined therein) party thereto and                                    ,
in its capacity as Collateral Agent for the Buyers. By executing this Joinder,
the undersigned hereby agrees that it is a Debtor thereunder and agrees to be
bound by all of the terms and provisions of the Security Agreement.

 

The undersigned represents and warrants to Secured Party that:

 

(a)                                  all of the Equipment,
Inventory and Goods owned by such Debtor is located at the places as specified
on Schedule I attached hereto;

 

(b)                                 except as disclosed on
Schedule I, none of such Collateral is in the possession of any
bailee, warehousemen, processor or consignee;

 

(c)                                  the chief place of
business, chief executive office and the office where such Debtor keeps its
books and records are located at the place specified on Schedule I;

 

(d)                                 such Debtor (including
any Person acquired by such Debtor) does not do business or has not done
business during the past five years under any tradename or fictitious business
name, except as disclosed on Schedule II;

 

(e)                                  all Copyrights,
Patents and Trademarks owned or licensed by the undersigned are listed in Schedules
III, IV and V, respectively;

 

(f)                                    all Deposit
Accounts, securities accounts, brokerage accounts and other similar accounts
maintained by such Debtor, and the financial institutions at which such
accounts are maintained, are listed on Schedule VI;

 

(g)                                 all Commercial Tort
Claims of such Debtor are listed on Schedule VII;

 

(h)                                 all interests in real
property and mining rights held by such Debtor are listed on Schedule VIII;

 

(i)                                     all Equipment
(including Motor Vehicles) owned by such debtor are listed on Schedule IX;
and

 

(j)                                     all other
representations and warranties made by the Debtors in the Security Agreement
are true, complete and correct in all respects as of the date hereof.

 

A-1

 

	
  

  	
                             ,
  a               
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
  FEIN:

  	
   

  	
   

  
						

 

A-2

 

SCHEDULE I

TO 

SECURITY AGREEMENT

 

UCC Financing Statements; Location of Equipment, Inventory, Goods and
Books and Records; Goods in Possession of Consignees, Bailees, Warehousemen,
Agents and Processors; Debtors’ Legal Names; State of Incorporation;
Organizational Identification Number; Chief Executive Office.

 

I.                                         DEBTOR:  Averion International Corp.

 

	
  1

  	
  Legal Name of Debtor:

  	
  Averion International Corp.

  
	
   

  	
   

  	
   

  
	
  2

  	
  State of Incorporation:

  	
  Delaware

  
	
   

  	
   

  	
   

  
	
  3

  	
  Organizational Identification Number:

  	
  36-4599174

  
	
   

  	
   

  	
   

  
	
  4

  	
  Chief Executive Office:

  	
  225 Turnpike Road, Southborough, MA 01772

  
	
   

  	
   

  	
   

  
	
  5

  	
  Location of Books and Records:

  	
  225 Turnpike Road, Southborough, MA 01772

  
	
   

  	
   

  	
   

  
	
  6

  	
  Locations of Equipment, Inventory and
  Goods:

  	
  225 Turnpike Road, Southborough, MA 01772
  and 800 Westchester Avenue, Suite N341, Rye Brook, NY 10573

  
	
   

  	
   

  	
   

  
	
  7

  	
  Locations of Goods in Possession of
  Consignees, Bailees, Warehousemen, Agents and Processors (including names of
  such consignees, bailees, etc.):

  	
  N/A

  
	
   

  	
   

  	
   

  
	
  8

  	
  Jurisdictions For UCC Filings:

  	
  Delaware, Secretary of State

  

 

I-1

 

SCHEDULE II

TO 

SECURITY AGREEMENT

 

Tradenames and Fictitious Names

(Present and Past Five Years)

 

	
  1.

  	
  Clinical Trials Assistance Corporation

  
	
  2.

  	
  IT&E International Group

  
	
  3.

  	
  IT&E International Group, Inc.

  
	
  4.

  	
  Millennix Inc.

  
	
  5.

  	
  IT&E International Corporation

  
	
  6.

  	
  IT&E International

  
	
  7.

  	
  Averion Inc.

  
	
  8.

  	
  Averion International Corp.

  

 

II-1

 

SCHEDULE III

TO 

SECURITY AGREEMENT

 

U.S. Copyright Registrations; Foreign Copyright Registrations; U.S.
Copyright Applications;

Foreign Copyright Applications; Copyright Licenses

 

U.S. Copyright Registrations

 

N/A

 

Foreign Copyright Registrations

 

N/A

 

U.S. Copyright Applications

 

N/A

 

Foreign Copyright Applications

 

N/A

 

Copyright Licenses

 

N/A

 

 

III-1

 

SCHEDULE IV

TO 

SECURITY AGREEMENT

 

U.S. Patent Registrations; Foreign Patent Registrations; U.S. Patent
Applications; Foreign Patent

Applications; Patent Licenses

 

U.S. Patent Registrations

 

N/A

 

Foreign Patent Registrations

 

N/A

 

U.S. Patent Applications

 

N/A

 

Foreign Patent Applications

 

N/A

 

Patent Licenses

 

N/A

 

IV-1

 

SCHEDULE V

TO 

SECURITY AGREEMENT

 

U.S. Trademark Registrations; Foreign Trademark Registrations; U.S.
Trademark Applications;

Foreign Trademark Applications; Trademark Licenses

 

U.S. Trademark Registrations

 

N/A

 

Foreign Trademark Registrations

 

N/A

 

U.S. Trademark Applications

 

N/A

 

Foreign Trademark Applications

 

N/A

 

Trademark Licenses

 

N/A

 

V-1

 

SCHEDULE VI

TO 

SECURITY AGREEMENT

 

Depository Accounts and Other Accounts

 

	
  Name of Account

  Holder

  	
   

  	
  Bank

  	
   

  	
  Type of Account (with

  general description)

  	
   

  	
  Account

  Number

  	
   

  
	
  Company

  	
   

  	
  Bank of
  America

  	
   

  	
  Checking

  	
   

  	
  000006315712

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Company

  	
   

  	
  Bank of
  America

  	
   

  	
  Investment

  	
   

  	
  004605304233

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Company

  	
   

  	
  Bank of
  America

  	
   

  	
  Checking

  	
   

  	
  009420189314

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Company

  	
   

  	
  Bank of
  America

  	
   

  	
  Checking

  	
   

  	
  009481383807

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Company

  	
   

  	
  Bank of
  America

  	
   

  	
  Checking

  	
   

  	
  000027057742

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Company

  	
   

  	
  Bank of
  America

  	
   

  	
  Checking

  	
   

  	
  009518744101

  	
   

  

 

VI-1

 

SCHEDULE VII

TO 

SECURITY AGREEMENT

 

Commercial Tort Claims

 

N/A

 

VII-1

 

SCHEDULE VIII

TO 

SECURITY AGREEMENT

 

Interests in Real Property

 

1.                                       Executive
Offices in Southborough, Massachusetts:

 

The Company leases its executive offices
which are located at 225 Turnpike Road, Southborough, MA 01772. The Company
leases approximately 63,900 square feet at a base rent of $85,168 per month,
commencing January 2007 through June 2010. The rent increases to
$95,714 per month for the remainder of the lease through December 2012.

 

2.                                       Facility
in Rye Brook, New York:

 

The Company leases a facility located at 800
Westchester Avenue, Suite N341, Rye Brook, NY 10573. The Company leases
approximately 15,900 square feet at a base rent of $34,400 per month.

 

3.                                       Facility in
Solana Beach, California:

 

The Company leases a facility located at 505
Lomas Santa Fe Drive, Suite 200, Solana Beach, CA 92075. The Company
leases approximately 3,500 square feet at a base rent of $7,000 per month.

 

VIII-1

 

SCHEDULE IX

TO 

SECURITY AGREEMENT

 

Titled Equipment

 

N/A

 

IX-1Exhibit 10.50

 

GUARANTY

 

This GUARANTY
(as amended, restated, supplemented, or otherwise modified and in effect from
time to time, this “Guaranty”) is
made as of this 31st day of October, 2007, jointly and severally, by
each of Averion, Inc., a Delaware corporation (“Averion Inc.”) and
IT&E International, a California corporation (“IT&E,” and together with
Averion Inc. and each other person or entity who becomes a party to this
Guaranty by execution of a joinder in the form of Exhibit A
attached hereto, is referred to individually as a “Guarantor” and collectively
as the “Guarantors”) in favor of
Cumulus Investors, LLC, a Nevada limited liability company, on its own behalf
and in its capacity as collateral agent (together with its successors and
assigns in such capacity, the “Collateral
Agent”) for the benefit of the Buyers (as defined in the Purchase
Agreement described below).

 

W I T N E S
S E T H:

 

WHEREAS, as of the date hereof, Buyers have made
certain financial accommodations to AVERION
INTERNATIONAL CORP., a Delaware corporation (the “Company”) and purchased certain secured
senior notes in an original aggregate principal amount of up to $26,000,000
(such notes, together with any promissory notes or other securities issued in
exchange or substitution therefor or replacement thereof, as any of the same may be
amended, supplemented, restated or modified and in effect from time to time,
the “Notes”);

 

WHEREAS, the Notes are being acquired by Buyers
pursuant to a Securities Purchase Agreement dated as of October 31, 2007
among the Buyers and the Company (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the “Purchase Agreement”);

 

WHEREAS, pursuant to a Pledge Agreement of even date
herewith (as the same may be amended, restated, supplemented or otherwise
modified and in effect from time to time, the “Company Pledge Agreement”) by the Company in favor of the
Collateral Agent, the Company has pledged and granted a lien on and security
interest in all of the capital stock and other equity interests of each of
Averion Inc. and IT&E to Collateral Agent, for its benefit and the benefit
of the Buyers;

 

WHEREAS, pursuant to a Security Agreement of even
date herewith (as the same may be amended, restated, supplemented or
otherwise modified and in effect from time to time, the “Security Agreement”) by the “Debtors” (as defined therein), in favor of
the Collateral Agent, each of the Debtors (including the Company and the
Guarantors) has granted the Collateral Agent, for its benefit and the benefit
of the Buyers, a first priority security interest in, lien upon and pledge of
each of its rights in the Collateral (as defined in the Security Agreement);
and

 

WHEREAS, the Guarantors are direct or indirect
subsidiaries of the Company and, as such, will derive substantial benefit and
advantage from the financial accommodations available to the Company set forth
in the Purchase Agreement, the Notes and the other Transaction Documents, and
it will be to each Guarantor’s direct interest and economic benefit to assist
the Company in procuring said financial accommodations from Buyers.

 

 

NOW, THEREFORE, for and in consideration of the premises
and in order to induce Buyers to purchase the notes and make the financial
accommodations contemplated by the Purchase Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby jointly and severally agrees as follows:

 

1.                                       Definitions:  Capitalized terms used herein
without definition and defined in the Purchase Agreement are used herein as
defined therein. In addition, as used herein:

 

“Bankruptcy Code”
shall mean the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. §101, et
seq.), as amended and in effect from time to time thereunder.

 

“Event of Default”
shall have the meaning ascribed to such term in the Notes.

 

“Obligations”
shall mean (i) all obligations, liabilities and indebtedness of every
nature of the Company from time to time owed or owing to the Buyers and
Collateral Agent, including, without limitation, all obligations, liabilities
and indebtedness of every nature of the Company under the Security Documents,
the Purchase Agreement, the Notes, the Registration Rights Agreement and the
other Transaction Documents, including, without limitation, the principal
amount of all debts, claims and indebtedness, accrued and unpaid interest and
all fees, taxes, indemnities, costs and expenses, whether primary, secondary,
direct, contingent, fixed or otherwise, heretofore, now and/or from time to
time hereafter owing, due or payable whether before or after the filing of a
bankruptcy, insolvency or similar proceeding under applicable federal, state,
foreign or other law and whether or not an allowed claim in any such
proceeding, and (ii) all obligations, liabilities and indebtedness of
every nature of the Guarantors from time to time owed or owing to the Buyers
and/or Collateral Agent, including, without limitation, all obligations,
liabilities and indebtedness of every nature of the Guarantors under or in
respect of this Guaranty, the Security Documents, the Purchase Agreement, the
Notes, the Registration Rights Agreement and the other Transaction Documents,
as the case may be, including, without limitation, the principal amount of
all debts, claims and indebtedness, accrued and unpaid interest and all fees,
taxes, indemnities, costs and expenses, whether primary, secondary, direct,
contingent, fixed or otherwise, heretofore, now and/or from time to time
hereafter owing, due or payable whether before or after the filing of a
bankruptcy, insolvency or similar proceeding under applicable federal, state,
foreign or other law and whether or not an allowed claim in any such
proceeding.

 

2.                                       Guaranty of Payment.

 

(a)                                  Each Guarantor, jointly and severally, hereby
unconditionally and irrevocably guaranties (as primary obligor and not merely
as a surety) the full and prompt payment and performance to Buyers and
Collateral Agent, on behalf of itself and in its capacity as collateral agent
for the benefit of Buyers, when due, upon demand, at maturity or by reason of
acceleration or otherwise and at all times thereafter, of any and all of the
Obligations.

 

(b)                                 Each Guarantor acknowledges that valuable
consideration supports this Guaranty, including, without limitation, the
consideration set forth in the recitals above, as well as any commitment to
lend, extension of credit or other financial accommodation, whether

 

2

 

heretofore
or hereafter made by Buyers to the Company; any extension, renewal or
replacement of any of the Obligations; any forbearance with respect to any of
the Obligations or otherwise; any cancellation of an existing guaranty; any
purchase of any of the Company’s assets by any Buyer or Collateral Agent; or
any other valuable consideration.

 

(c)                                  Each Guarantor agrees that all payments under
this Guaranty shall be made in United States currency and in the same manner as
provided for the Obligations.

 

(d)                                 Notwithstanding any provision of this
Guaranty to the contrary, it is intended that this Guaranty, and any interests,
liens and security interests granted by any Guarantor as security for this
Guaranty, not constitute a “Fraudulent Conveyance” (as defined below) in the
event that this Guaranty or such interest is subject to the Bankruptcy Code or
any applicable fraudulent conveyance or fraudulent transfer law or similar law
of any state. Consequently, Guarantors, Collateral Agent and Buyers agree that
if this Guaranty, or any such interests, liens or security interests securing
this Guaranty, would, but for the application of this sentence, constitute a
Fraudulent Conveyance, this Guaranty and each such lien and security interest
shall be valid and enforceable only to the maximum extent that would not cause
this Guaranty or such interest, lien or security interest to constitute a
Fraudulent Conveyance, and this Guaranty shall automatically be deemed to have
been amended accordingly at all relevant times. For purposes hereof, “Fraudulent Conveyance” means a fraudulent
conveyance under Section 548 of the Bankruptcy Code or a fraudulent
conveyance or fraudulent transfer under the provisions of any applicable
fraudulent conveyance or fraudulent transfer law or similar law of any state,
as in effect from time to time.

 

3.                                       Costs and Expenses. Each Guarantor, jointly and severally,
agrees to pay on demand, all reasonable costs and expenses of every kind
incurred by any Buyer or Collateral Agent: (a) in enforcing this Guaranty,
(b) in collecting any of the Obligations from the Company or any
Guarantor, and (c) in realizing upon or protecting or preserving any
collateral for this Guaranty or for payment of any of the Obligations. “Costs and expenses” as used in the
preceding sentence shall include, without limitation, reasonable attorneys’
fees incurred by any Buyer or Collateral Agent in retaining counsel for advice,
suit, appeal, any insolvency or other proceedings under the Bankruptcy Code or
otherwise, or for any purpose specified in the preceding sentence.

 

4.                                       Nature of Guaranty: Continuing, Absolute and
Unconditional.

 

(a)                                  This Guaranty is and is intended to be a
continuing guaranty of payment of the Obligations, and not of collectibility,
and is intended to be independent of and in addition to any other guaranty,
indorsement, collateral or other agreement held by Buyers or Collateral Agent
therefor or with respect thereto, whether or not furnished by a Guarantor. None
of Buyers and Collateral Agent shall be required to prosecute collection, enforcement
or other remedies against Company, any other Guarantor or guarantor of the
Obligations or any other person or entity, or to enforce or resort to any of
the Collateral or other rights or remedies pertaining thereto, before calling
on a Guarantor for payment. The obligations of each Guarantor to repay the
Obligations hereunder shall be unconditional. Each Guarantor shall have no
right of subrogation with respect to any payments made by any Guarantor
hereunder until the termination of this Guaranty in accordance with Section 8
below, and hereby waives any benefit of, and any

 

3

 

right
to participate in, any security or collateral given to Buyers to secure payment
of the Obligations, and each Guarantor agrees that it will not take any action
to enforce any obligations of the Company to any Guarantor prior to the
Obligations being finally and irrevocably paid in full in cash, provided
that, in the event of the bankruptcy or insolvency of the Company, Collateral
Agent, for the benefit of itself and Buyers, and Buyers shall be entitled
notwithstanding the foregoing, to file in the name of any Guarantor or in its
own name a claim for any and all indebtedness owing to a Guarantor by the
Company (exclusive of this Guaranty), vote such claim and to apply the proceeds
of any such claim to the Obligations.

 

(b)                                 For the further security of Buyers and
without in any way diminishing the liability of the Guarantors, following the
occurrence and during the continuance of an Event of Default, all debts and
liabilities, present or future of the Company to the Guarantors and all monies
received from the Company or for its account by the Guarantors in respect
thereof shall be received in trust for Buyers and Collateral Agent and forthwith
upon receipt shall be paid over to Collateral Agent, for its benefit and in its
capacity as collateral agent for the benefit of Buyers, until all of the
Obligations have been finally and irrevocably paid in full in cash. This
assignment and postponement is independent of and severable from this Guaranty
and shall remain in full effect whether or not any Guarantor is liable for any
amount under this Guaranty.

 

(c)                                  This Guaranty is absolute and unconditional
and shall not be changed or affected by any representation, oral agreement, act
or thing whatsoever, except as herein provided. This Guaranty is intended by
the Guarantors to be the final, complete and exclusive expression of the
guaranty agreement between the Guarantors and Buyers. No modification or
amendment of any provision of this Guaranty shall be effective against any
party hereto unless in writing and signed by a duly authorized officer of such
party.

 

(d)                                 Each Guarantor hereby releases the Company
from all, and agrees not to assert or enforce (whether by or in a legal or
equitable proceeding or otherwise) any “claims” (as defined in Section 101(5) of
the Bankruptcy Code), whether arising under any law, ordinance, rule,
regulation, order, policy or other requirement of any domestic or foreign
government or any instrumentality or agency thereof, having jurisdiction over
the conduct of its business or assets or otherwise, to which the Guarantors are
or would at any time be entitled by virtue of its obligations hereunder, any
payment made pursuant hereto or the exercise by any Buyer or Collateral Agent
of its rights with respect to the Collateral, including any such claims to
which such Guarantors may be entitled as a result of any right of
subrogation, exoneration or reimbursement.

 

5.                                       Certain Rights and Obligations.

 

(a)                                  Each Guarantor acknowledges and agrees that
Buyers and Collateral Agent, for its benefit and as collateral agent for the
benefit of Buyers, may, without notice, demand or any reservation of rights
against such Guarantor and without affecting such Guarantor’s obligations
hereunder, from time to time:

 

(i)                                     renew, extend, increase, accelerate or
otherwise change the time for payment of, the terms of or the interest on the
Obligations or any part thereof or grant other indulgences to the Company
or others;

 

4

 

(ii)                                  accept from any person or entity and hold
collateral for the payment of the Obligations or any part thereof, and
modify, exchange, enforce or refrain from enforcing, or release, compromise,
settle, waive, subordinate or surrender, with or without consideration, such
collateral or any part thereof;

 

(iii)                               accept and hold any indorsement or guaranty
of payment of the Obligations or any part thereof, and discharge, release
or substitute any such obligation of any such indorser or guarantor, or
discharge, release or compromise any Guarantor, or any other person or entity
who has given any security interest in any collateral as security for the
payment of the Obligations or any part thereof, or any other person or
entity in any way obligated to pay the Obligations or any part thereof,
and enforce or refrain from enforcing, or compromise or modify, the terms of
any obligation of any such indorser, guarantor, or person or entity;

 

(iv)                              dispose of any and all collateral securing
the Obligations in any manner as the Collateral Agent, in its sole discretion, may deem
appropriate, and direct the order or manner of such disposition and the
enforcement of any and all endorsements and guaranties relating to the
Obligations or any part thereof as Collateral Agent in its sole discretion
may determine;

 

(v)                                 (a) sell, exchange, enforce, waive,
substitute, liquidate, terminate, release, abandon, fail to perfect,
subordinate, accept, substitute, surrender, exchange, affect, impair or
otherwise alter or release any collateral for any Obligation or any other
guaranty therefor in any manner, (b) receive, take and hold additional
collateral to secure any Obligation, (c) add, release or substitute any
one or more other Guarantors, makers or endorsers of any Obligation or any part thereof
and (d) otherwise deal in any manner with the Company and any other
Guarantor, maker or endorser of any Obligation or any part thereof;

 

(vi)                              settle, release, compromise, collect or
otherwise liquidate the Obligations;

 

(vii)                           determine the manner, amount and time of
application of payments and credits, if any, to be made on all or any part of
any component or components of the Obligations (whether principal, interest,
fees, costs, and expenses, or otherwise), including, without limitation, the
application of payments received from any source to the payment of indebtedness
other than the Obligations even though Buyers might lawfully have elected to
apply such payments to the Obligations to amounts which are not covered by this
Guaranty;

 

(viii)                        take advantage or refrain from taking
advantage of any security or accept or make or refrain from accepting or making
any compositions or arrangements when and in such manner as Collateral Agent,
in its sole discretion, may deem appropriate;

 

(ix)                                (a) modify, amend, supplement or
otherwise change, (b) accelerate or otherwise change the time of payment,
or (c) waive or otherwise consent to noncompliance with any Obligation or
any Transaction Document pursuant to the terms thereof;

 

and
generally do or refrain from doing any act or thing which might otherwise, at
law or in equity, release the liability of such Guarantor as a guarantor or
surety in whole or in part, and in no case shall Buyers or Collateral Agent be
responsible or shall any Guarantor be released either

 

5

 

in
whole or in part for any act or omission in connection with Buyers or
Collateral Agent having sold any security at less than its value.

 

(b)                                 Following the occurrence of an Event of
Default, and upon demand by Collateral Agent, each Guarantor, jointly and
severally, hereby agrees to pay the Obligations to the extent hereinafter
provided:

 

(i)                                     without deduction by reason of any setoff,
defense (other than payment) or counterclaim of the Company or any other
Guarantor;

 

(ii)                                  without requiring presentment, protest or
notice of nonpayment or notice of default to any Guarantor, to the Company or
to any other person or entity;

 

(iii)                               without demand for payment or proof of such
demand or filing of claims with a court in the event of receivership,
bankruptcy or reorganization of the Company or any other Guarantor;

 

(iv)                              without requiring Buyers or Collateral Agent
to resort first to the Company (this being a guaranty of payment and not of
collection), to any other Guarantor, or to any other guaranty or any collateral
which Buyers or Collateral Agent may hold;

 

(v)                                 without requiring notice of acceptance hereof
or assent hereto by any Buyer or Collateral Agent; and

 

(vi)                              without requiring notice that any of the
Obligations has been incurred, extended or continued or of the reliance by any
Buyer or Collateral Agent upon this Guaranty;

 

all
of which each Guarantor hereby waives.

 

(c)                                  Each Guarantor’s obligation hereunder shall
not be affected by any of the following, all of which such Guarantor hereby
waives:

 

(i)                                     any failure to perfect or continue the
perfection of any security interest in or other lien on any collateral securing
payment of any of the Obligations or any Guarantor’s obligation hereunder;

 

(ii)                                  the invalidity, unenforceability, propriety
of manner of enforcement of, or loss or change in priority of any document or
any such security interest or other lien or guaranty of the Obligations;

 

(iii)                               any failure to protect, preserve or insure
any such collateral;

 

(iv)                              failure of a Guarantor to receive notice of
any intended disposition of such collateral;

 

6

 

(v)                                 any defense arising by reason of the
cessation from any cause whatsoever of liability of the Company including,
without limitation, any failure, negligence or omission by any Buyer or
Collateral Agent in enforcing its claims against the Company;

 

(vi)                              any release, settlement or compromise of any
obligation of the Company, any other Guarantor or any other guarantor of the
Obligations;

 

(vii)                           the invalidity or unenforceability of any of
the Obligations;

 

(viii)                        any change of ownership of the Company, any
other Guarantor or any other guarantor of the Obligations or the insolvency,
bankruptcy or any other change in the legal status of the Company, any other
Guarantor or any other guarantor of the Obligations;

 

(ix)                                any change in, or the imposition of, any law,
decree, regulation or other governmental act which does or might impair, delay
or in any way affect the validity, enforceability or the payment when due of
the Obligations;

 

(x)                                   the existence of any claim, setoff or other
rights which the Guarantor, Company, any other Guarantor or guarantor of the
Obligations or any other person or entity may have at any time against any
Buyer, Collateral Agent, the Company, any other Guarantor or guarantor in
connection herewith or any unrelated transaction;

 

(xi)                                any Buyer’s or Collateral Agent’s election in
any case instituted under chapter 11 of the Bankruptcy Code, of the application
of section 1111(b)(2) of the Bankruptcy Code;

 

(xii)                             any use of cash collateral, or grant of a
security interest by the Company, as debtor in possession, under sections 363
or 364 of the Bankruptcy Code;

 

(xiii)                          the disallowance of all or any portion of any
of any Buyer’s or Collateral Agent’s claims for repayment of the Obligations
under sections 502 or 506 of the Bankruptcy Code;

 

(xiv)                         any workout, insolvency, bankruptcy,
proceeding, reorganization, arrangement, liquidation or dissolution by or
against the Company, any other Guarantor or any of the Company’s other
Subsidiaries or any procedure, agreement, order, stipulation, election, action
or omission thereunder, including any discharge or disallowance of, or bar or
stay against collecting, any Obligation (or any interest thereon) in or as a
result of any such proceeding;

 

(xv)                            any other fact or circumstance which might
otherwise constitute grounds at law or equity for the discharge or release of a
Guarantor from its obligations hereunder, all whether or not such Guarantor
shall have had notice or knowledge of any act or omission referred to in the
foregoing clauses (i) through (xvi) of this Section 5(c).

 

6.                                       Representations and Warranties. Each Guarantor further represents and
warrants to Buyers and Collateral Agent that: (a) such Guarantor is a
corporation or other entity duly incorporated or organized, as applicable,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or formation, as applicable, and has full power, authority and

 

7

 

legal
right to own its property and assets and to transact the business in which it
is engaged; (b) such Guarantor has full power, authority and legal right
to execute and deliver, and to perform its obligations under, this
Guaranty, and has taken all necessary action to authorize the guarantee
hereunder on the terms and conditions of this Guaranty and to authorize the
execution, delivery and performance of this Guaranty; (c) this Guaranty
has been duly executed and delivered by such Guarantor and constitutes a legal,
valid and binding obligation of such Guarantor enforceable against such
Guarantor in accordance with its terms, except to the extent that such
enforceability is subject to applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance and moratorium laws and other laws of general application
affecting enforcement of creditors’ rights generally, or the availability of
equitable remedies, which are subject to the discretion of the court before
which an action may be brought; and (d) the execution, delivery and
performance by each Guarantor of this Guaranty do not require any action by or
in respect of, or filing with, any governmental body, agency or official and do
not violate, conflict with or cause a breach or a default under any provision
of applicable law or regulation or of the organizational documents of any
Guarantor or of any agreement, judgment, injunction, order, decree or other
instrument binding upon it.

 

7.                                       Negative Covenants. Each Guarantor covenants with Buyers and
Collateral Agent that such Guarantor shall not grant any security interest in
or permit any lien, claim or encumbrance upon any of its assets in favor of any
person or entity other than liens and security interests in favor of Buyers and
Collateral Agent and other Permitted Liens.

 

8.                                       Termination. This Guaranty shall not terminate until such time, if any, as (i) all
Indebtedness under the Notes secured hereby shall be finally and irrevocably
paid in full in cash, (ii) no Notes shall remain outstanding, (iii) all
commitments to lend or make financial accommodations under the Purchase
Agreement shall have terminated and (iv) there shall exist no other
outstanding payment or reimbursement obligations (other than contingent
indemnification obligations for which no claims shall have been asserted) of
the Company or the Guarantors to the Collateral Agent under any of the
Transaction Documents. Thereafter, but subject to the following, Collateral
Agent, on its behalf and as agent for Buyers, shall take such action and
execute such documents as the Guarantors may reasonably request (and at
the Guarantors’ cost and expense) in order to evidence the termination of this
Guaranty. Each Guarantor further agrees that, to the extent that the Company
makes a payment or payments to Buyers or Collateral Agent on the Obligations,
or Buyers or Collateral Agent receive any proceeds of collateral securing the
Obligations or any other payments with respect to the Obligations, which
payment or receipt of proceeds or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
to be returned or repaid to the Company, its estate, trustee, receiver, debtor
in possession or any other person or entity, including, without limitation, the
Guarantors, under any insolvency or bankruptcy law, state or federal law,
common law or equitable cause, then to the extent of such payment, return or
repayment, the obligation or part thereof which has been paid, reduced or
satisfied by such amount shall be reinstated and continued in full force and
effect as of the date when such initial payment, reduction or satisfaction
occurred, and this Guaranty shall continue in full force notwithstanding any
contrary action which may have been taken by any Buyer or Collateral Agent
in reliance upon such payment, and any such contrary action so taken shall be
without prejudice to any Buyer’s or Collateral Agent’s rights under this
Guaranty and shall be deemed to have been conditioned upon such payment having
become final and irrevocable.

 

8

 

9.                                       Guaranty of Performance. Each Guarantor also guaranties the full,
prompt and unconditional performance of all obligations and agreements of every
kind owed or hereafter to be owed by the Company to Buyers and Collateral Agent
under the Purchase Agreement, the Registration Rights Agreement, Security
Documents, the Notes and the other Transaction Documents. Every provision for
the benefit of Buyers and Collateral Agent contained in this Guaranty shall
apply to the guaranty of performance given in this paragraph.

 

10.                                 Waivers; Reliance. Each Guarantor hereby unconditionally and
irrevocably waives and agrees not to assert any claim, defense, setoff or
counterclaim based on diligence, promptness, presentment, requirements for any
demand or notice hereunder including any of the following:  (a) any demand for payment or
performance and protest and notice of protest, (b) any notice of
acceptance, (c) any presentment, demand, protest or further or other
requirements of any kind with respect to any Obligation (including any accrued
but unpaid interest thereon) becoming immediately due and payable and (d) any
other notice in respect of any Obligation or any part thereof, and any
defense arising by reason of any disability or other defense of the Company or
any other Guarantor. Each Guarantor hereby assumes responsibility for keeping
itself informed of the financial condition of the Company, each other Guarantor
and any other guarantor, maker or endorser of any Obligation or any part thereof,
and of all other circumstances bearing upon the risk of nonpayment of any
Obligation or any part thereof that diligent inquiry would reveal, and
each Guarantor hereby agrees that no Collateral Agent or Buyer shall have any
duty to advise any Guarantor of information known to it regarding such
condition or any such circumstances.

 

11.                                 Miscellaneous.

 

(a)                                  The terms “Company” and “Guarantor” as used
in this Guaranty shall include: (i) any successor individual or
individuals, association, partnership, limited liability company or corporation
to which all or substantially all of the business or assets of the Company or
such Guarantor shall have been transferred and (ii) any other association,
partnership, limited liability company, corporation or entity into or with
which the Company or such Guarantor shall have been merged, consolidated,
reorganized, or absorbed.

 

(b)                                 Without limiting any other right of any Buyer
or Collateral Agent, whenever any Buyer or Collateral Agent has the right to
declare any of the Obligations to be immediately due and payable (whether or
not it has been so declared), Collateral Agent, on its behalf and in its
capacity as agent for the benefit of Buyers, at its sole election without
notice to the undersigned may appropriate and set off against the
Obligations:

 

(i)                                     any and all indebtedness or other moneys due
or to become due to any Guarantor by any Buyer or Collateral Agent in any
capacity; and

 

(ii)                                  any credits or other property belonging to
any Guarantor (including all account balances, whether provisional or final and
whether or not collected or available) at any time held by or coming into the
possession of any Buyer or Collateral Agent, or any affiliate of any Buyer or
Collateral Agent, whether for deposit or otherwise;

 

9

 

whether
or not the Obligations or the obligation to pay such moneys owed by any Buyer
or Collateral Agent is then due, and the applicable Buyer or Collateral Agent
shall be deemed to have exercised such right of set off immediately at the time
of such election even though any charge therefor is made or entered on such
Buyer’s or Collateral Agent’s records subsequent thereto. Collateral Agent
agrees to notify such Guarantor in a reasonably practicable time of any such
set-off; however, failure to so notify such Guarantor shall not affect the
validity of any set-off.

 

(c)                                  Each Guarantor’s obligation hereunder is to
pay the Obligations in full in cash when due according to the Notes, the
Security Documents, the other Transaction Documents and the other agreements,
documents and instruments governing the Obligations to the extent provided
herein, and shall not be affected by any stay or extension of time for payment
by the Company or any other Guarantor resulting from any proceeding under the
Bankruptcy Code or any similar law.

 

(d)                                 No course of dealing between the Company or
any Guarantor and Buyers or Collateral Agent and no act, delay or omission by
Buyers or Collateral Agent in exercising any right or remedy hereunder or with
respect to any of the Obligations shall operate as a waiver thereof or of any
other right or remedy, and no single or partial exercise thereof shall preclude
any other or further exercise thereof or the exercise of any other right or
remedy. Any Buyer or Collateral Agent may remedy any default by the
Company under any agreement with the Company or with respect to any of the
Obligations in any reasonable manner without waiving the default remedied and
without waiving any other prior or subsequent default by the Company. All
rights and remedies of Buyers and Collateral Agent hereunder are cumulative.

 

(e)                                  This Guaranty shall inure to the benefit of
each Buyer and Collateral Agent, and each such entity’s successors and assigns.

 

(f)                                    Collateral Agent may assign its rights
hereunder upon written notice to Guarantors, in which event such assignee shall
be deemed to be Collateral Agent hereunder with respect to such assigned
rights.

 

(g)                                 Captions of the sections of this Guaranty are
solely for the convenience of the parties hereto, and are not an aid in the
interpretation of this Guaranty and do not constitute part of the
agreement of the parties set forth herein.

 

(h)                                 If any provision of this Guaranty is
unenforceable in whole or in part for any reason, the remaining provisions
shall continue to be effective.

 

(i)                                     All questions concerning the construction,
validity, enforcement and interpretation of this Guaranty shall be governed by
the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New
York or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of New York. Each Guarantor hereby
irrevocably submits to the non-exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives,

 

10

 

and
agrees not to assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court, that such suit,
action or proceeding is brought in an inconvenient forum or that the venue of
such suit, action or proceeding is improper. Each Guarantor hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Notwithstanding the foregoing,
the Collateral Agent may enforce its rights or remedies in any other
jurisdiction.

 

(j)                                     Notices. All notices, approvals, requests, demands and other communications
hereunder shall be delivered or made in the manner set forth in, and shall be
effective in accordance with the terms of, the Purchase Agreement or, in the
case of communications to the Collateral Agent, directed to the notice address
set forth in the Security Agreement; provided, that any communication shall be
effective as to any Guarantor if made or sent to the Company in accordance with
the foregoing.

 

12.                                 WAIVERS.

 

(a)                                  EACH GUARANTOR WAIVES THE
BENEFIT OF ALL VALUATION, APPRAISAL AND EXEMPTION LAWS.

 

(b)                                 UPON THE OCCURRENCE OF A
DEFAULT OR EVENT OF DEFAULT, EACH GUARANTOR HEREBY WAIVES ALL RIGHTS TO NOTICE
AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY ANY BUYER OR COLLATERAL AGENT,
ON ITS BEHALF AND IN ITS CAPACITY AS AGENT FOR THE BENEFIT OF BUYERS, OF ITS
RIGHTS TO REPOSSESS THE COLLATERAL WITHOUT JUDICIAL PROCESS OR TO REPLEVY,
ATTACH OR LEVY UPON THE COLLATERAL WITHOUT PRIOR NOTICE OR HEARING. EACH
GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY COUNSEL OF ITS CHOICE WITH
RESPECT TO THIS TRANSACTION AND THIS GUARANTY.

 

(c)                                  EACH GUARANTOR WAIVES ITS
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS GUARANTY, OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN
ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY BUYER OR
COLLATERAL AGENT. EACH GUARANTOR AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION
SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING,
EACH GUARANTOR FURTHER AGREES THAT ITS RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS GUARANTY OR ANY PROVISION HEREOF. THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS GUARANTY.

 

11

 

13.                                 Collateral Agent. The terms and provisions of Section 5.12
of the Security Agreement which set forth the appointment of the Collateral
Agent and the indemnifications to which the Collateral Agent is entitled are
hereby incorporated by reference herein as if fully set forth therein.

 

14.                                 Payments Free of Taxes.

 

(a)                                  Definitions. In this Section 14:

 

(i)                                     “Excluded
Taxes” means, with respect to the Collateral Agent or the Buyers, or
any other recipient of any payment to be made by or on account of any
obligations of any Guarantor under this Guaranty, or under any other Security
Document, income or franchise taxes imposed on (or measured by) its net income
by the United States of America or such other jurisdiction under the laws of
which such recipient is organized or in which its principal office is located.

 

(ii)                                  “Governmental
Authority” means the government of the United States of America or
any other nation, or any political subdivision thereof, whether state or local,
or any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government over the
Company or any of its Subsidiaries, or any of their respective properties,
assets or undertakings.

 

(iii)                               “Indemnified
Taxes” means Taxes other than Excluded Taxes.

 

(iv)                              “Taxes”
means any and all present or future taxes, levies, imposts, duties, deductions,
charges or withholdings imposed by any Governmental Authority.

 

(b)                                 Any and all payments by or on account of any
obligation of any of the Guarantors under this Guaranty or any other Security
Document shall be made without any set-off, counterclaim or deduction and free
and clear of and without deduction for any Indemnified Taxes; provided that if
any Guarantor shall be required to deduct any Indemnified Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 14(b)), the Collateral
Agent or Buyers, as applicable, receives an amount equal to the sum it would
have received had no such deductions been made, (ii) such Guarantor shall
make such deductions and (iii) such Guarantor shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.

 

(c)                                  Indemnification by the Guarantors. Each Guarantor shall indemnify the
Collateral Agent and the Buyers, within ten (10) days after written demand
therefor, for the full amount of any Indemnified Taxes paid by the Collateral
Agent or Buyers, as applicable, on or with respect to any payment by or on
account of any obligation of such Guarantor under this Guaranty and the other
Security Documents (including Indemnified Taxes or imposed or asserted on or
attributable to amounts payable under this Section 14) and any penalties,
interest and expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate of

 

12

 

the
Collateral Agent or any Buyer as to the amount of such payment or liability
under this Section 14 shall be delivered to such Guarantor and shall be
conclusive absent manifest error.

 

15.                                 Counterparts. This Guaranty may be executed in two
or more identical counterparts, all of which shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to each other party; provided that a facsimile, .pdf
or similar electronically transmitted signature shall be considered due
execution and shall be binding upon the signatory thereto with the same force
and effect as if the signature were an original signature.

 

- Remainder
of page Intentionally Left Blank; Signature Page Follows -

 

13

 

IN WITNESS WHEREOF, Guarantors have executed this
Guaranty as of the date first written above.

 

	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  AVERION INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip T. Lavin, Ph.D.

  	
   

  
	
   

  	
  Name:

  	
   Philip T. Lavin,
  Ph.D.

  	
   

  
	
   

  	
  Title:

  	
   Chief Executive
  Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  IT&E INTERNATIONAL, a California

  corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Philip T. Lavin, Ph.D.

  	
   

  
	
   

  	
  Name:

  	
   Philip T. Lavin,
  Ph.D.

  	
   

  
	
   

  	
  Title:

  	
   Chief Executive
  Officer

  	
   

  
						

 

[Signature Page to Guaranty]

 

 

EXHIBIT A

 

FORM OF
JOINDER

JOINDER TO GUARANTY

 

The undersigned, [                  ]
a [                  ],
hereby joins in the execution of that certain Guaranty dated as of October    ,
2007 (the “Guaranty”), by each of [              ], a [         ], [                ], a [       ], and each other person or entity that
becomes a Guarantor thereunder after the date and pursuant to the terms
thereof, to and in favor of                             ,
a                       ,
as Collateral Agent. By executing this Joinder, the undersigned hereby agrees
that it is a Guarantor thereunder with the same force and effect as if
originally named therein as a Guarantor. The undersigned agrees to be bound by
all of the terms and provisions of the Guaranty and represents and warrants
that the representations and warranties set forth in Section 6 of
the Guaranty are, with respect to the undersigned, true and correct as of the
date hereof. Each reference to a Guarantor in the Guaranty shall be deemed to
include the undersigned.

 

In Witness Whereof, the undersigned has executed
this Joinder this      day of               ,
200  .

 

	
   

  	
   

  	
   

  

 

A-1

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