EXECUTION VERSION

 

GUARANTY AND SECURITY AGREEMENT

 

This GUARANTY AND SECURITY AGREEMENT (this “Agreement”), dated as of July 19,
2012, among the Persons listed on the signature pages hereof as “Grantors” and
those additional entities that hereafter become parties hereto by executing the
form of Joinder attached hereto as Annex 1 (each, a “Grantor” and collectively,
the “Grantors”), and NTR METALS, LLC, a Texas limited liability company
(together with its successors and assigns, “Secured Party” or “Lender”).

 

WITNESSETH:

 

WHEREAS, pursuant to that certain Loan Agreement of even date herewith (as
amended, restated, supplemented, or otherwise modified from time to time, the
“Loan Agreement”) by and between DGSE COMPANIES, INC., as borrower (“Borrower”),
and Lender, Lender has agreed to make certain financial accommodations available
to Borrower from time to time pursuant to the terms and conditions thereof;

 

WHEREAS, in order to induce Lender to enter into the Loan Agreement and the
other Loan Documents and to induce Lender to make financial accommodations to
Borrower as provided for in the Loan Agreement and the other Loan Documents, (a)
each Grantor (other than Borrower) has agreed to guaranty the Guarantied
Obligations, and (b) each Grantor has agreed to grant to Secured Party a
continuing security interest in and to the Collateral in order to secure the
prompt and complete payment, observance and performance of, among other things,
the Secured Obligations; and

 

WHEREAS, each Grantor (other than Borrower) is a Subsidiary of Borrower and, as
such, will benefit by virtue of the financial accommodations extended to
Borrower by Lender.

 

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

 

1.           Definitions; Construction.

 

(a)          The terms Account, Account Debtor, Chattel Paper, Equipment, Farm
Products, Fixtures and Inventory have the meanings ascribed thereto in the UCC.
All other terms used herein without definition shall have the meanings ascribed
thereto in the Loan Agreement. In addition to those terms defined elsewhere in
this Agreement, as used in this Agreement, the following terms shall have the
following meanings:

 

(i)          “Activation Instruction” has the meaning specified therefor in
Section 7(j).

 

(ii)         “Agreement” has the meaning specified therefor in the preamble to
this Agreement.

 

(iii)        “Bankruptcy Code” means title 11 of the United States Code, as in
effect from time to time.

 

(iv)        “Books” means books and records (including each Grantor’s Records
indicating, summarizing, or evidencing such Grantor’s assets (including the
Collateral) or liabilities, each Grantor’s Records relating to such Grantor’s
business operations or financial condition, and each Grantor’s goods or General
Intangibles related to such information).

 

 

 

   

(v)         “Borrower” has the meaning specified therefor in the recitals to
this Agreement.

 

(vi)        “Closing Date” means the date the initial Advances are made under
the Loan Agreement.

 

(vii)       “Collateral” has the meaning specified therefor in Section 3.

 

(viii)      “Collections” means all cash, checks, notes, instruments, and other
items of payment (including insurance proceeds, cash proceeds of asset sales,
rental proceeds, and tax refunds).

 

(ix)         “Commercial Tort Claims” means commercial tort claims (as that term
is defined in the UCC), and includes those commercial tort claims listed on
Schedule 1.

 

(x)          “Controlled Account Bank” has the meaning specified therefor in
Section 7(j).

 

(xi)         “Copyrights” means any and all rights in any works of authorship,
including (A) copyrights and moral rights, (B) copyright registrations and
recordings thereof and all applications in connection therewith including those
listed on Schedule 2, (C) income, license fees, royalties, damages, and payments
now and hereafter due or payable under and with respect thereto, including
payments under all licenses entered into in connection therewith and damages and
payments for past, present, or future infringements thereof, (D) the right to
sue for past, present, and future infringements thereof, and (E) all of each
Grantor’s rights corresponding thereto throughout the world.

 

(xii)        “Copyright Security Agreement” means each Copyright Security
Agreement executed and delivered by Grantors, or any of them, and Secured Party,
in substantially the form of Exhibit A.

 

(xiii)       “Equity Interest” means, with respect to a Person, all of the
shares, options, warrants, interests, participations, or other equivalents
(regardless of how designated) of or in such Person, whether voting or
nonvoting, including capital stock (or other ownership or profit interests or
units).

 

(xiv)       “Foreclosed Grantor” has the meaning specified therefor in
Section 2(i)(iv).

 

(xv)       “General Intangibles” means general intangibles (as that term is
defined in the UCC), and includes payment intangibles, software, contract
rights, rights to payment, rights arising under common law, statutes, or
regulations, choses or things in action, goodwill, Intellectual Property,
Intellectual Property Licenses, purchase orders, customer lists, monies due or
recoverable from pension funds, route lists, rights to payment and other rights
under any royalty or licensing agreements, including Intellectual Property
Licenses, infringement claims, pension plan refunds, pension plan refund claims,
insurance premium rebates, tax refunds, and tax refund claims, interests in a
partnership or limited liability company which do not constitute a security
under Article 8 of the UCC, and any other personal property other than
Commercial Tort Claims, money, Accounts, Chattel Paper, Deposit Accounts, goods,
Investment Property, Negotiable Collateral, and oil, gas, or other minerals
before extraction.

 

(xvi)      “Grantor” and “Grantors” have the respective meanings specified
therefor in the preamble to this Agreement.

 

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(xvii)     “Guarantied Obligations” means all of the Obligations now or
hereafter existing, whether for principal, interest (including any interest that
accrues after the commencement of an Insolvency Proceeding, regardless of
whether allowed or allowable in whole or in part as a claim in any such
Insolvency Proceeding), and all fees, costs and expenses (including counsel fees
and expenses) payable by any Loan Party in accordance with the Loan Documents
(including any fees or expenses that accrue after the commencement of an
Insolvency Proceeding, regardless of whether allowed or allowable in whole or in
part as a claim in any such Insolvency Proceeding), or otherwise. Without
limiting the generality of the foregoing, Guarantied Obligations shall include
all amounts that constitute part of the Guarantied Obligations and would be owed
by Borrower to Secured Party, but for the fact that they are unenforceable or
not allowable, including due to the existence of a bankruptcy, reorganization,
other Insolvency Proceeding or similar proceeding involving Borrower or any
Guarantor.

 

(xviii)    “Guarantor” means each Grantor other than Borrower.

 

(xix)       “Guaranty” means the guaranty set forth in Section 2 hereof.

 

(xx)        “Insolvency Proceeding” means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code or under any other state
or federal bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.

 

(xxi)       “Intellectual Property” means any and all Patents, Copyrights,
Trademarks, trade secrets, know-how, inventions (whether or not patentable),
algorithms, software programs (including source code and object code),
processes, product designs, industrial designs, blueprints, drawings, data,
customer lists, URLs and domain names, specifications, documentations, reports,
catalogs, literature, and any other forms of technology or proprietary
information of any kind, including all rights therein and all applications for
registration or registrations thereof.

 

(xxii)      “Intellectual Property Licenses” means, with respect to any Person
(the “Specified Party”), (A) any licenses or other similar rights provided to
the Specified Party in or with respect to Intellectual Property owned or
controlled by any other Person, and (B) any licenses or other similar rights
provided to any other Person in or with respect to Intellectual Property owned
or controlled by the Specified Party, in each case, including (x) any software
license agreements (other than license agreements for commercially available
off-the-shelf software that is generally available to the public which have been
licensed to a Grantor pursuant to end-user licenses), (y) the license agreements
listed on Schedule 3, and (z) the right to use any of the licenses or other
similar rights described in this definition in connection with the enforcement
of Secured Party’s rights under the Loan Documents.

 

(xxiii)     “Investment Property” means (A) any and all investment property (as
that term is defined in the UCC), and (B) any and all of the following
(regardless of whether classified as investment property under the UCC): all
Pledged Interests, Pledged Operating Agreements, and Pledged Partnership
Agreements.

 

(xxiv)    “Joinder” means each Joinder to this Agreement executed and delivered
by Secured Party and each of the other parties listed on the signature pages
thereto, in substantially the form of Annex 1.

 

(xxv)     “Loan Agreement” has the meaning specified therefor in the recitals to
this Agreement.

 

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(xxvi)    “Negotiable Collateral” means letters of credit, letter-of-credit
rights, instruments, promissory notes, drafts and documents (as each such term
is defined in the UCC).

 

(xxvii)   “Patents” means patents and patent applications, including (A) the
patents and patent applications listed on Schedule 4, (B) all continuations,
divisionals, continuations-in-part, re-examinations, reissues, and renewals
thereof and improvements thereon, (C) all income, royalties, damages and
payments now and hereafter due or payable under and with respect thereto,
including payments under all licenses entered into in connection therewith and
damages and payments for past, present, or future infringements thereof, (D) the
right to sue for past, present, and future infringements thereof, and (E) all of
each Grantor’s rights corresponding thereto throughout the world.

 

(xxviii)    “Patent Security Agreement” means each Patent Security Agreement
executed and delivered by Grantors, or any of them, and Secured Party, in
substantially the form of Exhibit B.

 

(xxix)      “Pledged Companies” means each Person listed on Schedule 5 as a
“Pledged Company”, together with each other Person, all or a portion of whose
Equity Interests are acquired or otherwise owned by a Grantor after the Closing
Date.

 

(xxx)        “Pledged Interests” means all of each Grantor’s right, title and
interest in and to all of the Equity Interests now owned or hereafter acquired
by such Grantor, regardless of class or designation, including in each of the
Pledged Companies, and all substitutions therefor and replacements thereof, all
proceeds thereof and all rights relating thereto, also including any
certificates representing the Equity Interests, the right to receive any
certificates representing any of the Equity Interests, all warrants, options,
share appreciation rights and other rights, contractual or otherwise, in respect
thereof and the right to receive all dividends, distributions of income,
profits, surplus, or other compensation by way of income or liquidating
distributions, in cash or in kind, and all cash, instruments, and other property
from time to time received, receivable, or otherwise distributed in respect of
or in addition to, in substitution of, on account of, or in exchange for any or
all of the foregoing.

 

(xxxi)      “Pledged Interests Addendum” means a Pledged Interests Addendum
substantially in the form of Exhibit C.

 

(xxxii)     “Pledged Operating Agreements” means all of each Grantor’s rights,
powers, and remedies under the limited liability company operating agreements of
each of the Pledged Companies that are limited liability companies.

 

(xxxiii)    “Pledged Partnership Agreements” means all of each Grantor’s rights,
powers, and remedies under the partnership agreements of each of the Pledged
Companies that are partnerships.

 

(xxxiv)     “Proceeds” has the meaning specified therefor in Section 3.

 

(xxxv)      “PTO” means the United States Patent and Trademark Office.

 

(xxxvi)     “Real Property” means any estates or interests in real property now
owned or hereafter acquired by any Grantor or any Subsidiary of any Grantor and
the improvements thereto.

 

(xxxvii)    “Record” means information that is inscribed on a tangible medium or
which is stored in an electronic or other medium and is retrievable in
perceivable form.

 

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(xxxviii)  “Secured Obligations” means each and all of the following: (A) all of
the present and future obligations of each of the Grantors arising from, or
owing under or pursuant to, this Agreement (including the Guaranty), the Loan
Agreement, or any of the other Loan Documents, and (B) all other Obligations of
Borrower and all other Guarantied Obligations of each Guarantor (including, in
the case of each of clauses (A) and (B), attorneys fees and expenses and any
interest, fees, or expenses that accrue after the filing of an Insolvency
Proceeding, regardless of whether allowed or allowable in whole or in part as a
claim in any Insolvency Proceeding).

 

(xxxix)    “Secured Party” has the meaning specified therefor in the preamble to
this Agreement.

 

(xl)         “Secured Party’s Lien” means, collectively, the Liens granted by
Borrower or any of its Subsidiaries to Secured Party under the Loan Documents.

 

(xli)        “Security Interest” has the meaning specified therefor in Section
3.

 

(xlii)      “Supporting Obligations” means supporting obligations (as such term
is defined in the UCC), and includes letters of credit and guaranties issued in
support of Accounts, Chattel Paper, documents, General Intangibles, instruments
or Investment Property.

 

(xliii)     “Trademarks” means any and all trademarks, trade names, registered
trademarks, trademark applications, service marks, registered service marks and
service mark applications, including (A) the trade names, registered trademarks,
trademark applications, registered service marks and service mark applications
listed on Schedule 6, (B) all renewals thereof, (C) all income, royalties,
damages and payments now and hereafter due or payable under and with respect
thereto, including payments under all licenses entered into in connection
therewith and damages and payments for past or future infringements or dilutions
thereof, (D) the right to sue for past, present and future infringements and
dilutions thereof, (E) the goodwill of each Grantor’s business symbolized by the
foregoing or connected therewith, and (F) all of each Grantor’s rights
corresponding thereto throughout the world.

 

(xliv)      “Trademark Security Agreement” means each Trademark Security
Agreement executed and delivered by Grantors, or any of them, and Secured Party,
in substantially the form of Exhibit D.

 

(xlv)        “UCC” means the Texas Uniform Commercial Code, as in effect from
time to time; provided, however, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection, priority, or
remedies with respect to Secured Party’s Lien on any Collateral is governed by
the Uniform Commercial Code as enacted and in effect in a jurisdiction other
than the State of Texas, the term “UCC” shall mean the Uniform Commercial Code
as enacted and in effect in such other jurisdiction solely for purposes of the
provisions thereof relating to such attachment, perfection, priority, or
remedies.

 

(xlvi)      “URL” means “uniform resource locator,” an internet web address.

 

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(b)          Unless the context of this Agreement clearly requires otherwise,
references to the plural include the singular, references to the singular
include the plural, the terms “includes” and “including” are not limiting, and
the term “or” has, except where otherwise indicated, the inclusive meaning
represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,”
“hereunder,” and similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. Section,
subsection, clause, schedule, and exhibit references herein are to this
Agreement unless otherwise specified. Any reference in this Agreement to any
agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable (subject to any
restrictions on such alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein or in the Loan Agreement). The words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties. Any reference herein to any
Person shall be construed to include such Person’s successors and assigns. Any
requirement of a writing contained herein shall be satisfied by the transmission
of a Record.

 

(c)          All of the schedules and exhibits attached to this Agreement shall
be deemed incorporated herein by reference.

 

2.           Guaranty.

 

(a)          In recognition of the direct and indirect benefits to be received
by Guarantors from the proceeds of the Advances, and by virtue of the financial
accommodations to be made to Borrower, each of the Guarantors, jointly and
severally, hereby unconditionally and irrevocably guarantees as a primary
obligor and not merely as a surety the full and prompt payment when due, whether
upon maturity, acceleration, or otherwise, of all of the Guarantied Obligations.
If any or all of the Obligations becomes due and payable, each of the
Guarantors, unconditionally and irrevocably, and without the need for demand,
protest, or any other notice or formality, promises to pay such indebtedness to
Secured Party, together with any and all expenses that may be incurred by
Secured Party, in demanding, enforcing, or collecting any of the Guarantied
Obligations (including the enforcement of any collateral for such Obligations or
any collateral for the obligations of the Guarantors under this Guaranty). If
claim is ever made upon Secured Party, for repayment or recovery of any amount
or amounts received in payment of or on account of any or all of the Obligations
and Secured Party repays all or part of said amount by reason of (i) any
judgment, decree, or order of any court or administrative body having
jurisdiction over such payee or any of its property, or (ii) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including Borrower or any Guarantor), then and in each such event, each of the
Guarantors agrees that any such judgment, decree, order, settlement, or
compromise shall be binding upon the Guarantors, notwithstanding any revocation
(or purported revocation) of this Guaranty or other instrument evidencing any
liability of any Grantor, and the Guarantors shall be and remain liable to the
aforesaid payees hereunder for the amount so repaid or recovered to the same
extent as if such amount had never originally been received by any such payee.

 

(b)          Additionally, each of the Guarantors unconditionally and
irrevocably guarantees the payment of any and all of the Obligations to Secured
Party, and irrevocably and unconditionally promises to pay such indebtedness to
Secured Party, without the requirement of demand, protest, or any other notice
or other formality, in lawful money of the United States.

 

(c)          The liability of each of the Guarantors hereunder is primary,
absolute, and unconditional, and is independent of any security for or other
guaranty of the Obligations, whether executed by any other Guarantor or by any
other Person, and the liability of each of the Guarantors hereunder shall not be
affected or impaired by (i) any payment on, or in reduction of, any such other
guaranty or undertaking, (ii) any dissolution, termination, or increase,
decrease, or change in personnel by any Grantor, (iii) any payment made to
Secured Party on account of the Obligations which Secured Party repays to any
Grantor pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding (or any settlement or compromise of
any claim made in such a proceeding relating to such payment), and each of the
Guarantors waives any right to the deferral or modification of its obligations
hereunder by reason of any such proceeding, or (iv) any action or inaction by
Secured Party, or (v) any invalidity, irregularity, avoidability, or
unenforceability of all or any part of the Obligations or of any security
therefor.

 

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(d)          This Guaranty includes all present and future Guarantied
Obligations including any under transactions continuing, compromising,
extending, increasing, modifying, releasing, or renewing the Guarantied
Obligations, changing the interest rate, payment terms, or other terms and
conditions thereof, or creating new or additional Guarantied Obligations after
prior Guarantied Obligations have been satisfied in whole or in part. To the
maximum extent permitted by law, each Guarantor hereby waives any right to
revoke this Guaranty as to future Guarantied Obligations. If such a revocation
is effective notwithstanding the foregoing waiver, each Guarantor acknowledges
and agrees that (i) no such revocation shall be effective until written notice
thereof has been received by Secured Party, (ii) no such revocation shall apply
to any Guarantied Obligations in existence on the date of receipt by Secured
Party of such written notice (including any subsequent continuation, extension,
or renewal thereof, or change in the interest rate, payment terms, or other
terms and conditions thereof), (iii) no such revocation shall apply to any
Guarantied Obligations made or created after such date to the extent made or
created pursuant to a legally binding commitment of Secured Party in existence
on the date of such revocation, (iv) no payment by any Guarantor, Borrower, or
from any other source, prior to the date of Secured Party’s receipt of written
notice of such revocation shall reduce the maximum obligation of such Guarantor
hereunder, and (v) any payment by Borrower or from any source other than such
Guarantor subsequent to the date of such revocation shall first be applied to
that portion of the Guarantied Obligations as to which the revocation is
effective and which are not, therefore, guarantied hereunder, and to the extent
so applied shall not reduce the maximum obligation of such Guarantor hereunder.
This Guaranty shall be binding upon each Guarantor, its successors and assigns
and inure to the benefit of and be enforceable by Secured Party and its
successors, transferees, or assigns.

 

(e)          The guaranty by each of the Guarantors hereunder is a guaranty of
payment and not of collection. The obligations of each of the Guarantors
hereunder are independent of the obligations of any other Guarantor or Grantor
or any other Person and a separate action or actions may be brought and
prosecuted against one or more of the Guarantors whether or not action is
brought against any other Guarantor or Grantor or any other Person and whether
or not any other Guarantor or Grantor or any other Person be joined in any such
action or actions. Each of the Guarantors waives, to the fullest extent
permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement hereof. Any payment by any Grantor or
other circumstance which operates to toll any statute of limitations as to any
Grantor shall operate to toll the statute of limitations as to each of the
Guarantors.

 

(f)          Each of the Guarantors authorizes Secured Party without notice or
demand, and without affecting or impairing its liability hereunder, from time to
time to:

 

(i)          change the manner, place, or terms of payment of, or change or
extend the time of payment of, renew, increase, accelerate, or alter: (A) any of
the Obligations (including any increase or decrease in the principal amount
thereof or the rate of interest or fees thereon); or (B) any security therefor
or any liability incurred directly or indirectly in respect thereof, and this
Guaranty shall apply to the Obligations as so changed, extended, renewed, or
altered;

 

(ii)         take and hold security for the payment of the Obligations and sell,
exchange, release, impair, surrender, realize upon, collect, settle, or
otherwise deal with in any manner and in any order any property at any time
pledged or mortgaged to secure the Obligations or any of the Guarantied
Obligations (including any of the obligations of all or any of the Guarantors
under this Guaranty) incurred directly or indirectly in respect thereof or
hereof, or any offset on account thereof;

 

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(iii)        exercise or refrain from exercising any rights against any Grantor;

 

(iv)        release or substitute any one or more endorsers, guarantors, any
Grantor, or other obligors;

 

(v)         settle or compromise any of the Obligations, any security therefor,
or any liability (including any of those of any of the Guarantors under this
Guaranty) incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of any Grantor to its creditors;

 

(vi)        apply any sums by whomever paid or however realized to any liability
or liabilities of any Grantor to Secured Party regardless of what liability or
liabilities of such Grantor remain unpaid;

 

(vii)       consent to or waive any breach of, or any act, omission, or default
under, this Agreement or any other Loan Document or otherwise amend, modify, or
supplement this Agreement or any other Loan Document; or

 

(viii)      take any other action that could, under otherwise applicable
principles of law, give rise to a legal or equitable discharge of one or more of
the Guarantors from all or part of its liabilities under this Guaranty.

 

(g)          It is not necessary for Secured Party to inquire into the capacity
or powers of any of the Guarantors or the officers, directors, partners or
agents acting or purporting to act on their behalf, and any Obligations made or
created in reliance upon the professed exercise of such powers shall be
Guarantied hereunder.

 

(h)          Each Guarantor jointly and severally guarantees that the Guarantied
Obligations will be paid strictly in accordance with the terms of the Loan
Documents, regardless of any law, regulation, or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of Secured
Party with respect thereto. The obligations of each Guarantor under this
Guaranty are independent of the Guarantied Obligations, and a separate action or
actions may be brought and prosecuted against each Guarantor to enforce such
obligations, irrespective of whether any action is brought against any other
Guarantor or whether any other Guarantor is joined in any such action or
actions. The liability of each Guarantor under this Guaranty shall be absolute
and unconditional irrespective of, and each Guarantor hereby irrevocably waives
any defense it may now or hereafter have in any way relating to, any or all of
the following:

 

(i)          any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;

 

(ii)         any change in the time, manner, or place of payment of, or in any
other term of, all or any of the Guarantied Obligations, or any other amendment
or waiver of or any consent to departure from any Loan Document, including any
increase in the Guarantied Obligations resulting from the extension of
additional credit;

 

(iii)        any taking, exchange, release, or non-perfection of any Lien in and
to any Collateral, or any taking, release, amendment, waiver of, or consent to
departure from any other guaranty, for all or any of the Guarantied Obligations;

 

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(iv)        the existence of any claim, set-off, defense, or other right that
any Guarantor may have at any time against any Person, including Secured Party;

 

(v)         any defense, set-off, counterclaim, or claim, of any kind or nature,
arising directly or indirectly from the present or future lack of perfection,
sufficiency, validity, or enforceability of the Guarantied Obligations or any
security therefor;

 

(vi)        any right or defense arising by reason of any claim or defense based
upon an election of remedies by Secured Party including any defense based upon
an impairment or elimination of such Guarantor’s rights of subrogation,
reimbursement, contribution, or indemnity of such Guarantor against any other
Grantor or any guarantors or sureties;

 

(vii)       any change, restructuring, or termination of the corporate, limited
liability company, or partnership structure or existence of any Grantor; or

 

(viii)      any other circumstance that might otherwise constitute a defense
available to, or a discharge of, any Grantor or any other guarantor or surety.

 

(i)          Waivers

 

(i)          Each of the Guarantors waives any right (except as shall be
required by applicable statute and cannot be waived) to require Secured Party to
(i) proceed against any other Grantor or any other Person, (ii) proceed against
or exhaust any security held from any other Grantor or any other Person, or
(iii) protect, secure, perfect, or insure any security interest or Lien on any
property subject thereto or exhaust any right to take any action against any
other Grantor, any other Person, or any collateral, or (iv) pursue any other
remedy in Secured Party’s power whatsoever. Each of the Guarantors waives any
defense based on or arising out of any defense of any Grantor or any other
Person, other than payment of the Obligations to the extent of such payment,
based on or arising out of the disability of any Grantor or any other Person, or
the validity, legality, or unenforceability of the Obligations or any part
thereof from any cause, or the cessation from any cause of the liability of any
Grantor other than payment of the Obligations to the extent of such payment.
Secured Party may foreclose upon any Collateral held by Secured Party by one or
more judicial or nonjudicial sales or other dispositions, whether or not every
aspect of any such sale is commercially reasonable or otherwise fails to comply
with applicable law or may exercise any other right or remedy Secured Party may
have against any Grantor or any other Person, or any security, in each case,
without affecting or impairing in any way the liability of any of the Guarantors
hereunder except to the extent the Obligations have been paid.

 

(ii)         Each of the Guarantors waives all presentments, demands for
performance, protests and notices, including notices of nonperformance, notices
of protest, notices of dishonor, notices of acceptance of this Guaranty, and
notices of the existence, creation, or incurring of new or additional
Obligations or other financial accommodations. Each of the Guarantors waives
notice of any Default or Event of Default under any of the Loan Documents,
except to the extent provided otherwise in the Loan Agreement. Each of the
Guarantors assumes all responsibility for being and keeping itself informed of
each Grantor’s financial condition and assets and of all other circumstances
bearing upon the risk of nonpayment of the Obligations and the nature, scope,
and extent of the risks which each of the Guarantors assumes and incurs
hereunder, and agrees that Secured Party shall not have any duty to advise any
of the Guarantors of information known to them regarding such circumstances or
risks.

 

8

 

  

(iii)        To the fullest extent permitted by applicable law, each Guarantor
hereby waives: (A) any right to assert against Secured Party any defense (legal
or equitable), set-off, counterclaim, or claim which each Guarantor may now or
at any time hereafter have against Borrower or any other party liable to Secured
Party; (B) any defense, set-off, counterclaim, or claim, of any kind or nature,
arising directly or indirectly from the present or future lack of perfection,
sufficiency, validity, or enforceability of the Guarantied Obligations or any
security therefor; (C) any right or defense arising by reason of any claim or
defense based upon an election of remedies by Secured Party including any
defense based upon an impairment or elimination of such Guarantor’s rights of
subrogation, reimbursement, contribution, or indemnity of such Guarantor against
Borrower or other guarantors or sureties; and (D) the benefit of any statute of
limitations affecting such Guarantor’s liability hereunder or the enforcement
thereof, and any act which shall defer or delay the operation of any statute of
limitations applicable to the Guarantied Obligations shall similarly operate to
defer or delay the operation of such statute of limitations applicable to such
Guarantor’s liability hereunder

 

(iv)        No Guarantor will exercise any rights that it may now or hereafter
acquire against any Grantor or any other guarantor that arise from the
existence, payment, performance or enforcement of such Guarantor’s obligations
under this Guaranty, including any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in any
claim or remedy of Secured Party, against any Grantor or any other guarantor or
any Collateral, whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, including the right to take or receive
from any Grantor or any other guarantor, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security solely
on account of such claim, remedy or right, unless and until all of the
Guarantied Obligations and all other amounts payable under this Guaranty shall
have been paid in full in cash and the Commitment has been terminated in full.
If any amount shall be paid to any Guarantor in violation of the immediately
preceding sentence, such amount shall be held in trust for the benefit of
Secured Party, and shall forthwith be paid to Secured Party to be credited and
applied to the Guarantied Obligations and all other amounts payable under this
Guaranty, whether matured or unmatured, in accordance with the terms of the Loan
Agreement, or to be held as Collateral for any Guarantied Obligations or other
amounts payable under this Guaranty thereafter arising. Notwithstanding anything
to the contrary contained in this Guaranty, no Guarantor may exercise any rights
of subrogation, contribution, indemnity, reimbursement or other similar rights
against, and may not proceed or seek recourse against or with respect to any
property or asset of, any other Grantor (the “Foreclosed Grantor”), including
after payment in full of the Obligations, if all or any portion of the
Obligations have been satisfied in connection with an exercise of remedies in
respect of the Equity Interests of such Foreclosed Grantor whether pursuant to
this Agreement or otherwise.

 

(v)         Each of the Guarantors represents, warrants, and agrees that each of
the waivers set forth above is made with full knowledge of its significance and
consequences and that if any of such waivers are determined to be contrary to
any applicable law or public policy, such waivers shall be effective to the
maximum extent permitted by law.

 

3.          Grant of Security. Each Grantor hereby unconditionally grants,
assigns, and pledges to Secured Party to secure the Secured Obligations, a
continuing security interest (hereinafter referred to as the “Security
Interest”) in all of such Grantor’s right, title, and interest in and to the
following, whether now owned or hereafter acquired or arising and wherever
located (the “Collateral”):

 

(a)          all of such Grantor’s Accounts;

 

(b)          all of such Grantor’s Books;

 

(c)          all of such Grantor’s Chattel Paper;

 

(d)          all of such Grantor’s Commercial Tort Claims;

 

9

 

  

(e)          all of such Grantor’s Deposit Accounts;

 

(f)           all of such Grantor’s Equipment;

 

(g)          all of such Grantor’s Farm Products;

 

(h)          all of such Grantor’s Fixtures;

 

(i)           all of such Grantor’s General Intangibles;

 

(j)           all of such Grantor’s Inventory;

 

(k)          all of such Grantor’s Investment Property;

 

(l)           all of such Grantor’s Intellectual Property and Intellectual
Property Licenses;

 

(m)         all of such Grantor’s Negotiable Collateral;

 

(n)          all of such Grantor’s Pledged Interests (including all of such
Grantor’s Pledged Operating Agreements and Pledged Partnership Agreements);

 

(o)          all of such Grantor’s Securities Accounts;

 

(p)          all of such Grantor’s Supporting Obligations;

 

(q)          all of such Grantor’s money, cash equivalents, or other assets of
such Grantor that now or hereafter come into the possession, custody, or control
of Secured Party (or its agent or designee); and

 

(r)          all of the proceeds (as such term is defined in the UCC) and
products, whether tangible or intangible, of any of the foregoing, including
proceeds of insurance or Commercial Tort Claims covering or relating to any or
all of the foregoing, and any and all Accounts, Books, Chattel Paper, Deposit
Accounts, Equipment, Fixtures, General Intangibles, Inventory, Investment
Property, Intellectual Property, Negotiable Collateral, Pledged Interests,
Securities Accounts, Supporting Obligations, money, or other tangible or
intangible property resulting from the sale, lease, license, exchange,
collection, or other disposition of any of the foregoing, the proceeds of any
award in condemnation with respect to any of the foregoing, any rebates or
refunds, whether for taxes or otherwise, and all proceeds of any such proceeds,
or any portion thereof or interest therein, and the proceeds thereof, and all
proceeds of any loss of, damage to, or destruction of the above, whether insured
or not insured, and, to the extent not otherwise included, any indemnity,
warranty, or guaranty payable by reason of loss or damage to, or otherwise with
respect to any of the foregoing (the “Proceeds”). Without limiting the
generality of the foregoing, the term “Proceeds” includes whatever is receivable
or received when Investment Property or proceeds are sold, exchanged, collected,
or otherwise disposed of, whether such disposition is voluntary or involuntary,
and includes proceeds of any indemnity or guaranty payable to any Grantor or
Secured Party from time to time with respect to any of the Investment Property.

 

4.          Security for Secured Obligations. The Security Interest created
hereby secures the payment and performance of the Secured Obligations, whether
now existing or arising hereafter. Without limiting the generality of the
foregoing, this Agreement secures the payment of all amounts which constitute
part of the Secured Obligations and would be owed by Grantors, or any of them,
to Secured Party, but for the fact that they are unenforceable or not allowable
(in whole or in part) as a claim in an Insolvency Proceeding involving any
Grantor due to the existence of such Insolvency Proceeding.

 

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5.          Grantors Remain Liable. Anything herein to the contrary
notwithstanding, (a) each of the Grantors shall remain liable under the
contracts and agreements included in the Collateral, including the Pledged
Operating Agreements and the Pledged Partnership Agreements, to perform all of
the duties and obligations thereunder to the same extent as if this Agreement
had not been executed, (b) the exercise by Secured Party of any of the rights
hereunder shall not release any Grantor from any of its duties or obligations
under such contracts and agreements included in the Collateral, and (c) Secured
Party shall not have any obligation or liability under such contracts and
agreements included in the Collateral by reason of this Agreement, nor shall
Secured Party be obligated to perform any of the obligations or duties of any
Grantors thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder. Until an Event of Default shall occur and be
continuing, except as otherwise provided in this Agreement, the Loan Agreement,
or any other Loan Document, Grantors shall have the right to possession and
enjoyment of the Collateral for the purpose of conducting the ordinary course of
their respective businesses, subject to and upon the terms hereof and of the
Loan Agreement and the other Loan Documents. Without limiting the generality of
the foregoing, it is the intention of the parties hereto that record and
beneficial ownership of the Pledged Interests, including all voting, consensual,
dividend, and distribution rights, shall remain in the applicable Grantor until
(i) the occurrence and continuance of an Event of Default and (ii) Secured Party
has notified the applicable Grantor of Secured Party’s election to exercise such
rights with respect to the Pledged Interests pursuant to Section 15.

 

6.          Representations and Warranties. In order to induce Secured Party to
enter into this Agreement, each Grantor makes the following representations and
warranties to Secured Party which shall be true, correct, and complete, in all
material respects (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof), as of the date hereof, and shall
be true, correct, and complete, in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof), as of the date of the making of each Advance (or other extension of
credit) made thereafter, as though made on and as of the date of such Advance
(or other extension of credit) (except to the extent that such representations
and warranties relate solely to an earlier date, in which case such
representations and warranties shall be true and correct in all material
respects (except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof) as of such earlier date) and such
representations and warranties shall survive the execution and delivery of this
Agreement:

 

(a)          The name (within the meaning of Section 9-503 of the UCC) and
jurisdiction of organization of each Grantor and each of its Subsidiaries is set
forth on Schedule 7 (as such Schedule may be updated from time to time to
reflect changes resulting from transactions permitted under the Loan Documents).

 

(b)          The chief executive office of each Grantor and each of its
Subsidiaries is located at the address indicated on Schedule 7 (as such Schedule
may be updated from time to time to reflect changes resulting from transactions
permitted under the Loan Documents).

 

(c)          Each Grantor’s and each of its Subsidiaries’ tax identification
numbers and organizational identification numbers, if any, are identified on
Schedule 7 (as such Schedule may be updated from time to time to reflect changes
resulting from transactions permitted under the Loan Documents).

 

11

 

 

(d)          As of the Closing Date, no Grantor and no Subsidiary of a Grantor
holds any commercial tort claims that exceed $25,000 in aggregate amount, except
as set forth on Schedule 1.

 

(e)          Set forth on Schedule 9 (as such Schedule may be updated from time
to time subject to Section 7(j)(iii) with respect to Controlled Accounts and
provided that Grantors comply with Section 7(c) hereof) is a listing of all of
Grantors’ and their Subsidiaries’ Deposit Accounts and Securities Accounts,
including, with respect to each bank or securities intermediary (a) the name and
address of such Person, and (b) the account numbers of the Deposit Accounts or
Securities Accounts maintained with such Person.

 

(f)          Schedule 8 sets forth all Real Property owned or leased by any of
the Grantors as of the Closing Date.

 

(g)          As of the Closing Date: (i) Schedule 2 provides a complete and
correct list of all registered Copyrights owned by any Grantor, all applications
for registration of Copyrights owned by any Grantor, and all other Copyrights
owned by any Grantor and material to the conduct of the business of any Grantor;
(ii) Schedule 3 provides a complete and correct list of all Intellectual
Property Licenses entered into by any Grantor pursuant to which (A) any Grantor
has provided any license or other rights in Intellectual Property owned or
controlled by such Grantor to any other Person (other than non-exclusive
software licenses granted in the ordinary course of business) or (B) any Person
has granted to any Grantor any license or other rights in Intellectual Property
owned or controlled by such Person that is material to the business of such
Grantor, including any Intellectual Property that is incorporated in any
Inventory, software, or other product marketed, sold, licensed, or distributed
by such Grantor; (iii) Schedule 4 provides a complete and correct list of all
Patents owned by any Grantor and all applications for Patents owned by any
Grantor; and (iv) Schedule 6 provides a complete and correct list of all
registered Trademarks owned by any Grantor, all applications for registration of
Trademarks owned by any Grantor, and all other Trademarks owned by any Grantor
and material to the conduct of the business of any Grantor.

 

(h)          This Agreement creates a valid security interest in the Collateral
of each Grantor, to the extent a security interest therein can be created under
the UCC, securing the payment of the Secured Obligations. Except to the extent a
security interest in the Collateral cannot be perfected by the filing of a
financing statement under the UCC, all filings and other actions necessary or
desirable to perfect and protect such security interest have been duly taken or
will have been taken upon the filing of financing statements listing each
applicable Grantor, as a debtor, and Secured Party, as secured party, in the
jurisdictions listed next to such Grantor’s name on Schedule 11. Upon the making
of such filings, Secured Party shall have a first priority perfected security
interest in the Collateral of each Grantor to the extent such security interest
can be perfected by the filing of a financing statement. Upon filing of any
Copyright Security Agreement with the United States Copyright Office, filing of
any Patent Security Agreement and any Trademark Security Agreement with the PTO,
and the filing of appropriate financing statements in the jurisdictions listed
on Schedule 11, all action necessary or desirable to protect and perfect the
Security Interest in and on each Grantor’s Patents, Trademarks, or Copyrights
has been taken and such perfected Security Interest is enforceable as such as
against any and all creditors of and purchasers from any Grantor. All action by
any Grantor necessary to protect and perfect such security interest on each item
of Collateral has been duly taken.

 

12

 

 

(i)          (i) Except for the Security Interest created hereby, each Grantor
is and will at all times be the sole holder of record and the legal and
beneficial owner, free and clear of all Liens other than Liens permitted by the
Loan Agreement, of the Pledged Interests indicated on Schedule 5 as being owned
by such Grantor and, when acquired by such Grantor, any Pledged Interests
acquired after the Closing Date; (ii) all of the Pledged Interests are duly
authorized, validly issued, fully paid and nonassessable and the Pledged
Interests constitute or will constitute the percentage of the issued and
outstanding Equity Interests of the Pledged Companies of such Grantor identified
on Schedule 5 as supplemented or modified by any Pledged Interests Addendum or
any Joinder to this Agreement; (iii) such Grantor has the right and requisite
authority to pledge, the Investment Property pledged by such Grantor to Secured
Party as provided herein; (iv) all actions necessary or desirable to perfect and
establish the first priority of, or otherwise protect, Secured Party’s Liens in
the Investment Property, and the proceeds thereof, have been duly taken, upon
(A) the execution and delivery of this Agreement; (B) the taking of possession
by Secured Party (or its agent or designee) of any certificates representing the
Pledged Interests (but only to the extent such Pledged Interests have been
certificated), together with undated powers (or other documents of transfer
acceptable to Secured Party) endorsed in blank by the applicable Grantor; (C)
the filing of financing statements in the applicable jurisdiction set forth on
Schedule 11 for such Grantor with respect to the Pledged Interests of such
Grantor that are not represented by certificates, and (D) with respect to any
Securities Accounts, the delivery of Control Agreements with respect thereto;
and (v) each Grantor has delivered to and deposited with Secured Party all
certificates representing the Pledged Interests owned by such Grantor to the
extent such Pledged Interests are represented by certificates, and undated
powers (or other documents of transfer acceptable to Secured Party) endorsed in
blank with respect to such certificates. None of the Pledged Interests owned or
held by such Grantor has been issued or transferred in violation of any
securities registration, securities disclosure, or similar laws of any
jurisdiction to which such issuance or transfer may be subject.

 

(j)          No consent, approval, authorization, or other order or other action
by, and no notice to or filing with, any Governmental Authority or any other
Person is required (i) for the grant of a Security Interest by such Grantor in
and to the Collateral pursuant to this Agreement or for the execution, delivery,
or performance of this Agreement by such Grantor, or (ii) for the exercise by
Secured Party of the voting or other rights provided for in this Agreement with
respect to the Investment Property or the remedies in respect of the Collateral
pursuant to this Agreement, except as may be required in connection with such
disposition of Investment Property by laws affecting the offering and sale of
securities generally and except for consents, approvals, authorizations, or
other orders or actions that have been obtained or given (as applicable) and
that are still in force.

 

(k)          As to all limited liability company or partnership interests,
issued under any Pledged Operating Agreement or Pledged Partnership Agreement,
each Grantor hereby represents and warrants that the Pledged Interests issued
pursuant to such agreement (A) are not dealt in or traded on securities
exchanges or in securities markets, (B) do not constitute investment company
securities, and (C) are not held by such Grantor in a Securities Account. In
addition, none of the Pledged Operating Agreements, the Pledged Partnership
Agreements, or any other agreements governing any of the Pledged Interests
issued under any Pledged Operating Agreement or Pledged Partnership Agreement,
provides that such Pledged Interests are securities governed by Article 8 of the
Uniform Commercial Code as in effect in any relevant jurisdiction.

 

7.          Covenants. Each Grantor, jointly and severally, covenants and agrees
with Secured Party that from and after the date of this Agreement and until the
date of termination of this Agreement in accordance with Section 22:

 

(a)          Possession of Collateral. In the event that any Collateral,
including Proceeds, is evidenced by or consists of Negotiable Collateral,
Investment Property, or Chattel Paper having an aggregate value or face amount
of $25,000 or more for all such Negotiable Collateral, Investment Property, or
Chattel Paper, the Grantors shall promptly (and in any event within five (5)
Business Days after acquisition thereof), notify Secured Party thereof, and if
and to the extent that perfection or priority of Secured Party’s Security
Interest is dependent on or enhanced by possession, the applicable Grantor,
promptly (and in any event within five (5) Business Days) after request by
Secured Party, shall execute such other documents and instruments as shall be
requested by Secured Party or, if applicable, endorse and deliver physical
possession of such Negotiable Collateral, Investment Property, or Chattel Paper
to Secured Party, together with such undated powers (or other relevant document
of transfer acceptable to Secured Party) endorsed in blank as shall be requested
by Secured Party, and shall do such other acts or things deemed necessary or
desirable by Secured Party to protect Secured Party’s Security Interest therein;

 

13

 

  

(b)          Chattel Paper.

 

(i)          Promptly (and in any event within five (5) Business Days) after
request by Secured Party, each Grantor shall take all steps reasonably necessary
to grant Secured Party control of all electronic Chattel Paper in accordance
with the UCC and all “transferable records” as that term is defined in Section
16 of the Uniform Electronic Transaction Act and Section 201 of the federal
Electronic Signatures in Global and National Commerce Act as in effect in any
relevant jurisdiction, to the extent that the aggregate value or face amount of
such electronic Chattel Paper equals or exceeds $25,000;

 

(ii)         If any Grantor retains possession of any Chattel Paper or
instruments (which retention of possession shall be subject to the extent
permitted hereby and by the Loan Agreement), promptly upon the request of
Secured Party, such Chattel Paper and instruments shall be marked with the
following legend: “This writing and the obligations evidenced or secured hereby
are subject to the Security Interest of NTR Metals, LLC, as Secured Party”;

 

(c)          Control Agreements.

 

(i)          Except to the extent otherwise excused by Section 7(j)(iv), each
Grantor shall obtain an authenticated Control Agreement, from each bank
maintaining a Deposit Account or Securities Account for such Grantor;

 

(ii)         Except to the extent otherwise excused by Section 7(j)(iv), each
Grantor shall obtain an authenticated Control Agreement, from each issuer of
uncertificated securities, securities intermediary, or commodities intermediary
issuing or holding any financial assets or commodities to or for any Grantor, or
maintaining a Securities Account for such Grantor; and

 

(iii)        Except to the extent otherwise excused by Section 7(j)(iv), each
Grantor shall obtain an authenticated Control Agreement with respect to all of
such Grantor’s investment property;

 

(d)          Letter-of-Credit Rights. If the Grantors (or any of them) are or
become the beneficiary of letters of credit having a face amount or value of
$25,000 or more in the aggregate, then the applicable Grantor or Grantors shall
promptly (and in any event within five (5) Business Days after becoming a
beneficiary), notify Secured Party thereof and, promptly (and in any event
within five (5) Business Days) after request by Secured Party, enter into a
tri-party agreement with Secured Party and the issuer or confirming bank with
respect to letter-of-credit rights assigning such letter-of-credit rights to
Secured Party and directing all payments thereunder to Secured Party’s Account,
all in form and substance reasonably satisfactory to Secured Party;

 

14

 

 

(e)          Commercial Tort Claims. If the Grantors (or any of them) obtain
Commercial Tort Claims having a value, or involving an asserted claim, in the
amount of $25,000 or more in the aggregate for all Commercial Tort Claims, then
the applicable Grantor or Grantors shall promptly (and in any event within five
(5) Business Days of obtaining such Commercial Tort Claim), notify Secured Party
upon incurring or otherwise obtaining such Commercial Tort Claims and, promptly
(and in any event within five (5) Business Days) after request by Secured Party,
amend Schedule 1 to describe such Commercial Tort Claims in a manner that
reasonably identifies such Commercial Tort Claims and which is otherwise
reasonably satisfactory to Secured Party, and hereby authorizes the filing of
additional financing statements or amendments to existing financing statements
describing such Commercial Tort Claims, and agrees to do such other acts or
things deemed necessary or desirable by Secured Party to give Secured Party a
first priority, perfected security interest in any such Commercial Tort Claim;

 

(f)          Government Contracts. Other than Accounts and Chattel Paper the
aggregate value of which does not at any one time exceed $25,000, if any Account
or Chattel Paper arises out of a contract or contracts with the United States of
America or any department, agency, or instrumentality thereof, Grantors shall
promptly (and in any event within five (5) Business Days of the creation
thereof) notify Secured Party thereof and, promptly (and in any event within
five (5) Business Days) after request by Secured Party, execute any instruments
or take any steps reasonably required by Secured Party in order that all moneys
due or to become due under such contract or contracts shall be assigned to
Secured Party, and shall provide written notice thereof under the Assignment of
Claims Act or other applicable law;

 

(g)          Intellectual Property.

 

(i)          Upon the request of Secured Party, in order to facilitate filings
with the PTO and the United States Copyright Office, each Grantor shall execute
and deliver to Secured Party one or more Copyright Security Agreements,
Trademark Security Agreements, or Patent Security Agreements to further evidence
Secured Party’s Lien on such Grantor’s Patents, Trademarks, or Copyrights, and
the General Intangibles of such Grantor relating thereto or represented thereby;

 

(ii)         Each Grantor shall have the duty, with respect to Intellectual
Property that is necessary in or material to the conduct of such Grantor’s
business, to protect and diligently enforce and defend at such Grantor’s expense
its Intellectual Property, including (A) to diligently enforce and defend,
including promptly suing for infringement, misappropriation, or dilution and to
recover any and all damages for such infringement, misappropriation, or
dilution, and filing for opposition, interference, and cancellation against
conflicting Intellectual Property rights of any Person, (B) to prosecute
diligently any trademark application or service mark application that is part of
the Trademarks pending as of the date hereof or hereafter until the termination
of this Agreement, (C) to prosecute diligently any patent application that is
part of the Patents pending as of the date hereof or hereafter until the
termination of this Agreement, (D) to take all reasonable and necessary action
to preserve and maintain all of such Grantor’s Trademarks, Patents, Copyrights,
Intellectual Property Licenses, and its rights therein, including paying all
maintenance fees and filing of applications for renewal, affidavits of use, and
affidavits of noncontestability, and (E) to require all employees, consultants,
and contractors of each Grantor who were involved in the creation or development
of such Intellectual Property to sign agreements containing assignment of
Intellectual Property rights and obligations of confidentiality. Each Grantor
further agrees not to abandon any Intellectual Property or Intellectual Property
License that is necessary in or material to the conduct of such Grantor’s
business. Each Grantor hereby agrees to take the steps described in this Section
7(g)(ii) with respect to all new or acquired Intellectual Property to which it
or any of its Subsidiaries is now or later becomes entitled that is necessary in
or material to the conduct of such Grantor’s business; and

 

(iii)        Grantors acknowledge and agree that Secured Party shall have no
duties with respect to any Intellectual Property or Intellectual Property
Licenses of any Grantor. Without limiting the generality of this Section
7(g)(iii), Grantors acknowledge and agree that Secured Party shall not be under
any obligation to take any steps necessary to preserve rights in the Collateral
consisting of Intellectual Property or Intellectual Property Licenses against
any other Person, but Secured Party may do so at its option from and after the
occurrence and during the continuance of an Event of Default, and all expenses
incurred in connection therewith (including reasonable fees and expenses of
attorneys and other professionals) shall be for the sole account of Borrower and
shall be chargeable to the Loan Account.

 

15

 

 

(h)          Investment Property.

 

(i)          If any Grantor shall acquire, obtain, receive or become entitled to
receive any Pledged Interests after the Closing Date, it shall promptly (and in
any event within five (5) Business Days of acquiring or obtaining such
Collateral) deliver to Secured Party a duly executed Pledged Interests Addendum
identifying such Pledged Interests;

 

(ii)         Upon the occurrence and during the continuance of an Event of
Default, following the request of Secured Party, all sums of money and property
paid or distributed in respect of the Investment Property that are received by
any Grantor shall be held by the Grantors in trust for the benefit of Secured
Party segregated from such Grantor’s other property, and such Grantor shall
deliver it forthwith to Secured Party in the exact form received;

 

(iii)        Each Grantor shall promptly deliver to Secured Party a copy of each
material notice or other material communication received by it in respect of any
Pledged Interests;

 

(iv)        No Grantor shall make or consent to any amendment or other
modification or waiver with respect to any Pledged Interests, Pledged Operating
Agreement, or Pledged Partnership Agreement, or enter into any agreement or
permit to exist any restriction with respect to any Pledged Interests if the
same is prohibited pursuant to the Loan Documents;

 

(v)         Each Grantor agrees that it will cooperate with Secured Party in
obtaining all necessary approvals and making all necessary filings under
federal, state, local, or foreign law to effect the perfection of the Security
Interest on the Investment Property or to effect any sale or transfer thereof;

 

(vi)        As to all limited liability company or partnership interests, issued
under any Pledged Operating Agreement or Pledged Partnership Agreement, each
Grantor hereby covenants that the Pledged Interests issued pursuant to such
agreement (A) are not and shall not be dealt in or traded on securities
exchanges or in securities markets, (B) do not and will not constitute
investment company securities, and (C) are not and will not be held by such
Grantor in a securities account. In addition, none of the Pledged Operating
Agreements, the Pledged Partnership Agreements, or any other agreements
governing any of the Pledged Interests issued under any Pledged Operating
Agreement or Pledged Partnership Agreement, provides or shall provide that such
Pledged Interests are securities governed by Article 8 of the Uniform Commercial
Code as in effect in any relevant jurisdiction.

 

(i)          Controlled Accounts; Controlled Investments.

 

(i)          Each Grantor shall deposit or cause to be deposited promptly, and
in any event no later than the first Business Day after the date of receipt
thereof, all of their cash and Collections (including those sent directly by
their Account Debtors to a Grantor) into a bank account of such Grantor (each, a
“Controlled Account”) at one or more of the banks set forth on Schedule 11 (each
a “Controlled Account Bank”).

 

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(ii)         Each Grantor shall establish and maintain Control Agreements with
Secured Party and the applicable Controlled Account Bank, in form and substance
acceptable to Secured Party, in respect of each of such Grantor’s Controlled
Accounts. Each such Control Agreement shall provide, among other things, that
(A) the Controlled Account Bank will comply with any instructions originated by
Secured Party directing the disposition of the funds in such Controlled Account
without further consent by the applicable Grantor, (B) the Controlled Account
Bank waives, subordinates, or agrees not to exercise any rights of setoff or
recoupment or any other claim against the applicable Controlled Account other
than for payment of its service fees and other charges directly related to the
administration of such Controlled Account and for returned checks or other items
of payment, and (C) upon the instruction of Secured Party (an “Activation
Instruction”), the Controlled Account Bank will forward by daily sweep all
amounts in the applicable Controlled Account to the Secured Party’s Account
pursuant to the instructions contained in such Control Agreement after the
occurrence and during the continuance of an Event of Default.

 

(iii)        So long as no Event of Default has occurred and is continuing,
Borrower may amend Schedule 11 to add or replace a Controlled Account Bank or
Controlled Account and shall upon such addition or replacement provide to
Secured Party an amended Schedule 11; provided, however, that (A) such
prospective Controlled Account Bank shall be satisfactory to Secured Party, and
(B) prior to the time of the opening of such Controlled Account, the applicable
Grantor and such prospective Controlled Account Bank shall have executed and
delivered to Secured Party a Control Agreement.

 

(iv)        Other than amounts deposited into Deposit Accounts specially and
exclusively used for payroll, payroll taxes and other employee wage and benefit
payments to or for any Grantor’s or its Subsidiaries’ employees, no Grantor
will, and no Grantor will permit its Subsidiaries to, make, acquire, or permit
to exist investments consisting of cash, cash equivalents, or amounts credited
to Deposit Accounts or Securities Accounts unless Grantor or its Subsidiary, as
applicable, and the applicable bank or securities intermediary have entered into
Control Agreements with Secured Party governing such investments in order to
perfect (and further establish) Secured Party’s Liens in such cash, cash
equivalents and investments.

 

(v)         Borrower will deliver to Secured Party, prior to the 10th day of
each month, or on such other frequency as Secured Party may request, a written
report in form and content satisfactory to Secured Party, showing a listing and
aging of Accounts and such other information as Secured Party may request from
time to time, and Borrower shall immediately notify Secured Party of the
assertion by any Account Debtor of any set-off, defense, or claim regarding an
Account or any other matter adversely affecting an Account.

 

(j)          Name, Etc. No Grantor will, nor will any Grantor permit any of its
Subsidiaries to, change its name, organizational identification number,
jurisdiction of organization or organizational identity; provided, that Grantor
or any of its Subsidiaries may change its name upon at least 10 days prior
written notice to Secured Party of such change.

 

8.           Further Assurances, Etc.

 

(a)          Each Grantor agrees that from time to time, at its own expense,
such Grantor will promptly execute and deliver all further instruments and
documents, and take all further action, that Secured Party may reasonably
request, in order to perfect and protect the Security Interest granted hereby,
to create, perfect or protect the Security Interest purported to be granted
hereby or to enable Secured Party to exercise and enforce its rights and
remedies hereunder with respect to any of the Collateral. By executing this
Agreement, each Grantor also agrees to be bound by all provisions of the Loan
Documents applicable to it (and hereby makes all representations and warranties
applicable to such Grantor contained in the Loan Documents), in each case,
regardless of whether such Grantor is an actual party to such Loan Documents.

 

17

 

 

(b)          Each Grantor authorizes the filing by Secured Party of financing or
continuation statements, or amendments thereto, and such Grantor will execute
and deliver to Secured Party such other instruments or notices, as Secured Party
may reasonably request, in order to perfect and preserve the Security Interest
granted or purported to be granted hereby.

 

(c)          Each Grantor authorizes Secured Party at any time and from time to
time to file, transmit, or communicate, as applicable, financing statements and
amendments (i) describing the Collateral as “all personal property of debtor” or
“all assets of debtor” or words of similar effect, (ii) describing the
Collateral as being of equal or lesser scope or with greater detail, or (iii)
that contain any information required by part 5 of Article 9 of the UCC for the
sufficiency or filing office acceptance. Each Grantor also hereby ratifies any
and all financing statements or amendments previously filed by Secured Party in
any jurisdiction.

 

(d)          Each Grantor acknowledges that it is not authorized to file any
financing statement or amendment or termination statement with respect to any
financing statement filed in connection with this Agreement without the prior
written consent of Secured Party, subject to such Grantor’s rights under Section
9-509(d)(2) of the UCC.

 

9.           Secured Party’s Right to Perform Contracts, Exercise Rights, etc.
Secured Party (or its designee) at any time (a) may proceed to perform any and
all of the obligations of any Grantor contained in any contract, lease, or other
agreement and exercise any and all rights of any Grantor therein contained as
fully as such Grantor itself could, (b) shall have the right to use any
Grantor’s rights under Intellectual Property Licenses in connection with the
enforcement of Secured Party’s rights hereunder, including the right to prepare
for sale and sell any and all Inventory and Equipment now or hereafter owned by
any Grantor and now or hereafter covered by such licenses, and (c) shall have
the right to request that any Equity Interests that are pledged hereunder be
registered in the name of Secured Party or any of its nominees.

 

10.         Secured Party Appointed Attorney-in-Fact. Each Grantor hereby
irrevocably appoints Secured Party its attorney-in-fact, with full authority in
the place and stead of such Grantor and in the name of such Grantor or otherwise
to, at any time after the occurrence and during the continuance of an Event of
Default, take any action and to execute any instrument which Secured Party may
reasonably deem necessary or advisable to accomplish the purposes of this
Agreement, including:

 

(a)          to ask, demand, collect, sue for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
connection with the Accounts or any other Collateral of such Grantor;

 

(b)          to receive and open all mail addressed to such Grantor and to
notify postal authorities to change the address for the delivery of mail to such
Grantor to that of Secured Party;

 

(c)          to receive, indorse, and collect any drafts or other instruments,
documents, Negotiable Collateral or Chattel Paper;

 

(d)          to file any claims or take any action or institute any proceedings
which Secured Party may deem necessary or desirable for the collection of any of
the Collateral of such Grantor or otherwise to enforce the rights of Secured
Party with respect to any of the Collateral;

 

(e)          to repair, alter, or supply goods, if any, necessary to fulfill in
whole or in part the purchase order of any Person obligated to such Grantor in
respect of any Account of such Grantor;

 

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(f)          to use any Intellectual Property or Intellectual Property Licenses
of such Grantor, including but not limited to any labels, Patents, Trademarks,
trade names, URLs, domain names, industrial designs, Copyrights, or advertising
matter, in preparing for sale, advertising for sale, or selling Inventory or
other Collateral and to collect any amounts due under Accounts, contracts or
Negotiable Collateral of such Grantor; and

 

(g)          Secured Party shall have the right, but shall not be obligated, to
bring suit in its own name to enforce the Intellectual Property and Intellectual
Property Licenses and, if Secured Party shall commence any such suit, the
appropriate Grantor shall, at the request of Secured Party, do any and all
lawful acts and execute any and all proper documents reasonably required by
Secured Party in aid of such enforcement.

 

To the extent permitted by law, each Grantor hereby ratifies all that such
attorney-in-fact shall lawfully do or cause to be done by virtue hereof. This
power of attorney is coupled with an interest and shall be irrevocable until
this Agreement is terminated.

 

11.         Secured Party May Perform. If any Grantor fails to perform any
agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the reasonable expenses of Secured Party
incurred in connection therewith shall be payable, jointly and severally, by
Grantors.

 

12.         Secured Party’s Duties. The powers conferred on Secured Party
hereunder are solely to protect Secured Party’s interest in the Collateral, and
shall not impose any duty upon Secured Party to exercise any such powers. Except
for the safe custody of any Collateral in its actual possession and the
accounting for moneys actually received by it hereunder, Secured Party shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral. Secured Party shall be deemed to have exercised reasonable care in
the custody and preservation of any Collateral in its actual possession if such
Collateral is accorded treatment substantially equal to that which Secured Party
accords its own property.

 

13.         Collection of Accounts, General Intangibles and Negotiable
Collateral. Upon the occurrence and during the continuance of an Event of
Default, Secured Party or Secured Party’s designee may at any time (a) notify
Account Debtors of any Grantor that the Accounts, General Intangibles, Chattel
Paper or Negotiable Collateral of such Grantor have been assigned to Secured
Party or that Secured Party has a security interest therein, and (b) collect the
Accounts, General Intangibles and Negotiable Collateral of any Grantor directly,
and any collection costs and expenses shall constitute part of such Grantor’s
Secured Obligations under the Loan Documents.

 

14.         Disposition of Pledged Interests by Secured Party. None of the
Pledged Interests existing as of the date of this Agreement are, and none of the
Pledged Interests hereafter acquired on the date of acquisition thereof will be,
registered or qualified under the various federal or state securities laws of
the United States and disposition thereof after an Event of Default may be
restricted to one or more private (instead of public) sales in view of the lack
of such registration. Each Grantor understands that in connection with such
disposition, Secured Party may approach only a restricted number of potential
purchasers and further understands that a sale under such circumstances may
yield a lower price for the Pledged Interests than if the Pledged Interests were
registered and qualified pursuant to federal and state securities laws and sold
on the open market. Each Grantor, therefore, agrees that: (a) if Secured Party
shall, pursuant to the terms of this Agreement, sell or cause the Pledged
Interests or any portion thereof to be sold at a private sale, Secured Party
shall have the right to rely upon the advice and opinion of any nationally
recognized brokerage or investment firm (but shall not be obligated to seek such
advice and the failure to do so shall not be considered in determining the
commercial reasonableness of such action) as to the best manner in which to
offer the Pledged Interest or any portion thereof for sale and as to the best
price reasonably obtainable at the private sale thereof; and (b) such reliance
shall be conclusive evidence that Secured Party has handled the disposition in a
commercially reasonable manner.

 

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15.         Voting and Other Rights in Respect of Pledged Interests.

 

(a)          Upon the occurrence and during the continuation of an Event of
Default, (i) Secured Party may, at its option, and with two (2) Business Days
prior notice to any Grantor, and in addition to all rights and remedies
available to Secured Party under any other agreement, at law, in equity, or
otherwise, exercise all voting rights, or any other ownership or consensual
rights (including any dividend or distribution rights) in respect of the Pledged
Interests owned by such Grantor, but under no circumstances is Secured Party
obligated by the terms of this Agreement to exercise such rights, and (ii) if
Secured Party duly exercises its right to vote any of such Pledged Interests,
each Grantor hereby appoints Secured Party, such Grantor’s true and lawful
attorney-in-fact and IRREVOCABLE PROXY to vote such Pledged Interests in any
manner Secured Party deems advisable for or against all matters submitted or
which may be submitted to a vote of shareholders, partners or members, as the
case may be. The power-of-attorney and proxy granted hereby is coupled with an
interest and shall be irrevocable.

 

(b)          For so long as any Grantor shall have the right to vote the Pledged
Interests owned by it, such Grantor covenants and agrees that it will not,
without the prior written consent of Secured Party, vote or take any consensual
action with respect to such Pledged Interests which would materially adversely
affect the rights of Secured Party or the value of the Pledged Interests.

 

16.         Remedies. Upon the occurrence and during the continuance of an Event
of Default:

 

(a)          Secured Party may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein, in the other Loan
Documents, or otherwise available to it, all the rights and remedies of a
secured party on default under the UCC or any other applicable law. Without
limiting the generality of the foregoing, each Grantor expressly agrees that, in
any such event, Secured Party without demand of performance or other demand,
advertisement or notice of any kind (except a notice specified below of time and
place of public or private sale) to or upon any Grantor or any other Person (all
and each of which demands, advertisements and notices are hereby expressly
waived to the maximum extent permitted by the UCC or any other applicable law),
may take immediate possession of all or any portion of the Collateral and (i)
require Grantors to, and each Grantor hereby agrees that it will at its own
expense and upon request of Secured Party forthwith, assemble all or part of the
Collateral as directed by Secured Party and make it available to Secured Party
at one or more locations where such Grantor regularly maintains Inventory, and
(ii) without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of Secured
Party’s offices or elsewhere, for cash, on credit, and upon such other terms as
Secured Party may deem commercially reasonable. Each Grantor agrees that, to the
extent notification of sale shall be required by law, at least ten (10) days
notification by mail to the applicable Grantor of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification and specifically such notification shall
constitute a reasonable “authenticated notification of disposition” within the
meaning of Section 9-611 of the UCC. Secured Party shall not be obligated to
make any sale of Collateral regardless of notification of sale having been
given. Secured Party may adjourn any public sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. Each
Grantor agrees that (A) the internet shall constitute a “place” for purposes of
Section 9-610(b) of the UCC and (B) to the extent notification of sale shall be
required by law, notification by mail of the URL where a sale will occur and the
time when a sale will commence at least ten (10) days prior to the sale shall
constitute a reasonable notification for purposes of Section 9-611(b) of the
UCC. Each Grantor agrees that any sale of Collateral to a licensor pursuant to
the terms of a license agreement between such licensor and a Grantor is
sufficient to constitute a commercially reasonable sale (including as to method,
terms, manner, and time) within the meaning of Section 9-610 of the UCC.

 

20

 

 

(b)          Secured Party is hereby granted a license or other right to use,
without liability for royalties or any other charge, each Grantor’s Intellectual
Property, including but not limited to, any labels, Patents, Trademarks, trade
names, URLs, domain names, industrial designs, Copyrights, and advertising
matter, whether owned by any Grantor or with respect to which any Grantor has
rights under license, sublicense, or other agreements (including any
Intellectual Property License), as it pertains to the Collateral, in preparing
for sale, advertising for sale and selling any Collateral, and each Grantor’s
rights under all licenses and all franchise agreements shall inure to the
benefit of Secured Party.

 

(c)          Secured Party may, in addition to other rights and remedies
provided for herein, in the other Loan Documents, or otherwise available to it
under applicable law and without the requirement of notice to or upon any
Grantor or any other Person (which notice is hereby expressly waived to the
maximum extent permitted by the UCC or any other applicable law), (i) with
respect to any Grantor’s Deposit Accounts in which Secured Party’s Liens are
perfected by control under Section 9-104 of the UCC, instruct the bank
maintaining such Deposit Account for the applicable Grantor to pay the balance
of such Deposit Account to or for the benefit of Secured Party, and (ii) with
respect to any Grantor’s Securities Accounts in which Secured Party’s Liens are
perfected by control under Section 9-106 of the UCC, instruct the securities
intermediary maintaining such Securities Account for the applicable Grantor to
(A) transfer any cash in such Securities Account to or for the benefit of
Secured Party, or (B) liquidate any financial assets in such Securities Account
that are customarily sold on a recognized market and transfer the cash proceeds
thereof to or for the benefit of Secured Party.

 

(d)          Any cash held by Secured Party as Collateral and all cash proceeds
received by Secured Party in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied against the
Secured Obligations in the order set forth in the Loan Agreement. In the event
the proceeds of Collateral are insufficient to satisfy all of the Secured
Obligations in full, each Grantor shall remain jointly and severally liable for
any such deficiency.

 

(e)          Each Grantor hereby acknowledges that the Secured Obligations arise
out of a commercial transaction, and agrees that if an Event of Default shall
occur and be continuing Secured Party shall have the right to an immediate writ
of possession without notice of a hearing. Secured Party shall have the right to
the appointment of a receiver for the properties and assets of each Grantor, and
each Grantor hereby consents to such rights and such appointment and hereby
waives any objection such Grantor may have thereto or the right to have a bond
or other security posted by Secured Party.

 

17.         Remedies Cumulative. Each right, power, and remedy of Secured Party,
as provided for in this Agreement or the other Loan Documents now or hereafter
existing at law or in equity or by statute or otherwise shall be cumulative and
concurrent and shall be in addition to every other right, power, or remedy
provided for in this Agreement and the other Loan Documents or now or hereafter
existing at law or in equity or by statute or otherwise, and the exercise or
beginning of the exercise by Secured Party of any one or more of such rights,
powers, or remedies shall not preclude the simultaneous or later exercise by
Secured Party of any or all such other rights, powers, or remedies.

 

21

 

 

18.         Marshaling. Secured Party shall not be required to marshal any
present or future collateral security (including but not limited to the
Collateral) for, or other assurances of payment of, the Secured Obligations or
any of them or to resort to such collateral security or other assurances of
payment in any particular order, and all of its rights and remedies hereunder
and in respect of such collateral security and other assurances of payment shall
be cumulative and in addition to all other rights and remedies, however existing
or arising. To the extent that it lawfully may, each Grantor hereby agrees that
it will not invoke any law relating to the marshaling of collateral which might
cause delay in or impede the enforcement of Secured Party’s rights and remedies
under this Agreement or under any other instrument creating or evidencing any of
the Secured Obligations or under which any of the Secured Obligations is
outstanding or by which any of the Secured Obligations is secured or payment
thereof is otherwise assured, and, to the extent that it lawfully may, each
Grantor hereby irrevocably waives the benefits of all such laws.

 

19.         Indemnity and Expenses.

 

(a)          Each Grantor agrees to indemnify Secured Party from and against all
claims, lawsuits and liabilities (including attorneys fees) growing out of or
resulting from this Agreement (including enforcement of this Agreement) or any
other Loan Document to which such Grantor is a party, except claims, losses or
liabilities resulting from the gross negligence or willful misconduct of the
party seeking indemnification as determined by a final non-appealable order of a
court of competent jurisdiction. This provision shall survive the termination of
this Agreement and the Loan Agreement and the repayment of the Secured
Obligations.

 

(b)          Grantors, jointly and severally, shall, upon demand, pay to Secured
Party all the fees and expenses which Secured Party may incur in connection with
(i) the administration of this Agreement, (ii) the custody, preservation, use or
operation of, or the sale of, collection from, or other realization upon, any of
the Collateral in accordance with this Agreement and the other Loan Documents,
(iii) the exercise or enforcement of any of the rights of Secured Party
hereunder or (iv) the failure by any Grantor to perform or observe any of the
provisions hereof.

 

20.         Merger, Amendments; Etc. THIS AGREEMENT, TOGETHER WITH THE OTHER
LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES. No waiver of any
provision of this Agreement, and no consent to any departure by any Grantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by Secured Party, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. No
amendment of any provision of this Agreement shall be effective unless the same
shall be in writing and signed by Secured Party and each Grantor to which such
amendment applies.

 

21.         Addresses for Notices. All notices and other communications provided
for hereunder shall be given in the form and manner and delivered to Secured
Party at its address specified in the Loan Agreement, and to any of the Grantors
at their respective addresses specified in the Loan Agreement or Guaranty, as
applicable, or, as to any party, at such other address as shall be designated by
such party in a written notice to the other party.

 

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22.         Continuing Security Interest: Assignments under Loan Agreement.

 

(a)          This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the Obligations
have been paid in full in accordance with the provisions of the Loan Agreement
and the Commitment has expired or has been terminated, (ii) be binding upon each
Grantor, and their respective successors and assigns, and (iii) inure to the
benefit of, and be enforceable by, Secured Party, and its successors,
transferees and assigns. Without limiting the generality of the foregoing clause
(iii), Lender may assign or otherwise transfer all or any portion of its rights
and obligations under the Loan Agreement to any other Person, and such other
Person shall thereupon become vested with all the benefits in respect thereof
granted to such Lender herein or otherwise. Upon payment in full of the Secured
Obligations in accordance with the provisions of the Loan Agreement and the
expiration or termination of the Commitment, the Guaranty made and the Security
Interest granted hereby shall terminate and all rights to the Collateral shall
revert to Grantors or any other Person entitled thereto. At such time, upon
Borrower’s request, Secured Party will authorize the filing of appropriate
termination statements to terminate such Security Interest. No transfer or
renewal, extension, assignment, or termination of this Agreement or of the Loan
Agreement, any other Loan Document, or any other instrument or document executed
and delivered by any Grantor to Secured Party nor any additional loans made by
Lender to Borrower, nor the taking of further security, nor the retaking or
re-delivery of the Collateral to Grantors, or any of them, by Secured Party
shall release any Grantor from any obligation, except a release or discharge
executed in writing by Secured Party in accordance with the provisions of the
Loan Agreement. Secured Party shall not by any act, delay, omission or
otherwise, be deemed to have waived any of its rights or remedies hereunder,
unless such waiver is in writing and signed by Secured Party and then only to
the extent therein set forth. A waiver by Secured Party of any right or remedy
on any occasion shall not be construed as a bar to the exercise of any such
right or remedy which Secured Party would otherwise have had on any other
occasion.

 

(b)          Each Grantor agrees that, if any payment made by any Grantor or
other Person and applied to the Secured Obligations is at any time annulled,
avoided, set, aside, rescinded, invalidated, declared to be fraudulent or
preferential or otherwise required to be refunded or repaid, or the proceeds of
any Collateral are required to be returned by Secured Party to such Grantor, its
estate, trustee, receiver or any other party, including any Grantor, under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or repayment, any Lien or other Collateral securing
such liability shall be and remain in full force and effect, as fully as if such
payment had never been made. If, prior to any of the foregoing, (i) any Lien or
other Collateral securing such Grantor’s liability hereunder shall have been
released or terminated by virtue of the foregoing clause (a), or (ii) any
provision of the Guaranty hereunder shall have been terminated, cancelled or
surrendered, such Lien, other Collateral or provision shall be reinstated in
full force and effect and such prior release, termination, cancellation or
surrender shall not diminish, release, discharge, impair or otherwise affect the
obligations of any such Grantor in respect of any Lien or other Collateral
securing such obligation or the amount of such payment.

 

23.         Survival. All representations and warranties made by the Grantors in
this Agreement and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of this Agreement and the making of any Advances, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that Secured Party may have had notice or knowledge of any Default or Event of
Default or incorrect representation or warranty at the time any credit is
extended under the Loan Documents, and shall continue in full force and effect
as long as the principal of or any accrued interest on any loan or any fee or
any other amount payable under the Loan Agreement is outstanding and unpaid and
so long as the Commitment has not expired or terminated.

 

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24.         CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

 

(a)          THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES
OF AMERICA. THIS AGREEMENT HAS BEEN ENTERED INTO IN DALLAS COUNTY, TEXAS, AND IT
SHALL BE PERFORMABLE FOR ALL PURPOSES IN DALLAS COUNTY, TEXAS. ANY ACTION OR
PROCEEDING AGAINST ANY LOAN PARTY UNDER OR IN CONNECTION WITH ANY OF THE LOAN
DOCUMENTS MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT IN DALLAS COUNTY, TEXAS.
EACH GRANTOR HEREBY IRREVOCABLY (I) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF
SUCH COURTS, AND (II) WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT OR THAT ANY
SUCH COURT IS AN INCONVENIENT FORUM. EACH GRANTOR AGREES THAT SERVICE OF PROCESS
UPON IT MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED,
AT ITS ADDRESS SPECIFIED OR DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 21. NOTHING HEREIN OR IN ANY OF THE OTHER LOAN DOCUMENTS SHALL AFFECT
THE RIGHT OF LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
SHALL LIMIT THE RIGHT OF LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST ANY
GRANTOR OR WITH RESPECT TO ANY OF ITS PROPERTY IN COURTS IN OTHER JURISDICTIONS.
ANY ACTION OR PROCEEDING BY ANY LOAN PARTY AGAINST LENDER SHALL BE BROUGHT ONLY
IN A COURT LOCATED IN DALLAS COUNTY, TEXAS.

 

(b)          TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH GRANTOR
HEREBY (OR BY ITS EXECUTION OF ANY OTHER LOAN DOCUMENTS) IRREVOCABLY AND
EXPRESSLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR
RELATING TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY
OR THE ACTIONS OF LENDER IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT
THEREOF.

 

25.         New Subsidiaries. Each of the Subsidiaries (whether now existing or
hereafter acquired) of any Loan Party is required to enter into this Agreement
by executing and delivering in favor of Secured Party a Joinder to this
Agreement in substantially the form of Annex 1. Upon the execution and delivery
of Annex 1 by any such Subsidiary, such Subsidiary shall become a Guarantor and
Grantor hereunder with the same force and effect as if originally named as a
Guarantor and Grantor herein. The execution and delivery of any instrument
adding an additional Guarantor or Grantor as a party to this Agreement shall not
require the consent of any Guarantor or Grantor hereunder. The rights and
obligations of each Guarantor and Grantor hereunder shall remain in full force
and effect notwithstanding the addition of any new Guarantor or Grantor
hereunder.

 

26.         Miscellaneous.

 

(a)          This Agreement is a Loan Document. This Agreement may be executed
in any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.

 

(b)          Any provision of this Agreement which is prohibited or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof in that
jurisdiction or affecting the validity or enforceability of such provision in
any other jurisdiction. Each provision of this Agreement shall be severable from
every other provision of this Agreement for the purpose of determining the legal
enforceability of any specific provision.

 

24

 

 

(c)          Headings and numbers have been set forth herein for convenience
only. Unless the contrary is compelled by the context, everything contained in
each Section applies equally to this entire Agreement.

 

[signature pages follow]

  

25

 

 

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

 

GRANTORS: DGSE COMPANIES, INC.,   a Nevada corporation       By:       William
H. Oyster, President       DGSE CORPORATION,   a Texas corporation       By:    
  William H. Oyster, President       DGSE BULLION EXPRESS, LLC,   a Texas
limited liability company       By:       William H. Oyster, Manager      
CHARLESTON GOLD & DIAMOND EXCHANGE, INC., a South Carolina corporation       By:
      William H. Oyster, President       SBT, INC.,   a Nevada corporation      
By:       William H. Oyster, President       SUPERIOR GALLERIES, INC.,   a
Delaware corporation       By:       William H. Oyster, President       US
BULLION EXCHANGE, INC.,   a Nevada corporation       By:       William H.
Oyster, President

 

[SIGNATURE PAGE TO SECURITY AGREEMENT]

 

 

 

 

SECURED PARTY: NTR METALS, LLC,   a Texas limited liability company       By:  
    Name:     Title:

 

[SIGNATURE PAGE TO SECURITY AGREEMENT]

  

 

 

 

ANNEX 1 TO GUARANTY AND SECURITY AGREEMENT

FORM OF JOINDER

 

Joinder No. ____ (this “Joinder”), dated as of ____________ 20___, to the
Guaranty and Security Agreement, dated as of July 19, 2012 (as amended,
restated, supplemented, or otherwise modified from time to time, the “Guaranty
and Security Agreement”), by and among each of the parties listed on the
signature pages thereto and those additional entities that thereafter become
parties thereto (collectively, jointly and severally, “Grantors” and each,
individually, a “Grantor”) and NTR METALS, LLC, a Texas limited liability
company, together with its successors and assigns, “Secured Party”).

 

WITNESSETH:

 

WHEREAS, pursuant to that certain Loan Agreement dated as of July 19, 2012 (as
amended, restated, supplemented, or otherwise modified from time to time, the
“Loan Agreement”) by and between DGSE Companies, Inc., as borrower (“Borrower”),
and Secured Party, as lender, Secured Party has agreed to make certain financial
accommodations available to Borrower from time to time pursuant to the terms and
conditions thereof; and

 

WHEREAS, initially capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Guaranty and
Security Agreement or, if not defined therein, in the Loan Agreement, and this
Joinder shall be subject to the rules of construction set forth in Section 1(b)
of the Guaranty and Security Agreement, which rules of construction are
incorporated herein by this reference, mutatis mutandis; and

 

WHEREAS, Grantors have entered into the Guaranty and Security Agreement in order
to induce Lender to make certain financial accommodations to Borrower as
provided for in the Loan Agreement and the other Loan Documents; and

 

WHEREAS, pursuant to Section 4.1 of the Loan Agreement and Section 25 of the
Guaranty and Security Agreement, all Subsidiaries of the Loan Parties must
execute and deliver certain Loan Documents, including the Guarantor and Security
Agreement, and the joinder to the Guaranty and Security Agreement by the
undersigned Grantor or Grantors (collectively, the “New Grantors”) may be
accomplished by the execution of this Joinder in favor of Secured Party; and

 

WHEREAS, each New Grantor (a) is a Subsidiary of Borrower and, as such, will
benefit by virtue of the financial accommodations extended to Borrower by Lender
and (b) by becoming a Grantor will benefit from certain rights granted to the
Grantors pursuant to the terms of the Loan Documents;

 

NOW, THEREFORE, for and in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each New Grantor hereby agrees as follows:

 

1.          In accordance with Section 25 of the Guaranty and Security
Agreement, each New Grantor, by its signature below, becomes a “Grantor” and
“Guarantor” under the Guaranty and Security Agreement with the same force and
effect as if originally named therein as a “Grantor” and “Guarantor” and each
New Grantor hereby (a) agrees to all of the terms and provisions of the Guaranty
and Security Agreement applicable to it as a “Grantor” or “Guarantor” thereunder
and (b) represents and warrants that the representations and warranties made by
it as a “Grantor” or “Guarantor” thereunder are true and correct in all material
respects (except that such materiality qualifier shall not be applicable to any
representations and warranties that are already qualified or modified by
materiality in the text thereof) on and as of the date hereof. In furtherance of
the foregoing, each New Grantor hereby (a) jointly and severally unconditionally
and irrevocably guarantees as a primary obligor and not merely as a surety the
full and prompt payment when due, whether upon maturity, acceleration, or
otherwise, of all of the Guarantied Obligations, and (b) unconditionally grants,
assigns, and pledges to Secured Party to secure the Secured Obligations, a
continuing security interest in and to all of such New Grantor’s right, title
and interest in and to the Collateral. Each reference to a “Grantor” or
“Guarantor” in the Guaranty and Security Agreement shall be deemed to include
each New Grantor. The Guaranty and Security Agreement is incorporated herein by
reference.

 

 

 

 

2.          Schedule 1, “Commercial Tort Claims”, Schedule 2, “Copyrights”,
Schedule 3, “Intellectual Property Licenses”, Schedule 4, “Patents”, Schedule 5,
“Pledged Companies”, Schedule 6, “Trademarks”, Schedule 7, Name; Chief Executive
Office; Tax Identification Numbers and Organizational Numbers, Schedule 8,
“Owned and Leased Real Property”, Schedule 9, “Deposit Accounts and Securities
Accounts”, Schedule 10, “Controlled Account Banks” and Schedule 11, “List of
Uniform Commercial Code Filing Jurisdictions” attached hereto supplement
Schedule 1, Schedule 2, Schedule 3, Schedule 4, Schedule 5, Schedule 6, Schedule
7, Schedule 8, Schedule 9, Schedule 10, and Schedule 11, respectively, to the
Guaranty and Security Agreement and shall be deemed a part thereof for all
purposes of the Guaranty and Security Agreement.

 

3.          Each New Grantor authorizes Secured Party at any time and from time
to time to file, transmit, or communicate, as applicable, financing statements
and amendments thereto (i) describing the Collateral as “all personal property
of debtor” or “all assets of debtor” or words of similar effect, (ii) describing
the Collateral as being of equal or lesser scope or with greater detail, or
(iii) that contain any information required by part 5 of Article 9 of the UCC
for the sufficiency or filing office acceptance. Each New Grantor also hereby
ratifies any and all financing statements or amendments previously filed by
Secured Party in any jurisdiction in connection with the Loan Documents.

 

4.          Each New Grantor represents and warrants to Secured Party that this
Joinder has been duly executed and delivered by such New Grantor and constitutes
its legal, valid, and binding obligation, enforceable against it in accordance
with its terms, except as enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium, or other similar
laws affecting creditors’ rights generally and general principles of equity
(regardless of whether such enforceability is considered in a proceeding at law
or in equity).

 

5.          This Joinder is a Loan Document. This Joinder may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Joinder. Delivery of an executed counterpart of this Joinder by telefacsimile or
other electronic method of transmission shall be equally as effective as
delivery of an original executed counterpart of this Joinder. Any party
delivering an executed counterpart of this Joinder by telefacsimile or other
electronic method of transmission also shall deliver an original executed
counterpart of this Joinder but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Joinder.

 

6.          The Guaranty and Security Agreement, as supplemented hereby, shall
remain in full force and effect.

 

7.          THIS JOINDER SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF
LAW AND VENUE AND JURY TRIAL WAIVER SET FORTH IN SECTION 24 OF THE GUARANTY AND
SECURITY AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS
REFERENCE, MUTATIS MUTANDIS.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

   

 

 

  

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

 

NEW GRANTOR: [NAME OF NEW GRANTOR]       By:       Name:     Title:       [NAME
OF NEW GRANTOR]       By:       Name:     Title:     SECURED PARTY: NTR METALS,
LLC, a Texas limited liability company       By:       Name:     Title:

 

[SIGNATURE PAGE TO JOINDER NO. ____ TO GUARANTY AND SECURITY AGREEMENT]

 

 

 

 

EXHIBIT A

 

COPYRIGHT SECURITY AGREEMENT

 

This COPYRIGHT SECURITY AGREEMENT (this “Copyright Security Agreement”) is made
this ___ day of ___________, 20__, by and among Grantors listed on the signature
pages hereof (collectively, jointly and severally, “Grantors” and each
individually “Grantor”), and NTR METALS, LLC, a Texas limited liability company,
together with its successors and assigns, “Secured Party”).

 

WITNESSETH:

 

WHEREAS, pursuant to that certain Loan Agreement dated as of July 19, 2012 (as
amended, restated, supplemented, or otherwise modified from time to time, the
“Loan Agreement”) by and among DGSE Companies, Inc., as borrower (“Borrower”),
and Secured Party, as lender, Secured Party has agreed to make certain financial
accommodations available to Borrower from time to time pursuant to the terms and
conditions thereof; and

 

WHEREAS, Secured Party is willing to make the financial accommodations to
Borrower as provided for in the Loan Agreement and the other Loan Documents, but
only upon the condition, among others, that Grantors shall have executed and
delivered to Secured Party, that certain Guaranty and Security Agreement, dated
as of July 19, 2012 (including all annexes, exhibits or schedules thereto, as
from time to time amended, restated, supplemented or otherwise modified, the
“Guaranty and Security Agreement”); and

 

WHEREAS, pursuant to the Guaranty and Security Agreement, Grantors are required
to execute and deliver to Secured Party, this Copyright Security Agreement;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantors hereby agree as follows:

 

1.          DEFINED TERMS. All initially capitalized terms used but not
otherwise defined herein have the meanings given to them in the Guaranty and
Security Agreement or, if not defined therein, in the Loan Agreement, and this
Copyright Security Agreement shall be subject to the rules of construction set
forth in Section 1(b) of the Guaranty and Security Agreement, which rules of
construction are incorporated herein by this reference, mutatis mutandis.

 

2.          GRANT OF SECURITY INTEREST IN COPYRIGHT COLLATERAL. Each Grantor
hereby unconditionally grants, assigns, and pledges to Secured Party, to secure
the Secured Obligations, a continuing security interest (referred to in this
Copyright Security Agreement as the “Security Interest”) in all of such
Grantor’s right, title and interest in and to the following, whether now owned
or hereafter acquired or arising (collectively, the “Copyright Collateral”):

 

(a)          all of such Grantor’s Copyrights and Copyright Intellectual
Property Licenses to which it is a party including those referred to on Schedule
I;

 

(b)          all renewals or extensions of the foregoing; and

 

(c)          all products and proceeds of the foregoing, including any claim by
such Grantor against third parties for past, present or future infringement of
any Copyright or any Copyright exclusively licensed under any Intellectual
Property License, including the right to receive damages, or the right to
receive license fees, royalties, and other compensation under any Copyright
Intellectual Property License.

 

 

 

 

3.          SECURITY FOR SECURED OBLIGATIONS. This Copyright Security Agreement
and the Security Interest created hereby secures the payment and performance of
the Secured Obligations, whether now existing or arising hereafter. Without
limiting the generality of the foregoing, this Copyright Security Agreement
secures the payment of all amounts which constitute part of the Secured
Obligations and would be owed by Grantors, or any of them, to Secured Party,
whether or not they are unenforceable or not allowable due to the existence of
an Insolvency Proceeding involving any Grantor.

 

4.          SECURITY AGREEMENT. The Security Interest granted pursuant to this
Copyright Security Agreement is granted in conjunction with the security
interests granted to Secured Party, pursuant to the Guaranty and Security
Agreement. Each Grantor hereby acknowledges and affirms that the rights and
remedies of Secured Party with respect to the Security Interest in the Copyright
Collateral made and granted hereby are more fully set forth in the Guaranty and
Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein. To the extent there is any
inconsistency between this Copyright Security Agreement and the Guaranty and
Security Agreement, the Guaranty and Security Agreement shall control.

 

5.          AUTHORIZATION TO SUPPLEMENT. Grantors shall give Secured Party prior
written notice of no less than five (5) Business Days before filing any
additional application for registration of any copyright and prompt notice in
writing of any additional copyright registrations granted therefor after the
date hereof. Without limiting Grantors’ obligations under this Section, Grantors
hereby authorize Secured Party unilaterally to modify this Copyright Security
Agreement by amending Schedule I to include any future United States registered
copyrights or applications therefor of each Grantor. Notwithstanding the
foregoing, no failure to so modify this Copyright Security Agreement or amend
Schedule I shall in any way affect, invalidate or detract from Secured Party’s
continuing security interest in all Collateral, whether or not listed on
Schedule I.

 

6.          COUNTERPARTS. This Copyright Security Agreement is a Loan Document.
This Copyright Security Agreement may be executed in any number of counterparts
and by different parties on separate counterparts, each of which, when executed
and delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Copyright Security Agreement.
Delivery of an executed counterpart of this Copyright Security Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Copyright
Security Agreement. Any party delivering an executed counterpart of this
Copyright Security Agreement by telefacsimile or other electronic method of
transmission also shall deliver an original executed counterpart of this
Copyright Security Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Copyright Security Agreement.

 

7.          CHOICE OF LAW AND VENUE AND JURY TRIAL WAIVER PROVISION. THIS
COPYRIGHT SECURITY AGREEMENT SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE
OF LAW AND VENUE AND JURY TRIAL WAIVER SET FORTH IN SECTION 24 OF THE GUARANTY
AND SECURITY AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS
REFERENCE, MUTATIS MUTANDIS.

 

[signature page follows]

 

2

 

 

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

 

GRANTORS:         By:       Name:     Title:           By:       Name:    
Title:       ACCEPTED AND ACKNOWLEDGED BY:     SECURED PARTY: NTR METALS, LLC, a
Texas limited liability company       By:       Name:     Title:

 

[SIGNATURE PAGE TO COPYRIGHT SECURITY AGREEMENT]

 

 

 

 

SCHEDULE I
to
COPYRIGHT SECURITY AGREEMENT

 

Copyright Registrations

 

Grantor   Country   Copyright   Registration No.   Registration Date            
                                                           

 

Copyright Licenses

 

 

 

 

EXHIBIT B

 

PATENT SECURITY AGREEMENT

 

This PATENT SECURITY AGREEMENT (this “Patent Security Agreement”) is made this
___ day of ___________, 20__, by and among the Grantors listed on the signature
pages hereof (collectively, jointly and severally, “Grantors” and each
individually “Grantor”), and NTR METALS, LLC, a Texas limited liability company,
together with its successors and assigns, “Secured Party”).

 

WITNESSETH:

 

WHEREAS, pursuant to that certain Loan Agreement dated as of July 19, 2012 (as
amended, restated, supplemented, or otherwise modified from time to time, the
“Loan Agreement”) by and among DGSE Companies, Inc., as borrower (“Borrower”),
and Secured Party, as Lender, Lender has agreed to make certain financial
accommodations available to Borrower from time to time pursuant to the terms and
conditions thereof; and

 

WHEREAS, Secured Party is willing to make the financial accommodations to
Borrower as provided for in the Loan Agreement and the other Loan Documents, but
only upon the condition, among others, that the Grantors shall have executed and
delivered to Secured Party, that certain Guaranty and Security Agreement, dated
as of July 19, 2012 (including all annexes, exhibits or schedules thereto, as
from time to time amended, restated, supplemented or otherwise modified, the
“Guaranty and Security Agreement”); and

 

WHEREAS, pursuant to the Guaranty and Security Agreement, Grantors are required
to execute and deliver to Secured Party, this Patent Security Agreement;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor hereby agrees as
follows:

 

1.          DEFINED TERMS. All initially capitalized terms used but not
otherwise defined herein have the meanings given to them in the Guaranty and
Security Agreement or, if not defined therein, in the Loan Agreement, and this
Patent Security Agreement shall be subject to the rules of construction set
forth in Section 1(b) of the Guaranty and Security Agreement, which rules of
construction are incorporated herein by this reference, mutatis mutandis.

 

2.          GRANT OF SECURITY INTEREST IN PATENT COLLATERAL. Each Grantor hereby
unconditionally grants, assigns, and pledges to Secured Party to secure the
Secured Obligations, a continuing security interest (referred to in this Patent
Security Agreement as the “Security Interest”) in all of such Grantor’s right,
title and interest in and to the following, whether now owned or hereafter
acquired or arising (collectively, the “Patent Collateral”):

 

(a)          all of its Patents and Patent Intellectual Property Licenses to
which it is a party including those referred to on Schedule I;

 

(b)          all divisionals, continuations, continuations-in-part, reissues,
reexaminations, or extensions of the foregoing; and

 

 

 

 

(c)          all products and proceeds of the foregoing, including any claim by
such Grantor against third parties for past, present or future infringement of
any Patent or any Patent exclusively licensed under any Intellectual Property
License, including the right to receive damages, or right to receive license
fees, royalties, and other compensation under any Patent Intellectual Property
License.

 

3.          SECURITY FOR SECURED OBLIGATIONS. This Patent Security Agreement and
the Security Interest created hereby secures the payment and performance of the
Secured Obligations, whether now existing or arising hereafter. Without limiting
the generality of the foregoing, this Patent Security Agreement secures the
payment of all amounts which constitute part of the Secured Obligations and
would be owed by Grantors, or any of them, to Secured Party, whether or not they
are unenforceable or not allowable due to the existence of an Insolvency
Proceeding involving any Grantor.

 

4.          SECURITY AGREEMENT. The Security Interest granted pursuant to this
Patent Security Agreement is granted in conjunction with the security interests
granted to Secured Party, pursuant to the Guaranty and Security Agreement. Each
Grantor hereby acknowledges and affirms that the rights and remedies of Secured
Party with respect to the Security Interest in the Patent Collateral made and
granted hereby are more fully set forth in the Guaranty and Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein. To the extent there is any inconsistency between this
Patent Security Agreement and the Guaranty and Security Agreement, the Guaranty
and Security Agreement shall control.

 

5.          AUTHORIZATION TO SUPPLEMENT. If any Grantor shall obtain rights to
any new patent application or issued patent or become entitled to the benefit of
any patent application or patent for any divisional, continuation,
continuation-in-part, reissue, or reexamination of any existing patent or patent
application, the provisions of this Patent Security Agreement shall
automatically apply thereto. Grantors shall give prompt notice in writing to
Secured Party with respect to any such new patent rights. Without limiting
Grantors’ obligations under this Section, Grantors hereby authorize Secured
Party unilaterally to modify this Patent Security Agreement by amending Schedule
I to include any such new patent rights of each Grantor. Notwithstanding the
foregoing, no failure to so modify this Patent Security Agreement or amend
Schedule I shall in any way affect, invalidate or detract from Secured Party’s
continuing security interest in all Collateral, whether or not listed on
Schedule I.

 

6.          COUNTERPARTS. This Patent Security Agreement is a Loan Document.
This Patent Security Agreement may be executed in any number of counterparts and
by different parties on separate counterparts, each of which, when executed and
delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Patent Security Agreement.
Delivery of an executed counterpart of this Patent Security Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Patent
Security Agreement. Any party delivering an executed counterpart of this Patent
Security Agreement by telefacsimile or other electronic method of transmission
also shall deliver an original executed counterpart of this Patent Security
Agreement but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Patent Security
Agreement.

 

7.          CHOICE OF LAW AND VENUE AND JURY TRIAL WAIVER PROVISION. THIS PATENT
SECURITY AGREEMENT SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW
AND VENUE AND JURY TRIAL WAIVER SET FORTH IN SECTION 24 OF THE GUARANTY AND
SECURITY AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS
REFERENCE, MUTATIS MUTANDIS.

 

[signature page follows]

 

2

 

 

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

 

GRANTORS:         By:       Name:     Title:           By:       Name:    
Title:     SECURED PARTY: ACCEPTED AND ACKNOWLEDGED BY:   NTR METALS, LLC, a
Texas limited liability company       By:       Name:     Title:

 

[SIGNATURE PAGE TO PATENT SECURITY AGREEMENT]

 

 

 

 

SCHEDULE I
to
PATENT SECURITY AGREEMENT

 

Patents

 

 

Grantor

 

 

Country

 

 

Patent

 

Application/ Patent

No.

 

 

Filing Date

                                                                               
         

 

Patent Licenses

 

 

 

 

EXHIBIT C

 

PLEDGED INTERESTS ADDENDUM

 

This Pledged Interests Addendum, dated as of July 19, 2012 (this “Pledged
Interests Addendum”), is delivered pursuant to Section 7 of the Guaranty and
Security Agreement referred to below. The undersigned hereby agrees that this
Pledged Interests Addendum may be attached to that certain Guaranty and Security
Agreement, dated as of July 19, 2012, (as amended, restated, supplemented, or
otherwise modified from time to time, the “Guaranty and Security Agreement”),
made by the undersigned, together with the other Grantors named therein, to NTR
METALS, LLC, a Texas limited liability company, as Secured Party. Initially
capitalized terms used but not defined herein shall have the meaning ascribed to
such terms in the Guaranty and Security Agreement or, if not defined therein, in
the Loan Agreement, and this Pledged Interests Addendum shall be subject to the
rules of construction set forth in Section 1(b) of the Guaranty and Security
Agreement, which rules of construction are incorporated herein by this
reference, mutatis mutandis. The undersigned hereby agrees that the additional
interests listed on Schedule I shall be and become part of the Pledged Interests
pledged by the undersigned to Secured Party in the Guaranty and Security
Agreement and any pledged company set forth on Schedule I shall be and become a
“Pledged Company” under the Guaranty and Security Agreement, each with the same
force and effect as if originally named therein.

 

This Pledged interests Addendum is a Loan Document. Delivery of an executed
counterpart of this Pledged Interests Addendum by telefacsimile or other
electronic method of transmission shall be equally as effective as delivery of
an original executed counterpart of this Pledged Interests Addendum. If the
undersigned delivers an executed counterpart of this Pledged Interests Addendum
by telefacsimile or other electronic method of transmission, the undersigned
shall also deliver an original executed counterpart of this Pledged Interests
Addendum but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Pledged
Interests Addendum.

 

The undersigned hereby certifies that the representations and warranties set
forth in Section 6 of the Guaranty and Security Agreement of the undersigned are
true and correct as to the Pledged Interests listed herein on and as of the date
hereof.

 

THIS PLEDGED INTERESTS ADDENDUM SHALL BE SUBJECT TO THE PROVISIONS REGARDING
CHOICE OF LAW AND VENUE AND JURY TRIAL WAIVER SET FORTH IN SECTION 24 OF THE
GUARANTY AND SECURITY AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY
THIS REFERENCE, MUTATIS MUTANDIS.

 

[signature page follows]

 

 

 

 

IN WITNESS WHEREOF, the undersigned has caused this Pledged Interests Addendum
to be executed and delivered as of the day and year first above written.

 

[___________________]

 

  By:       Name:     Title:

 

 

 

 

SCHEDULE I
to
PLEDGED INTERESTS ADDENDUM

 

Pledged Interests

 

 

Name of Grantor

 

Name of Pledged

Company

 

Number of

Shares/Units

 

Class of

Interests

 

Percentage of

Class Owned

 

Certificate

Nos.

                                           

 

 

 

 

EXHIBIT D

 

TRADEMARK SECURITY AGREEMENT

 

This TRADEMARK SECURITY AGREEMENT (this “Trademark Security Agreement”) is made
this ___ day of ___________, 20__, by and among Grantors listed on the signature
pages hereof (collectively, jointly and severally, “Grantors” and each
individually “Grantor”), and NTR METALS, LLC, a Texas limited liability company,
together with its successors and assigns, “Secured Party”).

 

WITNESSETH:

 

WHEREAS, pursuant to that certain Loan Agreement dated as of July 19, 2012 (as
amended, restated, supplemented, or otherwise modified from time to time, the
“Loan Agreement”) by and among DGSE Companies, Inc., as borrower (“Borrower”),
and Secured Party, as lender, Secured Party has agreed to make certain financial
accommodations available to Borrower from time to time pursuant to the terms and
conditions thereof; and

 

WHEREAS, Secured Party is willing to make the financial accommodations to
Borrower as provided for in the Loan Agreement and the other Loan Documents, but
only upon the condition, among others, that Grantors shall have executed and
delivered to Secured Party, that certain Guaranty and Security Agreement, dated
as of July 19, 2012 (including all annexes, exhibits or schedules thereto, as
from time to time amended, restated, supplemented or otherwise modified, the
“Guaranty and Security Agreement”); and

 

WHEREAS, pursuant to the Guaranty and Security Agreement, Grantors are required
to execute and deliver to Secured Party, this Trademark Security Agreement;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor hereby agrees as
follows:

 

1.          DEFINED TERMS. All initially capitalized terms used but not
otherwise defined herein have the meanings given to them in the Guaranty and
Security Agreement or, if not defined therein, in the Loan Agreement, and this
Trademark Security Agreement shall be subject to the rules of construction set
forth in Section 1(b) of the Guaranty and Security Agreement, which rules of
construction are incorporated herein by this reference, mutatis mutandis.

 

2.          GRANT OF SECURITY INTEREST IN TRADEMARK COLLATERAL. Each Grantor
hereby unconditionally grants, assigns, and pledges to Secured Party to secure
the Secured Obligations, a continuing security interest (referred to in this
Trademark Security Agreement as the “Security Interest”) in all of such
Grantor’s right, title and interest in and to the following, whether now owned
or hereafter acquired or arising (collectively, the “Trademark Collateral”):

 

(a)          all of its Trademarks and Trademark Intellectual Property Licenses
to which it is a party including those referred to on Schedule I;

 

(b)          all goodwill of the business connected with the use of, and
symbolized by, each Trademark and each Trademark Intellectual Property License;
and

 

 

 

 

(c)          all products and proceeds (as that term is defined in the UCC) of
the foregoing, including any claim by such Grantor against third parties for
past, present or future (i) infringement or dilution of any Trademark or any
Trademarks exclusively licensed under any Intellectual Property License,
including right to receive any damages, (ii) injury to the goodwill associated
with any Trademark, or (iii) right to receive license fees, royalties, and other
compensation under any Trademark Intellectual Property License.

 

3.          SECURITY FOR SECURED OBLIGATIONS. This Trademark Security Agreement
and the Security Interest created hereby secures the payment and performance of
the Secured Obligations, whether now existing or arising hereafter. Without
limiting the generality of the foregoing, this Trademark Security Agreement
secures the payment of all amounts which constitute part of the Secured
Obligations and would be owed by Grantors, or any of them, to Secured Party,
whether or not they are unenforceable or not allowable due to the existence of
an Insolvency Proceeding involving any Grantor.

 

4.          SECURITY AGREEMENT. The Security Interest granted pursuant to this
Trademark Security Agreement is granted in conjunction with the security
interests granted to Secured Party, pursuant to the Guaranty and Security
Agreement. Each Grantor hereby acknowledges and affirms that the rights and
remedies of Secured Party with respect to the Security Interest in the Trademark
Collateral made and granted hereby are more fully set forth in the Guaranty and
Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein. To the extent there is any
inconsistency between this Trademark Security Agreement and the Guaranty and
Security Agreement, the Guaranty and Security Agreement shall control.

 

5.          AUTHORIZATION TO SUPPLEMENT. If any Grantor shall obtain rights to
any new trademarks, the provisions of this Trademark Security Agreement shall
automatically apply thereto. Grantors shall give prompt notice in writing to
Secured Party with respect to any such new trademarks or renewal or extension of
any trademark registration. Without limiting Grantors’ obligations under this
Section, Grantors hereby authorize Secured Party unilaterally to modify this
Trademark Security Agreement by amending Schedule I to include any such new
trademark rights of each Grantor. Notwithstanding the foregoing, no failure to
so modify this Trademark Security Agreement or amend Schedule I shall in any way
affect, invalidate or detract from Secured Party’s continuing security interest
in all Collateral, whether or not listed on Schedule I.

 

6.          COUNTERPARTS. This Trademark Security Agreement is a Loan Document.
This Trademark Security Agreement may be executed in any number of counterparts
and by different parties on separate counterparts, each of which, when executed
and delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Trademark Security Agreement.
Delivery of an executed counterpart of this Trademark Security Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Trademark
Security Agreement. Any party delivering an executed counterpart of this
Trademark Security Agreement by telefacsimile or other electronic method of
transmission also shall deliver an original executed counterpart of this
Trademark Security Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Trademark Security Agreement.

 

7.          CHOICE OF LAW AND VENUE AND JURY TRIAL WAIVER PROVISION. THIS
TRADEMARK SECURITY AGREEMENT SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE
OF LAW AND VENUE AND JURY TRIAL WAIVER SET FORTH IN SECTION 24 OF THE GUARANTY
AND SECURITY AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS
REFERENCE, MUTATIS MUTANDIS.

 

[signature page follows]

 

2

 

 

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

   

GRANTORS:          By:       Name:     Title:               By:       Name:    
Title:     SECURED PARTY: ACCEPTED AND ACKNOWLEDGED BY:       NTR METALS, LLC, a
Texas limited liability company       By:       Name:     Title:

 

[SIGNATURE PAGE TO TRADEMARK SECURITY AGREEMENT]

  

 

 

 

SCHEDULE I
to
TRADEMARK SECURITY AGREEMENT

  
Trademark Registrations/Applications

   

 

Grantor

 

 

Country

 

 

Mark

 

Application/

Registration No.

 

 

App/Reg Date

                                                                       

 

Trade Names

 

Common Law Trademarks

 

Trademarks Not Currently In Use

 

Trademark Licenses