Exhibit 10.2

 

[Execution]

 

GUARANTY AND SECURITY AGREEMENT

 

This GUARANTY AND SECURITY AGREEMENT (this “Agreement”), dated as of October 29,
2020, by and 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 WELLS FARGO BANK, NATIONAL ASSOCIATION, a
national banking association (“Wells Fargo”), in its capacity as administrative
agent for each member of the Lender Group and the Bank Product Providers (in
such capacity, together with its successors and assigns in such capacity,
“Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement, of even date herewith (as
amended, restated, supplemented, or otherwise modified from time to time, the
“Credit Agreement”), by and among TESSCO Technologies Incorporated, a Delaware
corporation, as parent (“Parent”), TESSCO Incorporated, a Delaware corporation
(“Tessco”), GW Service Solutions, Inc., a Delaware corporation (“GW”), TESSCO
Service Solutions, Inc., a Delaware corporation (“Service”), TCPM, Inc., a
Delaware corporation (“TCPM”, and together with Tessco, GW, Service and those
additional entities that hereafter become parties to the Credit Agreement as
Borrowers in accordance with the terms thereof, each, a “Borrower” and
individually and collectively, jointly and severally, the “Borrowers”), the
lenders party thereto as “Lenders” (each of such Lenders, together with its
successors and assigns, is referred to hereinafter as a “Lender”) and Agent, the
Lender Group has agreed to make certain financial accommodations available to
Borrowers from time to time pursuant to the terms and conditions thereof; and

 

WHEREAS, Agent has agreed to act as agent for the benefit of the Lender Group
and the Bank Product Providers in connection with the transactions contemplated
by the Credit Agreement and this Agreement;

 

WHEREAS, in order to induce the Lender Group to enter into the Credit Agreement
and the other Loan Documents and to extend the Loans thereunder, to induce the
Bank Product Providers to enter into the Bank Product Agreements, and to induce
the Lender Group and the Bank Product Providers to make financial accommodations
to Borrowers as provided for in the Credit Agreement, the other Loan Documents
and the Bank Product Agreements, (a) each Grantor (other than any Borrower) has
agreed to guaranty the Guarantied Obligations, and (b) each Grantor has agreed
to grant to Agent, for the benefit of the Lender Group and the Bank Product
Providers, 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 any Borrower) is an Affiliate of each Borrower
and, as such, will benefit by virtue of the financial accommodations extended to
Borrowers by the Lender Group.

 

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)          All initially capitalized terms used herein (including in the
preamble and recitals hereof) without definition shall have the meanings
ascribed thereto in the Credit Agreement. Any terms (whether capitalized or
lower case) used in this Agreement that are defined in the Code (including,
without limitation, Account, Account Debtor, Chattel Paper, Commercial Tort
Claims, Deposit Account, Drafts, Documents, General
Intangibles, Inventory, Investment Property, Instruments, Letters of Credit,
Letter of Credit Rights, Promissory Notes, Proceeds, Securities Account and
Supporting Obligations) shall be construed and defined as set forth in the Code
unless otherwise defined herein or in the Credit Agreement; provided, that to
the extent that the Code is used to define any term used herein and if such term
is defined differently in different Articles of the Code, the definition of such
term contained in Article 9 of the Code shall govern. 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(k) hereof.

 

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

 

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

 

(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” and “Borrowers” have the respective meanings specified
therefor in the recitals to this Agreement.

 

(vi)           “Cash Dominion Event” means the occurrence of either of the
following: (a) Excess Availability is less than the greater of (x) 16.7% of the
Maximum Revolver Amount and (y) $12,500,000 for 5 consecutive Business Days, or
(b) the occurrence and continuance of any Event of Default; provided, that,
(i) to the extent that the Cash Dominion Event has occurred due to clause (a) of
this definition, if Excess Availability shall be equal to or greater than the
applicable amount for at least 45 consecutive days thereafter, the Cash Dominion
Event shall no longer be deemed to exist or be continuing until such time as
Excess Availability may again be less than the applicable amount provided for in
clause (a) of this definition, (ii) to the extent that the Cash Dominion Event
has occurred due to clause (b) of this definition, if such Event of Default is
cured or waived or otherwise no longer exists for a period of at least 45
consecutive days, the Cash Dominion Event shall no longer be deemed to exist or
be continuing, and (iii) a Cash Dominion Event may not be cured as contemplated
by clause (i) or (ii) above more than three (3) times in any twelve (12) month
period or more than six (6) times during the term of this Agreement.

 

(vii)          “Code” means the New York Uniform Commercial Code, as in effect
from time to time; provided, 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 Agent’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 New York, the term “Code” 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.

 

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

 

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(ix)            “Collection Account” means a Deposit Account of a Grantor which
is used exclusively for deposits of collections and proceeds of Collateral and
not as a disbursement or operating account upon which checks or other drafts may
be drawn.

 

(x)            “Commodity Exchange Act” means the Commodity Exchange Act (7
U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

 

(xi)           “Controlled Account” has the meaning specified therefor in
Section 7(k) hereof.

 

(xii)          “Controlled Account Agreements” means those certain cash
management agreements, in form and substance reasonably satisfactory to Agent,
each of which is executed and delivered by a Grantor, Agent, and one of the
Controlled Account Banks.

 

(xiii)         “Controlled Account Bank” has the meaning specified therefor in
Section 7(k) hereof.

 

(xiv)         “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, (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.

 

(xv)            “Credit Agreement” has the meaning specified therefor in the
recitals to this Agreement.

 

(xvi)            “Excluded Accounts” means (A) Deposit Accounts with an
aggregate amount on deposit therein of not more than $100,000 at any one time
for all such Deposit Accounts, (B) Deposit Accounts specially and exclusively
used for payroll, payroll taxes and other employee wage and benefit payments to
or for any Grantor’s employees or (C) for the avoidance of doubt, all Securities
Accounts.

 

(xvii)        “Excluded Swap Obligation” means, with respect to any Grantor, any
Swap Obligation if, and to the extent that, all or a portion of the guaranty of
such Grantor of (including by virtue of the joint and several liability
provisions of Section 2.15 of the Credit Agreement with respect to any Grantor
that is a Borrower), or the grant by such Grantor of a security interest to
secure, such Swap Obligation (or any guaranty thereof) is or becomes illegal
under the Commodity Exchange Act or any rule, regulation or order of the
Commodity Futures Trading Commission (or the application or official
interpretation of any thereof) by virtue of such Grantor’s failure for any
reason to constitute an “eligible contract participant” as defined in the
Commodity Exchange Act and the regulations thereunder at the time the guaranty
of such Grantor or the grant of such security interest becomes effective with
respect to such Swap Obligation. If a Swap Obligation arises under a master
agreement governing more than one swap, such exclusion shall apply only to the
portion of such Swap Obligation that is attributable to swaps for which such
guaranty or security interest is or becomes illegal.

 

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

 

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(xix)          “General Intangibles” means general intangibles (as that term is
defined in the Code), and includes payment intangibles, software, contract
rights, rights to payment, rights under Hedge Agreements (including the right to
receive payment on account of the termination (voluntarily or involuntarily) of
such Hedge Agreements), rights arising under common law, statutes, or
regulations, choses or things in action, goodwill, Intellectual
Property, Intellectual Property Licenses, purchase orders, customer lists, route
lists, rights to payment and other rights under Acquisition Documents, rights to
payment and other rights under any royalty or licensing agreements, including
Intellectual Property Licenses, infringement claims, monies due or recoverable
from pension funds, 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 Code, 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.

 

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

 

(xxi)          “Guarantied Obligations” means all of the Obligations (including
any Bank Product 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), fees (including the fees
provided for in the Fee Letter), Lender Group Expenses (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, and any and all expenses (including
reasonable counsel fees and expenses) incurred by Agent, any other member of the
Lender Group, or any Bank Product Provider (or any of them) in enforcing any
rights under the any of the Loan Documents. 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 any Borrower to Agent,
any other member of the Lender Group, or any Bank Product Provider 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 any Borrower or any guarantor; provided that,
anything to the contrary contained in the foregoing notwithstanding, the
Guarantied Obligations shall exclude any Excluded Swap Obligation.

 

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

 

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

 

(xxiv)       “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.

 

(xxv)        “Intellectual Property Licenses” means, with respect to any
Grantor, (A) any licenses or other similar rights provided to such Grantor 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 such Grantor, 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) [reserved], and (z) the right to use any of the licenses
or other similar rights described in this definition in connection with the
enforcement of the Lender Group’s rights under the Loan Documents.

 

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

 

(xxvii)      “Lender” and “Lenders” have the respective meanings specified
therefor in the recitals to this Agreement.

 

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

 

(xxix)        “Parent” has the meaning specified therefor in the recitals to
this Agreement.

 

(xxx)         “Patents” means patents and patent applications, including
(A) [reserved], (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.

 

(xxxi)        “Pledged Notes” has the meaning specified therefor in
Section 6(m) hereof.

 

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

 

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

 

(xxxiv)     “Qualified ECP Grantor” means, in respect of any Swap Obligation,
each Grantor that has total assets exceeding $10,000,000 at the time the
relevant guaranty, keepwell, or grant of the relevant security interest becomes
effective with respect to such Swap Obligation or such other person as
constitutes an “eligible contract participant” under the Commodity Exchange Act
or any regulations promulgated thereunder and can cause another person to
qualify as an “eligible contract participant” at such time by entering into a
keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

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

 

(xxxvi)     “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.

 

(xxxvii)    “Rescission” has the meaning specified therefor in
Section 7(k) hereof.

 

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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 Credit
Agreement, or any of the other Loan Documents, (B) all Bank Product Obligations,
and (C) all other Obligations of each Borrower and all other Guarantied
Obligations of each Guarantor (including, in the case of each of clauses (A),
(B) and (C), Lender Group 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) ; provided that, anything to the contrary contained in the foregoing
notwithstanding, the Secured Obligations shall exclude any Excluded Swap
Obligation.

 

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

 

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

 

(xli)          “Swap Obligation” means, with respect to any Grantor, any
obligation to pay or perform under any agreement, contract or transaction that
constitutes a “swap” within the meaning of section 1a(47) of the Commodity
Exchange Act.

 

(xlii)         “Trademarks” means any and all trademarks, trade names,
registered trademarks, trademark applications, service marks, registered service
marks and service mark applications, including (A) [reserved], (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.

 

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

 

(b)          This Agreement shall be subject to the rules of construction set
forth in Section 1.4 of the Credit Agreement, and such rules of construction are
incorporated herein by this reference, mutatis mutandis.

 

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

 

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2.            Guaranty.

 

(a)          In recognition of the direct and indirect benefits to be received
by Guarantors from the proceeds of the Revolving Loans, the issuance of the
Letters of Credit, and the entering into of the Bank Product Agreements and by
virtue of the financial accommodations to be made to Borrowers, 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 constituting
Guarantied 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 Agent, for
the benefit of the Lender Group and the Bank Product Providers, together
(subject to the next to last sentence of Section 10.3 of the Credit Agreement)
with any and all expenses (including Lender Group Expenses) that may be incurred
by Agent or any other member of the Lender Group or any Bank Product Provider in
demanding, enforcing, or collecting any of the Guarantied Obligations (including
the enforcement of any collateral for such Guarantied Obligations or any
collateral for the obligations of the Guarantors under this Guaranty). If claim
is ever made upon Agent or any other member of the Lender Group or any Bank
Product Provider for repayment or recovery of any amount or amounts received in
payment of or on account of any or all of the Guarantied Obligations and any of
Agent or any other member of the Lender Group or any Bank Product Provider
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 any 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 Guarantied Obligations
to Agent, for the benefit of the Lender Group and the Bank Product Providers,
whether or not due or payable by any Loan Party upon the occurrence of any of
the events specified in Section 8.4 or 8.5 of the Credit Agreement, and
irrevocably and unconditionally promises to pay such indebtedness to Agent, for
the benefit of the Lender Group and the Bank Product Providers, 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 Guarantied 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 (other than payment in full of the Guarantied
Obligations), (ii) any dissolution, termination, or increase, decrease, or
change in personnel by any Grantor, (iii) any payment made to Agent, any other
member of the Lender Group, or any Bank Product Provider on account of the
Obligations which Agent, such other member of the Lender Group, or such Bank
Product Provider 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, (iv) any action or inaction by Agent, any other member of
the Lender Group, or any Bank Product Provider, 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 Agent, (ii) no such revocation shall apply to any
Guarantied Obligations in existence on the date of receipt by Agent 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 any member of the Lender Group or
any Bank Product Provider in existence on the date of such revocation, (iv) no
payment by any Guarantor, any Borrower, or from any other source, prior to the
date of Agent’s receipt of written notice of such revocation shall reduce the
maximum obligation of such Guarantor hereunder, and (v) any payment by any
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, guaranteed 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 Agent (for the benefit of the Lender Group and the Bank
Product Providers) 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 Agent, the other members of the
Lender Group, and the Bank Product Providers without notice or demand (other
than any notice expressly required to be provided hereunder or under any other
Loan Document), 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;

 

(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;

 

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(vi)           apply any sums by whomever paid or however realized to any
liability or liabilities of any Grantor to Agent, any other member of the Lender
Group, or any Bank Product Provider 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, any other Loan Document, any Bank Product
Agreement, or any of the instruments or agreements referred to herein or
therein, or otherwise amend, modify, or supplement this Agreement, any other
Loan Document, any Bank Product Agreement, or any of such other instruments or
agreements; 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 (other
than a defense of payment in full of the Guarantied Obligations).

 

(g)         It is not necessary for Agent, any other member of the Lender Group,
or any Bank Product Provider 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 guaranteed
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 any
member of the Lender Group or any Bank Product Provider 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, supplement,
restatements, extension, novation, renewal, replacements, or continuation of, or
consent to departure from any other guaranty, for all or any of the Guarantied
Obligations;

 

(iv)           the existence of any claim, set-off, defense, or other right that
any Guarantor may have at any time against any Person, including Agent, any
other member of the Lender Group, or any Bank Product Provider;

 

(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;

 

9

 

 

(vi)           any right or defense arising by reason of any claim or defense
based upon an election of remedies by any member of the Lender Group or any Bank
Product Provider 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 Grantor or any other 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 Agent, any other
member of the Lender Group, or any Bank Product Provider 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 any member
of the Lender Group’s or any Bank Product Provider’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 Guarantied 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. Agent may, at the election of the Required Lenders
upon the occurrence and during the continuance of an Event of Default, foreclose
upon any Collateral held by Agent by one or more judicial or non-judicial 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 Agent, any other member of the Lender Group,
or any Bank Product Provider 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 Guarantied
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. 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 neither Agent nor any of the other members of
the Lender Group nor any Bank Product Provider shall have any duty to advise any
of the Guarantors of information known to them regarding such circumstances or
risks.

 

10

 

 

(iii)           To the fullest extent permitted by applicable law, each
Guarantor hereby waives: (A) any right to assert against any member of the
Lender Group or any Bank Product Provider, any defense (legal or equitable)
(other than the defense that all of the Guarantied Obligations have been paid in
full), set-off, counterclaim, or claim which each Guarantor may now or at any
time hereafter have against any Borrower or any other party liable to any member
of the Lender Group or any Bank Product Provider, (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 any member of the Lender Group or any Bank Product
Provider 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 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 Agent, any other member of the Lender Group, or any Bank
Product Provider 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 all of the Commitments have been terminated. 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 Agent, for the benefit of the
Lender Group and the Bank Product Providers, and shall forthwith be paid to
Agent 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 Credit 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,
collaterally assigns, and pledges to Agent, for the benefit of each member of
the Lender Group and each of the Bank Product Providers, to secure the Secured
Obligations (whether now existing or hereafter arising), 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;

 

11

 

 

(d)          [reserved];

 

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

 

(f)           [reserved];

 

(g)          [reserved];

 

(h)          [reserved];

 

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

 

(j)           all of such Grantor’s Inventory;

 

(k)           [reserved];

 

(l)            [reserved];

 

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

 

(n)          [reserved];

 

(o)          [reserved];

 

(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 Agent (or its agent or designee) or any other member of the Lender Group; and

 

(r)           all of the Proceeds and products, whether tangible or intangible,
of any of the foregoing, including proceeds of insurance covering or relating to
any or all of the foregoing, and any and all Accounts, Books, Chattel Paper,
Deposit Accounts, General Intangibles, Inventory, Negotiable Collateral,
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 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 Agent from time to time.

 

12

 

 

Notwithstanding anything contained in this Agreement to the contrary, the term
“Collateral” shall not include: (i) Investment Property, (ii) any rights or
interest in any contract, lease, permit, license, or license agreement covering
real or personal property of any Grantor if under the terms of such contract,
lease, permit, license, or license agreement, or applicable law with respect
thereto, the grant of a security interest or lien therein is prohibited as a
matter of law or under the terms of such contract, lease, permit, license, or
license agreement and such prohibition or restriction has not been waived or the
consent of the other party to such contract, lease, permit, license, or license
agreement has not been obtained (provided, that (A) the foregoing exclusions of
this clause (ii) shall in no way be construed (1) to apply to the extent that
any described prohibition or restriction is ineffective under Section 9-406,
9-407, 9-408, or 9-409 of the Code or other applicable law, or (2) to apply to
the extent that any consent or waiver has been obtained that would permit
Agent’s security interest or lien to attach notwithstanding the prohibition or
restriction on the pledge of such contract, lease, permit, license, or license
agreement and (B) the foregoing exclusions of clauses (i) and (ii) shall in no
way be construed to limit, impair, or otherwise affect any of Agent’s, any other
member of the Lender Group’s or any Bank Product Provider’s continuing security
interests in and liens upon any rights or interests of any Grantor in or to
(1) monies due or to become due under or in connection with any described
contract, lease, permit, license or license agreement (including any Accounts),
or (2) any proceeds from the sale, license, lease, or other dispositions of any
such contract, lease, permit, license or license agreement), (iii) any United
States intent-to-use trademark applications to the extent that, and solely
during the period in which, the grant of a security interest therein would
impair the validity or enforceability of such intent-to-use trademark
applications under applicable federal law; provided, that upon submission and
acceptance by the PTO of an amendment to allege use pursuant to 15 U.S.C.
Section 1060(a) (or any successor provision), such intent-to-use trademark
application shall be considered Collateral but only to the extent that it would
otherwise be included as Collateral pursuant to this Section 3 or (iv) all Real
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 Agent, the Lender Group, the Bank Product Providers or any of them, 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. Further, the Security Interest created hereby
encumbers each Grantor’s right, title, and interest in all Collateral, whether
now owned by such Grantor or hereafter acquired, obtained, developed, or created
by such Grantor and wherever located.

 

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, 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 Agent or any other member of the Lender
Group 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) none of the members of the Lender Group shall have any
obligation or liability under such contracts and agreements included in the
Collateral by reason of this Agreement, nor shall any of the members of the
Lender Group 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 Credit
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 Credit Agreement and the other Loan Documents.

 

13

 

 

6.            Representations and Warranties. In order to induce Agent to enter
into this Agreement for the benefit of the Lender Group and the Bank Product
Providers, each Grantor makes the following representations and warranties to
the Lender Group 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 Closing Date, 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 Revolving Loan (or other extension of credit) made
thereafter, as though made on and as of the date of such Revolving Loan (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 Code) and
jurisdiction of organization of each Grantor 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 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 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).

 

(d)          [Reserved].

 

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

 

(f)           [Reserved].

 

(g)          [Reserved].

 

(h)          (i)             each Grantor owns exclusively or holds licenses in
all Intellectual Property that is necessary in or material to the conduct of its
business;

 

(ii)            [Reserved];

 

(iii)           [Reserved];

 

(iv)           to each Grantor’s knowledge after reasonable inquiry, all
registered Copyrights, registered Trademarks, and issued Patents that are owned
by such Grantor and necessary in or material to the conduct of its business are
valid, subsisting and enforceable and in compliance with all legal requirements,
filings, and payments and other actions that are required to maintain such
Intellectual Property in full force and effect, in each case to the extent
necessary in or material to the conduct of its business; and

 

(v)            each Grantor has taken reasonable steps to maintain the
confidentiality of and otherwise protect and enforce its rights in all trade
secrets owned by such Grantor that are necessary in or material to the conduct
of the business of such Grantor except where the failure, individually or in the
aggregate could not reasonably be expected to result in a Material Adverse
Effect.

 

14

 

 

(i)           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 Code, 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 Code, 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 Agent, as secured party, in the
jurisdictions listed next to such Grantor’s name on Schedule 11. Upon the making
of such filings, Agent shall have a first priority (subject only to Permitted
Liens which are non-consensual Permitted Liens, permitted purchase money Liens,
or the interests of lessors under Capital Leases) 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 under the Code. All action by
any Grantor necessary to protect and perfect such security interest on each item
of Collateral has been duly taken.

 

(j)           [Reserved].

 

(k)          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 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, except (A) for consents,
approvals, authorizations, or other orders or actions that have already been
obtained or given (as applicable) and that are still in force, and (B) the
filing of financing statements and other filings necessary to perfect the
Security Interests granted hereby.

 

(l)           [Reserved].

 

(m)         There is no default, breach, violation, or event of acceleration
existing under any promissory note (as defined in the Code) constituting
Collateral and pledged hereunder (each a “Pledged Note”) and no event has
occurred or circumstance exists which, with the passage of time or the giving of
notice, or both, would constitute a default, breach, violation, or event of
acceleration under any Pledged Note, except for any default, breach, violation,
or event of acceleration under any Pledged Note(s), individually or in the
aggregate, with a principal amount of less than $3,500,000. During the
continuance of a Default or Event of Default, no Grantor that is an obligee
under a Pledged Note has waived any default, breach, violation, or event of
acceleration under such Pledged Note.

 

(n)          [Reserved].

 

7.            Covenants. Each Grantor, jointly and severally, covenants and
agrees with Agent that from and after the date of this Agreement and until the
date of termination of this Agreement in accordance with Section 23:

 

(a)          Possession of Collateral. In the event that any Collateral,
including Proceeds, is evidenced by or consists of Negotiable Collateral or
Chattel Paper having an aggregate value or face amount of $500,000 or more for
all such Negotiable Collateral or Chattel Paper, the Grantors shall promptly
(and in any event within seven Business Days (or such longer period as agreed to
by Agent in writing in its sole discretion) after acquisition thereof), notify
Agent thereof, and if and to the extent that perfection or priority of Agent’s
Security Interest is dependent on or enhanced by possession, the applicable
Grantor, promptly (and in any event within seven Business Days (or such longer
period as agreed to by Agent in writing in its sole discretion)) after request
by Agent, shall execute such other documents and instruments as shall be
requested by Agent or, if applicable, endorse and deliver physical possession of
such Negotiable Collateral or Chattel Paper to Agent, together with such undated
powers (or other relevant document of transfer acceptable to Agent) endorsed in
blank as shall be requested by Agent, and shall do such other acts or things
deemed necessary or desirable by Agent to protect Agent’s Security Interest
therein.

 

15

 

 

(b)         Chattel Paper.

 

(i)            Promptly (and in any event within seven Business Days (or such
longer period as agreed to by Agent in writing in its sole discretion)) after
request by Agent, each Grantor shall take all steps reasonably necessary to
grant Agent control of all electronic Chattel Paper in accordance with the Code
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 $350,000; and

 

(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 Credit Agreement), promptly upon the request of
Agent, 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 Wells Fargo Bank, National Association, as
Agent for the benefit of the Lender Group and the Bank Product Providers”.

 

(c)          Control Agreements.

 

(i)             Subject to any applicable time periods provided under Schedule
3.6 to the Credit Agreement, each Grantor shall obtain an authenticated Control
Agreement (which may include a Controlled Account Agreement), from each bank
maintaining a Deposit Account for such Grantor (other than with respect to any
Excluded Accounts);

 

(ii)            [Reserved]; and

 

(iii)           [Reserved].

 

(d)          Letter-of-Credit Rights. If the Grantors (or any of them) are or
become the beneficiary of letters of credit that constitutes Collateral having a
face amount or value of $500,000 or more in the aggregate, then the applicable
Grantor or Grantors shall promptly (and in any event within seven Business Days
(or such longer period as agreed to by Agent in writing in its sole discretion)
after becoming a beneficiary), notify Agent thereof and, promptly (and in any
event within seven Business Days (or such longer period as agreed to by Agent in
writing in its sole discretion)) after request by Agent, enter into a tri-party
agreement with Agent and the issuer or confirming bank with respect to
letter-of-credit rights assigning such letter-of-credit rights to Agent and
directing all payments thereunder to Agent’s Account, all in form and substance
reasonably satisfactory to Agent.

 

(e)          [Reserved].

 

(f)           Government Contracts. Other than Accounts and Chattel Paper the
aggregate value of which does not at any one time exceed $350,000, 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 seven Business Days (or such
longer period as agreed to by Agent in writing in its sole discretion) of the
creation thereof) notify Agent thereof and, promptly (and in any event within
seven Business Days (or such longer period as agreed to by Agent in writing in
its sole discretion)) after request by Agent, execute any instruments or take
any steps reasonably required by Agent in order that all moneys due or to become
due under such contract or contracts shall be assigned to Agent, for the benefit
of the Lender Group and the Bank Product Providers, and shall provide written
notice thereof under the Assignment of Claims Act or other applicable law.

 

16

 

 

 

(g)          Intellectual Property.

 

(i)            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 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 that are necessary or material to
the conduct of such Grantor’s business. 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 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. Grantors acknowledge and agree that the Lender Group
shall have no duties with respect to any Intellectual Property or Intellectual
Property Licenses of any Grantor.

 

(ii)           No Grantor shall enter into any Intellectual Property License
material to the conduct of the business to receive any license or rights in any
Intellectual Property of any other Person unless such Grantor has used
commercially reasonable efforts to permit the assignment of or sublicense in
such Intellectual Property License (and all rights of Grantor thereunder) to
Agent (and any transferees of Agent).

 

(h)          [Reserved].

 

(i)           Real Property; Fixtures.  Each Grantor covenants and agrees that
upon the acquisition of any fee interest in Real Property having a fair market
value in excess of $2,000,000 it will promptly (and in any event within
seven Business Days (or such longer period as agreed to by Agent in writing in
its sole discretion) of acquisition) notify Agent of the acquisition of such
Real Property and will grant to Agent, for the benefit of the Lender Group and
the Bank Product Providers, a first priority (subject only to Permitted Liens
which are non-consensual Permitted Liens, permitted purchase money Liens, or the
interests of lessors under Capital Leases) Mortgage on each fee interest in Real
Property now or hereafter owned by such Grantor and shall deliver such other
documentation and opinions, in form and substance satisfactory to Agent, in
connection with the grant of such Mortgage as Agent shall request in its
Permitted Discretion, including title insurance policies, financing statements,
fixture filings and environmental audits and such Grantor shall pay all
recording costs, intangible taxes and other fees and costs (including reasonable
attorneys’ fees and expenses) incurred in connection therewith.  Each Grantor
acknowledges and agrees that, to the extent permitted by applicable law, all of
the Collateral shall remain personal property regardless of the manner of its
attachment or affixation to real property.

 

(j)           Transfers and Other Liens. Grantors shall not (i) sell, assign (by
operation of law or otherwise) or otherwise dispose of, or grant any option with
respect to, any of the Collateral, except as permitted by the Credit Agreement,
or (ii) create or permit to exist any Lien upon or with respect to any of the
Collateral of any Grantor, except for Permitted Liens. The inclusion of Proceeds
in the Collateral shall not be deemed to constitute Agent’s consent to any sale
or other disposition of any of the Collateral except as permitted in this
Agreement or the other Loan Documents.

 

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(k)          Controlled Accounts; Controlled Investments.

 

(i)            Subject to any applicable time periods provided under Schedule
3.6 to the Credit Agreement, each Grantor shall (A) establish and maintain cash
management services of a type and on terms reasonably satisfactory to Agent at
Wells Fargo or one or more of the other banks set forth on Schedule 10 (each a
“Controlled Account Bank”), and shall take reasonable steps to ensure that all
of its Account Debtors forward payment of the amounts owed by them directly to a
Collection Account at such Controlled Account Bank that is not an Excluded
Account (each, a “Controlled Account”) (by wire transfer to the applicable
Controlled Account Bank or to a lockbox maintained by the applicable Controlled
Account Bank for deposit into such Collection Account), and (B) 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 Collections (including those
sent directly by their Account Debtors to a Grantor) and proceeds of Collateral
into a Controlled Account;

 

(ii)           Subject to any applicable time periods provided under Schedule
3.6 to the Credit Agreement, each Grantor shall establish and maintain
Controlled Account Agreements with Agent and the applicable Controlled Account
Bank, in form and substance reasonably acceptable to Agent. Each such Controlled
Account Agreement shall provide, among other things, that (A) the Controlled
Account Bank will comply with any instructions originated by Agent directing the
disposition of the funds in each applicable 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 each 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, except as otherwise agreed by Agent therein, and (C) upon the
instruction of Agent (an “Activation Instruction”), the Controlled Account Bank
will forward by daily sweep all amounts in each applicable Controlled Account to
the Agent’s Account. Agent agrees not to issue an Activation Instruction with
respect to the Controlled Accounts unless a Cash Dominion Event has occurred and
is continuing at the time such Activation Instruction is issued. Agent agrees to
use commercially reasonable efforts to rescind an Activation Instruction (the
“Rescission”) upon the written request of Administrative Borrower if a Cash
Dominion Event ceases to exist;

 

(iii)          So long as no Default or Event of Default has occurred and is
continuing or would result therefrom, Borrowers may amend Schedule 10 to add or
replace a Controlled Account Bank or Controlled Account and shall upon such
addition or replacement provide to Agent an amended Schedule 10; provided, that
(A) such prospective Controlled Account Bank shall be reasonably satisfactory to
Agent, 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 Agent a Controlled Account Agreement. Each Grantor
shall close any of its Controlled Accounts (and establish replacement Controlled
Account accounts in accordance with the foregoing sentence) as promptly as
practicable and in any event within 45 days after notice from Agent that the
operating performance, funds transfer, or availability procedures or performance
of the Controlled Account Bank with respect to Controlled Account Accounts or
Agent’s liability under any Controlled Account Agreement with such Controlled
Account Bank is no longer acceptable in Agent’s reasonable judgment; and

 

(iv)         Other than amounts in Excluded Accounts, no Grantor will, and no
Grantor will permit its Subsidiaries to, make, acquire, or permit to exist
Permitted Investments consisting of cash, Cash Equivalents, or amounts credited
to Deposit Accounts unless Grantor or its Subsidiary, as applicable, and the
applicable bank have entered into Control Agreements governing such Permitted
Investments in order to perfect (or further establish) Agent’s Liens in such
Permitted Investments.

 

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(l)           Name, Etc. No Grantor will change its name, chief executive
office, organizational identification number, jurisdiction of organization or
organizational identity; provided, that any Grantor may change its name or chief
executive office upon at least ten days prior written notice to Agent of such
change.

 

(m)         Account Verification. Each Grantor will, and will cause each of its
Subsidiaries to, permit Agent, in Agent’s name or in the name or a nominee of
Agent, to verify the validity, amount or any other matter relating to any
Account, by mail, telephone, facsimile transmission or other electronic means of
transmission or otherwise. Further, at the request of Agent, each Grantor will,
and will cause each of its Subsidiaries to, send requests for verification of
Accounts or, after the occurrence and during the continuance of an Event of
Default, send notices of assignment of Accounts to Account Debtors and other
obligors.

 

(n)         [Reserved].

 

(o)          Pledged Notes. Grantors (i) without the prior written consent of
Agent, will not (A) waive or release any obligation of any Person that is
obligated under any of the Pledged Notes, (B) take or omit to take any action or
knowingly suffer or permit any action to be omitted or taken, the taking or
omission of which would result in any right of offset against sums payable under
the Pledged Notes, or (C) other than Permitted Dispositions, assign or surrender
their rights and interests under any of the Pledged Notes or terminate, cancel,
modify, change, supplement or amend the Pledged Notes; provided, that, so long
as no Default or Event of Default has occurred and is continuing or would result
therefrom, Grantors may, without the prior written consent of Agent, terminate,
cancel, modify, change, supplement, amend, or reduce the amounts owing or
otherwise take or refrain from taking any of the actions referred to in this
clause (o) with respect to any Pledged Note(s), individually or in the
aggregate, with a principal amount of less than $3,500,000, and (ii) shall,
after the occurrence and during the continuance of a Default or Event of
Default, provide to Agent copies of all material written notices (including
notices of default) given or received with respect to the Pledged Notes promptly
after giving or receiving such notice.

 

(p)          Keepwell. Each Qualified ECP Grantor hereby jointly and severally
absolutely, unconditionally and irrevocably undertakes to provide such funds or
other support as may be needed from time to time by each other Loan Party to
guaranty and otherwise honor all Obligations in respect of Swap Obligations. The
obligations of each Qualified ECP Grantor under this Section shall remain in
full force and effect until payment in full of the Obligations. Each Qualified
ECP Grantor intends that this Section 7(o) constitute, and this
Section 7(o) shall be deemed to constitute, a “keepwell, support, or other
agreement” for the benefit of each other Grantor for all purposes of
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

8.            Relation to Other Security Documents. The provisions of this
Agreement shall be read and construed with the other Loan Documents referred to
below in the manner so indicated.

 

(a)          Credit Agreement. In the event of any conflict between any
provision in this Agreement and a provision in the Credit Agreement, such
provision of the Credit Agreement shall control.

 

(b)          [Reserved].

 

9.            Further Assurances.

 

(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 Agent 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 Agent to exercise and enforce its rights and remedies hereunder with
respect to any of the Collateral.

 

19

 

 

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

 

(c)          Each Grantor authorizes Agent 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 Code
for the sufficiency or filing office acceptance. Each Grantor also hereby
ratifies any and all financing statements or amendments previously filed by
Agent 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 Agent, subject to such Grantor’s rights under
Section 9-509(d)(2) of the Code.

 

10.           Agent’s Right to Perform Contracts, Exercise Rights, etc. Upon the
occurrence and during the continuance of an Event of Default, Agent (or its
designee) (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 and (b) shall have the right (subject to Section 17(b)) to use any
Grantor’s rights under Intellectual Property Licenses in connection with the
enforcement of Agent’s rights hereunder, including the right to prepare for sale
and sell any and all Inventory now or hereafter owned by any Grantor and now or
hereafter covered by such licenses.

 

11.           Agent Appointed Attorney-in-Fact. Each Grantor hereby irrevocably
appoints Agent its attorney-in-fact, with full authority in the place and stead
of such Grantor and in the name of such Grantor or otherwise, at such time as an
Event of Default has occurred and is continuing under the Credit Agreement, to
take any action and to execute any instrument which Agent 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 Agent;

 

(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 Agent may deem necessary or desirable for the collection of any of the
Collateral of such Grantor or otherwise to enforce the rights of Agent with
respect to any of the Collateral;

 

20

 

 

(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;

 

(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)          Agent, on behalf of the Lender Group or the Bank Product Providers,
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
Agent shall commence any such suit, the appropriate Grantor shall, at the
request of Agent, do any and all lawful acts and execute any and all proper
documents reasonably required by Agent in aid of such enforcement.

 

(h)          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.

 

12.           Agent May Perform. If any Grantor fails to perform any agreement
contained herein, Agent may itself perform, or cause performance of, such
agreement, and the reasonable expenses of Agent incurred in connection therewith
shall be payable, jointly and severally, by Grantors in accordance with the
terms of the Credit Agreement.

 

13.           Agent’s Duties. The powers conferred on Agent hereunder are solely
to protect Agent’s interest in the Collateral, for the benefit of the Lender
Group and the Bank Product Providers, and shall not impose any duty upon Agent
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, Agent 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. Agent 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 Agent
accords its own property.

 

14.           Collection of Accounts, General Intangibles and Negotiable
Collateral. At any time upon the occurrence and during the continuance of an
Event of Default, Agent or Agent’s designee may (a) make direct verification
from Account Debtors with respect to any or all Accounts that are part of the
Collateral, (b) notify Account Debtors of any Grantor that the Accounts, General
Intangibles, Chattel Paper or Negotiable Collateral of such Grantor have been
assigned to Agent, for the benefit of the Lender Group and the Bank Product
Providers, or that Agent has a security interest therein, or (c) 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.

 

15.           [Reserved].

 

16.           [Reserved].

 

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

 

21

 

 

(a)          Agent may, and, at the instruction of the Required Lenders, shall
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 Code or any
other applicable law. Without limiting the generality of the foregoing, each
Grantor expressly agrees that, in any such event, Agent 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
Code 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 Agent forthwith,
assemble all or part of the Collateral as directed by Agent and make it
available to Agent 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 Agent’s offices or elsewhere, for cash, on credit, and upon such other
terms as Agent may deem commercially reasonable. Each Grantor agrees that, to
the extent notification of sale shall be required by law, at least ten 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 Code. Agent shall not be obligated to make any
sale of Collateral regardless of notification of sale having been given. Agent
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
Code, 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 days prior to the sale shall constitute a reasonable
notification for purposes of Section 9-611(b) of the Code. 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 Code.

 

(b)          Agent 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 Agent.

 

(c)          Agent 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 Code or any other applicable law), with respect to any
Grantor’s Deposit Accounts in which Agent’s Liens are perfected by control under
Section 9-104 of the Code, 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 Agent.

 

(d)          Any cash held by Agent as Collateral and all cash proceeds received
by Agent 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 Credit 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.

 

22

 

 

(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 Agent shall have the right to an immediate writ of
possession without notice of a hearing. Agent 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 Agent.

 

18.           Remedies Cumulative. Each right, power, and remedy of Agent, any
other member of the Lender Group, or any Bank Product Provider as provided for
in this Agreement, the other Loan Documents or any Bank Product Agreement 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, the other Loan Documents and the Bank
Product Agreements or now or hereafter existing at law or in equity or by
statute or otherwise, and the exercise or beginning of the exercise by Agent,
any other member of the Lender Group, or any Bank Product Provider, of any one
or more of such rights, powers, or remedies shall not preclude the simultaneous
or later exercise by Agent, such other member of the Lender Group or such Bank
Product Provider of any or all such other rights, powers, or remedies.

 

19.           Marshaling. Agent 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 Agent’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.

 

20.           Indemnity. Each Grantor agrees to indemnify Agent, the other
members of the Lender Group, and the Bank Product Providers from and against all
claims, lawsuits and liabilities (including reasonable attorneys’ fees) arising
out of or resulting from this Agreement (including enforcement of this
Agreement) or any other Loan Document to which such Grantor is a party in
accordance with and to the extent set forth in Section 10.3 of the Credit
Agreement. This provision shall survive the termination of this Agreement and
the Credit Agreement and the repayment of the Secured Obligations.

 

21.           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 Agent, 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 Agent and each Grantor to which such amendment applies.

 

22.           Addresses for Notices. All notices and other communications
provided for hereunder shall be given in the form and manner and delivered to
Agent at its address specified in the Credit Agreement, and to any of the
Grantors at the notice address specified for Borrowers in the Credit Agreement,
or as to any party, at such other address as shall be designated by such party
in a written notice to the other party.

 

23

 

 

23.           Continuing Security Interest: Assignments under Credit 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 Credit Agreement
and the Commitments have expired or have 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, Agent, and its successors, transferees
and assigns. Without limiting the generality of the foregoing clause (iii), any
Lender may, in accordance with the provisions of the Credit Agreement, assign or
otherwise transfer all or any portion of its rights and obligations under the
Credit 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 Credit Agreement and the expiration or
termination of the Commitments, 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 Borrowers’
request, Agent 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 Credit Agreement, any
other Loan Document, or any other instrument or document executed and delivered
by any Grantor to Agent nor any additional Revolving Loans or other loans made
by any Lender to any Borrower, nor the taking of further security, nor the
retaking or re-delivery of the Collateral to Grantors, or any of them, by Agent,
nor any other act of the Lender Group or the Bank Product Providers, or any of
them, shall release any Grantor from any obligation, except a release or
discharge executed in writing by Agent in accordance with the provisions of the
Credit Agreement. Agent 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 Agent and then only to the extent therein set
forth. A waiver by Agent 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 Agent would
otherwise have had on any other occasion.

 

(b)          If any member of the Lender Group or any Bank Product Provider
repays, refunds, restores, or returns in whole or in part, any payment or
property (including any proceeds of Collateral) previously paid
or transferred to such member of the Lender Group or such Bank Product Provider
in full or partial satisfaction of any Secured Obligation or on account of any
other obligation of any Loan Party under any Loan Document or any Bank Product
Agreement, because the payment, transfer, or the incurrence of the obligation so
satisfied is asserted or declared to be void, voidable, or otherwise recoverable
under any law relating to creditors’ rights, including provisions of the
Bankruptcy Code relating to fraudulent transfers, preferences, or other voidable
or recoverable obligations or transfers (each, a “Voidable Transfer”), or
because such member of the Lender Group or Bank Product Provider elects to do so
on the reasonable advice of its counsel in connection with a claim that the
payment, transfer, or incurrence is or may be a Voidable Transfer, then, as to
any such Voidable Transfer, or the amount thereof that such member of the Lender
Group or Bank Product Provider elects to repay, restore, or return (including
pursuant to a settlement of any claim in respect thereof), and as to all
reasonable costs, expenses, and attorneys’ fees of such member of the Lender
Group or Bank Product Provider related thereto, (i) the liability of the Loan
Parties with respect to the amount or property paid, refunded, restored, or
returned will automatically and immediately be revived, reinstated, and restored
and will exist, and (ii) Agent’s Liens securing such liability shall be
effective, revived, and remain in full force and effect, in each case, as fully
as if such Voidable Transfer had never been made.  If, prior to any of the
foregoing, (A) Agent’s Liens shall have been released or terminated, or (B) any
provision of this Agreement shall have been terminated or cancelled, Agent’s
Liens, or such provision of this Agreement, 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 obligation of
any Loan Party in respect of such liability or any Collateral securing
such liability.

 

24

 

 

24.           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 loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that Agent, Issuing Lender, or any Lender
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 Credit
Agreement, 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 Credit Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated.

 

25.           CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE
PROVISION.

 

(a)          THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION,
AND ENFORCEMENT HEREOF, THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR RELATED HERETO, AND ANY CLAIMS, CONTROVERSIES OR
DISPUTES ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

(b)          THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE
AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE
COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH
ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH GRANTOR AND
AGENT WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH
MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO
THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 25(b).

 

(c)          TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH GRANTOR AND
AGENT HEREBY WAIVE THEIR RESPECTIVE RIGHTS, IF ANY, TO A JURY TRIAL OF ANY
CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS (EACH A “CLAIM”). EACH GRANTOR AND AGENT
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE
EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.

 

(d)          EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF
NEW YORK AND THE STATE OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT AGENT MAY OTHERWISE HAVE
TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST ANY GRANTOR
OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

25

 

 

(e)          NO CLAIM MAY BE MADE BY ANY GRANTOR AGAINST THE AGENT, THE SWING
LENDER, ANY OTHER LENDER, ISSUING LENDER, OR THE UNDERLYING ISSUER, OR ANY
AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR
ATTORNEY-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, OR
PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER
THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION
HEREWITH, AND EACH GRANTOR HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE UPON
ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR
SUSPECTED TO EXIST IN ITS FAVOR.

 

26.           New Subsidiaries. Pursuant to Section 5.11 of the Credit
Agreement, certain Subsidiaries (whether by acquisition or creation) of any
Grantor are required to enter into this Agreement by executing and delivering in
favor of Agent a Joinder to this Agreement in substantially the form of Annex 1.
Upon the execution and delivery of Annex 1 by any such new Subsidiary, such
Subsidiary shall become a Guarantor and/or Grantor hereunder with the same force
and effect as if originally named as a Guarantor and/or 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.

 

27.           Agent. Each reference herein to any right granted to, benefit
conferred upon or power exercisable by the “Agent” shall be a reference to
Agent, for the benefit of each member of the Lender Group and each of the Bank
Product Providers.

 

28.           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.

 

26

 

 

(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.

 

(d)          Neither this Agreement nor any uncertainty or ambiguity herein
shall be construed against any member of the Lender Group, any Bank Product
Provider, or any Grantor, whether under any rule of construction or otherwise.
This Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.

 

[Signature pages follow]

 

27

 

 

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:    

TESSCO Technologies Incorporated

 

By: /s/ Sandip Mukerjee

 

Name: Sandip Mukerjee
Title: President and Chief Executive Officer

 

 

TESSCO Incorporated

 

By: /s/ Aric Spitulnik

 

Name: Aric Spitulnik
Title: Vice President, Treasurer and Secretary

 

 

GW Service Solutions, Inc.

 

By: /s/ Aric Spitulnik

 

Name: Aric Spitulnik
Title: Vice President, Treasurer and Secretary

 

TESSCO Service Solutions, Inc.

 

By: /s/ Aric Spitulnik

 

Name: Aric Spitulnik
Title: Vice President, Treasurer and Secretary

 

TCPM, Inc.

 

By: /s/ Aric Spitulnik

 

Name: Aric Spitulnik
Title: Vice President, Treasurer and Secretary

 

TESSCO Business Services, LLC

 

By: /s/ Aric Spitulnik

 

Name: Aric Spitulnik
Title: Vice President, Treasurer and Secretary

 

TESSCO Integrated Solutions, LLC

 

By: /s/ Aric Spitulnik

 

Name: Aric Spitulnik
Title: Vice President, Treasurer and Secretary

 

[Signature Page to Guaranty and Security Amendment (Tessco)

 

 

 

 

 

TESSCO Communications Incorporated

 

By: /s/ Aric Spitulnik

 

Name: Aric Spitulnik
Title: Vice President, Treasurer and Secretary

 

TESSCO Financial Corporation

 

By: /s/ Aric Spitulnik

 

Name: Aric Spitulnik
Title: Vice President, Treasurer and Secretary

 

Wireless Solutions Incorporated

 

By: /s/ Aric Spitulnik

 

Name: Aric Spitulnik
Title: Vice President, Treasurer and Secretary

 

[Signature Page to Guaranty and Security Amendment (Tessco)

 

 

 

 

AGENT:      

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

By: /s/ Ernest May
Name: Ernest May

  Its Authorized Signatory  

 

[Signature Page to Guaranty and Security Amendment (Tessco)