Document:

Exhibit 10.5

 

AMENDMENT NO. 1 TO AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

AMENDMENT (this “Amendment”)
made as of August 18, 2004 by and between DRS Technologies, Inc., a Delaware
corporation (the “Company”), and Richard A. Schneider (the “Executive”).  This Amendment amends the Employment
Agreement (the “Employment Agreement”) made as of February 19, 1999 between the
Company and the Executive

 

1.             The Employment Agreement is hereby
amended by adding the phrase “for at least two years immediately” after the
word “effect” and before the word “following” in the second sentence of Section
1.

 

2.             The Employment Agreement is hereby
amended by deleting the language in Section 5.3(a)(iii) after the phrase
“following the Change of Control.”

 

3.             The Employment Agreement is hereby
amended by replacing the language in Section 5.3(b)(ii)(B) after the words
“equal to” with the following:

 

“3 times the sum of his Base
Salary then in effect plus the bonus earned by him during the immediately
preceding fiscal year of the Company and;”

 

4.             The Employment Agreement is hereby
amended by deleting the first partial sentence of Section 5.3(b)(ii)(C) and
replacing it with the following:

 

“his employment shall be
deemed to continue, for purposes of determining his participation in the
Benefit Program (excluding pension plans) (1) for the balance of this Agreement
(without regard to the early termination thereof hereunder) if his employment
is terminated prior to a Change in Control or (2) for 3 years if his employment
is terminated following a Change in Control; provided, however, if
participation by the Executive in the Benefit Program during the applicable
benefit continuation period is not permitted under any such plan, the Company
will provide him with equivalent benefits. 
Notwithstanding the foregoing, continued benefits or payments otherwise
receivable by the Executive under the Benefit Program pursuant to this Section
5.3(b)(ii) shall be reduced to the extent benefits of the same type are
received by or made available to the Executive by a subsequent employer during
the benefit continuation period (and any such benefits received by or made
available to the Executive shall be reported to the Company by the Executive).”

 

5.             The Employment Agreement is hereby
amended by adding the phase “and provide to the Executive the benefits” between
the words “amounts” and “described” in Section 5.4(a), changing the reference
in Section 5.4(a) from “5.3(b)(ii)(A)” to “5.3(b)(ii)” and deleting Section
5.4(b) in its entirety.

 

 

6.             The Employment Agreement is hereby
amended by adding the following as a new Section 5.5 and the Employment
Agreement and any cross-references shall be renumbered accordingly:

 

“5.5         Gross-up.

 

(a)           Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company, any individual or entity whose actions result in a
Change in Control, or their respective subsidiaries or affiliates to or for the
benefit of the Executive (including any payment or benefits received in
connection with a Change in Control or the Executive’s termination of
employment, whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement) (all such payments and benefits, excluding the
Gross-Up Payment, being hereinafter referred to as the “Total Payments”) will
be subject to any excise tax imposed under section 4999 of the Internal Revenue
Code of 1986, as amended (the “Code”) (such tax, the “Excise Tax”), the Company
shall pay to the Executive an additional amount (the “Gross Up Payment”) such
that the net amount retained by the Executive, after deduction of any Excise
Tax on the Total Payments and any federal, state and local income and
employment taxes and Excise Tax upon the Gross-Up Payment, and after taking
into account the phase out of itemized deductions and personal exemptions
attributable to the Gross-Up Payment, shall be equal to the Total Payments.

 

(b)           For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(i) all of the Total Payments shall be treated as “parachute payments” (within
the meaning of section 280G(b)(2) of the Code) unless, in the opinion of tax
counsel (“Tax Counsel”) reasonably acceptable to the Executive and selected by
the accounting firm which was, immediately prior to the Change in Control, the
Company’s independent auditor (the “Auditor”) (which Tax Counsel may be the
Company’s general counsel), such payments or benefits (in whole or in part) do not
constitute parachute payments, including by reason of section 280G(b)(4)(A) of
the Code, (ii) all “excess parachute payments” within the meaning of section
280G(b)(l) of the Code shall be treated as subject to the Excise Tax unless, in
the opinion of Tax Counsel, such excess parachute payments (in whole or in
part) represent reasonable compensation for services actually rendered (within
the meaning of section 280G(b)(4)(B) of the Code) in excess of the Base Amount
allocable to such reasonable compensation, or are otherwise not subject to the
Excise Tax, and (iii) the value of any non-cash benefits or any deferred
payment or benefit shall be determined by the Auditor in accordance with the
principles of sections 280G(d)(3) and (4) of the Code.  For purposes of determining the amount of
the Gross Up Payment, the Executive shall be deemed to pay federal income tax
at the

 

2

 

highest marginal rate of
federal income taxation in the calendar year in which the Gross Up Payment is
to be made and state and local income taxes at the highest marginal rate of
taxation in the state and locality of the Executive’s residence on the date of
termination of the Executive’s employment with the Company (or if there is no date
of termination, then the date on which the Gross-Up Payment is calculated for
purposes of this Section 5.5), net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and local taxes.

 

(c)           In the event that the Excise Tax is finally determined to
be less than the amount taken into account hereunder in calculating the
Gross-Up Payment, the Executive shall repay to the Company, within five (5)
business days following the time that the amount of such reduction in the
Excise Tax is finally determined, the portion of the Gross Up Payment
attributable to such reduction (plus that portion of the Gross Up Payment
attributable to the Excise Tax and federal, state and local income and
employment taxes imposed on the Gross Up Payment being repaid by the
Executive), to the extent that such repayment results in a reduction in the
Excise Tax and a dollar-for-dollar reduction in the Executive’s taxable income
and wages for purposes of federal, state and local income and employment taxes,
plus interest on the amount of such repayment at 120% of the rate provided in
section 1274(b)(2)(B) of the Code.  In
the event that the Excise Tax is determined to exceed the amount taken into
account hereunder in calculating the Gross-Up Payment (including by reason of
any payment the existence or amount of which cannot be determined at the time
of the Gross Up Payment), the Company shall make an additional Gross Up Payment
in respect of such excess (plus any interest, penalties or additions payable by
the Executive with respect to such excess) within five (5) business days
following the time that the amount of such excess is finally determined.  The Executive and the Company shall each
reasonably cooperate with the other in connection with any administrative or
judicial proceedings concerning the existence or amount of liability for Excise
Tax with respect to the Total Payments.

 

7.             The Employment Agreement is hereby
amended by deleting the  seventh and
eighth sentences of Section 7.1, which read “Each party shall bear its own
costs and attorneys fees.  All other
costs and expenses of arbitration shall be apportioned between the parties by
the arbitrators.”

 

8.             The Employment Agreement is hereby
amended by adding the following paragraph as Section 7.2 and the Employment
Agreement and any cross-references shall be renumbered accordingly:

 

“Legal Fees.  If the Company and the Executive become
involved in any action, suit or proceeding relating to the alleged breach of
this Agreement by the Company, the Company shall reimburse the Executive for
all

 

3

 

expenses (including
reasonable attorney’s fees) incurred by the Executive in connection with such
action, suit or proceeding; provided, however, that the Company will not
reimburse the Executive for any amounts incurred by the Executive in any
action, suit or proceeding which is ultimately determined by the arbitrator to
have been frivolous.  Such costs shall
be paid to the Executive promptly upon presentation of expense statements or
other supporting information evidencing the incurrence of such expenses.”

 

 

IN WITNESS WHEREOF, the parties have duly
executed this Amendment effective as of August 18, 2004.

 

 

	
   

  	
  DRS
  TECHNOLOGIxES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Mark S. Newman

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
  /s/ Richard A. Schneider

  

 

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Exhibit 10.52    
    

 
 

THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT    
    

        This THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this "Amendment"), made and entered into as of
April 15, 2004, is by and among LECG, LLC, a California limited liability company (the "Borrower"), the banks which are signatories hereto (each individually, a "Bank," and collectively, the
"Banks"), and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as one of the Banks, and as administrative agent for the Banks (in such capacity, the "Agent") 

RECITALS  

        1.     The
Agent, the Banks and the Borrower entered into an Amended and Restated Credit Agreement dated as of March 31, 2003, as amended by a First Amendment to Amended
and Restated Credit Agreement dated as of August 18, 2003 and a Second Amendment to Amended and Restated Credit Agreement dated as of November 12, 2003 (as amended, the "Credit
Agreement"). 

        2.     The
Borrower has informed the Agent that, pursuant to the LRTS Purchase Documents (defined below), LECG Canada Ltd. ("LECG Canada") (LECG Canada is a Subsidiary of
the Borrower) wishes to consummate the following transactions (collectively, the "LRTS Acquisition"): (a) the acquisition of all of the stock of 1284845 Ontario Ltd., a corporation
formed in accordance with the Business Corporations Act (Ontario), 1284846 Ontario Ltd., a corporation formed in accordance with the Business Corporations Act (Ontario), 1284847
Ontario Ltd., a corporation formed in accordance with the Business Corporations Act (Ontario), 1284848 Ontario Ltd., a corporation formed in accordance with the Business Corporations Act
(Ontario), LRTS Holding Limited, a corporation formed in accordance with the Business Corporations Act (Ontario), and LRTS Investigations, Inc., a corporation formed in accordance with the
Business Corporations Act (Ontario), (b) the acquisition of all of the partnership interests in Low Rosen Taylor Soriano Operating Company, a general partnership formed under the laws of the
Province of Ontario, and (c) the acquisition of substantially all the operating assets of LRTS Limited Partnership, a limited partnership formed under the laws of the Province of Ontario. The
entities referred to in the forgoing clauses (a), (b) and (c) are referred to herein as the LRTS Entities. 

        3.     The
Borrower has requested that the Banks agree to amend certain provisions of the Credit Agreement and the Banks have agreed to such amendments, subject to the terms and
conditions set forth in this Amendment. 

AGREEMENT  

        NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
the parties hereto hereby covenant and agree to be bound as follows: 

        Section 1.    Capitalized Terms.    Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to them in the Credit Agreement, unless the context shall otherwise require. 

        Section 2.    Amendments.    The Credit Agreement is hereby amended as follows: 

        2.1   Definitions. The definitions of "Guaranties" and
"Security Agreements" contained in Section 1.1 of the Credit Agreement are deleted in their entireties and the following definitions are inserted
in such Section 1.1 in the appropriate alphabetical order: 

        "Guaranties": The separate guaranties to be given by the Parent and, after the consummation of the Non-TCEP Exchange, LECG
Funding, and by certain Subsidiaries in favor of the Agent and the Banks and in the form prescribed by the Agent, as the same may be amended, restated or otherwise modified from time to time. 

 

        "LRTS Acquisition": The acquisition by LECG Canada Ltd of (a) all of the stock of 1284845 Ontario Ltd., a corporation
formed in accordance with the Business Corporations Act (Ontario), 1284846 Ontario Ltd., a corporation formed in accordance with the Business Corporations Act (Ontario), 1284847
Ontario Ltd., a corporation formed in accordance with the Business Corporations Act (Ontario), 1284848 Ontario Ltd., a corporation formed in accordance with the Business Corporations Act
(Ontario), LRTS Holding Limited, a corporation formed in accordance with the Business Corporations Act (Ontario), and LRTS Investigations, Inc., a corporation formed in accordance with the
Business Corporations Act (Ontario), (b) all of the partnership interests in Low Rosen Taylor Soriano Operating Company, a general partnership formed under the laws of the Province of Ontario,
and (c) of substantially all the operating assets of LRTS Limited Partnership, a limited partnership formed under the laws of the Province of Ontario. 

        "LRTS Purchase Documents": The Purchase Agreement dated as of March 26, 2004 by and among LECG Canada Ltd., the Parent, Low
BV Trust, Rosen BV Trust, Taylor BV Trust, Soriano BV Trust, Low LRTS Trust, Rosen LRTS Trust, LRTS Limited Partnership, 1284455 Ontario Ltd., Robert Low, Howard Rosen, Richard Taylor and Errol
Soriano and any exhibits and schedules, and any documents or instruments executed by LECG Canada or the Parent in connection with the foregoing. 

        "Security Agreements": The separate security agreements to be given by the Parent, the Borrower, and after the consummation of the
Non-TCEP Exchange, by TCEP Funding, and by certain Subsidiaries in favor of the Agent for the benefit of the Banks and in the form prescribed by the Agent, as the same may be amended,
restated or otherwise modified from time to time. 

        2.2   Investments. Section 6.12 of the Credit Agreement is amended by (a) deleting the
clause "and" as it appears at the end of subsection (h) thereof and by substituting in lieu thereof a semi-colon, (b) by deleting the period at the end of subsection
(i) thereof and substituting in lieu thereof the clause "; and", and (c) by inserting the following new subsection (j) at the end thereof: 

        (j)    the
LRTS Acquisition and the other transactions contemplated by the LRTS Purchase Documents. 

        2.3   Indebtedness. Section 6.13 of the Credit Agreement is amended by (a) deleting the
clause "and" as it appears at the end of subsection (k) thereof and by substituting in lieu thereof a semi-colon, (b) by deleting the period at the end of subsection
(l) thereof and by substituting in lieu thereof the clause "; and", and (c) by inserting the following new subsection (m) at the end thereof: 

        (m)  Indebtedness
consisting of "Earn Out Payments" payable under the LRTS Purchase Documents, provided that neither the Borrower nor any Subsidiary will make any such Earn
Out Payments if any Event of Default is continuing or would result therefrom. 

        2.4   Schedule of Subsidiaries. Schedule 4.19 of the Credit Agreement is hereby amended to read
as set forth in Exhibit A hereto, which Exhibit A is hereby made a part of the Credit Agreement
as Schedule 4.19 thereto. 

        Section 3.    Amendment to the Borrower Security Agreement.    Schedule I to the
Borrower's Security Agreement is hereby amended to read as set forth in Exhibit B hereto, which  Exhibit B is hereby made part of such Security
Agreement as Schedule I thereto. 

        Section 4.    Effectiveness of Amendments.    The amendments contained in this
Amendment shall become effective upon delivery by the Borrower of, and compliance by the Borrower with, the following: 

        4.1   This Amendment, duly executed by the Borrower. 

2

 

        4.2   A Security Agreement, in the form of Exhibit C hereto, duly
executed by LECG Canada Holding, Inc., a California corporation ("Holding"). 

        4.3   A Guaranty, in the form of Exhibit D hereto, duly executed by
Holding. 

        4.4   A Reaffirmation of Guaranty and Security Agreement, in the form of  Exhibit E hereto, duly executed by each of the Parent and LECG Funding.

        4.5   A copy of the company resolutions of the Borrower authorizing the execution, delivery and performance of this Amendment
certified as true and accurate by its Secretary or Assistant Secretary, along with a certification by such Secretary or Assistant Secretary (i) certifying that there has been no amendment to
the organizational documents of the Borrower since true and accurate copies of the same were delivered to the Agent with a certificate of the Secretary of the Borrower dated March 31, 2003, or,
if any of such documents have been amended, certifying that true and accurate copies of such documents have been attached thereto, (ii) certifying as to true and accurate copies of the
resolutions of the governing body of the Borrower authorizing the execution and delivery of this Amendment and each other document or instrument in connection with this Amendment (collectively, the
"Amendment Documents") to be executed by the Borrower, and (iii) identifying each officer of the Borrower authorized to execute the Amendment Documents, and, if specimens of such officers'
signatures were not previously provided to the Agent, certifying as to specimens of such officers' signatures and such officers' incumbency in such offices as such officers hold. 

        4.6   A copy of the corporate resolutions of Holding authorizing the execution, delivery and performance of Holding's Security
Agreement and Guaranty certified as true and accurate by its Secretary or Assistant Secretary, along with a certification by such Secretary or Assistant Secretary (i) certifying as to true and
correct copies of the organizational documents of Holding, (ii) certifying as to true and accurate copies of the resolutions of the governing body of Holding authorizing the execution and
delivery of Holding's Guaranty and Security Agreement and each other document or instrument to be executed by Holding in connection with this Amendment, and (iii) identifying each officer of
Holding authorized to execute Holding's Security Agreement and Guaranty and any other instrument or agreement executed by Holding in connection with this Amendment, and certifying as to specimens of
such officer's signature and such officer's incumbency in such offices as such officer holds. 

        4.7   A certificate demonstrating pro forma compliance with Sections 6.15, 6.16, 6.17, 6.18 and 6.19 for the four fiscal
quarters following the LRTS Acquisition, certified by the Chief Financial Officer of the Borrower. 

        4.8   A good standing certificate for Holding in the jurisdiction of its organization, issued at a date acceptable to the
Agent. 

        4.9   UCC searches for Holding, issued as of a date acceptable to the Agent. 

        4.10 The Borrower shall have satisfied such other conditions as specified by the Agent, including payment of all unpaid legal
fees and expenses incurred by the Agent through the date of this Amendment in connection with the Credit Agreement, the Security Documents and the Amendment Documents. 

        Section 5.    Reserved.    

        Section 6.    Representations, Warranties, Authority, No Adverse Claim.    

        6.1   Reassertion of Representations and Warranties, No Default. The Borrower hereby represents that on
and as of the date hereof and after giving effect to this Amendment (a) all of the representations and warranties contained in the Credit Agreement are true, correct and complete 

3

 

in
all respects as of the date hereof as though made on and as of such date, except for changes permitted by the terms of the Credit Agreement as amended by this Amendment, (b) the facts stated
in the Recital 2 hereof are true and correct, (c) there will exist no Default or Event of Default under the Credit Agreement as amended by this Amendment on such date which has not been
waived by the Banks, (d) true and accurate copies of the LRTS Purchase Documents have been attached hereto as Exhibit F and have not been
terminated and remain in full force and effect, and (e) upon or prior to the effectiveness of this Amendment, the LRTS Acquisition has been or will be consummated. 

        6.2   Authority, No Conflict, No Consent Required. The Borrower represents and warrants that the
Borrower has the power and legal right and authority to enter into the Amendment Documents and has duly authorized as appropriate the execution and delivery of the Amendment Documents and other
agreements and documents executed and delivered by the Borrower in connection herewith or therewith by proper company action, and none of the Amendment Documents nor the agreements contained herein or
therein contravenes or constitutes a default under any agreement, instrument or indenture to which the Borrower is a party or a signatory or a provision of the Borrower's articles of organization,
Bylaws or any other agreement or requirement of law, or results in the imposition of any Lien on any of its property under any agreement binding on or applicable to the Borrower or any of its property
except, if any, in favor of the Agent and the Banks. The Borrower represents and warrants that no consent, approval or authorization of or registration or declaration with any Person, including but
not limited to any governmental authority, is required in connection with the execution and delivery by the Borrower of the Amendment Documents or other agreements and documents executed and delivered
by the Borrower in connection therewith or the performance of obligations of the Borrower therein described, except for those which the Borrower has made, obtained or provided and as to which the
Borrower has delivered certified copies of documents evidencing each such action to the Agent and the Banks. 

        6.3   No Adverse Claim. The Borrower warrants, acknowledges and agrees that no events have been taken
place and no circumstances exist at the date hereof which would give the Borrower a basis to assert a defense, offset or counterclaim to any claim of the Agent or the Banks with respect to the
Obligations. 

        Section 7.    Affirmation of Credit Agreement, Further References, Affirmation of Security
Interest.    The Agent, each Bank and the Borrower each acknowledge and affirm that the Credit Agreement, as hereby amended, is hereby ratified and confirmed in all
respects and all terms, conditions and provisions of the Credit Agreement, except as amended by this Amendment, shall remain unmodified and in full force and effect. All references in any document or
instrument to the Credit Agreement are hereby amended and shall refer to the Credit Agreement as amended by this Amendment. The Borrower confirms to the Agent and the Banks that the Obligations are
and continue to be secured by the security interest granted by the Borrower in favor of the Agent and the Banks under the Security Agreement, and all of the terms, conditions, provisions, agreements,
requirements, promises, obligations, duties, covenants and representations of the Borrower under such documents and any and all other documents and agreements entered into with respect to the
obligations under the Credit Agreement are incorporated herein by reference and are hereby ratified and affirmed in all respects by the Borrower. 

        Section 8.    Merger and Integration, Superseding Effect.    This Amendment, from and
after the date hereof, embodies the entire agreement and understanding between the parties hereto and supersedes and has merged into this Amendment all prior oral and written agreements on the same
subjects by and between the parties hereto with the effect that this Amendment, shall control with respect to the specific subjects hereof and thereof. 

4

 

        Section 9.    Severability.    Whenever possible, each provision of this Amendment and
the other Amendment Documents and any other statement, instrument or transaction contemplated hereby or thereby or relating hereto or thereto shall be interpreted in such manner as to be effective,
valid and enforceable under the applicable law of any jurisdiction, but, if any provision of this Amendment, the other Amendment Documents or any other statement, instrument or transaction
contemplated hereby or thereby or relating hereto or thereto shall be held to be prohibited, invalid or unenforceable under the applicable law, such provision shall be ineffective in such jurisdiction
only to the extent of such prohibition, invalidity or unenforceability, without invalidating or rendering unenforceable the remainder of such provision or the remaining provisions of this Amendment,
the other Amendment Documents or any other statement, instrument or transaction contemplated hereby or thereby or relating hereto or thereto in such jurisdiction, or affecting the effectiveness,
validity or enforceability of such provision in any other jurisdiction. 

        Section 10.    Successors.    The Amendment Documents shall be binding upon the
Borrower, the Agent and the Banks and their respective successors and assigns, and shall inure to the benefit of the Borrower, the Agent and the Banks and the successors and assigns of the Agent and
the Banks. 

        Section 11.    Legal Expenses.    As provided in Section 9.2 of the Credit
Agreement, the Borrower agrees to reimburse the Agent, upon execution of this Amendment, for all reasonable out-of-pocket expenses (including attorney' fees and legal expenses
of Dorsey & Whitney LLP, counsel for the Agent) incurred in connection with the Credit Agreement,
including in connection with the negotiation, preparation and execution of the Amendment Documents and all other documents negotiated, prepared and executed in connection with the Amendment Documents,
and in enforcing the obligations of the Borrower under the Amendment Documents, and to pay and save the Agent and the Banks harmless from all liability for, any stamp or other taxes which may be
payable with respect to the execution or delivery of the Amendment Documents, which obligations of the Borrower shall survive any termination of the Credit Agreement. 

        Section 12.    Headings.    The headings of various sections of this Amendment have
been inserted for reference only and shall not be deemed to be a part of this Amendment. 

        Section 13.    Counterparts.    The Amendment Documents may be executed in several
counterparts as deemed necessary or convenient, each of which, when so executed, shall be deemed an original, provided that all such counterparts shall be regarded as one and the same document, and
either party to the Amendment Documents may execute any such agreement by executing a counterpart of such agreement. 

        Section 14.    Governing Law.    THE AMENDMENT DOCUMENTS SHALL
BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAW PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS, THEIR HOLDING
COMPANIES AND THEIR AFFILIATES.

        [Remainder
of page is intentionally left blank.] 

5

        IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date and year first above written. 

	 	 	LECG, LLC
	

 	
 	

By:	

/s/  J. GEOFFREY COLTON      
	 	 	 	
 J. Geoffrey Colton
	 	 	Title:	Director of Finance
	

 	
 	

U.S. BANK NATIONAL ASSOCIATION,

In its individual corporate capacity and as Agent
	

 	
 	

By:	

/s/  ROBERT A. ROSATI      
	 	 	 	

	 	 	Title:	Vice President
	 	 	 	

	

 	
 	

LASALLE BANK NATIONAL ASSOCIATION
	

 	
 	

By:	

/s/  PATRICK J. O'TOOLE      
	 	 	 	

	 	 	Title:	Vice President
	 	 	 	

  

 
 

EXHIBIT A TO THIRD AMENDMENT
  TO CREDIT AGREEMENT    
    

Schedule 4.19  

Subsidiaries  

(See Attached) 

A-1

 

  

A-2

  

 
 

EXHIBIT B TO
  THIRD AMENDMENT TO
  AMENDED AND RESTATED CREDIT AGREEMENT    
    

Schedule I to Amended and Restated Security Agreement  

Pledged Equity and Debt

        (Will
be forwarded to you under separate cover when it is available.) 

B-1

 

	Number	 	 	 	 	 	 	 	Common Shares
	
1	
 	
Incorporated Under the Laws of the State of California

March 16, 2004	
 	
5,000
	

 	
 	
LECG CANADA HOLDING, INC.	
 	

 
	

 	
 	

Authorized Common Stock: 10,000 Shares	
 	

 
	

 	
 	

SEE REVERSE SIDE FOR STATEMENT OF RESTRICTIONS	
 	

 
	

 	
 	
THIS CERTIFIES THAT LECG, LLC is the record holder of Five Thousand Common Shares transferable only on the books of the corporation by the holder hereof in person or by Attorney upon surrender of this Certificate
properly endorsed or assigned.	
 	

 
	

 	
 	
IN WITNESS WHEREOF, the said Corporation has caused this Certificate to be signed by its duly authorized officers and its Corporate Seal to be hereunto affixed this      day
of            A.D. 2004.	
 	

 
	

 	
 	

/s/  DAVID KAPLAN      	
 	

 	
 	

/s/  MARVIN A. TENENBAUM      
	 	 	
 David Kaplan, President	 	 	 	
 Marvin A. Tenenbaum, Secretary

B-2

 

NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR
ANY CHANGE WHATEVER 

FOR
VALUE RECEIVED
                                         
                                          
                                          
    HEREBY SELLS, ASSIGNS AND TRANSFERS UNTO
                                         
                                          
                                          
    COMMON SHARES REPRESENTED BY THE WITHIN
CERTIFICATE AND DOES HEREBY IRREVOCABLY CONSTITUTE AND APPOINT
                                         
   ATTORNEY TO TRANSFER THE SAID UNITS ON THE REGISTER OF THE WITHIN NAMED ORGANIZATION, WITH
FULL POWER OF SUBSTITUTION IN THE PREMISES. 

DATED:
                        , 2             

IN
PRESENCE OF
                                         
        }
                                         
        
 

	
 THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE
SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND QUALIFICATION UNDER THE APPLICABLE STATE OR OTHER JURISDICTION'S SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER (THE
"COMPANY") THAT REGISTRATION OR QUALIFICATION IS NOT REQUIRED.

B-3

Stock Power  

        For Value Received, LECG, LLC does hereby sell, assign and transfer
unto                        Five Thousand (5,000)
shares of the Common Stock of LECG Canada Holding, Inc., a California corporation, standing in its name on the books of the corporation and represented by Certificate No. 1, and does
hereby irrevocably constitute and appoint                attorney-in-fact to transfer the said stock on the books of the corporation with full power of substitution in
the
premises. 

        Dated:                 ,
2004 

	 	 	LECG, LLC
	

 	
 	

By:	

/s/  JOHN C. BURKE      
	 	 	 	
 John C. Burke
	

 	
 	

Its:	

Chief Financial Officer

  

 
 

EXHIBIT C TO
  THIRD AMENDMENT TO
  AMENDED AND RESTATED CREDIT AGREEMENT    
    

FORM OF

SECURITY AGREEMENT  

        THIS SECURITY AGREEMENT, dated as of            ,        , is made and given by LECG
CANADA HOLDING, INC., a corporation organized under the
laws of the State of California (the "Grantor"), to U.S. BANK NATIONAL ASSOCIATION, a national banking association, as administrative agent for the banks (the "Banks") from time to time party to the
Credit Agreement defined below (the "Secured Party"). 

        RECITALS

        A.    LECG,
LLC (the "Borrower"), the Secured Party, the Banks and LaSalle Bank National Association, as documentation agent for the Banks have entered into an Amended and
Restated Credit Agreement dated as of March 31, 2003 (as the same has been and may hereafter be amended, supplemented, extended, restated, or otherwise modified from time to time, the "Credit
Agreement") pursuant to which the Banks have agreed to extend to the Borrower certain credit accommodations consisting of certain revolving loans and term loans. 

        B.    Pursuant
to a Guaranty dated concurrently herewith in favor of the Secured Party and the Banks (as the same may be amended, supplemented, extended, restated, or otherwise
modified from time to time, the "Guaranty"), the Grantor has absolutely and unconditionally guaranteed all of the Borrower's obligations under the Credit Agreement. 

        C.    It
is a condition precedent to the obligation of the Banks to continue credit accommodations pursuant to the terms of the Credit Agreement that this Agreement be executed
and delivered by the Grantor. 

        D.    The
Grantor is a wholly-owned subsidiary of the Borrower. 

        E.    The
Grantor finds it advantageous, desirable and in its best interests to comply with the requirement that it execute and deliver this Security Agreement to the Secured
Party. 

        NOW,
THEREFORE, in consideration of the premises and in order to induce the Banks to enter into the Credit Agreement and to extend credit accommodations to the Borrower thereunder, the
Grantor hereby agrees with the Secured Party for itself and for the Banks' benefit as follows: 

        Section 1.    Defined Terms.    

        1(a) As
used in this Agreement, the following terms shall have the meanings indicated: 

        "Account" means a right to payment of a monetary obligation, whether or not earned by performance, (i) for property that has been
or is to be sold, leased, licensed, assigned, or otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a policy of insurance issued or to be issued,
(iv) for a secondary obligation incurred or to be incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a vessel under a charter or other contract,
(vii) arising out of the use of a credit or charge card or information contained on or for use with the card, or (viii) as winnings in a lottery or other game of chance operated,
sponsored, licensed or authorized by a State or governmental unit of a State, or person licensed or authorized to operate the game by a State or governmental unit of a State. The term includes
health-care insurance receivables. 

        "Account Debtor" shall mean a Person who is obligated on or under any Account, Chattel Paper, Instrument or General Intangible. 

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        "Borrower" shall have the meaning given to such term in Recital A hereof. 

        "Chattel Paper" shall mean a record or records that evidence both a monetary obligation and a security interest in specific goods, a
security interest in specific goods and software used in the goods, a security interest in specific goods and license of software used in the goods, a lease of specific goods, or a lease of specific
goods and license of software used in the goods. 

        "Collateral" shall mean all property and rights in property now owned or hereafter at any time acquired by the Grantor in or upon which a
Security Interest is granted to the Secured Party by the Grantor under this Agreement. 

        "Control" shall have the meaning given to such term in Section 8-106 of the Uniform Commercial Code in effect in the
State of Minnesota as of the date of this Agreement. 

        "Deposit Account" shall mean any demand, time, savings and passbook, or similar accounts maintained with any bank. 

        "Document" shall mean a document of title or a warehouse receipt. 

        "Equipment" shall mean all machinery, equipment, motor vehicles, furniture, furnishings and fixtures, including all accessions,
accessories and attachments thereto, and any guaranties, warranties, indemnities and other agreements of manufacturers, vendors and others with respect to such Equipment. 

        "Equity Interests" shall mean all shares, interests, participation or other equivalents, however designated, of or in a corporation, a
limited liability company, a general partnership, a limited liability partnership or a limited partnership, whether or not voting, including but not limited to common stock, member interests,
warrants, partnership interests, preferred stock, convertible debentures, and all agreements, instruments and documents convertible, in whole or in part, into any one or more or all of the foregoing. 

        "Event of Default" shall have the meaning given to such term in Section 21 hereof. 

        "Financing Statement" shall have the meaning given to such term in Section 4 hereof. 

        "Foreign Subsidiary" shall mean any corporation that is a foreign corporation, as defined in Section 7701(a)(5) of the Internal
Revenue Code of 1986, more than 50 percent of (i) the total combined
voting power of all classes of stock of such corporation entitled to vote, or (ii) the total value of the stock of such corporation, is directly or indirectly owned by the Borrower. 

        "Fixtures" shall mean goods that have become so related to particular real property that an interest in them arises under real property
law. 

        "General Intangibles" shall mean any personal property (other than goods, Accounts, Chattel Paper, Deposit Accounts, Documents,
Instruments, Investment Property, Letter of Credit Rights and money) including things in action, contract rights, payment intangibles, software, corporate and other business records, limited liability
company interests, partnership interests, inventions, designs, patents, patent applications, service marks, trademarks, tradenames, trade secrets, internet domain names, engineering drawings, good
will, registrations, copyrights, licenses, franchises, customer lists, tax refund claims, royalties, licensing and product rights, rights to the retrieval from third parties of electronically
processed and recorded data and all rights to payment resulting from an order of any court. 

        "Guaranty" shall have the meaning given to such term in Recital B hereof. 

        "Initial Pledged Collateral" shall mean the Pledged Equity Interests and the Pledged Debt. 

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        "Instrument" shall mean a negotiable instrument or any other writing which evidences a right to the payment of a monetary obligation and
is not itself a security agreement or lease and is of a type which is transferred in the ordinary course of business by delivery with any necessary endorsement or assignment. 

        "Inventory" shall mean goods, other than farm products, which are leased by a person as lessor, are held by a person for sale or lease or
to be furnished under a contract of service, are furnished by a person under a contract of service, or consist of raw materials, work in process, or materials used or consumed in a business or
incorporated or consumed in the production of any of the foregoing and supplies, in each case wherever the same shall be located, whether in transit, on consignment, in retail outlets, warehouses,
terminals or otherwise, and all property the sale, lease or other disposition of which has given rise to an Account and which has been returned to the Grantor or repossessed by the Grantor or stopped
in transit. 

        "Investment Property" shall mean a security, whether certificated or uncertificated, a security entitlement, a securities account and all
financial assets therein, a commodity contract or a commodity account. 

        "Letter of Credit Right" shall mean a right to payment or performance under a letter of credit, whether or not the beneficiary has
demanded or is at the time entitled to demand payment or performance. 

        "Lien" shall mean any security interest, mortgage, pledge, lien, charge, encumbrance, title retention agreement or analogous instrument or
device (including the interest of the lessors under capitalized leases), in, of or on any assets or properties of the Person referred to. 

        "Obligations" shall mean (a) all indebtedness, liabilities and obligations of the Grantor to the Banks or the Secured Party of
every kind, nature or description under the Guaranty, (b) all liabilities of the Grantor under this Agreement, and (c) in all of the foregoing cases whether due or to become due, and
whether now existing or hereafter arising or incurred. 

        "Person" shall mean any individual, corporation, partnership, limited partnership, limited liability company, joint venture, firm,
association, trust, unincorporated organization, government or governmental agency or political subdivision or any other entity, whether acting in an individual, fiduciary or other capacity. 

        "Pledged Collateral" shall mean collectively (a) the Initial Pledged Collateral and the certificates and instruments representing
the Initial Pledged Collateral, and all dividends, interest, principal, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Initial Pledged Collateral, (b) all additional shares of stock, member interests, partnership interests and debt of any issuer of or obligor upon the Initial
Pledged Collateral from time to time acquired by the Grantor in any manner, and the certificates and instruments representing such additional shares, member interest, partnership interests and debt,
and all dividends, interest, principal, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such shares,
member interests, partnership interests and debt, and (c) any and all collateral security now or hereafter securing all or any items of the Pledged Debt or securing all or any items of any
additional debt described in clause (c) above (including after-acquired security), and agreements granting such security (the "Related Collateral"), and all rights, remedies, powers and
privileges of the Grantor under all of the foregoing. 

        "Pledged Debt" shall mean the indebtedness described in Schedule I hereto and issued by the obligors named therein. 

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        "Pledged Equity Interests" shall mean the Equity Interests, if any, described in Schedule I hereto issued by the corporations,
limited liability companies and partnerships named therein, including (a) the Grantor's capital account, if any, relating to the issuers of such Equity Interests, (b) the entire economic
and voting interest of the Grantor as a shareholder, member of partner, as applicable in the issuers of such Equity Interest and (c) the Grantor's interest in the organizational documents of
the issuers of such Equity Interests. 

        "Related Collateral" shall have the meaning given to such term in the definition of "Pledged Collateral" herein. 

        "Securities Account" shall have the meaning given to such term in Section 8-501 the Uniform Commercial Code in effect
in the State of Minnesota as of the date of this Agreement. 

        "Security Interest" shall have the meaning given such term in Section 2 hereof. 

        1(b) All
other terms used in this Agreement which are not specifically defined herein shall have the meaning assigned to such terms in Article 9 of the Uniform
Commercial Code as adopted in the State of Minnesota. 

        1(c) Unless
the context of this Agreement otherwise clearly requires, references to the plural include the singular, the singular, the plural and "or" has the inclusive
meaning represented by the phrase "and/or." The words "include," "includes" and "including" shall be deemed to be followed by the phrase "without limitation." The words "hereof," "herein," "hereunder"
and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. References to Sections are references to Sections in this Security
Agreement unless otherwise provided. 

        Section 2.    Grant of Security Interest.    As security for the payment and performance of all of the
Obligations, the Grantor hereby grants to the Secured Party for itself and for the benefit of the Banks a security interest (the "Security Interest") in all of the Grantor's right, title, and interest
in and to the following, whether now or hereafter owned, existing, arising or acquired and wherever located: 

        2(a) All
Accounts. 

        2(b) All
Chattel Paper. 

        2(c) All
Deposit Accounts 

        2(d) All
Documents. 

        2(e) All
Equipment. 

        2(f)  All
Fixtures. 

        2(g) All
General Intangibles. 

        2(h) All
Instruments. 

        2(i)  All
Inventory. 

        2(j)  All
Investment Property. 

        2(k) All
Letter of Credit Rights. 

        2(l)  All
Pledged Collateral. 

        2(k) To
the extent not otherwise included in the foregoing, all other rights to the payment of money, including rents and other sums payable to the Grantor under leases,
rental agreements and other Chattel Paper; all books, correspondence, credit files, records, invoices, bills of lading, and other documents relating to any of the foregoing, including, without
limitation, all tapes, cards, 

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disks,
computer software, computer runs, and other papers and documents in the possession or control of the Grantor or any computer bureau from time to time acting for the Grantor; all rights in, to
and under all policies insuring the life of any officer, director, stockholder, manager, member or employee of the Grantor, the proceeds of which are payable to the Grantor; all accessions and
additions to, parts and appurtenances of, substitutions for and replacements of any of the foregoing; and all proceeds (including insurance proceeds) and products thereof. 

        Notwithstanding
anything herein to the contrary, in no event shall the Security Interest attach to, or the terms "Collateral" or "Pledged Collateral" be deemed to include, any of the
outstanding Equity Interests in a Foreign Subsidiary (a) in excess of 65% of the voting power of all classes of Equity Interests of such Foreign Subsidiary entitled to vote in the election of
directors or other similar body of such Foreign Subsidiary or (b) to the extent that the pledge thereof is prohibited by the laws of the jurisdiction of such Foreign Subsidiary's organization. 

        Section 3.    Grantor Remains Liable.    Anything herein to the contrary notwithstanding, (a) the
Grantor shall remain liable under the Accounts, Chattel Paper, General Intangibles and other items included in the Collateral to the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by the Secured Party of any of the rights hereunder shall not release the Grantor from any
of its duties or obligations under the Accounts and any items included in the Collateral, and (c) the Secured Party shall have no obligation or liability under Accounts, Chattel Paper, General
Intangibles and other items included in the Collateral by reason of this Agreement, nor shall the Secured Party be obligated to perform any of the obligations or duties of the Grantor thereunder or to
take any action to collect or enforce any claim for payment assigned hereunder. 

        Section 4.    Title to Collateral.    The Grantor has (or will have at the time it acquires rights in
Collateral hereafter acquired or arising) and will maintain so long as the Security Interest may remain outstanding, title to each item of Collateral (including the proceeds and products thereof),
free and clear of all Liens except the Security Interest and except Liens permitted by the Credit Agreement. The Grantor will not license any Collateral. The Grantor will defend the Collateral against
all claims or demands of all Persons (other than the Secured Party and Persons holding Liens permitted by the Credit Agreement) claiming the Collateral or any interest therein. As of the date of
execution of this Security Agreement, no effective financing statement or other similar document used to perfect and preserve a security interest under the laws of any jurisdiction (a "Financing
Statement") covering all or any part of the Collateral is on file in any recording office, except such as may have been filed (a) in favor of the Secured Party relating to this Agreement, or
(b) to perfect Liens permitted by the Credit Agreement. 

        Section 5.    Disposition of Collateral.    The Grantor will not sell, lease or otherwise dispose of, or
discount or factor with or without recourse, any Collateral, except sales of items of Inventory in the ordinary course of business and except as otherwise permitted by the Credit Agreement. 

        Section 6.    Delivery of Pledged Collateral.    All certificates and instruments representing or evidencing
the Pledged Collateral shall be delivered to the Secured Party contemporaneously with the execution of this Agreement, but only to the extent that such certificates and instruments exist. All
certificates and instruments representing or evidencing Pledged Collateral received by the Grantor after the execution of this Agreement shall be delivered to the Secured Party promptly upon the
Grantor's receipt thereof. All such certificates and instruments shall be held by or on behalf of the Secured Party pursuant hereto and shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Secured Party. The Secured Party shall have the right at any time, whether
before or after an Event of Default, to cause any or all of the Pledged Equity Interests to be transferred of record into the name of the Secured Party or its nominee (but subject to the rights of the
Grantor under Section 8) and to 

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exchange
certificates representing or evidencing Pledged Equity Interests for certificates of smaller or larger denominations. 

        Section 7.    Certain Warranties and Covenants.    The Grantor makes the following warranties and covenants: 

        (a)   The
Pledged Equity Interests have been duly authorized and validly issued by the issuer thereof and are fully paid and non-assessable. The Pledged Debt has
been duly authorized, issued and delivered and is the legal, valid and binding obligation of the obligors thereof, and is not in default. The certificates and instruments, as applicable, representing
the Pledged Collateral are genuine. Except as may be provided by the law of the jurisdiction in which a Foreign Subsidiary is organized, the Pledged Collateral is not subject to any offset or similar
right or claim of the issuers thereof. 

        (b)   The
Pledged Equity Interests constitute the percentage of the issued and outstanding ownership interests of the respective issuers thereof indicated on Schedule I
(if any such percentage is so indicated). 

        (c)   The
Pledged Debt constitutes all of the outstanding indebtedness for money borrowed or for the deferred purchase price of property (other than accounts payable on
ordinary trade terms) of the respective obligors thereof owed to the Grantor and is outstanding in the principal amount indicated on Schedule I. 

        (d)   The
Grantor shall not forgive, cancel, subordinate, compromise, modify, amend or extend the time for payment of, or waive any default under, any of the Pledged Debt, or
modify or amend, or waive any default under any agreement with respect to the Related Collateral, or consent to or acquiesce in any of the foregoing, without in each case the prior written consent of
the Secured Party. 

        (e)   None
of the Pledged Collateral (i) shall be deposited in, credited to or otherwise subject to any Securities Account, except a Securities Account subject to the
Control of the Secured Party, or (ii) shall be subject to the Control or any Person other than the Bank. 

        (f)    The
Grantor will (i) cause each issuer of the Pledged Equity Interests that it controls not to issue any Equity Interests in addition to or in substitution for
the Pledged Shares issued by such issuer, except to the Grantor, and (ii) pledge hereunder, immediately upon its acquisition (directly or indirectly) thereof, any and all additional Equity
Interests of each issuer of the Pledged Equity Interests that are issued to the Grantor. 

        Section 8.    Voting Rights; Dividends; Distributions, Etc.    

        (a)   Subject
to paragraph (d) of this Section 8, the Grantor shall be entitled to exercise or refrain from exercising any and all voting and other consensual
rights pertaining to the Pledged Equity Interests or any part thereof for any purpose not inconsistent with the terms of this Agreement or the Credit Agreement; provided, however, that the Grantor
shall not exercise or refrain from exercising any such right if such action could reasonably be expected to have a material adverse effect on the value of the Pledged Collateral or any material part
thereof. 

        (b)   Subject
to paragraph (e) of this Section 8, the Grantor shall be entitled to receive, retain, and use in any manner not prohibited by the Credit Agreement
any and all principal, interest, dividends and other distributions paid in respect of the Pledged Collateral; provided,  however, that any and all

	i.
	principal,
interest, dividends and other distributions paid or payable other than in cash in respect of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any Pledged Collateral, 

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	ii.
	dividends
and other distributions paid or payable in cash in respect of any Pledged Collateral in connection with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or paid-in-surplus, and

	iii.
	cash
paid, payable or otherwise distributed in respect of principal of, or in redemption of, or in exchange for, any Pledged Collateral (other than the Pledged Debt), 

shall
be, and shall be forthwith delivered to the Secured Party to hold as, Pledged Collateral and shall, if received by the Grantor, be received in trust for the benefit of the Secured Party, be
segregated from the other property or funds of the Grantor, and be forthwith delivered to the Secured Party as Pledged Collateral in the same form as so received (with any necessary indorsement or
assignment). The Grantor shall, upon request by the Secured Party, promptly execute all such documents and do all such acts as may be necessary or desirable to give effect to the provisions of this
Section 8(b). 

        (c)   The
Secured Party shall execute and deliver (or cause to be executed and delivered) to the Grantor all such proxies and other instruments as the Grantor may reasonably
request for the purpose of enabling the Grantor to exercise the voting and other rights that it is entitled to exercise pursuant to Section 8(a) hereof and to receive the principal, interest,
dividends and other distributions it is authorized to receive and retain pursuant to Section 8(b) hereof. 

        (d)   Upon
the occurrence and during the continuance of any Event of Default, the Secured Party shall have the right in its sole discretion, and the Grantor shall execute and
deliver all such proxies and other instruments as may be necessary or appropriate to give effect to such right, to terminate all rights of the Grantor to exercise or refrain from exercising the voting
and other consensual rights it would otherwise be entitled to exercise pursuant to Section 8(a) hereof, and all such rights shall thereupon become vested in the Secured Party who shall
thereupon have the sole right to exercise or refrain from exercising such voting and other consensual rights; provided, however, that the Secured Party shall not be deemed to possess or have control
over any voting rights with respect to any Pledged Collateral unless and until the Secured Party has given written notice to the Grantor that any further exercise of such voting rights by the Grantor
is prohibited and that the Secured Party and/or its assigns will henceforth exercise such voting rights; and provided, further, that neither the registration of any item of Pledged Collateral in the
Secured Party's name nor the exercise of any voting rights with respect thereto shall be deemed to constitute a retention by the Secured Party of any such Collateral in satisfaction of the Obligations
or any part thereof. 

        (e)   Upon
the occurrence and during the continuance of any Event of Default: 

	i.
	all
rights of the Grantor to receive the principal, interest, dividends and other distributions that it would otherwise be authorized to receive and retain pursuant to
Section 8(b) hereof shall cease, and all such rights shall thereupon become vested in the Secured Party who shall thereupon have the sole right to receive and hold such property as Pledged
Collateral, and

	ii.
	all
payments of principal, interest, dividends and other distributions that are received by the Grantor contrary to the provisions of paragraph (i) of this
Section 8(e) shall be received in trust for the benefit of the Secured Party, shall be segregated from other funds of the Grantor and shall be forthwith paid over to the Secured Party as
Pledged Collateral in the same form as so received (with any necessary indorsement). 

        Section 9.    Names, Offices, Locations, Jurisdiction of Organization.    The Grantor's legal name (as set
forth in its constituent documents filed with the appropriate governmental official or agency) is as set forth in the opening paragraph hereof. The jurisdiction of organization of the Grantor is the
state 

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of
indicated in the Preamble hereof and the organizational number of the Grantor is indicated on the signature page hereof. The Grantor will from time to time at the request of the Secured Party
provide the Secured Party with current good standing certificates and/or state-certified constituent documents from the appropriate governmental officials. The chief place of business and chief
executive office of Grantor are located at its address set forth on the signature page hereof. The Grantor will not relocate any item of Collateral into any jurisdiction in which an additional
Financing Statement would be required to be filed to maintain the Secured Party's perfection in such Collateral. The Grantor will not change its name, the location of its chief place of business and
chief executive office or its corporate structure (including without limitation, its jurisdiction of organization) unless the Secured Party has been given at least 30 days prior written notice
thereof and the Grantor has executed and delivered to the Secured Party such Financing Statements and other instruments required or appropriate to continue the perfection of the Security Interest. 

        Section 10.    Rights to Payment.    Except as the Grantor may otherwise advise the Secured Party in writing,
each Account, Chattel Paper, Document, General Intangible and Instrument constituting or evidencing Collateral is (or, in the case of all future Collateral, will be when arising or issued) the valid,
genuine and legally enforceable obligation of the Account Debtor or other obligor named therein or in the Grantor's records pertaining thereto as being obligated to pay or perform such obligation.
Without the Secured Party's prior written consent, the Grantor will not agree to any modifications, amendments, subordinations, cancellations or terminations of the obligations of any such Account
Debtors or other obligors except in the ordinary course of business. The Grantor will perform and comply in all material respects with all its obligations under any items included in the Collateral
and exercise promptly and diligently its rights thereunder. 

        Section 11.    Further Assurances; Attorney-in-Fact.    

        (a)   The
Grantor agrees that from time to time, at its expense, it will promptly execute and deliver all further instruments and documents, and take all further action, that
may be necessary or that the Secured Party may reasonably request, in order to perfect and protect the Security Interest granted or purported to be granted hereby or to enable the Secured Party to
exercise and enforce its rights and remedies hereunder with respect to any Collateral (but any failure to request or assure that the Grantor execute and deliver such instrument or documents or to take
such action shall not affect or impair the validity, sufficiency or enforceability of this Agreement and the Security Interest, regardless of whether any such item was or was not executed and
delivered or action taken in a similar context or on a prior occasion). Without limiting the generality of the foregoing, the Grantor will, promptly and from time to time at the request of the Secured
Party: (i) execute and file such Financing Statements or continuation statements in respect thereof, or amendments thereto, and such other instruments or notices (including fixture filings with
any necessary legal descriptions as to any goods included in the Collateral which the Secured Party determines might be deemed to be fixtures, and instruments and notices with respect to vehicle
titles), as may be necessary or desirable, or as the Secured Party may request, in order to perfect, preserve, and enhance the Security Interest granted or purported to be granted hereby;
(ii) obtain from any bailee holding any item of Collateral an acknowledgement, in form satisfactory to the Secured Party that such bailee holds such collateral for the benefit of the Secured
Party; (iii) obtain from any securities intermediary, or other party holding any item of Collateral, control agreements in form satisfactory to the Secured Party (iv) and deliver and
pledge to the Secured Party, all Instruments and Documents, duly indorsed or accompanied by duly executed instruments of transfer or assignment, with full recourse to the Grantor, all in form and
substance satisfactory to the Secured Party; (v) obtain waivers, in form satisfactory to the Secured Party, of any claim to any Collateral from any landlords or mortgagees of any property where
any Inventory or Equipment is located. 

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        (b)   The
Grantor hereby authorizes the Secured Party to file one or more Financing Statements or continuation statements in respect thereof, and amendments thereto, relating
to all or any part of the Collateral without the signature of the Grantor where permitted by law. The Grantor irrevocably waives any right to notice of any such filing. A photocopy or other
reproduction of this Agreement or any Financing Statement covering the Collateral or any part thereof shall be sufficient as a Financing Statement where permitted by law. 

        (c)   The
Grantor will furnish to the Secured Party from time to time statements and schedules further identifying and describing the Collateral and such other reports in
connection with the Collateral as the Secured Party may reasonably request, all in reasonable detail and in form and substance reasonably satisfactory to the Secured Party. 

        (d)   In
furtherance, and not in limitation, of the other rights, powers and remedies granted to the Secured Party in this Agreement, the Grantor hereby appoints the Secured
Party the Grantor's attorney-in-fact, with full authority in the place and stead of Grantor and
in the name of Grantor or otherwise, from time to time in the Secured Party's good faith discretion, to take any action (including the right to collect on any Collateral) and to execute any instrument
that the Secured Party may reasonably believe is necessary or advisable to accomplish the purposes of this Agreement, in a manner consistent with the terms hereof. 

        Section 12.    Taxes and Claims.    The Grantor will promptly pay all taxes and other governmental charges
levied or assessed upon or against any Collateral or upon or against the creation, perfection or continuance of the Security Interest, as well as all other claims of any kind (including claims for
labor, material and supplies) against or with respect to the Collateral, except to the extent (a) such taxes, charges or claims are being contested in good faith by appropriate proceedings,
(b) such proceedings do not involve any material danger of the sale, forfeiture or loss of any of the Collateral or any interest therein and (c) such taxes, charges or claims are
adequately reserved against on the Grantor's books in accordance with generally accepted accounting principles. 

        Section 13.    Books and Records.    The Grantor will keep and maintain at its own cost and expense
satisfactory and complete records of the Collateral, including a record of all payments received and credits granted with respect to all Accounts, Chattel Paper and other items included in the
Collateral. 

        Section 14.    Inspection, Reports, Verifications.    The Grantor will at all reasonable times permit the
Secured Party or its representatives to examine or inspect any Collateral, any evidence of Collateral and the Grantor's books and records concerning the Collateral, wherever located. The Grantor will
from time to time when requested by the Secured Party furnish to the Secured Party a report on its Accounts, Chattel Paper, General Intangibles and Instruments, naming the Account Debtors or other
obligors thereon, the amount due and the aging thereof. Upon the occurrence and during the continuation of an Event of Default, the Secured Party or its designee is authorized to contact Account
Debtors and other Persons obligated on any such Collateral from time to time to verify the existence, amount and/or terms of such Collateral. 

        Section 15.    Notice of Loss.    The Grantor will promptly notify the Secured Party of any loss of or material
damage to any material item of Collateral or of any substantial adverse change, known to Grantor, in any material item of Collateral or the prospect of payment or performance thereof. 

        Section 16.    Insurance.    The Grantor will keep the Inventory and Equipment insured against "all risks" for
the full replacement cost thereof subject to a deductible, and with an insurance company or companies, satisfactory to the Secured Party, the policies to protect the Secured Party as its interests may
appear, with such policies or certificates with respect thereto to be delivered to the Secured Party at its request. Each such policy or the certificate with respect thereto shall provide that such
policy shall not be canceled or allowed to lapse unless at least 30 days prior written notice is given to the Secured Party. 

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        Section 17.    Lawful Use; Fair Labor Standards Act.    The Grantor will use and keep the Collateral, and will
require that others use and keep the Collateral, only for lawful purposes, without violation of any federal, state or local law, statute or ordinance. All Inventory of the Grantor as of the date of
this Agreement that was produced by the Grantor or with respect to which the Grantor performed any manufacturing or assembly process was produced by the Grantor (or such manufacturing or assembly
process was conducted) in compliance in all material respects with all requirements of the Fair Labor Standards Act, and all Inventory produced, manufactured or assembled by the Grantor after the date
of this Agreement will be so produced, manufactured or assembled, as the case may be. 

        Section 18.    Action by the Secured Party.    If the Grantor at any time fails to perform or observe any of
the foregoing agreements, the Secured Party shall have (and the Grantor hereby grants to the Secured Party) the right, power and authority (but not the duty) to perform or observe such agreement on
behalf and in the name, place and stead of the Grantor (or, at the Secured Party's option, in the Secured Party's name) and to take any and all other actions which the Secured Party may reasonably
deem necessary to cure or correct such failure (including, without limitation, the payment of taxes, the satisfaction of Liens, the procurement and maintenance of insurance, the execution of
assignments, security agreements and Financing Statements, and the indorsement of instruments); and the Grantor shall thereupon pay to the Secured Party on demand the amount of all monies expended and
all costs and expenses (including reasonable attorneys' fees and legal expenses) incurred by the Secured Party in connection with or as a result of the performance or observance of such agreements or
the taking of such action by the Secured Party, together with interest thereon from the date expended or incurred at the highest lawful rate then applicable to any of the Obligations, and all such
monies expended, costs and expenses and interest thereon shall be part of the Obligations secured by the Security Interest. 

        Section 19.    Insurance Claims.    As additional security for the payment and performance of the Obligations,
the Grantor hereby assigns to the Secured Party for itself and the Banks' benefit any and all monies (including proceeds of insurance and refunds of unearned premiums) due or to become due under, and
all other rights of the Grantor with respect to, any and all policies of insurance now or at any time hereafter covering the Collateral or any evidence thereof or any business records or valuable
papers pertaining thereto. At any time, whether before or after the occurrence of any Event of Default, the Secured Party may (but need not), in the Secured Party's name or in Grantor's name, execute
and deliver proofs of claim, receive all such monies, indorse checks and other instruments representing payment of such monies, and adjust, litigate, compromise or release any claim against the issuer
of any such policy. Notwithstanding any of the foregoing, so long as no Event of Default exists the Grantor shall be entitled to all insurance proceeds with respect to Equipment or Inventory provided
that such proceeds are applied to the cost of replacement Equipment or Inventory. 

        Section 20.    The Secured Party's Duties.    The powers conferred on the Secured Party hereunder are solely to
protect its and the Banks' interest in the Collateral and shall not impose any duty upon it or any Bank to exercise any such powers. The Secured Party shall be deemed to have exercised reasonable care
in the safekeeping of any Collateral in its possession if such Collateral is accorded treatment substantially equal to the safekeeping which the Secured Party accords its own property of like kind.
Except for the safekeeping of any Collateral in its possession and the accounting for monies and for other properties actually received by it hereunder, neither Secured Party nor any Bank shall have
any duty, as to any Collateral, as to ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Collateral, whether or not any
Bank or the Secured Party has or is deemed to have knowledge of such matters, or as to the taking of any necessary steps to preserve rights against any Persons or any other rights pertaining to any
Collateral. The Secured Party will take action in the nature of exchanges, conversions, redemptions, tenders and the like requested in writing by the Grantor with respect to the Collateral in the
Secured Party's possession if the Secured Party in its reasonable judgment determines that such action will not impair the Security Interest or the value of the Collateral, but a failure of the
Secured Party to comply with 

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any
such request shall not of itself be deemed a failure to exercise reasonable care with respect to the taking of any necessary steps to preserve rights against any Persons or any other rights
pertaining to any Collateral. 

        Section 21.    Default.    Each of the following occurrences shall constitute an Event of Default under this
Agreement: (a) the Grantor shall fail to observe or perform any covenant or agreement applicable to the Grantor set forth in Sections 4, 5, 9, 10, 12, 16 or 17 of this Agreement;
(b) the Grantor shall fail to observe or perform any other covenant or agreement of the Grantor contained herein which continues for 20 days after the date the Secured Party gives
notices of such failure to the Grantor; (c) any representation or warranty made by the Grantor in this Agreement or any schedule, exhibit, supplement or attachment hereto or in any financial
statements, or reports or certificates heretofore or at any time hereafter submitted by or on behalf of the Grantor to the Secured Party shall prove to have been false or materially misleading when
made; or (d) any Event of Default shall occur under the Credit Agreement. 

        Section 22.    Remedies on Default.    Upon the occurrence of an Event of Default and at any time thereafter: 

        (a)   The
Secured Party may exercise and enforce any and all rights and remedies available upon default to a secured party under Article 9 of the Uniform Commercial
Code as adopted in the State of Minnesota. 

        (b)   The
Secured Party shall have the right to enter upon and into and take possession of all or such part or parts of the properties of the Grantor, including lands, plants,
buildings, Equipment, Inventory and other property as may be necessary or appropriate in the judgment of the Secured Party to permit or enable the Secured Party to manufacture, produce, process, store
or sell or complete the manufacture, production, processing, storing or sale of all or any part of the Collateral, as the Secured
Party may elect, and to use and operate said properties for said purposes and for such length of time as the Secured Party may deem necessary or appropriate for said purposes without the payment of
any compensation to Grantor therefor. The Secured Party may require the Grantor to, and the Grantor hereby agrees that it will, at its expense and upon request of the Secured Party forthwith, assemble
all or part of the Collateral as directed by the Secured Party and make it available to the Secured Party at a place or places to be designated by the Secured Party. The Secured Party may give any
entitlement orders deemed appropriate by it with respect to the Investment Property and Pledged Collateral. 

        (c)   Any
disposal of Collateral may be in one or more parcels at public or private sale, at any of the Secured Party's offices or elsewhere, at any exchange, broker's board
or at any of the Agent's offices or elsewhere, for cash, on credit, or for future delivery and upon such other terms as the Secured Party may reasonably believe are commercially reasonable. The
Secured Party shall not be obligated to dispose of Collateral regardless of notice of sale having been given, and the Secured Party may adjourn any public or private sale from time to time by
announcement made at the time and place fixed therefor, and such disposition may, without further notice, be made at the time and place to which it was so adjourned. 

        (d)   The
Secured Party is hereby granted a license or other right to use, without charge, all of the Grantor's property, including, without limitation, all of the Grantor's
labels, trademarks, copyrights, patents and advertising matter, or any property of a similar nature, as it pertains to the Collateral, in completing production of, advertising for sale and selling any
Collateral, and the Grantor's rights under all licenses and all franchise agreements shall inure to the Secured Party's benefit until the Obligations are paid in full. 

        (e)   If
notice to the Grantor of any intended disposition of Collateral or any other intended action is required by law in a particular instance, such notice shall be deemed
commercially 

C-11

 

reasonable
if given in the manner specified for the giving of notice in Section 28 hereof at least ten calendar days prior to the date of intended disposition or other action, and the Secured
Party may exercise or enforce any and all other rights or remedies available by law or agreement against the Collateral, against the Grantor, or against any other Person or property. The Secured Party
(i) may dispose of the Collateral in its then present condition or following such preparation and processing as the Secured Party deems commercially reasonable, (ii) shall have no duty
to prepare or process the Collateral prior to sale, (iii) may disclaim warranties of title, possession, quiet enjoyment and the like, and (iv) may comply with any applicable state or
federal law requirements in connection with a disposition of the Collateral and none of the foregoing actions shall be deemed to adversely affect the commercial reasonableness of the disposition of
the Collateral. 

        Section 23.    Remedies as to Certain Rights to Payment.    Upon the occurrence of an Event of Default and at
any time thereafter the Secured Party may notify any Account Debtor or other Person obligated on any Accounts or other Collateral that the same have been assigned or transferred to the Secured Party
and that the same should be performed as requested by, or paid directly to, the Secured Party, as the case
may be. The Grantor shall join in giving such notice, if the Secured Party so requests. The Secured Party may, in the Secured Party's name or in the Grantor's name, demand, sue for, collect or receive
any money or property at any time payable or receivable on account of, or securing, any such Collateral or grant any extension to, make any compromise or settlement with or otherwise agree to waive,
modify, amend or change the obligation of any such Account Debtor or other Person. If any payments on any such Collateral are received by the Grantor after an Event of Default has occurred, such
payments shall be held in trust by the Grantor as the property of the Secured Party and shall not be commingled with any funds or property of the Grantor and shall be forthwith remitted to the Secured
Party for application on the Obligations. 

        Section 24.    Application of Proceeds.    All cash proceeds received by the Secured Party in respect of any
sale of, collection from, or other realization upon all or any part of the Collateral may, in the discretion of the Secured Party, be held by the Secured Party as collateral for, or then or at any
time thereafter be applied in whole or in part by the Secured Party against, all or any part of the Obligations (including, without limitation, any expenses of the Secured Party payable pursuant to
Section 25 hereof). 

        Section 25.    Costs and Expenses; Indemnity.    The Grantor will pay or reimburse the Secured Party on demand
for all out-of-pocket expenses (including in each case all filing and recording fees and taxes and all reasonable fees and expenses of counsel and of any experts and agents)
incurred by the Secured Party in connection with the creation, perfection, protection, satisfaction, foreclosure or enforcement of the Security Interest and the preparation, administration,
continuance, amendment or enforcement of this Agreement, and all such costs and expenses shall be part of the Obligations secured by the Security Interest. The Grantor shall indemnify and hold each
Bank and the Secured Party harmless from and against any and all claims, losses and liabilities (including reasonable attorneys' fees) growing out of or resulting from this Agreement and the Security
Interest hereby created (including enforcement of this Agreement) or the Secured Party's actions pursuant hereto, except claims, losses or liabilities resulting from the Secured Party's or such Bank's
gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction. Any liability of the Grantor to indemnify and hold each Bank and the Secured Party
harmless pursuant to the preceding sentence shall be part of the Obligations secured by the Security Interest. The obligations of the Grantor under this Section shall survive any termination of this
Agreement. 

        Section 26.    Waiver of Certain Claims.    The Grantor acknowledges that because of present or future
circumstances, a question may arise under the Securities Act of 1933, as from time to time amended (the "Securities Act"), with respect to any disposition of the Pledged Collateral and Investment
Property permitted hereunder. The Grantor understands that compliance with the Securities Act may very strictly limit the course of conduct of the Secured Party if the Secured Party were to 

C-12

 

attempt
to dispose of all or any portion of the Pledged Collateral and Investment Property and may also limit the extent to which or the manner in which any subsequent transferee of the Pledged
Collateral and Investment Property or any portion thereof may dispose of the same. There may be other legal restrictions or limitations affecting the Secured Party in any attempt to dispose of all or
any portion of the Pledged Collateral and Investment Property under the applicable Blue Sky or other securities laws or similar laws analogous in purpose or effect. The Secured Party may be compelled
to resort to one or more private sales to a restricted group of purchasers who will be obliged to agree, among other things, to acquire such Pledged Collateral and Investment Property for their own
account for investment only and not to engage in a distribution or resale thereof. The Grantor agrees that the Secured Party shall not incur any liability, and any liability of the Grantor for any
deficiency shall not be impaired, as a result of the sale of the Pledged Collateral and Investment Property or any portion thereof at any such private sale in a manner that the Secured Party
reasonably believes is commercially reasonable (within the meaning of Section 9-627 of the Uniform Commercial Code). The Grantor hereby waives any claims against the Secured Party
arising by reason of the fact that the price at which the Pledged Collateral and Investment Property may have been sold at such sale was less than the price that might have been obtained at a public
sale or was less than the aggregate amount of the Obligations, even if the Secured Party shall accept the first offer received and does not offer any portion of the Pledged Collateral and Investment
Property to more than one possible purchaser. The Grantor further agrees that the Secured Party has no obligation to delay sale of any Pledged Collateral and Investment Property for the period of time
necessary to permit the issuer of such Pledged Collateral and Investment Property to qualify or register such Pledged Collateral and Investment Property for public sale under the Securities Act,
applicable Blue Sky laws and other applicable state and federal securities laws, even if said issuer would agree to do so. Without limiting the generality of the foregoing, the provisions of this
Section would apply if, for example, the Secured Party were to place all or any portion of the Pledged Collateral and Investment Property for private placement by an investment banking firm, or if
such investment banking firm purchased all or any portion of the Pledged Collateral and Investment Property for its own account, or if the Secured Party placed all or any portion of the Pledged
Collateral and Investment Property privately with a purchaser or purchasers. 

        Section 27.    Waivers; Remedies; Marshalling.    This Agreement can be waived, modified, amended, terminated
or discharged, and the Security Interest can be released, only explicitly in a writing signed by the Secured Party. A waiver so signed shall be effective only in the specific instance and for the
specific purpose given. Mere delay or failure to act shall not preclude the exercise or enforcement of any rights and remedies available to the Secured Party. All rights and remedies of the Secured
Party shall be cumulative and may be exercised singly in any order or sequence, or concurrently, at the Secured Party's option, and the exercise or enforcement of any such right or remedy shall
neither be a condition to nor bar the exercise or enforcement of any other. The Grantor hereby waives all requirements of law, if any, relating to the marshalling of assets which would be applicable
in connection with the enforcement by the Secured Party of its remedies hereunder, absent this waiver. 

        Section 28.    Notices.    Any notice or other communication to any party in connection with this Agreement
shall be in writing and shall be sent by manual delivery, facsimile transmission, overnight courier or United States mail (postage prepaid) addressed to such party at the address specified on the
signature page hereof, or at such other address as such party shall have specified to the other party hereto in writing. All periods of notice shall be measured from the date of delivery thereof if
manually delivered, from the date of sending thereof if sent by facsimile transmission, from the first business day after the date of sending if sent by overnight courier, or from four days after the
date of mailing if mailed. 

        Section 29.    Grantor Acknowledgments.    The Grantor hereby acknowledges that (a) it has been advised
by counsel in the negotiation, execution and delivery of this Agreement, (b) no Bank nor the 

C-13

 

Secured
Party has any fiduciary relationship to the Grantor, the relationship being solely that of debtor and creditor, and (c) no joint venture exists between the Grantor and any Bank or the
Secured Party. 

        Section 30.    Continuing Security Interest; Assignments under Credit Agreement.    This Agreement shall
(a) create a continuing security interest in the Collateral and shall remain in full force and effect until payment in full of the Obligations and the expiration of the obligations, if any, of
the Banks to extend credit accommodations to the Borrower, (b) be binding upon the Grantor, its successors and assigns, and (c) inure to the benefit of, and be enforceable by, the
Secured Party and its successors, transferees, and assigns. Without limiting the generality of the foregoing clause (c), the Secured Party may assign or otherwise transfer all or any portion of
its rights and obligations under the Credit Agreement to any other Persons to the extent and in the manner provided in the Credit Agreement and may similarly transfer all or any portion of its rights
under this Security Agreement to such Persons. 

        Section 31.    Termination of Security Interest.    Upon payment in full of the Obligations and the expiration
of any obligation of the Banks to extend credit accommodations to the Borrower, the Security Interest granted hereby shall terminate. Upon any such termination, the Secured Party will return to the
Grantor such of the Collateral then in the possession of the Secured Party as shall not have been sold or otherwise applied pursuant to the terms hereof and execute and deliver to the Grantor such
documents as the Grantor shall reasonably request to evidence such termination. Any reversion or return of Collateral upon termination of this Agreement and any instruments of transfer or termination
shall be at the expense of the Grantor and shall be without warranty by, or recourse on, any Bank or the Secured Party. As used in this Section, "Grantor" includes any assigns of Grantor, any Person
holding a subordinate security interest in any of the Collateral or whoever else may be lawfully entitled to any part of the Collateral. 

        Section 32.    Governing Law and Construction.    THE VALIDITY,
CONSTRUCTION AND ENFORCEABILITY OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF, EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE MANDATORILY GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF MINNESOTA. Whenever possible, each provision of this Agreement and any other statement, instrument or transaction contemplated hereby or
relating hereto shall be interpreted in such manner as to be effective and valid under such applicable law, but, if any provision of this Agreement or any other statement, instrument or transaction
contemplated hereby or relating hereto shall be held to be prohibited or invalid under such applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions of this Agreement or any other statement, instrument or transaction contemplated hereby or relating hereto. 

        Section 33.    Consent to
Jurisdiction.    AT THE OPTION OF THE SECURED PARTY, THIS AGREEMENT MAY BE ENFORCED IN ANY FEDERAL COURT OR MINNESOTA STATE COURT SITTING IN
HENNEPIN COUNTY; AND THE GRANTOR CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT THE GRANTOR COMMENCES ANY
ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT, THE SECURED PARTY AT ITS OPTION SHALL BE
ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.

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        Section 34.    Waiver of Notice and
Hearing.    THE GRANTOR HEREBY WAIVES ALL RIGHTS TO A JUDICIAL HEARING OF ANY KIND PRIOR TO THE EXERCISE BY THE SECURED PARTY OF ITS RIGHTS TO
POSSESSION OF THE COLLATERAL WITHOUT JUDICIAL PROCESS OR OF ITS RIGHTS TO REPLEVY, ATTACH, OR LEVY UPON THE COLLATERAL WITHOUT PRIOR NOTICE OR HEARING. THE GRANTOR ACKNOWLEDGES THAT IT HAS BEEN
ADVISED BY COUNSEL OF ITS CHOICE WITH RESPECT TO THIS PROVISION AND THIS AGREEMENT.

        Section 35.    Waiver of Jury
Trial.    EACH OF THE GRANTOR AND THE SECURED PARTY, BY ITS ACCEPTANCE OF THIS AGREEMENT, IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

        Section 36.    Counterparts.    This Agreement may be executed in any number of counterparts, each of which
when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. 

        Section 37.    General.    All representations and warranties contained in this Agreement or in any other
agreement between the Grantor and the Secured Party shall survive the execution, delivery and
performance of this Agreement and the creation and payment of the Obligations. The Grantor waives notice of the acceptance of this Agreement by the Secured Party. Captions in this Agreement are for
reference and convenience only and shall not affect the interpretation or meaning of any provision of this Agreement. 

        [The
remainder of this page was intentionally left blank.] 

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        IN WITNESS WHEREOF, the Grantor has caused this Security Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written. 

	 	 	LECG CANADA HOLDING, INC.
	

 	
 	

By	

/s/  J. GEOFFREY COLTON      
	 	 	 	

	 	 	Title	Director of Finance
	 	 	 	

Organizational
No. 2642723 

Address
for Grantor:

2000 Powell Street, Suite 600

Emeryville, CA 94608

Attention: John C. Burke 

With
a copy of Notices to: 

LECG

33 West Monroe Street, Suite 1850

Chicago, IL 60603

Attn.: Marvin A. Tenenbaum, General Counsel 

Address
for the Secured Party:

800 Nicollet Mall—BC-MN-H03Q

Minneapolis, Minnesota 55402

Attention: Robert Rosati 

C-S-1

   SCHEDULE I  

PLEDGED STOCK  

	Issuer:	 	LECG Canada Ltd.
	

Certificate No.:	
 	

2
	

No. of Shares:	
 	

100
	

Class of Stock:	
 	

Common
	

 	
 	

 
	

Issuer:	
 	

LECG Canada Ltd.
	

Certificate No.:	
 	

3
	

No. of Shares:	
 	

4,868,656
	

Class of Stock:	
 	

Common

C-I-1

  

 
 

EXHIBIT D TO
  THIRD AMENDMENT TO
  AMENDED AND RESTATED CREDIT AGREEMENT    
    

FORM OF

GUARANTY  

        THIS GUARANTY ("Guaranty"), dated as of            ,        , is made and given by
LECG CANADA HOLDING, INC., a corporation organized under the
laws of the State of California (the "Guarantor"), in favor of the lenders (the "Banks") from time to time party to the Credit Agreement defined below and U.S. BANK NATIONAL ASSOCIATION, a national
banking association, as administrative agent for the Banks (in such capacity, the "Agent"). 

        RECITALS

        A.    LECG,
LLC (the "Borrower"), the Agent, the Banks and LaSalle Bank National Association, as documentation agent for the Banks, have entered into an Amended and Restated
Credit Agreement dated as of March 31, 2003 (as the same has been and may hereafter be amended, restated, or otherwise modified from time to time, the "Credit Agreement") pursuant to which the
Agent and the Banks have agreed to continue certain credit accommodations to the Borrower. 

        B.    It
is a condition precedent to the obligation of the Agent and the Banks to continue credit accommodations pursuant to the terms of the Credit Agreement that this
Guaranty be executed and delivered by the Guarantor. 

        C.    The
Guarantor is a wholly-owned subsidiary of the Borrower. 

        D.    The
Guarantor expects to derive benefits from the continuation of credit accommodations to the Borrower by the Agent and the Banks and finds it advantageous, desirable
and in its their best interests to execute and deliver this Guaranty to the Agent. 

        NOW,
THEREFORE, in consideration of the credit accommodations to be extended to the Borrower and for other good and valuable consideration, the Guarantor hereby covenants and agrees with
the Agent as follows: 

        Section 1.    Defined Terms.    As used in this Guaranty, the following terms shall have the meaning indicated: 

        "Agent" shall have the meaning indicated in the opening paragraph hereof. 

        "Banks" shall have the meaning indicated in the Credit Agreement. 

        "Borrower" shall have the meaning indicated in Recital A. 

        "Credit Agreement" shall have the meaning indicated in Recital A. 

        "Guarantor" shall have the meaning indicated in the opening paragraph hereof. 

        "Loan Documents" shall have the meaning indicated in the Credit Agreement. 

        "Obligations" shall mean all indebtedness, liabilities and obligations of the Borrower to the Agent or the Banks of every kind, nature or
description under the Credit Agreement, including the Borrower's obligation on any promissory note or notes under the Credit Agreement and any note or notes hereafter issued in substitution or
replacement thereof, in all cases whether due or to become due, and whether now existing or hereafter arising or incurred. 

        "Person" shall mean any individual, corporation, partnership, limited partnership, limited liability company, joint venture, firm,
association, trust, unincorporated organization, government or 

D-1

 

governmental
agency or political subdivision or any other entity, whether acting in an individual, fiduciary or other capacity. 

        Section 2.    The Guaranty.    Subject always to the following Section, the Guarantor hereby absolutely and
unconditionally guarantees to the Agent and the Banks the payment when due (whether at a stated maturity or earlier by reason of acceleration or otherwise) and performance of the Obligations. 

        Section 3.    Limitation; Insolvency Laws.    As used in this Section: (a) the term "Applicable
Insolvency Laws" means the laws of the United States of America or of any State, province, nation or other governmental unit relating to bankruptcy, reorganization, arrangement, adjustment of debts,
relief of debtors, dissolution, insolvency, fraudulent transfers or conveyances or other similar laws (including, without limitation, 11 U.S.C. §547, §548, §550 and
other "avoidance" provisions of Title 11 of the United Stated Code) as applicable in any proceeding in which the validity and/or enforceability of this Guaranty or any Specified Lien is in issue; and
(b) "Specified Lien" means any security interest, mortgage, lien or encumbrance securing this Guaranty, in whole or in part. Notwithstanding any other provision of this Guaranty, if, in any
proceeding, a court of competent jurisdiction determines that this Guaranty or any Specified Lien would, but for the operation of this Section, be subject to avoidance and/or recovery or be
unenforceable by reason of Applicable Insolvency Laws, this Guaranty and each such Specified Lien shall be valid and enforceable only to the maximum extent that would not cause this Guaranty or such
Specified Lien to be subject to avoidance, recovery or unenforceability. To the extent that any payment to, or realization by, the Agent and the Banks on the guaranteed Obligations exceeds the
limitations of this Section and is otherwise subject to avoidance and recovery in any such proceeding, the amount subject to avoidance shall in all events be limited to the amount by which such actual
payment or realization exceeds such limitation, and this Guaranty as limited shall in all events remain in full force and effect and be fully enforceable against the Guarantor. This Section is
intended solely to reserve the rights of the Agent and the Banks hereunder against the Guarantor in such proceeding to the maximum extent permitted by Applicable Insolvency Laws and neither the
Guarantor, the Borrower, any other guarantor of the Obligations nor any Person shall have any right, claim or defense under this Section that would not otherwise be available under Applicable
Insolvency Laws in such proceeding. 

        Section 4.    Continuing Guaranty.    This Guaranty is an absolute, unconditional and continuing guaranty of
payment and performance of the Obligations, and the obligations of the Guarantor hereunder shall not be released, in whole or in part, by any action or thing which might, but for this provision of
this Guaranty, be deemed a legal or equitable discharge of a surety or guarantor, other than irrevocable payment and performance in full of the Obligations. No notice of the Obligations to which this
Guaranty may apply, or of any renewal or extension thereof need be given to the Guarantor and none of the foregoing acts shall release the Guarantor from liability hereunder. The Guarantor hereby
expressly waives (a) demand of payment, presentment, protest, notice of dishonor, nonpayment or nonperformance on any and all forms of the Obligations; (b) notice of acceptance of this
Guaranty and notice of any liability to which it may apply; (c) all other notices and demands of any kind and description relating to the Obligations now or hereafter provided for by any
agreement, statute, law, rule or regulation; and (d) any and all defenses of the Borrower pertaining to the Obligations except for the defense of discharge by payment. The Guarantor shall not
be exonerated with respect to the Guarantor's liabilities under this Guaranty by any act or thing except irrevocable payment and performance of the Obligations, it being the purpose and intent of this
Guaranty that the Obligations constitute the direct and primary obligations of the Guarantor and that the covenants, agreements and all obligations of the Guarantor hereunder be absolute,
unconditional and irrevocable. The Guarantor shall be and remain liable for any deficiency remaining after foreclosure of any mortgage, deed of trust or security agreement securing all or any part of
the Obligations, whether or not the liability of the Borrower or any other Person for such deficiency is discharged pursuant to statute, judicial decision or 

D-2

 

otherwise.
The acceptance of this Guaranty by the Agent is not intended and does not release any liability previously existing of any guarantor or surety of any indebtedness of the Borrower to the
Agent and the Banks. 

        Section 5.    Other Transactions.    The Agent and the Banks are expressly authorized (a) to exchange,
surrender or release with or without consideration any or all collateral and security which may at any time be placed with any of them by the Borrower or by any other Person, or to forward or deliver
any or all such collateral and security directly to the Borrower for collection and remittance or for credit, or to collect the same in any other manner without notice to the Guarantor; and
(b) to amend, modify, extend or supplement the Credit Agreement, any note or other instrument evidencing the Obligations or any part thereof and any other agreement with respect to the
Obligations, waive compliance by the Borrower or any other Person with the respective terms thereof and settle or compromise any of the Obligations without notice to the Guarantor and without in any
manner affecting the absolute liabilities of the Guarantor hereunder. No invalidity, irregularity or unenforceability of all or any part of the Obligations or of any security therefor or other
recourse with respect thereto shall affect, impair or be a defense to this Guaranty. The liabilities of the Guarantor hereunder shall not be affected or impaired by any failure, delay, neglect or
omission on the part of the Agent or the Banks to realize upon any of the Obligations of the Borrower to the Agent or the Banks, or upon any collateral or security for any or all of the Obligations,
nor by the taking by the Agent or any Bank of (or the failure to take) any other guaranty or guaranties to secure the Obligations, nor by the taking by the Agent or any Bank of (or the failure to take
or the failure to perfect its security interest in or other lien on) collateral or security of any kind. No act or omission of the Agent or any Bank, whether or not such action or failure to act
varies or increases the risk of, or affects the rights or remedies of the Guarantor, shall affect or impair the obligations of the Guarantor hereunder. The Guarantor acknowledges that this Guaranty is
in effect and binding without reference to whether this Guaranty is signed by any other Person or Persons, that possession of this Guaranty by the Agent shall be conclusive evidence of due
delivery hereof by the Guarantor and that this Guaranty shall continue in full force and effect, both as to the Obligations then existing and/or thereafter created, notwithstanding the release of or
extension of time to any other guarantor of the Obligations or any part thereof. 

        Section 6.    Actions Not Required.    The Guarantor hereby waives any and all right to cause a marshalling of
the assets of the Borrower or any other action by any court or other governmental body with respect thereto or to cause the Agent or any Bank to proceed against any security for the Obligations or any
other recourse which the Agent or any Bank may have with respect thereto and further waives any and all requirements that the Agent or any Bank institute any action or proceeding at law or in equity,
or obtain any judgment, against the Borrower or any other Person, or with respect to any collateral security for the Obligations, as a condition precedent to making demand on or bringing an action or
obtaining and/or enforcing a judgment against, the Guarantor upon this Guaranty. The Guarantor further acknowledges that time is of the essence with respect to the Guarantor's obligations under this
Guaranty. Any remedy or right hereby granted which shall be found to be unenforceable as to any Person or under any circumstance, for any reason, shall in no way limit or prevent the enforcement of
such remedy or right as to any other Person or circumstance, nor shall such unenforceability limit or prevent enforcement of any other remedy or right hereby granted. 

        Section 7.    Subrogation.    The Guarantor shall not exercise any right of subrogation until such time as all
Obligations shall have been indefeasably paid in full in cash and all commitments to extend credit terminated. In the case of the liquidation, winding-up or bankruptcy of the Borrower
(whether voluntary or involuntary) or in the event that the Borrower shall make an arrangement or composition with its creditors, the Agent and the Banks shall have the right to rank first for their
full claim and to receive all distributions or other payments with respect thereto until their claims have been paid in full, and the Guarantor shall continue to be liable to the Agent and the Banks
for any balance of the 

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Obligations
which may be owing to the Agent and/or the Banks by the Borrower. The Guarantor, to the extent permitted by law, irrevocably releases and waives any subrogation rights or right of
contribution or indemnity (whether arising by operation of law, contract or otherwise) it may have against the Borrower if and to the extent any such right or rights would give rise to a claim under
the U.S. Bankruptcy Code that payments or transfers to the Agent or the Banks with respect to the Obligations constitute a preference in favor of the Guarantor or a claim under the Bankruptcy Code
that any such preference is recoverable from the Agent or the Banks. 

        Section 8.    Application of Payments.    Any and all payments upon the Obligations made by the Guarantor or by
any other Person, and/or the proceeds of any or all collateral or security for any of the Obligations, will be applied by the Agent in accordance with the terms of the Credit Agreement. 

        Section 9.    Recovery of Payment.    If any payment received by the Agent or any Bank and applied to the
Obligations is subsequently set aside, recovered, rescinded or required to be returned for any reason (including, without limitation, the bankruptcy, insolvency or reorganization of the Borrower or
any
other obligor), the Obligations to which such payment was applied shall for the purposes of this Guaranty be deemed to have continued in existence, notwithstanding such application, and this Guaranty
shall be enforceable as to such Obligations as fully as if such application had never been made. References in this Guaranty to amounts "irrevocably paid" or to "irrevocable payment" refer to payments
that cannot be set aside, recovered, rescinded or required to be returned for any reason. 

        Section 10.    Borrower's Financial Condition.    The Guarantor is familiar with the financial condition of the
Borrower, and the Guarantor has executed and delivered this Guaranty based on the Guarantor's own judgment and not in reliance upon any statement or representation of the Agent or any Bank. Neither
the Agent nor any Bank shall have any obligation to provide the Guarantor with any advice whatsoever or to inform the Guarantor at any time of the Agent's or any Bank's actions, evaluations or
conclusions on the financial condition or any other matter concerning the Borrower. 

        Section 11.    Remedies.    All remedies afforded to the Agent by reason of this Guaranty are separate and
cumulative remedies and it is agreed that no one of such remedies, whether or not exercised by the Agent, shall be deemed to be in exclusion of any of the other remedies available to the Agent and no
one of such remedies shall in any way limit or prejudice any other legal or equitable remedy which the Agent may have hereunder and with respect to the Obligations. Mere delay or failure to act shall
not preclude the exercise or enforcement of any rights and remedies available to the Agent. 

        Section 12.    Bankruptcy of the Borrower.    The Guarantor expressly agrees that the liabilities and
obligations of the Guarantor under this Guaranty shall not in any way be impaired or otherwise affected by the institution by or against the Borrower or any other Person of any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or any other similar proceedings for relief under any bankruptcy law or similar law for the relief of debtors and that any discharge
of any of the Obligations pursuant to any such bankruptcy or similar law or other law shall not diminish, discharge or otherwise affect in any way the obligations of the Guarantor under this Guaranty,
and that upon the institution of any of the above actions, such obligations shall be enforceable against the Guarantor. 

        Section 13.    Costs and Expenses.    The Guarantor will pay or reimburse the Agent on demand for all
out-of-pocket expenses (including in each case all reasonable fees and expenses of counsel) incurred by the Agent arising out of or in connection with the enforcement of this
Guaranty against the Guarantor or arising out of or in connection with any failure of the Guarantor to fully and timely perform the obligations of the Guarantor hereunder. 

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        Section 14.    Waivers and Amendments.    This Guaranty can be waived, modified, amended, terminated or
discharged only explicitly in a writing signed by the Agent. A waiver so signed shall be effective only in the specific instance and for the specific purpose given. 

        Section 15.    Notices.    Any notice or other communication to any party in connection with this Guaranty
shall be in writing and shall be sent by manual delivery, telegram, telex, facsimile transmission, overnight courier or United States mail (postage prepaid) addressed to such party at the address
specified on the signature page hereof, or at such other address as such party shall have specified to the other party hereto in writing. All periods of notice shall be measured from the date of
delivery thereof if manually delivered, from the date of sending thereof if sent by telegram, telex or facsimile transmission, from the first business day after the date of sending if sent by
overnight courier, or from four days after the date of mailing if mailed. 

        Section 16.    Guarantor Acknowledgements.    The Guarantor hereby acknowledges that (a) counsel has
advised the Guarantor in the negotiation, execution and delivery of this Guaranty, (b) the Agent and the Banks have no fiduciary relationship to the Guarantor, the relationship being solely
that of debtor and creditor, and (c) no joint venture exists between the Guarantor and the Agent or the Banks. 

        Section 17.    Representations and Warranties.    The Guarantor hereby represents and warrants to the Agent for
the benefit of the Agent and the Banks that it is a corporation, organized, validly existing and in good standing under the laws of the State of California and has the power and authority and the
legal right to own and operate its properties and to conduct the business in which it is currently engaged. The Guarantor further represents and warrants to the Agent that: 

        17(a) It
has the power and authority and the legal right to execute and deliver, and to perform its obligations under, this Guaranty and the other Loan Documents to which it
is a party and has taken all necessary action required by its form of organization to authorize such execution, delivery and performance. 

        17(b) This
Guaranty and the other Loan Documents to which it is a party constitutes its legal, valid and binding obligation enforceable in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law). 

        17(c) The
execution, delivery and performance of this Guaranty and the other Loan Documents to which it is a party will not (i) violate any provision of any law,
statute, rule or regulation or any order, writ, judgment, injunction, decree, determination or award of any court, governmental agency or arbitrator presently in effect having applicability to it,
(ii) violate or contravene any provision of its organizational documents, or (iii) result in a breach of or constitute a default under any indenture, loan or credit agreement or any
other agreement, lease or instrument to which it is a party or by which it or any of its properties may be bound or result in the creation of any lien thereunder. It is not in default under or in
violation of any such law, statute, rule or regulation, order, writ, judgment, injunction, decree, determination or award or any such indenture, loan or credit agreement or other agreement, lease or
instrument in any case in which the consequences of such default or violation could have a material adverse effect on its business, operations, properties, assets or condition (financial or
otherwise). 

        17(d) No
order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by, any governmental or public body or
authority is required on its part to authorize, or is required in connection with the execution, delivery and performance of, or the legality, validity, binding effect or enforceability of, this
Guaranty or the other Loan Documents to which it is a party. 

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        17(e) There
are no actions, suits or proceedings pending or, to its knowledge, threatened against or affecting it or any of its properties before any court or arbitrator, or
any governmental department, board, agency or other instrumentality which, if determined adversely to it, would have a material adverse effect on its business, operations, property or condition
(financial or otherwise) or on its ability to perform its obligations hereunder or under the other Loan Documents to which it is a party. 

        17(f) It
expects to derive benefits from the transactions resulting in the continuation of the Obligations. The Agent may rely conclusively on the continuing warranty,
hereby made, that it continues to be benefitted by the Agent's and the Banks' extension of credit accommodations to the Borrower and neither the Agent nor any Bank shall have any duty to inquire into
or confirm the receipt of any such benefits, and this Guaranty shall be effective and enforceable by the Agent without regard to the receipt, nature or value of any such benefits. 

        Section 18.    Continuing Guaranty; Assignments under Credit Agreement.    This Guaranty shall
(a) remain in full force and effect until irrevocable payment in full of the Obligations and the expiration of the obligations, if any, of the Agent and the Banks to extend credit
accommodations to the Borrower, (b) be binding upon the Guarantor, its successors and assigns and (c) inure to the benefit of, and be enforceable by, the Agent and the Banks and their
successors, transferees, and assigns. Without limiting the generality of the foregoing clause (c), the Agent or any Bank may assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Agreement to any other Persons to the extent and in the manner provided in the Credit Agreement and may similarly transfer all or any portion of its rights under this
Guaranty to such Persons. 

        Section 19.    Reaffirmation.    The Guarantor agrees that when so requested by the Agent from time to time it
will promptly execute and deliver to the Agent a written reaffirmation of this Guaranty in such form as the Agent may require. 

        Section 20.    Revocation.    Notwithstanding any other provision hereof, the Guarantor may revoke this
Guaranty prospectively as to future transactions by written notice to that effect actually received by the Agent. No such revocation shall release, impair or affect in any manner any liability
hereunder with respect to Obligations created, contracted, assumed or incurred prior to receipt by the Agent of written
notice of revocation, or Obligations created, contracted, assumed or incurred after receipt of such notice pursuant to any contract entered into by the Agent prior to receipt of such notice, or any
renewals or extensions thereof, theretofore or thereafter made, or any interest accrued or accruing on such Obligations, or all other costs, expenses and attorneys' fees arising from such Obligations. 

        Section 21.    Governing Law and Construction.    THE VALIDITY,
CONSTRUCTION AND ENFORCEABILITY OF THIS GUARANTY SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL
LAWS OF THE UNITED STATES APPLICABLE TO NATIONAL BANKS. Whenever possible, each provision of this Guaranty and any other statement, instrument or transaction contemplated
hereby or relating hereto shall be interpreted in such manner as to be effective and valid under such applicable law, but, if any provision of this Guaranty or any other statement, instrument or
transaction contemplated hereby or relating hereto shall be held to be prohibited or invalid under such applicable law, such provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the remaining provisions of this Guaranty or any other statement, instrument or transaction contemplated hereby or relating hereto. 

        Section 22.    Consent to Jurisdiction.    AT THE OPTION OF THE
AGENT, THIS GUARANTY MAY BE ENFORCED IN ANY FEDERAL COURT OR MINNESOTA STATE COURT SITTING IN HENNEPIN COUNTY, MINNESOTA; AND THE GUARANTOR CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND
WAIVES ANY ARGUMENT THAT  

D-6

 

 VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT THE GUARANTOR COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE
RELATIONSHIP CREATED BY THIS GUARANTY, THE AGENT AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.

        Section 23.    Waiver of Jury Trial.    EACH OF THE GUARANTOR
AND THE AGENT, BY ITS ACCEPTANCE OF THIS GUARANTY, IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

        Section 24.    Counterparts.    This Guaranty may be executed in any number of counterparts, each of which when
so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. 

        Section 25.    General.    All representations and warranties contained in this Guaranty or in any other
agreement between the Guarantor and the Agent shall survive the execution, delivery and performance of this Guaranty and the creation and payment of the Obligations. Captions in this Guaranty are for
reference and convenience only and shall not affect the interpretation or meaning of any provision of this Guaranty. All incorporation by reference of covenants, terms, definitions or other provisions
from other agreements are incorporated into this Guaranty as if such provisions were fully set forth herein, and such incorporation shall include all necessary definitions and related provisions from
such other agreements but including only amendments thereto agreed to by the Agent, and shall survive any termination of such other agreements until the Obligations have been indefeasibly paid in full
and the commitments of the Banks to advance funds to the Borrower have been terminated. 

[Remainder
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D-7

QuickLinks

Exhibit 10.52

THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

EXHIBIT A TO THIRD AMENDMENT TO CREDIT AGREEMENT

EXHIBIT B TO THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

EXHIBIT C TO THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

EXHIBIT D TO THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

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