Document:

Exhibit 10.2

 

EXECUTION VERSION 

 

LIMITED GUARANTY

 

THIS LIMITED GUARANTY
(this “Guaranty”) is made as of February 19, 2020 by B. Riley Financial, Inc. (the “Guarantor”),
in favor of BTC Holdings Fund I, LLC, BTC Holdings Fund I-B, LLC and BTC Holdings SC Fund LLC (collectively, “Blue Torch”).

 

RECITALS

 

A. Franchise
Group Intermediate Holdco, LLC, a Delaware limited liability company (“Lead Borrower”), as a Borrower,
Franchise Group Merger Sub AF, INC., a Delaware corporation (“Merger Sub”), as a Borrower (which, on
February 14, 2020, was merged with and into American Freight Group, Inc., a Delaware corporation (“AFGI”),
with AFGI surviving such merger as a Borrower), certain other Subsidiaries of Lead Borrower from time to time party thereto
as Borrowers (collectively with Lead Borrower and AFGI, the “Borrowers”), the lenders from time to time
party thereto (each of such lenders, together with its successors and permitted assigns, is referred to hereinafter as a
“Lender”), Kayne Solutions Fund I, L.P., in its capacity as collateral agent (the “Collateral
Agent”) and GACP Finance Co., LLC, (“GACP”) in its capacity as administrative agent (the
“Administrative Agent” and, together with the Collateral Agent, collectively, the
“Agent”), have entered into that certain Credit Agreement, dated as of February 14, 2020 (as amended,
restated, supplemented or otherwise modified and in effect from time to time as permitted hereunder, the “Credit
Agreement”; capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the
Credit Agreement).

 

B. The
Guarantor is a direct or indirect owner of FACP and will benefit directly and indirectly from Blue Torch joining the Credit Agreement
as a Tranche A-1 Term Lender.

 

C. As
an inducement to and as one of the conditions precedent to the agreement of Blue Torch to join the Credit Agreement as a Tranche
A-1 Term Lender, Blue Torch has required the execution and delivery of this Guaranty, whereby the Guarantor shall guarantee the
payment when due of all Guaranteed Obligations (as defined below).

 

AGREEMENT

 

NOW, THEREFORE, in
order to induce Blue Torch to join the Credit Agreement as a Tranche A-1 Term Lender, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby agrees as follows:

 

1. Guaranty.
The Guarantor guarantees to Blue Torch the full and prompt payment and performance, when due, whether upon demand, maturity,
by required prepayment, acceleration or otherwise, and at all times thereafter, of all Guaranteed Obligations which may now
be or may hereafter become due and owing. For purposes hereof, “Guaranteed Obligations” means (a) all
Obligations in respect of Tranche A-1 Term Loans, including principal, interest, fees, premiums, indemnities and other
amounts, payable to Blue Torch as a holder of Tranche A-1 Term Loans under the Credit Agreement or the other Loan Documents
and (b) all Obligations in respect of Protective Advances, including principal, interest, fees, premiums, indemnities and
other amounts, payable to the Agents by Blue Torch under the Credit Agreement or the other Loan Documents, in each case,
including without limitation all interest, fees and other amounts that accrue after the commencement of an Insolvency
Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any Insolvency Proceeding);
provided, however, that the Guarantor’s liability under this Guaranty shall be limited to the sum of (i) $50,000,000
plus (ii) the principal amount of all Protective Advances payable to the Agents by Blue Torch, plus (iii) the amount of
interest, fees, premiums, indemnities and other amounts owing in respect of the amounts described in the foregoing clauses
(i) and (ii), plus (iv) the amount of all Expenses (as defined below) (the amount described in the foregoing clauses (i)
through (iv) being referred to herein as the “Guaranty Cap”). The Guarantor hereby agrees to pay or
reimburse all fees, costs and expenses (including, without limitation, all court costs and attorneys’ fees, costs and
expenses) paid or incurred by Blue Torch (1) collecting, enforcing or endeavoring to collect or enforce all or any part of
the Guaranteed Obligations from, or in prosecuting any action against, the Guarantor in connection with this Guaranty and (2)
preserving, protecting or defending the enforceability of this Guaranty or Blue Torch’s rights hereunder (the amounts
described in the foregoing clauses (1) and (2) are collectively referred to herein as the “Expenses”; the
Expenses and the Guaranteed Obligations are collectively referred to herein as the “B. Riley
Obligations”).

 

     

     

    

 

2. Payment
of Obligations. Upon the occurrence of any Guarantor Event of Default (as defined below), at any time, and from time to time,
the Guarantor shall pay to Blue Torch promptly (and in any event within five (5) Business Days) after the Guarantor’s receipt
of written demand therefor and in immediately available funds, all of the Guaranteed Obligations then due and outstanding up to
the amount of the Guaranty Cap.

 

3. Guaranty
Provisions.

 

3.01 Obligations Unconditional.
The obligations of the Guarantor under this Guaranty are absolute and unconditional, irrespective of the validity or
enforceability of the Loan Documents, or any other agreement or instrument referred to herein or therein, or any
substitution, release or exchange of any other guaranty of or security for any of the Obligations or the Tranche A-1 Term
Loans, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section
that the obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances and shall
not be released, discharged or in any way affected or impaired by any thing, event, happening, matter, circumstance or
condition whatsoever (whether or not the Guarantor shall have any knowledge or notice thereof or shall consent thereto),
other than payment in full of the Obligations, which might otherwise constitute a legal or equitable discharge or defense of
a guarantor. In furtherance of the foregoing and without limiting the generality thereof, the Guarantor agrees as
follows:

 

(a)
This Guaranty is a guaranty of payment and performance when due and not of collection.

 

(b)
The obligations of the Guarantor hereunder are independent of the obligations of the Borrowers and any one or more of the
Loan Parties under the other Loan Documents to which they are a party and a separate action or actions may be brought and
prosecuted against the Guarantor whether or not any action is brought against the Borrowers or any other Loan Party and
whether or not the Borrowers or any other Loan Party is joined in any such action or actions.

 

(c)
Payment, performance or completion by the Guarantor, or any other obligor, of a portion, but not all, of the Obligations
shall in no way limit, affect, modify or abridge the Guarantor’s liability hereunder for any portion of the Guaranteed
Obligations which have not been paid, performed or completed. Without limiting the generality of the foregoing, if Blue Torch
is awarded a judgment in any suit brought to enforce the Guarantor’s or any other obligor’s covenants to pay any
of the Obligations, such judgment shall not be deemed to release the Guarantor from its covenant hereunder to pay any of the
Guaranteed Obligations that are not the subject of such suit, and such judgment shall not, except to the extent satisfied by
such Guarantor, limit, affect, modify or abridge such Guarantor’s liability hereunder in respect of the Guaranteed
Obligations.

 

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(d)
The Agents and the Lenders (subject to the terms of the Loan Documents), upon such terms as the Agents or the Lenders, as the
case may be, deem appropriate, may (i) renew, extend, accelerate, increase the rate of interest on, or otherwise change the
time, place, manner or terms of payment or performance under the Loan Documents, (ii) settle, compromise, release or
discharge, or accept or refuse any offer of performance with respect to, or substitutions for, the Obligations or any Loan
Document and/or subordinate the payment of the same to the payment of any other obligations; (iii) request and accept other
guaranties of any of the Borrowers’ obligations under the Loan Documents and take and hold security for the payment or
performance of this Guaranty or the Loan Documents; (iv) release, surrender, exchange, substitute, compromise, settle,
rescind, waive, alter, subordinate or modify, with or without consideration, any security for payment or performance of the
Borrowers’ obligations under the Loan Documents, any other guaranties of the Obligations, or any other obligation of
any Person with respect to the Obligations; (v) enforce and apply any security now or hereafter held by or for the benefit of
Blue Torch in respect of this Guaranty or the Obligations and direct the order or manner of sale thereof, and to bid at any
such sale, or exercise any other right or remedy that the Agents and the Lenders may have against any such security, in each
case as in its discretion may determine consistent with any applicable security agreement, including without limitation
foreclosure on any such security pursuant to one or more judicial or non-judicial sales, even though such action operates to
impair or extinguish any right of reimbursement or subrogation or other right or remedy of the Guarantor against the
Borrowers or Affiliates of any Borrower or any security for the Obligations; and (vi) exercise any other rights available to
them under the Loan Documents or otherwise. The Guarantor authorizes the Agents at any time in its discretion to direct the
order and manner of any sale of all or any part of any security now or later held for the Obligations and to bid at any such
sale, to apply any payments or recoveries from the Borrowers, the Guarantor or any other source, and any proceeds of any
security, to the Obligations in such manner, order and priority as set forth in the Credit Agreement (whether or not those
obligations are guaranteed by this Guaranty or secured at the time of the application). The Agents and the Lenders may take
any of the foregoing actions upon any terms and conditions as the Agents or the Lenders, as the case may be, may elect,
without giving notice to, or making any demand upon, the Guarantor, and without affecting the validity or enforceability of
this Guaranty, or giving rise to any reduction, limitation, impairment, discharge or termination of the Guarantor’s
liability hereunder.

 

(e)
Except as otherwise expressly provided in this Guaranty, this Guaranty and the obligations of the Guarantor hereunder shall
be valid and enforceable and shall not be subject to any reduction, limitation, impairment, discharge or termination for any
reason (other than payment in full of the B. Riley Obligations), including without limitation the occurrence of any of the
following, whether or not the Guarantor shall have had notice or knowledge of any of them: (i) any failure or omission to
assert or enforce, or agreement or election not to assert or enforce, or the stay or enjoining, by order of court, by
operation of law or otherwise, of the exercise or enforcement of, any claim or demand or any right, power or remedy (whether
arising under the Loan Documents, at law, in equity or otherwise) with respect to the Obligations or the Loan Documents, or
with respect to any other guaranty of or security for the payment or performance of the Obligations; (ii) any rescission,
waiver, amendment or modification of, or any consent to departure from, any of the terms or provisions (including without
limitation provisions relating to events of default) of the Loan Documents or of any other guaranty or security for the
Obligations, in each case whether or not in accordance with the terms of the Loan Documents or any agreement relating to such
other guaranty or security; (iii) the application of payments received from any source (other than payments received pursuant
to this Guaranty or the other Loan Documents or from the proceeds of any security for the Guaranteed Obligations except to
the extent such security also serves as collateral for indebtedness other than the Guaranteed Obligations) to the payment of
indebtedness other than the Obligations, even though the Agents and Lenders might have elected to apply such payment to any
part or all of the Obligations; (iv) the consent of the Agents and Lenders to the change, reorganization or termination of
the ownership structure or existence of any Borrower or any of its Affiliates and to any corresponding restructuring of the
Obligations, including, without limitation, the Tranche A-1 Term Loans; (v) any failure to perfect or continue perfection of
a security interest in any collateral which secures any of the Obligations; (vi) the acquisition or transfer of title to any
real property covered by any mortgage to any Agent, any Lender, any Affiliate of any Lender or any designee of any Lender
(including, without limitation, any purchaser through foreclosure, deed in lieu or otherwise); (vii) any act or event which
might otherwise discharge, reduce, limit or modify any of the Guarantor’s obligations under this Guaranty; (viii) any
waiver, extension, modification, forbearance, delay or other act or omission of the Agents and Lenders, or their failure to
proceed promptly or otherwise as against any Borrower, any other Loan Party or the Guarantor, any other obligor or any
security; (ix) any action, omission or circumstance which might increase the likelihood that the Guarantor may be called upon
to perform under this Guaranty or which might affect the rights or remedies of the Guarantor as against any Borrower or
Affiliates of any Borrower; (x) any dealings occurring at any time between any Borrower and the Agents and Lenders, whether
relating to the Obligations or otherwise; and (xi) any other act or thing or omission, or delay to do any other act or thing,
which may or might in any manner or to any extent vary the risk of the Guarantor as an obligor in respect of the
Obligations.

 

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3.02 Waivers by the
Guarantors. The Guarantor hereby waives, for the benefit of Blue Torch, to the fullest extent permitted by applicable law:

 

(i)
any right to require Blue Torch or any other Person, as a condition of payment or performance by the Guarantor, to (A)
proceed against the Borrowers, any other Loan Party or any other Person, (B) proceed against or exhaust any security held
from the Borrowers, any other Loan Party, the Guarantor or any other Person, (C) proceed against or have resort to any
balance of any deposit account or credit on the books of Blue Torch or any other Person in favor of the Borrowers, any other
Loan Party or any other Person, or (D) pursue any other remedy in the power of Blue Torch or any other Person
whatsoever;

 

(ii)
any defense arising by reason of the incapacity, lack of authority or any disability or other defense of the Borrowers,
including, without limitation, any defense based on or arising out of the lack of validity or the unenforceability of the
Obligations or any agreement or instrument related thereto or by reason of the cessation of the liability of the Borrowers
from any cause other than payment and performance in full of the Obligations;

 

(iii)
any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the principal;

 

(iv)
any defense based upon any errors or omissions in the administration of the Tranche A-1 Term Loans or any other
Obligations;

 

(v)
(A) any principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms of this
Guaranty and any legal or equitable discharge of the Guarantor’s obligations hereunder (other than payment and
performance of the B. Riley Obligations in full), (B) the benefit of any statute of limitations affecting the
Guarantor’s liability hereunder or the enforcement hereof, (C) any rights to set-offs, recoupments and counterclaims
which may at any time be available to or be asserted by any Borrower or any other Person against Blue Torch or any other
Person, including without limitation any defenses available to a surety (all of which defenses are hereby waived), and (D)
promptness, diligence and any requirement that Blue Torch or any other Person protect, secure, perfect or insure any security
interest or lien or any property subject thereto;

 

(vi)
except as otherwise expressly required under Sections 2 hereof, notices, demands, presentments, protests, notices of
protest, notices of dishonor and notices of any action or inaction, notices of default under the other Loan Documents, this
Guarnty or any agreement or instrument related thereto, notices of any renewal, extension or modification of the Obligations
or any agreement related thereto, notices of any extension of credit to the Borrowers and any right to consent to any
thereof;

 

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(vii)
any release, discharge, modification, impairment or limitation of the liability of the Borrowers to Blue Torch or any other
Person, whether consented to by Blue Torch or any other Person, consensual or arising by operation of law or any proceedings
in bankruptcy or reorganization or from any other cause;

 

(viii)
any defense based on any rejection or disaffirmance of the Obligations, or any part thereof, or any security held therefor,
in any such proceedings in bankruptcy or reorganization;

 

(ix)
any defense based on any action taken or omitted by Blue Torch or any other Person in any proceedings in bankruptcy or
reorganization involving any Borrower, any other Loan Party or any other Person, including without limitation any election to
have their claim allowed as being secured, partially secured or unsecured, any extension of credit by Blue Torch to any
Borrower in any proceedings in bankruptcy or reorganization and the taking and holding by Blue Torch of any security for any
such extension of credit; and

 

(x)
any defense or benefits that may be derived from or afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of this Guaranty, other than payment and performance of the B. Riley
Obligations in full.

 

3.03 Reinstatement. The
obligations of the Guarantor under this Guaranty shall be automatically reinstated if and to the extent that for any reason
any payment by or on behalf of any Borrower, another Loan Party or the Guarantor in respect of the Obligations is rescinded
or must be otherwise restored by any holder of the Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise.

 

3.04 Guarantor’s Rights of
Subrogation, Contribution, Etc. The Guarantor hereby waives, until the Termination Date, any claim, right or remedy,
direct or indirect, that the Guarantor now has or may hereafter have against any Borrower or any other Loan Party, or any of
their respective assets, in connection with this Guaranty or the performance by the Guarantor of its obligations hereunder,
in each case whether such claim, right or remedy arises in equity, under contract, by statute, under common law or otherwise
and, including without limitation, (i) any right of subrogation, reimbursement or indemnification that the Guarantor now has
or may hereafter have against the Borrowers or any other Loan Party, (ii) any right to enforce, or to participate in, any
claim, right or remedy that Blue Torch now has or may hereafter have against any Borrower or any other Loan Party, and (iii)
any benefit of, and any right to participate in, any collateral or security now or hereafter held by or on behalf of Blue
Torch. In addition, until the Termination Date, the Guarantor shall withhold exercise of any right of contribution which the
Guarantor may have against any other guarantor of the Obligations. The Guarantor further agrees that, to the extent the
waiver or agreement to withhold the exercise of its right of subrogation, reimbursement, indemnification and contribution as
set forth herein is found by a court of competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification the Guarantor may have against any Borrower or any other Loan Party, or against
any collateral or security, and any rights of contribution the Guarantor may have against any other guarantor, shall be
junior and subordinate to any rights Blue Torch (or any Agent or any Lender) may have against the Borrowers and the Loan
Parties, to all right, title and interest Blue Torch (or any Agent or any Lender) may have in any such collateral or
security, and to any right Blue Torch (or any Agent or any Lender) may have against such other guarantor. If any amount shall
be paid to the Guarantor on account of any such subrogation, reimbursement, indemnification or contribution rights at any
time prior to the Termination Date, such amount shall be held in trust for Blue Torch and shall forthwith be paid over to
Blue Torch to be credited and applied against the Guaranteed Obligations, whether matured or unmatured, in accordance with
the terms hereof. The Guarantor agrees that it is not a surety and waives any right that it may have as a surety to require
that Blue Torch commence action against any Borrower, any other Loan Party or any other Person or against any of the
Collateral.

 

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3.05 Subordination of Other
Obligations. Any Indebtedness of any Borrower or any other Loan Party now or hereafter held by the Guarantor is hereby
subordinated in right of payment to the prior payment and performance in full of the Guaranteed Obligations, and any such
Indebtedness collected or received by the Guarantor after a Guarantor Event of Default has occurred and is continuing shall
be held in trust for Blue Torch and shall forthwith be paid over to Blue Torch to be credited and applied against the
Guaranteed Obligation, whether matured or unmatured, but without affecting, impairing or limiting in any manner the liability
of the Guarantor under any other provision of this Guaranty.

 

3.06  Remedies.

 

(a) The Guarantor agrees that,
notwithstanding anything set forth in this Guaranty to the contrary, if for whatever reason, Blue Torch is prevented by
applicable law or the terms of any subordination agreement from exercising any of its rights to receive payment from the
Borrowers of all or any part of the Guaranteed Obligations, to collect interest on all or any part of the Guaranteed
Obligations or to enforce or exercise any other right or remedy with respect to all or any part of the Guaranteed
Obligations, or is prevented from taking any action to realize on all or any part of the collateral securing the Guaranteed
Obligations or the liabilities of the Borrowers, and any such occurrence results in, or occurs during the continuance of, a
Guarantor Event of Default, the Guarantor agrees to pay to Blue Torch, within five (5) Business Days after receipt of written
demand therefor and in immediately available funds, the amount that would otherwise have been due and payable had such rights
and remedies been permitted to be exercised by Blue Torch up to Guaranty Cap.

 

(b) All
of the remedies set forth in this Guaranty and/or provided for in any of the Loan Documents or at law (including without limitation
the right of set-off) or in equity shall be equally available to Blue Torch, and the choice by Blue Torch of one such alternative
over another shall not be subject to question or challenge by the Guarantor or any other Person, nor shall any such choice be asserted
as a defense, setoff, or failure to mitigate damages in any action, proceeding, or counteraction by Blue Torch to recover or seek
any other remedy under this Guaranty, nor shall any such choice preclude Blue Torch from subsequently electing to exercise a different
remedy; provided that only Blue Torch (or any Affiliate or Related Fund of Blue Torch) shall be entitled to enforce this
Guaranty.

 

3.07 Continuing Guaranty. This
Guaranty is a continuing guaranty and shall remain in effect until the date that the B. Riley Obligations have been paid in full
(the “Termination Date”), and the Guarantor irrevocably waives any right to revoke this Guaranty, or the continuing
nature hereof, as to future transactions giving rise to any Guaranteed Obligations or any Expenses payable hereunder (subject
to the Guaranty Cap).

 

3.08 Assumption
of Risk Regarding Loan Parties’ Financial Condition. Before signing this Guaranty, the Guarantor investigated the
financial condition and business operations of the Borrowers and the other Loan Parties and such other matters as the
Guarantor deemed appropriate to assure themselves of the Borrowers’ and other Loan Parties’ ability to discharge
their respective obligations under the Loan Documents. The Guarantor assumes full responsibility for keeping fully informed
of the financial condition of the Borrowers and the other Loan Parties and all other circumstances affecting the
Borrowers’ and the other Loan Parties’ ability to perform their respective obligations to Blue Torch, and agree
that Blue Torch will not have any duty to report to the Guarantor any information which it receives about the
Borrowers’ or any Loan Party’s financial condition or any circumstances bearing on the Borrowers’ or any
Loan Party’s ability to perform.

 

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4. Representations
and Warranties. The Guarantor hereby represents and warrants to Blue Torch as of the date hereof that:

 

4.01  No
Breach. None of the execution and delivery of this Guaranty, the

 

consummation of the
transactions herein contemplated or compliance by the Guarantor with the terms and provisions hereof will conflict with or result
in a breach of, or require any consent under any applicable law or regulation, or any order, writ, injunction or decree of any
court or governmental authority or agency, or any agreement or instrument to which the Guarantor is a party or by which it is bound
or to which it is subject or any of the Guarantor’s Organizational Documents, or constitute a default under any such agreement,
instrument, or Organizational Documents, or result in the creation or imposition of any lien upon any of the revenues or assets
of the Guarantor pursuant to the terms of any such agreement, instrument or Organizational Documents.

 

4.02 Action. This
Guaranty has been duly and validly executed and delivered by the Guarantor and constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws of general application affecting the enforcement of creditors’ rights.

 

4.03 Litigation.
There are no legal or arbitration proceedings or any proceedings by or before any governmental authority, now pending or (to
the knowledge of the Guarantor) threatened against the Guarantor which could cause (a) a material impairment of the ability
of the Guarantor, taken as a whole, to perform any of its obligations hereunder, (b) a material adverse effect upon the
legality, validity, binding effect or enforceability against the Guarantor of this Guaranty, or (c) a material impairment of
the ability of Blue Torch to enforce this Guaranty (the foregoing clauses (a) through (c), each, a “Material Adverse
Effect”).

 

4.04 Organization.
The Guarantor is validly existing and in good standing under the laws of its jurisdiction of organization; and the Guarantor
is duly qualified to do business in each jurisdiction where, because of the nature of its activities or properties, such
qualification is required, except for such jurisdictions where the failure to so qualify could not reasonably be expected to
have a Material Adverse Effect.

 

4.05 Authorization.
The Guarantor is duly authorized to execute and deliver this Guaranty and perform its obligations hereunder.

 

4.06 Solvency.
Immediately after giving effect to this Guaranty, (a)(i) the debt (including without limitation contingent liabilities) of the
Guarantor does not exceed the present fair saleable value of the present assets of the Guarantor, (ii) the capital of the Guarantor
is not unreasonably small in relation to its business as contemplated on the date hereof, and (iii) the Guarantor has not incurred
and does not intend to incur, or believe (nor should reasonably believe) that it will incur, debts beyond its ability to pay such
debts as they become due (whether at maturity or otherwise), and (b) the Guarantor is “solvent” within the meaning
given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances. For purposes of this
Section 4.06, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts
and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability
(irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard
No. 5).

 

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5.  Covenants.
The Guarantor covenants to Blue Torch that, until the Termination Date:

 

5.01 Compliance
with Laws. The Guarantor will comply with the requirements of all applicable laws, rules, regulations and orders of
governmental or regulatory authorities if failure to comply with such requirements could reasonably be expected to have a
Material Adverse Effect (either individually or in the aggregate), except to the extent being contested in good faith and by
proper proceedings and against which adequate reserves are being maintained.

 

5.02 Litigation.
The Guarantor will promptly give Blue Torch notice of all legal or arbitral proceedings, and of all proceedings by or before
any governmental or regulatory authority or agency, affecting the Guarantor, except proceedings which could not reasonably be
expected to have a Material Adverse Effect.

 

5.03 Preservation
of Existence, Etc. Guarantor will (i) preserve and maintain its separate existence, (ii) preserve and maintain all
rights, franchises, licenses and privileges necessary to the conduct of its business, and (iii) maintain its qualification to
do business in each jurisdiction where the nature of its business makes such qualification necessary, in each case of the
foregoing clauses (ii) and (iii), except where the failure to do so could not reasonably be expected to have a Material
Adverse Effect.

 

5.04 Fundamental
Changes. Guarantor will not dissolve, liquidate, or wind up its affairs, or be a party to any transaction of merger or
consolidation in which Guarantor merges or consolidates with or into another Person, unless Guarantor is the surviving
entity.

 

5.05 Maintenance
of Capital. The Guarantor shall retain and maintain sufficient capital or access to capital to satisfy its obligations
under this Guaranty.

 

5.06 Further Assurances.
At any time or from time to time upon the request of Blue Torch, the Guarantor will, at its expense, promptly execute, acknowledge,
and deliver such further documents and do such other acts and things as Blue Torch may reasonably request in order to effect fully
the purposes of this Guaranty. In furtherance and not in limitation of the foregoing, the Guarantor shall take such actions as
Blue Torch may reasonably request from time to time to ensure that the Guaranteed Obligations are guaranteed by the Guarantor.

 

6. Guarantor Event
of Default. Any or each of the following shall constitute an event of default (each, a “Guarantor Event of Default”):

 

6.01 Payment or Bankruptcy
Event of Default. An Event of Default shall occur under Section 8.01(a), Section 8.01(f) and/or Section 8.01(g) of the Credit
Agreement.

 

6.02 Covenants.
The Guarantor shall fail to perform or comply with any term or condition contained in Section 5 or any other section
of this Guaranty.

 

6.03 Representations
and Warranties. Any representation, warranty or other certification made or deemed made by or on behalf of the Guarantor
under Section 4 or otherwise under or in connection with this Guaranty, or any report, certificate, financial
statement or other document furnished or deemed furnished pursuant to or in connection with this Guaranty, shall prove to
have been incorrect in any material respect (without duplication of any materiality qualification therein) when made or
deemed made.

 

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6.04 Acceleration.
An Event of Default shall occur under the Credit Agreement and/or the other Loan Documents and all or any portion of the
Obligations shall become or be declared due and payable (or subject to compulsory repurchase or redemption) or shall require
the prepayment, redemption, repurchase or defeasance of, or cause any Loan Party or any of their respective Subsidiaries to
make any offer to prepay, redeem, repurchase or defease all or any portion of, the Obligations prior to the stated maturity
of all or such portion of the Obligations.

 

6.05 Involuntary
Bankruptcy; Appointment of Receiver, etc. (i) A court of competent jurisdiction shall enter a decree or order for relief
in respect of the Guarantor in an involuntary case under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency, or similar law now or hereafter in effect, which decree or order is not stayed, or any other similar relief shall
be granted under any applicable federal or state law, or (ii) an involuntary case shall be commenced against the Guarantor
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency, or similar law now or hereafter in effect, or
a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian, or other officer having similar powers over the Guarantor, or over all or a substantial part of its
property, shall have been entered, or there shall have occurred the involuntary appointment of an interim receiver, trustee,
or other custodian of the Guarantor for all or a substantial part of its property, or a warrant of attachment, execution, or
similar process shall have been issued against any substantial part of the property of the Guarantor, and any such event
described in this clause (ii) shall continue for 60 days without having been dismissed, bonded, or discharged.

 

6.06 Voluntary
Bankruptcy; Appointment of Receiver, etc. (i) The Guarantor shall have an order for relief entered with respect to it or
shall commence a voluntary case under the Bankruptcy Code or under any other applicable bankruptcy, insolvency, or similar
law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee, or other custodian for all or a substantial part of its property, or the Guarantor shall
make any assignment for the benefit of creditors or (ii) the Guarantor shall be unable, or shall fail generally, or shall
admit in writing its inability, to pay its debts as such debts become due, or the Board (or similar governing body) of the
Guarantor (or any committee thereof with authority therefor) shall adopt any resolution or otherwise authorize any action to
approve any of the actions referred to herein or in Section 6.05.

 

6.07 Invalidity.
(i) This Guaranty for any reason shall cease to be in full force and effect (other than in accordance with its terms) or
shall be declared to be null and void or the Guarantor shall repudiate its obligations hereunder or (ii) the Guarantor shall
contest the validity or enforceability of this Guaranty in writing or deny in writing that it has any further liability under
this Guaranty.

 

7.  Miscellaneous.

 

7.01 Governing Law.
THIS GUARANTY SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

 

    9

     

    

 

7.02 Forum Selection;
Consent to Jurisdiction. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS GUARANTY, SHALL
BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK; PROVIDED THAT NOTHING IN THIS GUARANTY SHALL BE DEEMED OR OPERATE TO PRECLUDE BLUE TORCH FROM BRINGING
SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION FOR PURPOSES OF ENFORCING A FINAL JUDGMENT OF ANY SUCH COURT. EACH
OF THE GUARANTOR AND BLUE TORCH HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE. EACH OF THE GUARANTOR AND BLUE TORCH FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH OF THE GUARANTOR AND BLUE TORCH HEREBY EXPRESSLY
AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.

 

7.03 Waiver of Jury
Trial. EACH OF THE GUARANTOR AND BLUE TORCH HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE
OR DEFEND ANY RIGHTS UNDER THIS GUARANTY AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE
BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

7.04 Notices.
All notices, requests, demands, statements, authorizations, approvals, directions, consents and other communications provided
for herein shall be given or made in writing and shall be deemed sufficiently given or served for all purposes as of the date
(a) when hand delivered, (b) four (4) days after being sent by postage pre-paid registered or certified mail, return receipt
requested, (c) one (1) Business Day after being sent by reputable overnight courier service (with delivery evidenced by
written receipt and charges prepaid), or (d) by facsimile, when sent, with confirmation in each case addressed to the
intended recipient at the “Address for Notices” specified on the signature pages hereto; or, as to any party, at
such other address as shall be designated by such party in a notice to each other party. Notices and other communications to
Blue Torch hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by Blue
Torch. Blue Torch and the Guarantor may, each in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may
be limited to particular notices or communications.

 

7.05 Amendments,
Etc. The terms of this Guaranty may be waived, modified and amended only by an instrument in writing duly executed by
Blue Torch and the Guarantor. Any such waiver, modification or amendment shall be binding upon Blue Torch and the
Guarantor.

 

7.06 Successors
and Assigns. This Guaranty shall be binding upon and inure to the benefit of the respective successors and permitted
assigns of the Guarantor and Blue Torch; provided that neither Blue Torch nor the Guarantor may assign or transfer its rights
or obligations hereunder without the prior written consent of the other party hereto (and any such purported assignment or
transfer shall be null and void); provided further that Blue Torch may assign or transfer its rights hereunder to an
Affiliate or a Related Fund of Blue Torch without consent from the Guarantor.

 

    10

     

    

 

7.07 Captions. The captions and
section headings appearing herein are included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Guaranty.

 

7.08 Counterparts. This
Guaranty may be executed in multiple counterparts, each of which shall be an original and all of which, when taken together,
shall constitute one and the same agreement among the parties. Delivery of an executed counterpart of this Guaranty by
facsimile or other electronic means shall be equally as effective as delivery of a manually executed counterpart hereof. Any
party hereto delivering an executed counterpart hereof by facsimile or other electronic means shall also deliver a manually
executed counterpart hereof, but the failure to so deliver a manually executed counterpart hereof shall not affect the
validity, enforceability or binding effect hereof.

 

7.09 Severability.
If any provision of this Guaranty shall be held by any court of competent jurisdiction to be unlawful, void or unenforceable
for any reason as to any Person or circumstance, such provision or provisions shall be deemed severable from and shall in no
way affect the enforceability and validity of the remaining provisions of this Guaranty.

 

7.10 No
Waiver. No failure on the part of Blue Torch to exercise, no delay in exercising, and no course of dealing with respect
to, any right or remedy hereunder will operate as a waiver, thereof; nor will any single or partial exercise or any right or
remedy hereunder preclude any other or further exercise thereof or the exercise of any other right or remedy.

 

[Signature Page Follows]

 

    11

     

    

 

IN WITNESS WHEREOF, this Guaranty has been
duly executed as of the day and year first set forth above.

 

	GUARANTOR:	B. RILEY FINANCIAL, INC.
	 	 
	 	By:	/s/
    Bryant R. Riley
	 	Name:	Bryant R. Riley
	 	Title:	Co-Chief Executive Officer

 

Signature Page to Limited
Guaranty

 

    12

     

    

 

	 	BTC HOLDNGS FUND I, LLC
	 	 	 
	 	By: Blue Torch Credit Opportunities
    Fund I LP, its sole member
	 	 	 
	 	By: Blue Torch Credit Opportunities
    GP LLC, its general partner
	 	 	 	 
	 	By:	/s/
    kevin Genda
	 	 	Name:	Kevin Genda
	 	 	Title:	Authorized signer

 

	 	BTC HOLDINGS FUND I-B, LLC
	 	 	 	 
	 	by: Blue Torch Credit Opportunities
    Fund I LP, its sole member
	 	 	 	 
	 	by: Blue Torch Credit Opportunities
    GP LLC, its general partner
	 	 
	 	By:	/s/ kevin Genda
	 	 	Name:	Kevin Genda
	 	 	Title:	Authorized signer
	 	 	 	 
	 	BTC HOLDINGS SC FUND LLC
	 	 	 	 
	 	by: Blue Torch Credit Opportunities
    SC Master Fund LP, its sole member
	 	 	 
	 	by: Blue Torch Credit Opportunities
    SC GP LLC, its General Partner
	 	 	 	 
	 	By	/s/
    Kevin Genda
	 	 	 Name:	Kevin Genda
	 	 	Title:	Authorized signer

 

Signature
Page to Limited Guaranty

 

    13

     

    

 

Notice Addresses: 

 

Blue Torch

 

c/o Blue
Torch Capital 

430 Park Avenue

New York NY 10022

Attention: Vuk Djunic

E-mail: VDjunic@bluetorchcapital.com

Telephone: 212-503-5860

 

With a copy (which shall not constitute
notice) to:

 

Dechert LLP

Three Bryant Park

1095 Avenue of the
Americas

New York, New York
10036-6797

Attention: Jay Alicandri

Email: Jay.Alicandri@dechert.com

Telephone: (212) 698-3800

 

Grantor

 

B. Riley Financial,
Inc.

21255 Burbank Blvd.,
Suite 400

Woodland Hills, CA
91367

Attn: Alan Forman

E-mail: aforman@brileyfin.com

 

 

 

14Exhibit 10.3

 

EXECUTION
VERSION

 

LIMITED
GUARANTY

 

THIS
LIMITED GUARANTY (this “Guaranty”) is made as of February 14, 2020 by B. Riley Financial, Inc. (the “Guarantor”),
in favor of CIBC BANK USA, as administrative agent (in such capacity, the “Administrative Agent”) for the financial
institutions that are or may from time to time become parties to the Credit Agreement (as hereafter defined).

 

RECITALS

 

A. Franchise
Group Intermediate L 2, LLC, a Delaware limited liability company (the “Borrower”), the financial institutions
that are or may from time to time become parties thereto as lenders (the “Lenders”) and the Administrative
Agent are parties to that certain Credit Agreement, dated as of May 16, 2019 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), pursuant to which the Lenders agreed to extend credit
and make certain financial accommodations available to the Borrower (the “Loans”). Capitalized terms not otherwise
defined herein shall have the meanings specified in the Credit Agreement.

 

B. Certain
Affiliates of the Borrower (the “Borrower Affiliates”) are entering into that certain Credit Agreement, dated
as of February 14, 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “GACP Credit
Agreement”), by and among Franchise Group Intermediate Holdco, LLC, as a borrower, the other “Borrowers”
referred to therein, the “Guarantors” referred to therein, the lenders from time to time party thereto, GACP Finance
Co., LLC, as administrative agent (“GACP”), and Kayne Solutions Fund, L.P., as collateral agent (together with
GACP and the lenders thereunder, the “GACP Secured Parties”).

 

C. The
Borrower has requested that the Administrative Agent and the Lenders consent to a second lien on the Collateral in favor of the
GACP Secured Parties (the “Second Lien”), in order to induce the GACP Secured Parties to enter into the GACP
Credit Agreement and extend credit to the Borrower Affiliates thereunder.

 

D. The
Guarantor is a direct or indirect owner of GACP and will benefit directly and indirectly from the Second Lien.

 

E. As
an inducement to and as one of the conditions precedent to the agreement of the Administrative Agent and the Lenders to enter
into an amendment to the Credit Agreement of even date herewith (the “Sixth Credit Agreement Amendment”) and
certain related transactions, including the consent to the Second Lien, the Administrative Agent and the Lenders have required
the execution and delivery of this Guaranty, whereby the Guarantor shall guarantee the payment when due of all Guaranteed Obligations
(as defined below), including, without limitation, all principal, interest, and other amounts that shall be at any time payable
by the Borrower under the Credit Agreement or the other Loan Documents.

 

     

     

    

 

AGREEMENT

 

NOW,
THEREFORE, in order to induce the Lenders to consummate the transactions contemplated by and related to the Sixth Credit
Agreement Amendment, and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor hereby agrees as follows:

 

1. Guaranty.
The Guarantor guarantees the full and prompt payment and performance, when due, whether upon demand, maturity, by required prepayment,
acceleration or otherwise, and at all times thereafter, of all of the Secured Obligations which may now be or may hereafter become
due and owing (the “Obligations”); provided, however, the Guarantor’s liability under this Guaranty shall
be limited to the sum of $125,000,000 (the “Guaranteed Obligations”). The Guarantor hereby agrees to pay all
reasonable and documented out-of-pocket fees, costs and expenses (including, without limitation, all court costs and reasonable
attorneys’ fees and costs and expenses) paid or incurred by the Administrative Agent in: (1) endeavoring to collect all
or any part of the Guaranteed Obligations from, or in prosecuting any action against, the Guarantor in accordance with the terms
hereof and (2) preserving, protecting or defending the enforceability of this Guaranty or its rights hereunder (all such costs
and expenses are referred to herein collectively as the “Expenses”) (the Guaranteed Obligations together with
the Expenses shall be collectively referred to herein as the “B. Riley Obligations”).

 

2. Payment
of Obligations. Upon the occurrence of any Event of Default pursuant to Section 8.1(a) or Section 8.1(b) of the Credit Agreement,
at any time, and from time to time, the Guarantor shall pay to the Administrative Agent promptly (and in any event within five
(5) Business Days) after the Guarantor’s receipt of written demand therefor and in immediately available funds, all of the
Obligations then due and outstanding up to the amount of the Guaranteed Obligations at such time.

 

 3. Guaranty Provisions.

 

3.01
Obligations Unconditional. The obligations of the Guarantor under this Guaranty are absolute and unconditional, irrespective
of the validity or enforceability of the Loan Documents, or any other agreement or instrument referred to herein or therein, or
any substitution, release or exchange of any other guaranty of or security for any of the Obligations or the Loans, and, to the
fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever which might otherwise constitute
a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section that the obligations of
the Guarantor hereunder shall be absolute and unconditional under any and all circumstances and shall not be released, discharged
or in any way affected or impaired by any thing, event, happening, matter, circumstance or condition whatsoever (whether or not
the Guarantor shall have any knowledge or notice thereof or shall consent thereto), other than payment in full, which might otherwise
constitute a legal or equitable discharge or defense of a guarantor. In furtherance of the foregoing and without limiting the
generality thereof, the Guarantor agrees as follows:

 

(a)
This Guaranty is a guaranty of payment and performance when due and not of collection.

 

(b)
The obligations of the Guarantor hereunder are independent of the obligations of the Borrower and any one or more of the Loan
Parties under the other Loan Documents to which they are a party and a separate action or actions may be brought and prosecuted
against the Guarantor whether or not any action is brought against the Borrower or any other Loan Party and whether or not
the Borrower or any other Loan Party is joined in any such action or actions.

 

    2

     

    

 

(c) Payment,
performance or completion by the Guarantor, or any other guarantor, of a portion, but not all, of the Guaranteed Obligations shall
in no way limit, affect, modify or abridge the Guarantor’s liability for any portion of the Guaranteed Obligations which
has not been paid, performed or completed. Without limiting the generality of the foregoing, if the Administrative Agent or any
Lender is awarded a judgment in any suit brought to enforce the Guarantor’s or any other guarantor’s covenants to
pay any of the Guaranteed Obligations, such judgment shall not be deemed to release the Guarantor from its covenant to pay any
of the Guaranteed Obligations that is not the subject of such suit, and such judgment shall not, except to the extent satisfied
by such Guarantor, limit, affect, modify or abridge such Guarantor’s liability hereunder in respect of the Guaranteed Obligations.

 

(d)
The Administrative Agent and the Lenders (subject to the terms of the Loan Documents), upon such terms as the Required
Lenders or the Lenders, as the case may be, deem appropriate, may (i) renew, extend, accelerate, increase the rate of
interest on, or otherwise change the time, place, manner or terms of payment or performance under the Loan Documents, (ii)
settle, compromise, release or discharge, or accept or refuse any offer of performance with respect to, or substitutions for,
the Obligations or any Loan Document and/or subordinate the payment of the same to the payment of any other obligations;
(iii) request and accept other guaranties of any of the Borrower’s obligations under the Loan Documents and take and
hold security for the payment or performance of this Guaranty or the Loan Documents; (iv) release, surrender, exchange,
substitute, compromise, settle, rescind, waive, alter, subordinate or modify, with or without consideration, any security for
payment or performance of the Borrower’s obligations under the Loan Documents, any other guaranties of the Obligations,
or any other obligation of any Person with respect to the Obligations; (v) enforce and apply any security now or hereafter
held by or for the benefit of the Administrative Agent and the Lenders in respect of this Guaranty or the Obligations and
direct the order or manner of sale thereof, and to bid at any such sale, or exercise any other right or remedy that the
Administrative Agent and the Lenders may have against any such security, in each case as in its discretion may determine
consistent with any applicable security agreement, including foreclosure on any such security pursuant to one or more
judicial or non-judicial sales, even though such action operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of the Guarantor against the Borrower or Borrower Affiliates or any security for the
Obligations; and (vi) exercise any other rights available to them under the Loan Documents. The Guarantor authorizes the
Administrative Agent at any time in its discretion to direct the order and manner of any sale of all or any part of any
security now or later held for the Obligations and to bid at any such sale, to apply any payments or recoveries from the
Borrower, the Guarantor or any other source, and any proceeds of any security, to the Obligations in such manner, order and
priority as set forth in the Credit Agreement (whether or not those obligations are guaranteed by this Guaranty or secured at
the time of the application). The Administrative Agent and the Lenders may take any of the foregoing actions upon any terms
and conditions as the Required Lenders or the Lenders, as the case may be, may elect, without giving notice to, or making any
demand upon, the Guarantor, and without affecting the validity or enforceability of this Guaranty, or giving rise to any
reduction, limitation, impairment, discharge or termination of the Guarantor’s liability hereunder.

 

    3

     

    

 

(e) Except
as otherwise expressly provided in this Guaranty, this Guaranty and the obligations of the Guarantor hereunder shall be valid
and enforceable and shall not be subject to any reduction, limitation, impairment, discharge or termination for any reason (other
than payment in full of the B. Riley Obligations or termination pursuant to Section 3.07 hereof), including without limitation
the occurrence of any of the following, whether or not the Guarantor shall have had notice or knowledge of any of them: (i) any
failure or omission to assert or enforce, or agreement or election not to assert or enforce, or the stay or enjoining, by order
of court, by operation of law or otherwise, of the exercise or enforcement of, any claim or demand or any right, power or remedy
(whether arising under the Loan Documents, at law, in equity or otherwise) with respect to the Obligations or the Loan Documents,
or with respect to any other guaranty of or security for the payment or performance of the Obligations; (ii) any rescission, waiver,
amendment or modification of, or any consent to departure from, any of the terms or provisions (including without limitation provisions
relating to events of default) of the Loan Documents or of any other guaranty or security for the Obligations, in each case whether
or not in accordance with the terms of the Loan Documents or any agreement relating to such other guaranty or security; (iii)
the application of payments received from any source (other than payments received pursuant to this Guaranty or the other Loan
Documents or from the proceeds of any security for the Obligations except to the extent such security also serves as collateral
for indebtedness other than the Obligations) to the payment of indebtedness other than the Loans, even though the Lenders might
have elected to apply such payment to any part or all of the Obligations; (iv) the consent of the Required Lenders or the Lenders,
as the case may be, to the change, reorganization or termination of the ownership structure or existence of the Borrower or any
of its Affiliates and to any corresponding restructuring of the Loans, including, without limitation, the Obligations; (v) any
failure to perfect or continue perfection of a security interest in any collateral which secures any of the Obligations; (vi)
the acquisition or transfer of title to any real property covered by any Mortgage to the Administrative Agent, any Lender, any
Affiliate of any Lender or any designee of any Lender (including, without limitation, any purchaser through foreclosure, deed
in lieu or otherwise); (vii) any act or event which might otherwise discharge, reduce, limit or modify any of the Guarantor’s
obligations under this Guaranty; (viii) any waiver, extension, modification, forbearance, delay or other act or omission of the
Lenders, or their failure to proceed promptly or otherwise as against the Borrower, any other Loan Party or the Guarantor or any
security; (ix) any action, omission or circumstance which might increase the likelihood that the Guarantor may be called upon
to perform under this Guaranty or which might affect the rights or remedies of the Guarantor as against the Borrower or Borrower
Affiliates; (x) any dealings occurring at any time between the Borrower and the Lenders, whether relating to the Obligations or
otherwise; and (xi) any other act or thing or omission, or delay to do any other act or thing, which may or might in any manner
or to any extent vary the risk of the Guarantor as obligors in respect of the Guaranteed Obligations.

 

3.02
Waivers by the Guarantors. The Guarantor hereby waives, for the benefit of the Administrative Agent and the Lenders, to
the fullest extent permitted by applicable law:

 

(i)
any right to require the Administrative Agent or any Lender, as a condition of payment or performance by the Guarantor, to
(A) proceed against the Borrower, any other Loan Party or any other Person, (B) proceed against or exhaust any security held
from the Borrower, any other Loan Party, the Guarantor or any other Person, (C) proceed against or have resort to any balance
of any deposit account or credit on the books of any Lender in favor of the Borrower, any other Loan Party or any other
Person, or (D) pursue any other remedy in the power of the Administrative Agent or any Lender whatsoever;

 

    4

     

    

 

(ii) any
defense arising by reason of the incapacity, lack of authority or any disability or other defense of the Borrower, including,
without limitation, any defense based on or arising out of the lack of validity or the unenforceability of the Obligations or
any agreement or instrument related thereto or by reason of the cessation of the liability of the Borrower from any cause other
than payment and performance in full of the Obligations or termination pursuant to Section 3.07 hereof;

 

(iii) any
defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount
nor in other respects more burdensome than that of the principal;

 

(iv) any
defense based upon the Administrative Agent’s or any Lender’s errors or omissions in the administration of the Loans;

 

(v)
(A) any principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms of this
Guaranty and any legal or equitable discharge of the Guarantor’s obligations hereunder (other than payment, performance
and completion of the B. Riley Obligations in full or termination pursuant to Section 3.07 hereof), (B) the benefit of
any statute of limitations affecting the Guarantor’s liability hereunder or the enforcement hereof, (C) any rights to
set-offs, recoupments and counterclaims which may at any time be available to or be asserted by the Borrower or any other
Person against the Administrative Agent or any Lender, including without limitation any defenses available to a surety (all
of which defenses are hereby waived), and (D) promptness, diligence and any requirement that the Administrative Agent or any
Lender protect, secure, perfect or insure any security interest or lien or any property subject thereto;

 

(vi) except
as otherwise expressly required under Sections 1, 2 and 3.07 hereof, notices, demands, presentments, protests, notices
of protest, notices of dishonor and notices of any action or inaction, notices of default under the other Loan Documents or any
agreement or instrument related thereto, notices of any renewal, extension or modification of the Obligations or any agreement
related thereto, notices of any extension of credit to the Borrower and any right to consent to any thereof;

 

(vii) any
release, discharge, modification, impairment or limitation of the liability of the Borrower to the Administrative Agent or any
Lender, whether consented to by the Administrative Agent, the Required Lenders or the Lenders, as the case may be, consensual
or arising by operation of law or any proceedings in bankruptcy or reorganization or from any other cause;

 

(viii) any
defense based on any rejection or disaffirmance of the Obligations, or any part thereof, or any security held therefor, in any
such proceedings in bankruptcy or reorganization;

 

    5

     

    

 

(ix)
any defense based on any action taken or omitted by the Administrative Agent or any Lender in any proceedings in bankruptcy
or reorganization involving the Borrower or other Loan Party, including any election to have their claim allowed as being
secured, partially secured or unsecured, any extension of credit by any Lender to the Borrower in any proceedings in
bankruptcy or reorganization and the taking and holding by the Administrative Agent or any Lender of any security for any
such extension of credit; and

 

(x) any
defense or benefits that may be derived from or afforded by law which limit the liability of or exonerate guarantors or sureties,
or which may conflict with the terms of this Guaranty, other than payment or performance of the B. Riley Obligations in full or
termination pursuant to Section 3.07 hereof.

 

3.03 Reinstatement. The obligations of the Guarantor under this Guaranty shall be automatically reinstated if and to the
extent that for any reason any payment by or on behalf of the Borrower, another Loan Party or the Guarantor in respect of the
Obligations is rescinded or must be otherwise restored by any holder of the Obligations, whether as a result of any proceedings
in bankruptcy or reorganization or otherwise.

 

3.04 Guarantor’s
Rights of Subrogation, Contribution, Etc. The Guarantor hereby waives, until the Termination Date, any claim, right or
remedy, direct or indirect, that the Guarantor now has or may hereafter have against the Borrower or any other Loan Party, or
any of their respective assets, in connection with this Guaranty or the performance by the Guarantor of its obligations
hereunder, in each case whether such claim, right or remedy arises in equity, under contract, by statute, under common law or
otherwise and, including without limitation, (i) any right of subrogation, reimbursement or indemnification that the
Guarantor now has or may hereafter have against the Borrower or any other Loan Party, (ii) any right to enforce, or to
participate in, any claim, right or remedy that the Administrative Agent or any Lender now has or may hereafter have against
any Borrower or any other Loan Party, and (iii) any benefit of, and any right to participate in, any collateral or security
now or hereafter held by or on behalf of the Administrative Agent or any Lender. In addition, until the Termination Date, the
Guarantor shall withhold exercise of any right of contribution which the Guarantor may have against any other guarantor of
the Obligations. The Guarantor further agrees that, to the extent the waiver or agreement to withhold the exercise of its
right of subrogation, reimbursement, indemnification and contribution as set forth herein is found by a court of competent
jurisdiction to be void or voidable for any reason, any rights of subrogation, reimbursement or indemnification the Guarantor
may have against the Borrower or any other Loan Party, or against any collateral or security, and any rights of contribution
the Guarantor may have against any other guarantor, shall be junior and subordinate to any rights the Administrative Agent or
the Lenders may have against the Borrower and the Loan Parties, to all right, title and interest the Administrative Agent or
the Lenders may have in any such collateral or security, and to any right the Administrative Agent or any Lender may have
against such other guarantor. If any amount shall be paid to the Guarantor on account of any such subrogation, reimbursement,
indemnification or contribution rights at any time prior to the Termination Date, such amount shall be held in trust for the
Administrative Agent and the Lenders and shall forthwith be paid over to the Administrative Agent to be credited and applied
against the Obligations, whether matured or unmatured, in accordance with the terms hereof. The Guarantor agrees that it is
not a surety and waives any right that it may have as a surety to require that the Administrative Agent commence action
against the Borrower, any other Loan Party or any other person or against any of the Collateral.

 

    6

     

    

 

3.05
Subordination of Other Obligations. Any Indebtedness of the Borrower or any other Loan Party now or hereafter held by the
Guarantor is hereby subordinated in right of payment to the Obligations, and any such Indebtedness collected or received by the
Guarantor after an Event of Default pursuant to Section 8.1(a) or 8.1(b) of the Credit Agreement has occurred and is continuing
shall be held in trust for the Administrative Agent and the Lenders and shall forthwith be paid over to the Administrative Agent
to be credited and applied against the Guaranteed Obligations if any are then due but without affecting, impairing or limiting
in any manner the liability of the Guarantor under any other provision of this Guaranty.

 

3.06 Remedies.

 

(a) The
Guarantor agrees that, notwithstanding anything set forth in this Guaranty to the contrary, if for whatever reason, the Administrative
Agent or any Lender is prevented by applicable law or the terms of any subordination agreement from exercising any of its rights
to receive payment from the Borrower of all or any part of the Obligations, to collect interest on all or any part of the Obligations
or to enforce or exercise any other right or remedy with respect to all or any part of the Obligations, or is prevented from taking
any action to realize on all or any part of the collateral securing the Obligations or the liabilities of the Borrower and such
occurrence results in, or occurs during the continuance of, an Event of Default pursuant to Section 8.1(a) or Section 8.1(b) of
the Credit Agreement, the Guarantor agrees to pay to the Administrative Agent, within five (5) Business Days after receipt of
written demand therefor and in immediately available funds, the amount that would otherwise have been due and payable had such
rights and remedies been permitted to be exercised by the Administrative Agent up to the amount of the Guaranteed Obligations
at such time.

 

(b) All
of the remedies set forth in this Guaranty and/or provided for in any of the Loan Documents or at law (including without limitation
the right of set-off) or in equity shall be equally available to the Administrative Agent and any Lender, and the choice by the
Administrative Agent of one such alternative over another shall not be subject to question or challenge by the Guarantor or any
other Person, nor shall any such choice be asserted as a defense, setoff, or failure to mitigate damages in any action, proceeding,
or counteraction by the Administrative Agent or any Lender to recover or seek any other remedy under this Guaranty, nor shall
any such choice preclude the Administrative Agent or any Lender from subsequently electing to exercise a different remedy; provided
that only the Administrative Agent shall be entitled to enforce this Guaranty.

 

3.07 Continuing Guaranty. This Guaranty is a continuing guaranty and shall remain in effect until the earlier of (a) the
date that the Guaranteed Obligations and Expenses have been paid in full and (b) June 30, 2020 (such earlier date, the “Termination
Date”); provided, however, that if the Administrative Agent has exercised any of its rights or remedies hereunder prior
to June 30, 2020, the Termination Date shall be the date in clause (a).

 

    7

     

    

 

3.08 Assumption
of Risk Regarding Loan Parties’ Financial Condition. Before signing this Guaranty, the Guarantor investigated the
financial condition and business operations of the Borrower and the other Loan Parties and such other matters as the
Guarantor deemed appropriate to assure themselves of the Borrower’s and other Loan Parties’ ability to discharge
their respective obligations under the Loan Documents. The Guarantor assumes full responsibility for keeping fully informed
of the financial condition of the Borrower and the other Loan Parties and all other circumstances affecting the
Borrower’s and the other Loan Parties’ ability to perform their respective obligations to the Lenders, and agree
that none of the Administrative Agent or any of the Lenders will have any duty to report to the Guarantor any information
which it receives about the Borrower’s or any Loan Party’s financial condition or any circumstances bearing on
the Borrower’s or any Loan Party’s ability to perform.

 

3.09 [Reserved].

 

4. Representations
and Warranties. The Guarantor hereby represents and warrants to the Administrative Agent as of the date hereof that:

 

4.01
No Breach. None of the execution and delivery of this Guaranty, the consummation of the transactions herein contemplated
or compliance by the Guarantor with the terms and provisions hereof will conflict with or result in a breach of, or require any
consent under any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority
or agency, or any agreement or instrument to which the Guarantor is a party or by which it is bound or to which it is subject,
or constitute a default under any such agreement or instrument, or result in the creation or imposition of any lien upon any of
the revenues or assets of the Guarantor pursuant to the terms of any such agreement or instrument.

 

4.02
Action. This Guaranty has been duly and validly executed and delivered by the Guarantor and constitutes its legal, valid
and binding obligation, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws of general application affecting the enforcement of creditors’ rights.

 

4.03
Litigation. Except as disclosed to the Lenders in writing prior to the date of this Guaranty, there are no legal or arbitration
proceedings or any proceedings by or before any Governmental Authority, now pending or (to the knowledge of the Guarantor) threatened
against the Guarantor which could cause (a) a material impairment of the ability of the Guarantor, taken as a whole, to perform
any of its obligations hereunder, (b) a material adverse effect upon the legality, validity, binding effect or enforceability
against the Guarantor of this Guaranty, or (c) a material impairment of the ability of the Administrative Agent to enforce this
Guaranty (the foregoing clauses (a) through (c), each, a “Material Adverse Effect”).

 

4.04
Organization. The Guarantor is validly existing and in good standing under the laws of its jurisdiction of organization;
and the Guarantor is duly qualified to do business in each jurisdiction where, because of the nature of its activities or properties,
such qualification is required, except for such jurisdictions where the failure to so qualify could not reasonably be expected
to have a Material Adverse Effect.

 

4.05
Authorization. The Guarantor is duly authorized to execute and deliver this Guaranty and perform its obligations hereunder.

 

    8

     

    

 

5. 
Covenants. The Guarantor covenants to the Lender that, until the Termination Date:

 

5.01
Compliance with Laws. The Guarantor will comply with the requirements of all applicable laws, rules, regulations and orders
of governmental or regulatory authorities if failure to comply with such requirements would reasonably be expected to have a Material
Adverse Effect (either individually or in the aggregate), except to the extent being contested in good faith and by proper proceedings
and against which adequate reserves are being maintained.

 

5.02
Litigation. The Guarantor will promptly give the Administrative Agent notice of all legal or arbitral proceedings, and
of all proceedings by or before any governmental or regulatory authority or agency, affecting the Guarantor, except proceedings
which would not reasonably be expected to have a Material Adverse Effect.

 

6. No
Waiver. No failure on the part of the Administrative Agent or any Lender to exercise, no delay in exercising, and no course
of dealing with respect to, any right or remedy hereunder will operate as a waiver, thereof; nor will any single or partial exercise
or any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right or remedy.

 

 7. Miscellaneous.

 

7.01
Governing Law. THIS GUARANTY SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

 

7.02 Forum Selection; Consent to Jurisdiction. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK
OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL
BE DEEMED OR OPERATE TO PRECLUDE THE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION
FOR PURPOSES OF ENFORCING A FINAL JUDGMENT OF ANY SUCH COURT. EACH OF THE GUARANTOR AND THE ADMINISTRATIVE AGENT HEREBY EXPRESSLY
AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH OF THE GUARANTOR AND THE ADMINISTRATIVE
AGENT FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN
OR WITHOUT THE STATE OF NEW YORK. EACH OF THE GUARANTOR AND THE ADMINISTRATIVE AGENT HEREBY EXPRESSLY AND IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

    9

     

    

 

7.03
Waiver of Jury Trial. EACH OF THE GUARANTOR, ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS GUARANTY AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP
EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT
AND NOT BEFORE A JURY.

 

7.04 Notices.
All notices, requests, demands, statements, authorizations, approvals, directions, consents and other communications provided
for herein shall be given or made in writing and shall be deemed sufficiently given or served for all purposes as of the date
(a) when hand delivered, (b) four (4) days after being sent by postage pre-paid registered or certified mail, return receipt
requested, (c) one (1) Business Day after being sent by reputable overnight courier service (with delivery evidenced by
written receipt and charges prepaid), or (d) by facsimile, when sent, with confirmation in each case addressed to the
intended recipient at the “Address for Notices” specified on the signature pages hereto; or, as to any party, at
such other address as shall be designated by such party in a notice to each other party. Notices and other communications to
the Administrative Agent hereunder may be delivered or furnished by electronic communications pursuant to procedures approved
by the Administrative Agent. The Administrative Agent and the Guarantor may, each in its discretion, agree to accept notices
and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or communications.

 

7.05
Amendments, Etc. The terms of this Guaranty may be waived, modified and amended only by an instrument in writing duly executed
by the Administrative Agent and the Guarantor. Any such waiver, modification or amendment shall be binding upon the Administrative
Agent and the Guarantor.

 

7.06
Successors and Assigns. This Guaranty shall be binding upon and inure to the benefit of the respective successors and assigns
of the Guarantor and the Administrative Agent (provided, however, that the Guarantor shall not assign or transfer its rights or
obligations hereunder without the prior written consent of the Administrative Agent). Without notice to or the consent of the
Guarantor, the Administrative Agent and the Lenders may disclose any and all information in its possession concerning the Guarantor,
this Guaranty and any security for this Guaranty to any actual or prospective purchaser, assignee or pledgee of any participation
or other interest in the Loans, the Obligations and this Guaranty so long as such actual or prospective purchaser, assignee or
pledgee agrees to be bound by the terms of Section 10.14 of the Credit Agreement.

 

7.07
Captions. The captions and section headings appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Guaranty.

 

    10

     

    

 

7.08
Counterparts. This Guaranty may be executed in multiple counterparts, each of which shall be an original and all of which,
when taken together, shall constitute one and the same agreement among the parties. Delivery of an executed counterpart of this
Guaranty by facsimile or other electronic means shall be equally as effective as delivery of a manually executed counterpart hereof.
Any party hereto delivering an executed counterpart hereof by facsimile or other electronic means shall also deliver a manually
executed counterpart hereof, but the failure to so deliver a manually executed counterpart hereof shall not affect the validity,
enforceability or binding effect hereof.

 

7.09
Severability. If any provision of this Guaranty shall be held by any court of competent jurisdiction to be unlawful, void
or unenforceable for any reason as to any Person or circumstance, such provision or provisions shall be deemed severable from
and shall in no way affect the enforceability and validity of the remaining provisions of this Guaranty.

 

7.10
Authority of the Administrative Agent. The Guarantor acknowledges that the rights and responsibilities of the Administrative
Agent under this Guaranty with respect to any action taken by the Administrative Agent or the exercise or non- exercise by the
Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting
or arising out of this Guaranty shall, as between the Administrative Agent and the Lenders, be governed by the Credit Agreement
and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Administrative
Agent and the Guarantor, the Administrative Agent shall be conclusively presumed to be acting as agent for the Lenders with full
and valid authority so to act or refrain from acting, and the Guarantor shall be under no obligation, or entitlement, to make
any inquiry respecting such authority.

 

[Signature
Page Follows]

 

    11

     

    

 

IN
WITNESS WHEREOF, this Guaranty has been duly executed as of the day and year first set forth above.

 

	GUARANTOR:	B.
    RILEY FINANCIAL, INC.
	 	 	 
	 	By:	/s/
    Bryant R. Riley
	 	Name: 	Bryant
    R. Riley
	 	Title:	Co-Chief
    Executive Officer

 

Signature
Page to Limited Guaranty

 

     

     

    

 

	ADMINISTRATIVE
    AGENT:	 
	 	 	 
	CIBC
    BANK USA, as Administrative Agent	 
	 	 	 
	By:	/s/
    Javier Gutierrez	 
	Name:	Javier
    Gutierrez	 
	Title:
    	Managing
    Director	 

 

Signature
Page to Limited Guaranty

 

     

     

    

 

Notice
Addresses:

 

CIBC
Bank USA

120
S. LaSalle Street

Chicago,
IL 60603

Attn:
Javier Gutierrez

Tel:
786-749-3097

E-mail:
javier.gutierrez2@cibc.com

 

B.
Riley Financial, Inc.

21255
Burbank Blvd., Suite 400

Woodland
Hills, CA 91367

Attn:
Alan Forman

E-mail:
aforman@brileyfin.com

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