REIMBURSEMENT AND SECURITY AGREEMENT

Exhibit 10.2

EXECUTION COPY

REIMBURSEMENT AND SECURITY AGREEMENT

REIMBURSEMENT AND SECURITY AGREEMENT dated as of May 5, 2008, between APAC Customer Services, Inc., an Illinois corporation (the “Company”), and TCS Global Holdings, L.P., a Nevada limited partnership (“TCS”).

WHEREAS, the Company wishes to enter into that certain Revolving Credit and Security Agreement, dated as of May 5, 2008 (the “Credit Agreement”), among the Company, certain lenders (the “Lenders”), and PNC Bank, National Association, as agent for the lenders (the “Agent”);

WHEREAS, the Company’s wishes to have greater borrowing capacity under the Credit Agreement than provided for by its currently eligible assets, for purposes of the Credit Agreement; and

WHEREAS, in order to enable the Company to increase its borrowing capacity under the Credit Agreement, the Company has requested TCS to cause Deutsche Bank Trust Company Americas (the “Initial LC Bank”, and together with the Replacement LC Banks (as defined below), each an “LC Bank”) to issue its irrevocable letter of credit in the form attached hereto as Exhibit A (the “Initial Letter of Credit”, and together with the Replacement Letters of Credit (as defined below), each a “Letter of Credit”) in the amount of $9,000,000 and to deliver it to the Lenders as additional collateral under the Credit Agreement.

NOW, THEREFORE, in consideration of the premises and in order to induce TCS to cause the LC Bank to issue the Letter of Credit, the parties hereto agree as follows:

ARTICLE I
AMOUNT AND TERMS OF THE LETTER OF CREDIT

Section 1.01. The Letter of Credit .

(a) Subject to the terms and conditions hereof, TCS agrees to cause the Initial LC Bank to issue the Initial Letter of Credit to the Agent for the benefit of the Lenders, and to deliver the Initial Letter of Credit to the Agent, on the date hereof in the initial amount of $9,000,000, (the sum of all available amounts to be drawn with respect to all Letters of Credit issued and in effect at any time, as such amount may be reduced pursuant to Section 1.01(d), the “Stated Amount”) and expiring on the earlier of (a) the date of expiration of the Letter of Credit (as such date may be extended in accordance with its terms) and (b) the date the “Required Credit Enhancement Amount” (as defined in the Credit Agreement) is reduced to zero pursuant to Section 4.23 or 4.24 of the Credit Agreement (the “Expiration Date”).

(b) At any time prior to the Expiration Date, TCS may (i) cause any LC Bank, or any other entity acceptable to the Agent and the Company (in each case in such party’s reasonable discretion) (a “Substitute LC Bank”), to issue a replacement letter of credit (a “Substitute Letter of Credit”) to the Agent for the benefit of the Lenders in form and substance acceptable to the Agent and the Company, in each case in such party’s reasonable discretion, or (ii) deliver to the Agent cash or “Cash Equivalents” (as defined in the Credit Agreement) as collateral in substitution for any Letter of Credit in an amount equal to or greater than the Required Credit Enhancement Amount at such time (“Cash Collateral”); provided , that TCS shall only deliver any such Substitute Letter of Credit or Cash Collateral to the Agent on the condition that all prior Letters of Credit and Cash Collateral have been returned to TCS or terminated; and provided , further , that the sum of the Stated Amount with respect to all Letters of Credit issued and held by the Agent and all Cash Collateral held by the Agent at any time shall not exceed $9,000,000.

(c) Unless otherwise requested by the Company, if any Letter of Credit by its terms shall expire or terminate prior to the Expiration Date, TCS shall (i) use commercially reasonable good faith efforts to cause any LC Bank, or any other entity acceptable to the Company and the Agent, in each case in such party’s reasonable discretion, (together with any Substitute LC Bank, each such LC Bank a “Replacement LC Bank”), to issue a replacement letter of credit in form and substance acceptable to the Company and the Agent, in each case in such party’s reasonable discretion, (together with any Substitute Letter of Credit, each such letter of credit a “Replacement Letter of Credit”), (ii) deliver to the Agent Cash Collateral in substitution therefor or (iii) allow the Agent to draw on such Letter of Credit prior to its termination.

(d) Upon each drawing under any Letter of Credit, the Stated Amount under such Letter of Credit shall be reduced automatically by an amount equal to such drawing.

Section 1.02. Fees .

(a) The Company agrees to pay to TCS a letter of credit fee, at the rate of two percent (2%) per annum of the Stated Amount, which fee shall be payable in advance at closing and on each anniversary of the closing date on which a Letter of Credit is outstanding as of such date, in each case, calculated based on the Stated Amount as of such date; provided , if the Expiration Date occurs on a date which is prior to the next annual payment date, TCS shall either refund to the Company a pro rata portion of such fee for the period from the Expiration Date to such next annual payment date or apply any such amount to sums due to TCS under this Agreement or otherwise; provided , further , if the Stated Amount of the Letter of Credit is reduced prior to the Expiration Date or the next annual payment date, TCS shall either refund to the Company on the earlier of the Expiration Date or the next annual payment date the excess of (x) two percent (2%) per annum of the Stated Amount as of the prior payment date over (y) two percent (2%) per annum of the average daily Stated Amount for the period commencing on the date of the reduction of the Stated Amount and ending as of such Expiration Date or annual payment date, or apply any such amount to sums due to TCS under this Agreement or otherwise.

(b) The Company agrees to pay to TCS an additional letter of credit fee (the “Additional Fee”) at the following rates per annum:

(i) two percent (2%) of the Stated Amount if the Average Monthly Amount during the immediately preceding month is equal to or below the following amount as of such date: (A) the average daily amount of the “Advance Rate” for the preceding month minus (B) the “Restructuring Reserve” minus (C) the “Availability Reserve” (as each such term is defined in the Credit Agreement) minus (D) any additional reserves established by Agent pursuant to the terms of the Credit Agreement (such amount, as of any date of determination, the “Limit”);

(ii) three percent (3%) of the Stated Amount if Average Monthly Amount during the immediately preceding month exceeds the Limit by no more than $3,000,000;

(iii) four percent (4%) of the Stated Amount if the Average Monthly Amount during the immediately preceding month exceeds the Limit by more than $3,000,000 but by not more than $6,000,000; and

(iv) five percent (5%) of the Stated Amount if the Average Monthly Amount under the Credit Agreement during the immediately preceding month exceeds the Limit by more than $6,000,000.

The Additional Fee shall be paid monthly in arrears in respect of each month or partial month during which the Letter of Credit remains outstanding, calculated based on the Stated Amount as of the last day of such month. Payments shall be made on the 10 ^th day following the end of each month until the Expiration Date. No later than the time of such payment, the Company shall deliver to TCS a certificate of the treasurer, chief financial officer or chief accounting officer of the Company setting forth in reasonable detail, the Average Monthly Amount and the Advance Rate for the immediately preceding month and a calculation of the Additional Fee payable with respect thereto.

(c) For purposes of this Agreement, the “Average Monthly Amount” during any month shall mean the average of all amounts outstanding under the Credit Agreement during such month.

Section 1.03. Reimbursement and Other Payments . The Company hereby agrees to pay to TCS on demand on and after the date on which the LC Bank shall pay any draft presented under the Letter of Credit, a sum equal to (i) the amount so paid under the Letter of Credit, plus (ii) interest on any amount remaining unpaid by the Company to TCS under clause (i) above from and including the date such amount becomes payable until payment in full, payable on demand, at such fluctuating interest rate per annum as shall be in effect from time to time, which rate per annum shall at all times be equal to 8.75 percent (8.75%) per annum above LIBOR (the “Interest Rate”), plus (iii) interest on any Cash Collateral held by the Agent, payable on demand, at the Interest Rate; provided , in any case the Interest Rate shall in no event be higher than the maximum rate permitted by applicable law. TCS shall give prompt notice to the Company upon learning of any payment by an LC Bank under the Letter of Credit

For purposes of this Agreement, “LIBOR” shall mean for any day, the rate determined by TCS by reference to the British Bankers’ Association Interest Settlement Rate for deposits in U.S. Dollars with a maturity of one month, appearing on page 3750 of the Telerate Service (or any such page as may replace page 3750 on such service or any successor to or substitute for such service, providing rate quotations comparable to those currently provided by such service, as determined by TCS from time to time for purposes of providing quotations of interest rates applicable to deposits in U.S. Dollars in the London interbank market) at approximately 11:00 a.m., London time, on the second Business Day before such day.

Section 1.04. Payments and Computations . The Company shall make each payment hereunder in lawful money of the United States of America, not later than 12:00 noon (Chicago time) on the due date by wire transfer of immediately available funds, to such account as TCS may specify to the Company in writing from time to time. Computations of fees hereunder shall be made by TCS on the basis of a year of 365 for the actual number of days (including the first day but excluding the last day) elapsed. Interest hereunder shall be computed on the basis of a year of 360 days and for the actual number of days elapsed.

Section 1.05. Payment on Non-Business Days . Whenever any payment to be made hereunder shall be stated to be due on a Saturday, Sunday or a public or bank holiday or the equivalent for banks generally under the laws of the state of Illinois (any other day being a “Business Day”), such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or letter of credit fee, as the case may be.

Section 1.06. Obligations Absolute . During the term of this Agreement, each of the obligations of the Company under this Agreement (the “Reimbursement Obligations”) shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including, without limitation, the following circumstances:

(i) any lack of validity or enforceability of the Letter of Credit, the Limited Guaranty and Surety Agreement dated as of the date hereof by APAC Customer Services of Iowa, L.L.C. (the “Guarantor”) in favor of TCS (as amended, restated, or otherwise modified, the “Guaranty”), the Security Agreement dated as of the date hereof by the Guarantor in favor of TCS (as amended, restated, or otherwise modified, the “Guarantor Security Agreement”), or any other agreement or instrument relating thereto (the Letter of Credit and such agreements and instruments being collectively referred to herein as the “LC Documents”) or the Credit Agreement or any other agreement or instrument relating thereto (the Credit Agreement and such agreements and instruments being collectively referred to herein as the “Credit Agreement Documents”);

(ii) any amendment or waiver of or any consent to departure from all or any of the LC Documents or the Credit Agreement Documents;

(iii) the existence of any claim, set-off, defense or other right which the Company may have at any time against the LC Bank, the Lenders, the Agent (or any persons or entities for whom the Lender or any such Lenders or the Agent may be acting), TCS or any other person or entity, whether in connection with this Agreement, the transactions contemplated in the LC Documents or the Credit Agreement Documents or any unrelated transaction;

(iv) any statement or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

(v) payment by the LC Bank under the Letter of Credit against presentation of a draft or certificate which does not comply with the terms of the Letter of Credit; or

(vi) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.

Section 1.07. Intercreditor Agreement . The obligations under this Agreement are subordinated in the manner and to the extent set forth in the Intercreditor and Subordination Agreement dated as of May 5, 2008, as the same may be amended, modified, restated or supplemented from time to time (the “Intercreditor Agreement”), to the Senior Debt (as defined in the Intercreditor Agreement) and each party of this Agreement by its agreement hereto shall be bound by the provisions of the Intercreditor Agreement.

ARTICLE II
SECURITY FOR LETTER OF CREDIT OBLIGATIONS;

Section 2.01. Security Interest in the Collateral . To secure the prompt payment and performance to TCS of the Reimbursement Obligations, the Company hereby pledges and grants to TCS a continuing security interest in and to and lien on all of the following, whether now owned or existing or hereafter acquired or arising and wheresoever located (the “Collateral”):

(a) all of the Company’s accounts, contract rights, instruments (including those evidencing indebtedness owed to the Company by its affiliates), documents, chattel paper (including electronic chattel paper), general intangibles relating to accounts, drafts and acceptances, credit card receivables and all other forms of obligations owing to the Company arising out of or in connection with the sale or lease of Inventory (as defined below) or the rendition of services, all supporting obligations, guarantees and other security therefor, whether secured or unsecured, now existing or hereafter created, and whether or not specifically sold or assigned to TCS hereunder (collectively, “Receivables”);

(b) all of the Company’s goods (other than Inventory) whether now owned or hereafter acquired and wherever located including all equipment, machinery, apparatus, motor vehicles, fittings, furniture, furnishings, fixtures, parts, accessories and all replacements and substitutions therefor or accessions thereto (collectively, “Equipment”);

(c) all of the Company’s general intangibles, whether now owned or hereafter acquired, including all payment intangibles, all choses in action, causes of action, corporate or other business records, inventions, designs, patents, patent applications, equipment formulations, manufacturing procedures, quality control procedures, trademarks, trademark applications, service marks, trade secrets, goodwill, copyrights, design rights, software, computer information, source codes, codes, records and updates, registrations, licenses, franchises, customer lists, tax refunds, tax refund claims, computer programs, all claims under guaranties, security interests or other security held by or granted to the Company to secure payment of any of the Receivables by any account debtor with respect to any Receivable and/or the prospective purchaser of goods, services or both with respect to any contract or contract right, and/or any party who enters into or proposes to enter into any contract or other arrangement with the Company, pursuant to which the Company is to deliver any personal property or perform any services (any such account debtor, prospective purchaser or party, a “Customer”) (other than to the extent covered by Receivables) all rights of indemnification and all other intangible property of every kind and nature (other than Receivables) (collectively, “General Intangibles”);

(d) all of the Company’s now owned or hereafter acquired goods, merchandise and other personal property, wherever located, to be furnished under any consignment arrangement, contract of service or held for sale or lease, all raw materials, work in process, finished goods and materials and supplies of any kind, nature or description which are or might be used or consumed in the Company’s business or used in selling or furnishing such goods, merchandise and other personal property, and all documents of title or other documents representing them (collectively, “Inventory”);

(e) all of the Company’s now owned or hereafter acquired securities (whether certificated or uncertificated), securities entitlements, securities accounts, commodities contracts and commodities accounts (collectively, “Investment Property”);

(f) all of the following (collectively, “Subsidiary Stock”):

(i) one hundred percent 100% of the issued and outstanding Equity Interests (as defined below) of any Subsidiary of the Company which is incorporated or organized under the laws of any state of the United States or the District of Columbia (“Domestic Subsidiary”) and 65% of each class of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) (“ Voting Equity ”) and 100% of each class of the issued and outstanding Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) (“ Non-Voting Equity ”) of each Subsidiary of the Company that is not organized or incorporated in the United States or any State or territory thereof (“Foreign Subsidiary”) (but only to the extent that the pledge of such Non-Voting Equity would not cause the Reimbursement Obligations to be treated as “United States property” of such Foreign Subsidiary within the meaning of Treas. Reg. Section 1.956-2), in each case together with the certificates (or other agreements or instruments), if any, representing such Equity Interests, and all options and other rights, contractual or otherwise, with respect thereto (collectively, the “ Pledge Capital Stock ”), including, but not limited to, the following:

(A) subject to the percentage restrictions described above, all shares, securities, membership interests or other equity interests representing a dividend on any of the Pledged Capital Stock, or representing a distribution or return of capital upon or in respect of the Pledged Capital Stock, or resulting from a stock split, revision, reclassification or other exchange therefor, and any subscriptions, warrants, rights or options issued to the holder of, or otherwise in respect of, the Pledged Capital Stock; and

(B) without affecting the obligations of the Company under any provision prohibiting such action hereunder, in the event of any consolidation or merger involving the issuer of any Pledged Capital Stock and in which such issuer is not the surviving entity, all shares of each class of the Equity Interests of the successor entity formed by or resulting from such consolidation or merger;

(ii) Subject to the percentage restrictions described above, any and all other Capital Stock (as defined below) owned by the Company in any Domestic Subsidiary or any Foreign Subsidiary; and

(iii) All proceeds and products of the foregoing, however and whenever acquired and in whatever form;

(g) all of the Company’s right, title and interest in and to, whether now owned or hereafter acquired and wherever located, (i) its respective goods and other property including, but not limited to, all merchandise returned or rejected by Customers, relating to or securing any of the Receivables; (ii) all of the Company’s rights as a consignor, a consignee, an unpaid vendor, mechanic, artisan, or other lienor, including stoppage in transit, setoff, detinue, replevin, reclamation and repurchase; (iii) all additional amounts due to the Company from any Customer relating to the Receivables; (iv) other property, including warranty claims, relating to any goods securing the Obligations; (v) all of the Company’s assignable contract rights, rights of payment which have been earned under a contract right, instruments (including promissory notes), documents, chattel paper (including electronic chattel paper), warehouse receipts, deposit accounts, letters of credit and money; (vi) each commercial tort claim in existence as of the date hereof and in which a security interest is hereafter granted to TCS by the Company pursuant to the provision of Section 2.01 or otherwise; (viii) all letter of credit rights (whether or not the respective letter of credit is evidenced by a writing); (ix) all supporting obligations; and (x) any other goods, personal property or real property now owned or hereafter acquired in which the Company has expressly granted a security interest or may in the future grant a security interest to TCS hereunder, or in any amendment or supplement hereto or thereto, or under any other agreement between TCS and the Company;

(h) all of the Company’s ledger sheets, ledger cards, files, correspondence, records, books of account, business papers, computers, computer software (owned by the Company or in which it has an interest), computer programs, tapes, disks and documents relating to clauses (a), (b), (c), (d), (e), (f) or (g) of this Section;

(i) all of the Company’s cash and cash equivalents; and

(j) proceeds and products of clauses (a), (b), (c), (d), (e), (f), (g), (h) and (i) in whatever form, including, but not limited to: cash, deposit accounts (whether or not comprised solely of proceeds), certificates of deposit, insurance proceeds (including hazard, flood and credit insurance), negotiable instruments and other instruments for the payment of money, chattel paper, security agreements, documents, eminent domain proceeds, condemnation proceeds and tort claim proceeds.

The Company shall mark its books and records as may be necessary or appropriate to evidence, protect and perfect TCS’s security interest and shall cause its financial statements to reflect such security interest. The Company shall promptly provide TCS with written notice of all commercial tort claims, such notice to contain the case title together with the applicable court and a brief description of the claim(s). Upon delivery of each such notice, the Company shall be deemed to hereby grant to TCS a security interest and lien in and to such commercial tort claims and all proceeds thereof.

For purposes of this Agreement, “Equity Interests” of any person or entity shall mean any and all shares, rights to purchase, options, warrants, general, limited or limited liability partnership interests, member interests, participation or other equivalents of or interest in (regardless of how designated) equity of such person or entity, whether voting or nonvoting, including common stock, preferred stock, convertible securities or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended).

For purposes of this Agreement, “Subsidiary” of any person or entity shall mean a corporation or other entity of whose Equity Interests having ordinary voting power (other than Equity Interests having such power only by reason of the happening of a contingency) to elect a majority of the directors of such corporation, or other person or entities performing similar functions for such entity, are owned, directly or indirectly, by such person or entity.

For purposes of this Agreement, “Capital Stock” shall mean (i) in the case of a corporation, capital stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (iii) in the case of a partnership, partnership interests (whether general or limited), (iv) in the case of a limited liability company, membership interests and (v) any other equity interest or participation that confers on a person or entity the right to receive a share of the profits and losses of, or distributions of assets of, the issuing person or entity.

Section 2.02. Perfection of Security Interest . The Company shall take all action that may be necessary or desirable, or that TCS may reasonably request, so as at all times to maintain the validity, perfection, enforceability and priority of the Company’s security interest in and lien on the Collateral or to enable TCS to protect, exercise or enforce its rights hereunder and in the Collateral, including, but not limited to, (i) immediately discharging all Liens other than Permitted Encumbrances (as defined in the Credit Agreement), (ii) obtaining lien waiver agreements, (iii) delivering to TCS, endorsed or accompanied by such instruments of assignment as TCS may specify, and stamping or marking, in such manner as TCS may specify, any and all chattel paper, instruments, letters of credits and advices thereof and documents evidencing or forming a part of the Collateral, (iv) entering into warehousing, lockbox and other custodial arrangements satisfactory to TCS, and (v) executing and delivering financing statements, control agreements, instruments of pledge, mortgages, notices and assignments, in each case in form and substance satisfactory to TCS, relating to the creation, validity, perfection, maintenance or continuation of TCS’s security interest and lien under the Uniform Commercial Code or other applicable law. TCS is hereby authorized to file financing statements in accordance with the Uniform Commercial Code as adopted in the relevant jurisdiction from time to time. By its signature hereto, the Company hereby authorizes TCS to file against the Company, one or more financing continuation or amendment statements pursuant to the Uniform Commercial Code in form and substance satisfactory to the Company (which statements may have a description of collateral which is broader than that set forth herein and which may describe the Collateral as “all assets” or “all personal property”). All charges, expenses and fees TCS may incur in doing any of the foregoing, and any local taxes relating thereto, shall be added to the Reimbursement Obligations, or, at TCS’s option, shall be paid to TCS immediately upon demand.

Section 2.03. Disposition of Collateral . The Company will safeguard and protect all Collateral for TCS’s general account and make no disposition thereof whether by sale, lease or otherwise except (a) the sale of Inventory in the ordinary course of business (as the Company’s business is conducted on the date hereof, the “Ordinary Course of Business”) and (b) the disposition or transfer of Equipment in the Ordinary Course of Business and only to the extent that (i) the proceeds of any such disposition are used to acquire replacement Equipment which is subject to TCS’s security interest (subject only to a Permitted Encumbrance) or (ii) the proceeds of which are remitted to TCS.

Section 2.04. Preservation of Collateral . Following the occurrence of an Event of Default, and provided TCS elects to exercise its remedies under this Agreement, in addition to the rights and remedies set forth in Section 6.02 hereof, TCS (or any agent on its behalf): (a) may at any time take such steps as TCS (or its agent) deems necessary to protect TCS’s interest in and to preserve the Collateral, (b) may lease warehouse facilities to which TCS may move all or part of the Collateral; (c) may use the Company’s owned or leased lifts, hoists, trucks and other facilities or equipment for handling or removing the Collateral; and (d) shall have, and is hereby granted, a right of ingress and egress to the places where the Collateral is located, and may proceed over and through any of the Company’s owned or leased property. The Company shall cooperate fully with all of TCS’s efforts to preserve the Collateral and will take such actions to preserve the Collateral as TCS or its agent may direct. All of TCS’s or its agents’ expenses of preserving the Collateral, including any expenses relating to the bonding of a custodian, shall be added to the Reimbursement Obligations.

Section 2.05. Ownership of Collateral .

(a) With respect to the Collateral, at the time the Collateral becomes subject to TCS’s security interest: (i) the Company shall be the sole owner of and fully authorized and able to sell, transfer, pledge and/or grant a security interest in each and every item of the its respective Collateral to TCS; and, except for Permitted Encumbrances the Collateral shall be free and clear of all liens and encumbrances whatsoever; (ii) each document and agreement executed by the Company or delivered to TCS in connection with this Agreement shall be true and correct in all material respects; (iii) all signatures and endorsements of the Company that appear on such documents and agreements shall be genuine and the Company shall have full capacity to execute same; and (iv) the Company’s Equipment and Inventory shall be located as set forth on Schedule 4.5 to the Credit Agreement and shall not be removed from such location(s) without the prior written consent of TCS except (A) with respect to the sale of Inventory in the Ordinary Course of Business and Equipment to the extent permitted in Section 2.03 hereof and (b) that the Company may move Collateral from one location set forth on Schedule 4.5 to the Credit Agreement to another location set forth on such schedule.

(b) (i) There is no location at which the Company has any Inventory (except for Inventory in transit) or other Collateral other than those locations listed on Schedule 4.5 to the Credit Agreement; (ii) Schedule 4.5 to the Credit Agreement sets forth a correct and complete list as of the date hereof of (A) each place of business of the Company and (B) the chief executive office of the Company; and (iii) Schedule 4.5 to the Credit Agreement sets forth a correct and complete list as of the date hereof of the location, by state and street address, of all real property owned or leased by the Company, identifying which properties are owned and which are leased, together with the names and addresses of any landlords.

Section 2.06. Defense of TCS’s Interests . Until (a) payment and performance in full of all of the Reimbursement Obligations and (b) termination of this Agreement, TCS’s interests in the Collateral shall continue in full force and effect. During such period the Company shall not, without TCS’s prior written consent, pledge, sell (except Inventory in the Ordinary Course of Business and Equipment to the extent permitted in Section 2.03 hereof), assign, transfer, create or suffer to exist a lien upon or encumber or allow or suffer to be encumbered in any way except for Permitted Encumbrances, any part of the Collateral. The Company shall defend TCS’s interests in the Collateral against any and all persons or entities whatsoever. At any time following demand by TCS for payment of all Reimbursement Obligations, TCS, or an agent on its behalf, shall have the right to take possession of the indicia of the Collateral and the Collateral in whatever physical form contained, including: labels, stationery, documents, instruments and advertising materials. If TCS exercises this right to take possession of the Collateral, the Company shall, upon demand, assemble it in the best manner possible and make it available to TCS (or its agent) at a place reasonably convenient to TCS. In addition, with respect to all Collateral, TCS shall be entitled to all of the rights and remedies set forth herein and further provided by the Uniform Commercial Code or other applicable law. The Company shall, and TCS may, at its option, instruct all suppliers, carriers, forwarders, warehousers or others receiving or holding cash, checks, Inventory, documents or instruments in which TCS holds a security interest to deliver same to TCS and/or subject to TCS’s order and if they shall come into the Company’s possession, they, and each of them, shall be held by the Company in trust as TCS’s trustee, and the Company will immediately deliver them to TCS in their original form together with any necessary endorsement.

Section 2.07. Books and Records . The Company shall (a) keep proper books of record and account in which full, true and correct entries will be made of all dealings or transactions of or in relation to its business and affairs which books and records shall be kept at the Company’s principal place of business; (b) set up on its books accruals with respect to all taxes, assessments, charges, levies and claims; and (c) on a reasonably current basis set up on its books, from its earnings, allowances against doubtful Receivables, advances and investments and all other proper accruals (including by reason of enumeration, accruals for premiums, if any, due on required payments and accruals for depreciation, obsolescence, or amortization of properties), which should be set aside from such earnings in connection with its business. All determinations pursuant to this subsection shall be made in accordance with, or as required by, generally accepted accounting principles in the United States of America in effect at such time consistently applied (“GAAP”) in the opinion of such independent public accountant as shall then be regularly engaged by the Company.

Section 2.08. Financial Disclosure . The Company hereby irrevocably authorizes and directs all accountants and auditors employed by the Company at any time until the payment in full of the Reimbursement Obligations and the termination of this Agreement to interact with TCS and to deliver to TCS copies of any of the Company’s financial statements, trial balances or other accounting records of any sort in the accountant’s or auditor’s possession that may be reasonably requested by TCS, and to disclose to TCS any information such accountants may have concerning the Company’s financial status and business operations.

Section 2.09. Compliance with Laws . The Company shall comply in all material respects with all applicable laws with respect to the Collateral or any part thereof or to the operation of the Company’s business the non-compliance with which could reasonably be expected to materially and adversely affect the business or condition of the Company. The assets of the Company at all times shall be maintained in accordance with the requirements of all insurance carriers which provide insurance with respect to the assets of the Company so that such insurance shall remain in full force and effect.

Section 2.10. Inspection of Premises; Appraisals . At all reasonable times and with reasonable prior written notice, provided no Event of Default then exists, TCS shall have full access to and the right to audit, check, inspect and make abstracts and copies from the Company’s books, records, audits, correspondence and all other papers relating to the Col