Exhibit 10.2

PLEDGE AND SECURITY AGREEMENT

THIS PLEDGE AND SECURITY AGREEMENT (as the same may be amended, restated,
supplemented or otherwise modified from time to time, this “Security Agreement”)
is entered into as of January 9, 2015 by and among THE ADVISORY BOARD COMPANY, a
Delaware corporation (the “Borrower”), the Domestic Subsidiaries of the Borrower
listed on the signature pages hereto (together with the Borrower, the “Initial
Grantors,” and together with any additional Domestic Subsidiaries, whether now
existing or hereafter formed or acquired which become parties to this Security
Agreement from time to time, in accordance with the terms of the Credit
Agreement (as defined below), by executing a Security Agreement Supplement
hereto in substantially the form of Annex I, the “Grantors”), and JPMORGAN CHASE
BANK, N.A., a national banking association, in its capacity as administrative
agent (the “Administrative Agent”) for itself and for the Secured Parties (as
defined in the Credit Agreement identified below).

PRELIMINARY STATEMENT

The Borrower, the Administrative Agent and the Lenders are entering into a
Credit Agreement dated as of the date hereof (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”). The Grantors are entering into this Security Agreement in order to
induce the Lenders to enter into and extend credit to the Borrower under the
Credit Agreement.

ACCORDINGLY, the Grantors and the Administrative Agent, on behalf of the Secured
Parties, hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1 Terms Defined in the Credit Agreement. All capitalized terms used in this
Security Agreement and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement.

1.2 Terms Defined in UCC. Terms defined in the UCC which are not otherwise
defined in this Security Agreement are used herein as defined in the UCC.

1.3 Definitions of Certain Terms Used Herein. As used in this Security
Agreement, in addition to the terms defined in the Preliminary Statement, the
following terms shall have the following meanings:

“Accounts” shall have the meaning set forth in Article 9 of the UCC.

“Article” shall mean a numbered article of this Security Agreement, unless
another document is specifically referenced.

“CFC” shall have the meaning set forth in Article II hereof.

“CFC Holdco” shall have the meaning set forth in Article II hereof.

“Chattel Paper” shall have the meaning set forth in Article 9 of the UCC.

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“Collateral” shall mean all Accounts, Chattel Paper, Commercial Tort Claims,
Copyrights, Deposit Accounts, Documents, Equipment, Farm Products, Fixtures,
General Intangibles, Goods, Instruments, Inventory, Investment Property, letters
of credit, Letter-of-Credit Rights, Licenses, Patents, Pledged Deposits,
Supporting Obligations, Trademarks and Other Collateral, wherever located, in
which any Grantor now has or hereafter acquires any right or interest, and the
proceeds (including Stock Rights), insurance proceeds and products thereof,
together with all books and records, customer lists, credit files, computer
files, programs, printouts and other computer materials and records related
thereto; provided that, notwithstanding the foregoing, Collateral shall
expressly exclude the Excluded Assets and shall be subject to the limitations
contained in Article II of this Security Agreement.

“Commercial Tort Claims” shall mean commercial tort claims, as defined in the
UCC of any Grantor, including each commercial tort claim specifically described
in Exhibit “F.”

“Control” shall have the meaning set forth in Article 8 or, if applicable, in
Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.

“Copyrights” shall mean, with respect to any Person, all of such Person’s right,
title, and interest in and to the following: (a) all copyrights, rights and
interests in copyrights, works protectable by copyright, copyright
registrations, and copyright applications; (b) all renewals of any of the
foregoing; (c) all income, royalties, damages, and payments now or hereafter due
and/or payable under any of the foregoing, including, without limitation,
damages or payments for past or future infringements for any of the foregoing;
(d) the right to sue for past, present, and future infringements of any of the
foregoing; and (e) all rights corresponding to any of the foregoing throughout
the world.

“Deposit Account Control Agreement” shall mean an agreement, in form and
substance reasonably satisfactory to the Administrative Agent, and each
applicable Grantor, among any Grantor, a banking institution holding such
Grantor’s funds, and the Administrative Agent with respect to collection and
Control of all deposits and balances held in a deposit account maintained by
such Grantor with such banking institution.

“Deposit Accounts” shall have the meaning set forth in Article 9 of the UCC.

“Documents” shall have the meaning set forth in Article 9 of the UCC.

“Equipment” shall have the meaning set forth in Article 9 of the UCC.

“Excluded Actions” shall mean (i) except to the extent required pursuant to
Section 5.09(b)(ii) of the Credit Agreement in the case of Equity Interests in a
Foreign Subsidiary, entering into pledge agreements, security agreements or
other documents governed by laws other than those of the United States of
America or any State thereof, (ii) except to the extent provided in (or in
connection with) any Mortgage, obtaining any waivers, access agreements,
estoppels or other undertakings of landlords, bailees, warehousemen or
consignees, (iii) taking any action outside of the United States to perfect a
security interest in Patents, Trademarks, Copyrights or any other Intellectual
Property that is registered in any jurisdiction outside the United States of
America, (iv) making or authorizing any fixture filings except with regard to
real estate that is required to become subject to a Mortgage pursuant to the
Credit Agreement, (v) delivering any Instruments, Chattel Paper or Documents
that do not exceed the applicable thresholds in Section 4.4, taking actions
contemplated in Section 4.8 with respect to letters of credit that have a stated
amount not exceeding the threshold provided for therein, taking actions
contemplated in Section 4.9 with respect claims that do not exceed the threshold
amount provided for therein, or taking actions contemplated in Section 4.13 with
respect to commercial tort claims that do not exceed the threshold provided for
therein, or (vi) any other perfection actions as to which the Administrative
Agent, in consultation with the applicable Grantor, shall determine that the
cost of taking such perfection action is excessive in relation to the value of
the security to be afforded thereby.

 

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“Excluded Deposit Accounts” shall mean (a) any Deposit Account the balance of
which is transferred at the end of each day to a Deposit Account or a Securities
Account that is subject to the Control of the Administrative Agent, (b) Deposit
Accounts used exclusively as escrow and trust accounts, (c) Deposit Accounts
used exclusively for payroll, payroll taxes and other employee wage and benefit
payments for the benefit of any Grantor’s salaried employees (including former
employees), and (d) any Deposit Accounts in which the balance thereof, together
with the balance of all other Deposit Accounts excluded pursuant to this clause
(d), at no time exceeds $1,000,000 for any period of more than one Business Day.

“Excluded Securities Accounts” shall mean (a) any Securities Account the balance
of which is transferred at the end of each day to a Deposit Account or a
Securities Account that is subject to the Control of the Administrative Agent,
(b) Securities Accounts used exclusively as escrow and trust accounts,
(c) Securities Accounts used exclusively for payroll, payroll taxes and other
employee wage and benefit payments for the benefit of any Grantor’s salaried
employees (including former employees), and (d) any Securities Accounts in which
the stated value of property held therein, together with the stated value of all
other Securities Accounts excluded pursuant to this clause (d), at no time
exceeds $1,000,000 for any period of more than one Business Day.

“Exhibit” refers to a specific exhibit to this Security Agreement, unless
another document is specifically referenced.

“Farm Products” shall have the meaning set forth in Article 9 of the UCC.

“Fixtures” shall have the meaning set forth in the UCC.

“General Intangibles” shall have the meaning set forth in Article 9 of the UCC
and, in any event, includes payment intangibles, contract rights, rights to
payment, rights arising under common law, statutes, or regulations, choses or
things in action, goodwill (including the goodwill associated with any
Trademark), Patents, Trademarks, Copyrights, URLs and domain names, Industrial
Designs, other industrial or Intellectual Property or rights therein or
applications therefor, whether under license or otherwise, programs, programming
materials, blueprints, drawings, purchase orders, customer lists, monies due or
recoverable from pension funds, route lists, rights to payment and other rights
under any royalty or licensing agreements, including Licenses, infringement
claims, computer programs, information contained on computer disks or tapes,
software, literature, reports, catalogs, pension plan refunds, pension plan
refund claims, insurance premium rebates, tax refunds and tax refund claims,
interests in a partnership or limited liability company which do not constitute
a security under Article 8 of the Code, and any other personal property other
than Commercial Tort Claims, money, Accounts, Chattel Paper, Deposit Accounts,
Goods, Investment Property, negotiable Collateral, and oil, gas, or other
minerals before extraction.

“Goods” shall have the meaning set forth in Article 9 of the UCC.

“Industrial Designs” shall mean (a) registered industrial designs and industrial
design applications, (b) all renewals, divisions and any industrial design
registrations issuing thereon and any and all foreign applications corresponding
thereto, (c) all income, royalties, damages and payments now and hereafter due
or payable under and with respect thereto, including payments under all licenses
entered into in connection therewith and damages and payments for past or future
infringements thereof, (d) the right to sue for past, present and future
infringements thereof, and (e) all of each Grantor’s rights corresponding
thereto throughout the world.

 

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“Instruments” shall have the meaning set forth in Article 9 of the UCC.

“Intellectual Property” shall mean all Patents, Trademarks, Copyrights, domain
names, trade secrets, rights in computer software, data and databases and any
other intellectual property.

“Inventory” shall have the meaning set forth in Article 9 of the UCC.

“Investment Property” shall have the meaning set forth in Article 9 of the UCC.

“Knowledge” when used with respect to any Grantor, shall mean the actual
knowledge of the chief executive officer, president, chief financial officer,
principal accounting officer, treasurer or, in the case of Intellectual
Property, such other individual responsible for Intellectual Property matters of
such Grantor or of the Borrower.

“Letter-of-Credit Right” shall have the meaning set forth in Article 9 of the
UCC.

“Licenses” shall mean, with respect to any Person, all of such Person’s right,
title, and interest in and to (a) any and all licensing agreements or similar
arrangements in and to its Intellectual Property, (b) all income, royalties,
damages, claims, and payments now or hereafter due or payable under and with
respect thereto, including, without limitation, damages and payments for past
and future breaches thereof, and (c) all rights to sue for past, present, and
future breaches thereof.

“Other Collateral” shall mean any property of the Grantors, not included within
the defined terms Accounts, Chattel Paper, Commercial Tort Claims, Copyrights,
Deposit Accounts, Documents, Equipment, Fixtures, Farm Products, General
Intangibles, Goods, Instruments, Inventory, Investment Property,
Letter-of-Credit Rights, Licenses, Patents, Pledged Deposits, Supporting
Obligations and Trademarks, including, without limitation, all cash on hand,
letters of credit, Stock Rights or any other deposits (general or special, time
or demand, provisional or final) with any bank or other financial institution,
it being intended that the Collateral include all real and personal property of
the Grantors, provided that “Other Collateral” shall exclude all Excluded Assets
and shall be subject to the limitations contained in Article II of this Security
Agreement.

“Patents” shall mean, with respect to any Person, all of such Person’s right,
title, and interest in and to: (a) any and all patents and patent applications;
(b) all inventions and improvements described and claimed therein; (c) all
reissues, divisions, continuations, renewals, extensions, and
continuations-in-part thereof; (d) all licenses of the foregoing whether as
licensee or licensor; (e) all income, royalties, damages, claims, and payments
now or hereafter due or payable under and with respect thereto, including,
without limitation, damages and payments for past and future infringements
thereof; (f) all rights to sue for past, present, and future infringements
thereof; and (g) all rights corresponding to any of the foregoing throughout the
world.

“Payment Event of Default or Acceleration Event” shall mean the occurrence of
(a) an Event of Default (as defined in the Credit Agreement) under clause (a) or
(b) of Article VII of the Credit Agreement, or (b) the termination of the
Commitments and the Loans and the other Obligations becoming due and payable
prior to their scheduled payment date or maturity pursuant to Article VII of the
Credit Agreement.

 

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“Pledged Collateral” shall mean all Instruments, Securities and other Investment
Property of the Grantors, whether or not physically delivered to the
Administrative Agent pursuant to this Security Agreement, but excluding the
Excluded Assets.

“Pledged Deposits” shall mean all time deposits of money (other than Deposit
Accounts and Instruments), whether or not evidenced by certificates, which a
Grantor may from time to time designate as pledged to the Administrative Agent
or to any Secured Party as security for any Secured Obligations, and all rights
to receive interest on such deposits.

“Receivables” shall mean the Accounts, Chattel Paper, Documents, Investment
Property, Instruments or Pledged Deposits, and any other rights or claims to
receive money which are General Intangibles or which are otherwise included as
Collateral.

“Section” shall mean a numbered section of this Security Agreement, unless
another document is specifically referenced.

“Security” shall have the meaning set forth in Article 8 of the UCC.

“Securities Account” shall have the meaning set forth in Article 8 of the UCC.

“Securities Account Control Agreement” shall mean an agreement, in form and
substance reasonably satisfactory to the Administrative Agent and each
applicable Grantor, among any Grantor, a securities intermediary holding such
Grantor’s investments, and the Administrative Agent with respect to collection
and Control of all investments held in a Securities Account maintained by such
Grantor with such securities intermediary.

“Stock Rights” shall mean any securities, dividends, instruments or other
distributions and any other right or property which any Grantor shall receive or
shall become entitled to receive for any reason whatsoever with respect to, in
substitution for or in exchange for any Equity Interest constituting Collateral,
any right to receive an Equity Interest and any right to receive earnings, in
which any Grantor now has or hereafter acquires any right, issued by an issuer
of such securities.

“Supporting Obligation” shall have the meaning set forth in Article 9 of the
UCC.

“Trademarks” shall mean, with respect to any Person, all of such Person’s right,
title, and interest in and to the following: (a) all trademarks (including
service marks), trade names, trade dress, and trade styles and the registrations
and applications for registration thereof and the goodwill of the business
symbolized by the foregoing; (b) all licenses of the foregoing, whether as
licensee or licensor; (c) all renewals of the foregoing; (d) all income,
royalties, damages, and payments now or hereafter due or payable with respect
thereto, including, without limitation, damages, claims, and payments for past
and future infringements thereof; (e) all rights to sue for past, present, and
future infringements of the foregoing, including the right to settle suits
involving claims and demands for royalties owing; and (f) all rights
corresponding to any of the foregoing throughout the world.

The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.

 

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ARTICLE II

GRANT OF SECURITY INTEREST

Each of the Grantors hereby pledges, assigns and grants to the Administrative
Agent and its successors and assigns, on behalf of and for the benefit of the
Secured Parties, a security interest in all of such Grantor’s right, title and
interest, whether now owned or hereafter acquired, in and to the Collateral to
secure the prompt and complete payment and performance of the Secured
Obligations; provided that, notwithstanding anything to the contrary contained
in this Article II, (a) the security interest created by this Security Agreement
shall not extend to, and the term “Collateral” shall not include, any Excluded
Assets and (b) the amount of Equity Interests in any Foreign Subsidiaries that
are controlled foreign corporations within the meaning of Section 957 of the
Internal Revenue Code (a “CFC Holdco”) or that is owned by a foreign subsidiary
that is a controlled foreign corporation within the meaning of Section 957 of
the Internal Revenue Code (a “CFC”) pledged or required to be pledged to the
Administrative Agent hereunder or under any other Collateral Document shall be
automatically limited to 65% of the voting capital stock of any such CFC or CFC
Holdco and 100% of the non-voting capital stock of any such CFC or CFC Holdco.
For the avoidance of doubt, the grant of a security interest herein shall not be
deemed to be an assignment of intellectual property rights owned by the
Grantors. In addition, for the avoidance of doubt, (i) neither the Borrower nor
any Subsidiary shall be required to obtain bailee or landlord waivers in respect
of any location where Inventory is stored and (ii) no Equity Interest in any
Subsidiary may be pledged or included in the term “Collateral” or otherwise
subject to the provisions of this Agreement unless such Subsidiary is (y) a
Domestic Subsidiary or (z) a First Tier Foreign Subsidiary that, in the case of
this clause (z), is a Material Subsidiary.

Any other provision of this Agreement to the contrary notwithstanding, in no
event shall this Agreement grant any Lien in any Excluded Assets, nor shall any
representation, warranty, covenant, duty, undertaking, indemnity or other
provision in this Agreement apply to any of the Excluded Assets.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Each of the Initial Grantors represents and warrants to the Administrative Agent
and the Secured Parties as of the Effective Date, and each Grantor that becomes
a party to this Security Agreement pursuant to the execution of a Security
Agreement Supplement in substantially the form of Annex I represents and
warrants solely with respect to such Grantor as of the date of such Security
Agreement Supplement (after giving effect to supplements to each of the Exhibits
hereto with respect to such subsequent Grantor as attached to such Security
Agreement Supplement), that:

3.1 Title, Authorization, Validity and Enforceability. Such Grantor has rights
in or the power to transfer rights in the Collateral held by it with respect to
which it has purported to grant a security interest hereunder, free and clear of
all Liens except for Liens permitted under Section 4.1.6 hereof, and has full
corporate, limited liability company or partnership, as applicable, power and
authority to grant to the Administrative Agent the security interest in such
Collateral pursuant hereto. The execution and delivery by such Grantor of this
Security Agreement have been duly authorized by proper corporate, limited
liability company, limited partnership or partnership, as applicable,
proceedings, and this Security Agreement constitutes a legal, valid and binding
obligation of such Grantor and creates a security interest which is enforceable
against such Grantor in all Collateral, except (a) to the extent the Collateral
is not reasonably identified herein as required under Section 9-108 of the UCC,
and (b) as enforceability may be limited by (i) bankruptcy, insolvency,
fraudulent conveyance, reorganization or similar laws relating to or affecting
the enforcement of creditors’ rights generally, (ii) general equitable
principles (whether

 

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considered in a proceeding in equity or at law), and (iii) requirements of
reasonableness, good faith, and fair dealing. When financing statements have
been filed in the appropriate offices against such Grantor in the locations
listed in Exhibit “E” in accordance with Section 4.1.4 hereof, the
Administrative Agent will have a fully perfected first priority security
interest in the Collateral owned by such Grantor in which a security interest
may be perfected by filing of a financing statement under the UCC, subject only
to Liens permitted under Section 6.02 of the Credit Agreement.

3.2 Conflicting Laws and Contracts. The execution and delivery by each Grantor
of this Agreement, the consummation by it of the transactions herein
contemplated, and compliance by it with the terms and provisions hereof (A) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect and except for filings required to be
made with the SEC under the Exchange Act or the Securities Act after the
execution of the Loan Documents or necessary to perfect Liens created pursuant
to the Loan Documents, (B) will not (i) violate in any respect any Requirements
of Law applicable to such Grantor, (ii) violate the Organizational Documents of
such Grantor or (iii) violate any order of any Governmental Authority, (C) will
not violate or result in a default under any indenture, material agreement or
other material instrument binding upon such Grantor or any of its assets, or
give rise to a right thereunder to require any payment to be made by such
Grantor, and (D) will not result in the creation or imposition of any Lien on
any asset of such Grantor, other than Liens created or permitted under the Loan
Documents, except (in the case of clause (A), (B)(i), (B)(iii) or (C)), to the
extent that the failure to obtain or make such consent, approval, registration,
filing or action, or such violation, default or right, as the case may be, could
not reasonably be expected to have a Material Adverse Effect.

3.3 Principal Location. Such Grantor’s mailing address and the location of its
place of business (if it has only one) or its chief executive office (if it has
more than one place of business), are disclosed in Exhibit “A”; such Grantor has
no other places of business except those set forth in Exhibit “A.”

3.4 Property Locations. The Inventory, Equipment and Fixtures of each Grantor
are located solely at the locations of such Grantor described in Exhibit “A.”
All of such locations are owned by such Grantor except for locations (i) which
are leased by such Grantor as lessee and designated in Part B of Exhibit “A” and
(ii) at which Inventory is held in a public warehouse or is otherwise held by a
bailee or on consignment by such Grantor as designated in Part C of Exhibit “A.”

3.5 No Other Names; Etc. Within the five-year period ending as of the date such
Person becomes a Grantor hereunder, such Grantor has not conducted business
under any name, changed its jurisdiction of formation, merged with or into or
consolidated with any other Person, except as disclosed in Exhibit “A.” The name
in which such Grantor has executed this Security Agreement is the exact name as
it appears in such Grantor’s organizational documents, as amended, as filed with
such Grantor’s jurisdiction of organization as of the date such Person becomes a
Grantor hereunder.

3.6 Reserved.

3.7 Accounts and Chattel Paper. To the Knowledge of such Grantor, except as
disclosed to the Administrative Agent, the names of the obligors, amounts owing,
due dates and other information with respect to the Accounts and Chattel Paper
owned by such Grantor are correctly stated in all material respects in all
records of such Grantor relating thereto and in all invoices and reports with
respect thereto furnished to the Administrative Agent by such Grantor from time
to time.

 

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3.8 Filing Requirements. None of the Collateral owned by such Grantor is of a
type for which security interests or liens may be perfected by filing under any
federal statute except for Patents, Trademarks and Copyrights held by such
Grantor and described in Exhibit “B.”

3.9 No Financing Statements, Security Agreements. No financing statement or
security agreement describing all or any portion of the Collateral which has not
lapsed or been terminated naming such Grantor as debtor has been filed or is of
record in any jurisdiction except financing statements (i) naming the
Administrative Agent on behalf of the Secured Parties as the secured party or
(ii) in respect of Liens permitted under Section 6.02 of the Credit Agreement;
provided that nothing herein shall be deemed to constitute an agreement to
subordinate any of the Liens of the Administrative Agent under the Loan
Documents to any Liens otherwise permitted under Section 6.02 of the Credit
Agreement except as may be required under Section 9.02(d) of the Credit
Agreement.

3.10 Federal Employer Identification Number; State Organization Number;
Jurisdiction of Organization. Such Grantor’s federal employer identification
number is, and if such Grantor is a registered organization, such Grantor’s
state of organization, type of organization and state of organization
identification number are, listed in Exhibit “G.”

3.11 Pledged Securities and Other Investment Property. Exhibit “D” sets forth a
complete and accurate list of the Instruments, Securities and other Investment
Property constituting Pledged Collateral, provided that, for the avoidance of
doubt, (i) with respect to the Equity Interests in the Subsidiaries, only the
Pledged Collateral in the form of certificates, instruments or agreements
representing or evidencing Equity Interests in Subsidiaries that constitute
Collateral in accordance with Article II of this Security Agreement shall be
delivered to the Administrative Agent and no Equity Interests in any other
Persons shall be required to be delivered, and (ii) no physical instruments,
securities or other physical Investment Property held in any of the accounts
identified in Exhibit D shall be required to be delivered to the Administrative
Agent; provided further that the Equity Interests in the First Tier Foreign
Subsidiaries required to be delivered hereunder may be delivered after the
Closing Date in accordance with Section 5.09 of the Credit Agreement. Each
Grantor is the direct and beneficial owner of each Instrument, Security and
other type of Investment Property listed in Exhibit “D” as being owned by it,
free and clear of any Liens, except for the security interest granted to the
Administrative Agent for the benefit of the Secured Parties hereunder or as
permitted under Section 6.02 of the Credit Agreement. Each Grantor further
represents and warrants that (i) all Pledged Collateral owned by it constituting
an Equity Interest in a Subsidiary has been (to the extent such concepts are
relevant with respect to such Pledged Collateral) duly authorized and validly
issued, are fully paid and non-assessable and constitute the percentage of the
issued and outstanding shares of stock (or other Equity Interests) of the
respective issuers thereof indicated in Exhibit “D” hereto, (ii) with respect to
any certificates delivered to the Administrative Agent representing an Equity
Interest, either such certificates are Securities as defined in Article 8 of the
UCC of the applicable jurisdiction as a result of actions by the issuer or
otherwise, or, if such certificates are not Securities, such Grantor has so
informed the Administrative Agent so that the Administrative Agent may take
steps to perfect its security interest therein as a General Intangible and
(iii) to the extent, such Pledged Collateral is held by a securities
intermediary in a Securities Account, such account shall be subject to a
Securities Account Control Agreement to the extent required by Section 4.7
hereof.

3.12 Intellectual Property.

3.12.1 Exhibit “B” contains a complete and accurate listing as of the Effective
Date of the following Intellectual Property included in the Collateral of each
of the Grantors: (i) all U.S. (state and federal) and all material foreign
trademark registrations, applications for trademark registration and material
common law trademarks, (ii) all U.S. and all material foreign patents and
patents applications, together with all reissuances, continuations,
continuations in part,

 

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revisions, extensions, and reexaminations thereof, (iii) all U.S. and all
material foreign copyright registrations and applications for registration and
(iv) all Patents, Trademarks, and Copyrights described in clauses
(i)-(iii) above that are owned by a third party and licensed to the Grantors or
otherwise used by the Grantors under contract, and the names of any Person who
has been granted rights in respect thereof outside of the ordinary course of
business. All of the U.S. registrations, applications for registration or
applications for issuance of such Intellectual Property listed in Exhibit “B”
are valid and subsisting, in good standing and are recorded or in the process of
being recorded in the name of the applicable Grantor, except as could not be
reasonably expected to result in a Material Adverse Effect.

3.12.2 Such Intellectual Property included in the Collateral is valid,
subsisting, unexpired (where registered) and enforceable and has not been
abandoned or adjudged invalid or unenforceable, in whole or in part, except as
could not be reasonably expected to result in a Material Adverse Effect.

3.12.3 Except as disclosed in Exhibit “B”, no Person other than the respective
Grantor has any right or interest of any kind or nature in or to the
Intellectual Property included in the Collateral, including any right to sell,
license, lease, transfer, distribute, use or otherwise exploit the Intellectual
Property or any portion thereof outside of the ordinary course of the respective
Grantor’s business. Each Grantor has exclusive title to, and the valid and
enforceable power and right to sell, license, transfer, distribute, use and
otherwise exploit, its Intellectual Property included in the Collateral, except
as could not be reasonably expected to result in a Material Adverse Effect.

3.12.4 To the Knowledge of each Grantor, each Grantor has taken or caused to be
taken steps so that none of its Intellectual Property included in the
Collateral, the value of which to the Grantors are contingent upon maintenance
of the confidentiality thereof, have been disclosed by such Grantor to any
Person other than employees, contractors, customers, representatives and agents
of the Grantors who are parties to customary confidentiality and nondisclosure
agreements with the Grantors, except as could not be reasonably expected to
result in a Material Adverse Effect.

3.12.5 To the Knowledge of each Grantor, no Person has violated, infringed upon
or breached, or is currently violating, infringing upon or breaching, any of the
rights of such Grantor to the Intellectual Property included in the Collateral
or has breached or is breaching any duty or obligation owed to such Grantor in
respect of the Intellectual Property included in the Collateral except where
those breaches, individually or in the aggregate, could not be reasonably
expected to result in a Material Adverse Effect.

3.12.6 No settlement or consents, covenants not to sue, nonassertion assurances,
or releases have been entered into by any Grantor or to which any Grantor is
bound that adversely affects its rights to own or use any Intellectual Property
included in the Collateral except as could not be reasonably expected to result
in a Material Adverse Effect, in each case individually or in the aggregate.

3.12.7 No Grantor has received any written notice that remains outstanding
challenging the validity, enforceability, or ownership of any Intellectual
Property included in the Collateral except where those challenges could not
reasonably be expected to result in a Material Adverse Effect, and to such
Grantor’s knowledge at the date hereof there are no facts upon which such a
challenge could be made.

 

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3.12.8 Each Grantor owns directly or is entitled to use, by license or
otherwise, all Intellectual Property included in the Collateral necessary for
the conduct of such Grantor’s business in all material respects.

3.12.9 The consummation of the transactions contemplated by the Loan Documents
will not result in the termination or material impairment of any of the
Intellectual Property included in the Collateral, except to the extent that such
termination or impairment could not reasonably be expected to result in a
Material Adverse Effect.

3.13 Deposit Accounts and Securities Accounts. All of such Grantor’s Deposit
Accounts and Securities Accounts are listed on Exhibit “H.”

ARTICLE IV

COVENANTS

From the date of this Security Agreement and thereafter until this Security
Agreement is terminated, each of the Initial Grantors agrees, and from and after
the effective date of any Security Agreement Supplement applicable to any
Grantor (and after giving effect to supplements to each of the Exhibits hereto
with respect to such subsequent Grantor as attached to such Security Agreement
Supplement) and thereafter until this Security Agreement is terminated each such
subsequent Grantor agrees:

4.1 General.

4.1.1 Inspection. Such Grantor will permit the Administrative Agent or any
Secured Party, by its representatives and agents, to inspect the Collateral in
the manner and to the extent set forth in Section 5.06 of the Credit Agreement
as if it were a party thereto.

4.1.2 Taxes. Such Grantor will comply with Section 5.04 of the Credit Agreement
as if it were a party thereto.

4.1.3 Records and Reports; Notification of Event of Default. Such Grantor will
comply with Section 5.06 of the Credit Agreement as if it were a party thereto.

4.1.4 Financing Statements and Other Actions; Defense of Title. Each Grantor
hereby authorizes the Administrative Agent to file, in the central filing office
of the jurisdiction in which such Grantor is “located” within the meaning of
that term in Section 9-307 of the UCC, all financing statements describing the
Collateral owned by such Grantor and other documents and each Grantor agrees to
take such other actions as may from time to time reasonably be requested by the
Administrative Agent in order to maintain a first priority, perfected security
interest in and, if applicable, Control of, the Collateral owned by such
Grantor, subject to Liens permitted under Section 6.02 of the Credit Agreement
and to the provisions of Section 4.7 hereof, provided that (i) nothing herein
shall be deemed to constitute an agreement to subordinate any of the Liens of
the Administrative Agent under the Loan Documents to any Liens otherwise
permitted under Section 6.02 of the Credit Agreement except as may be required
under Section 9.02(d) or Section 9.14 of the Credit Agreement, and (ii) nothing
herein shall require any Grantor to take any Excluded Actions. Such financing
statements may describe the Collateral in the same manner as described herein or
may contain an indication or description of collateral that describes such
property in any other manner as the Administrative Agent may determine, in its
sole discretion, is necessary, advisable or prudent to ensure that the
perfection of the security interest in the Collateral granted

 

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to the Administrative Agent herein, including, without limitation, describing
such property as “all assets of the debtor whether now owned or hereafter
acquired and wheresoever located, including all accessions thereto and proceeds
thereof.” Each Grantor will take any and all actions necessary to defend title
to the Collateral owned by such Grantor against all Persons and to defend the
security interest of the Administrative Agent in such Collateral and the
priority thereof against any Lien not expressly permitted hereunder or under any
other Loan Document; provided that it is understood and agreed that no Grantor
will be required to take any Excluded Action.

4.1.5 Disposition of Collateral. No Grantor will sell, lease or otherwise
dispose of the Collateral owned by such Grantor except in transactions permitted
under Section 6.03 of the Credit Agreement.

4.1.6 Liens. No Grantor will create, incur, or suffer to exist any Lien on the
Collateral owned by such Grantor except Liens permitted under Section 6.02 of
the Credit Agreement, provided that nothing herein shall be deemed to constitute
an agreement to subordinate any of the Liens of the Administrative Agent under
the Loan Documents to any Liens otherwise permitted under Section 6.02 of the
Credit Agreement except to the extent provided in Section 9.02(d) or 9.14 of the
Credit Agreement.

4.1.7 Change in Corporate Existence, Type or Jurisdiction of Organization,
Location, Name. Each Grantor will:

(i) preserve its existence and corporate, limited liability company or
partnership, as applicable, structure as in effect on the Effective Date (except
to the extent otherwise permitted by the Credit Agreement);

(ii) not change its name or jurisdiction of organization;

(iii) not maintain its place of business (if it has only one) or its chief
executive office (if it has more than one place of business) at a location other
than a location specified in Exhibit “A”;

(iv) not (a) change its name or taxpayer identification number or (b) change its
mailing address; and

(v) continue to record properly its Inventory and Equipment on the internal
books and records of the Borrower and the Grantors;

unless, in each such case, such Grantor shall give the Administrative Agent
written notice of such event or occurrence no later than the date that is thirty
(30) days after such event or occurrence and, to the extent reasonably requested
by the Administrative Agent, shall take such steps as are necessary or advisable
to properly maintain the validity, perfection and priority of the Administrative
Agent’s security interest in the Collateral owned by such Grantor.

4.1.8 Other Financing Statements. No Grantor will suffer to exist or authorize
the filing of any financing statement naming it as debtor covering all or any
portion of the Collateral owned by such Grantor, except any financing statement
authorized under Section 4.1.4 hereof or any financing statement evidencing such
Liens as are permitted under Section 6.02 of the Credit Agreement (including,
without limitation, a financing statement of a third party financing source in
connection with the sale or discount of accounts receivable permitted under
Section 6.03(a)(vi)(E) of the Credit Agreement). Each Grantor acknowledges that
it is not authorized to

 

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file any financing statement or amendment or termination statement with respect
to any financing statement filed in connection herewith without the prior
written consent of the Administrative Agent (such consent not to be unreasonably
withheld), subject to such Grantor’s rights under Section 9-509(d)(2) of the
UCC.

4.2 Receivables.

4.2.1 Certain Agreements on Receivables. During the occurrence and continuation
of a Payment Event of Default or Acceleration Event, no Grantor will make or
agree to make any discount, credit, rebate or other reduction in the original
amount owing on a Receivable or accept in satisfaction of a Receivable less than
the original amount thereof; provided that prior to the occurrence and
continuation of a Payment Event of Default or Acceleration Event, any Grantor
may reduce the amount of Accounts arising from the sale of Inventory or the
rendering of services in accordance with its then prevailing policies and in the
ordinary course of business and as otherwise permitted under the Credit
Agreement.

4.2.2 Delivery of Invoices. Upon the occurrence of a Payment Event of Default or
Acceleration Event and during the continuance thereof, each Grantor will use its
commercially reasonable efforts to deliver to the Administrative Agent promptly
upon its request duplicate invoices with respect to each Account owned by such
Grantor bearing such language of assignment as the Administrative Agent shall
specify.

4.2.3 Disclosure of Counterclaims on Receivables. If (i) any discount, credit or
agreement to make a rebate or to otherwise reduce the amount owing on a material
Receivable owned by such Grantor exists or (ii) if, to the Knowledge of such
Grantor, any dispute, setoff, claim, counterclaim or defense exists or has been
asserted or threatened with respect to a Receivable, and such discount, credit,
rebate, reduction, defense, setoff, claim, counterclaim or defense could
reasonably be expected to have a Material Adverse Effect, such Grantor will
disclose such fact to the Administrative Agent in writing in connection with the
inspection by the Administrative Agent of any record of such Grantor relating to
such Receivable and in connection with any invoice or report furnished by such
Grantor to the Administrative Agent relating to such Receivable.

4.2.4 Electronic Chattel Paper. Each Grantor shall take all steps as the
Administrative Agent may reasonably request as being necessary to grant the
Administrative Agent Control of all electronic chattel paper in accordance with
the UCC and all “transferable records” as defined in each of the Uniform
Electronic Transactions Act and the Electronic Signatures in Global and National
Commerce Act, in each case with a face value in excess of $1,000,000.

4.3 Maintenance of Goods. Each Grantor shall comply with Section 5.05 of the
Credit Agreement as if it were a party thereto.

4.4 Instruments, Securities, Chattel Paper, Documents and Pledged Deposits. Each
Grantor will (i) deliver to the Administrative Agent on the date hereof (or, in
the case of the Target or any of its Subsidiaries, within thirty (30) days of
the date hereof) the originals of all Chattel Paper, Securities (to the extent
certificated) and Instruments constituting Collateral (if any then exist) held
by such Grantor, (ii) hold in trust for the Administrative Agent upon receipt
and, promptly (and in any event within thirty (30) days of the acquisition
thereof or such later date agreed to by the Administrative Agent in its
reasonable discretion), deliver to the Administrative Agent any Chattel Paper,
Securities (to the extent certificated) and Instruments constituting Collateral,
(iii) upon the Administrative Agent’s request, after the occurrence and during
the continuance of an Event of Default, deliver to the Administrative Agent (and
thereafter

 

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hold in trust for the Administrative Agent upon receipt and promptly (and in any
event within thirty (30) days of the acquisition thereof or such later date
agreed to by the Administrative Agent in its reasonable discretion) deliver to
the Administrative Agent) any Document evidencing or constituting Collateral in
an amount greater than $1,000,000, and (iv) upon the Administrative Agent’s
reasonable request, deliver to the Administrative Agent a duly executed
amendment to this Security Agreement, in the form of Exhibit “I” hereto (the
“Amendment”), pursuant to which such Grantor will pledge such additional
Collateral; provided that, notwithstanding the foregoing, the requirements of
this Section 4.4 shall not apply to (a) Documents, Instruments (other than
promissory notes) and Chattel Paper that do not exceed $1,000,000 individually,
and (b) promissory notes (which term does not include checks or bank drafts)
that do not exceed $1,000,000 individually and in the aggregate for all such
promissory notes excluded from the requirements of this Section 4.4. Such
Grantor hereby authorizes the Administrative Agent to attach each Amendment to
this Security Agreement and agrees that all additional Collateral owned by it
set forth in such Amendments shall be considered to be part of the Collateral;
provided that, for the avoidance of doubt, with respect to any delivery of
Equity Interests in the Subsidiaries required under this Section 4.4, only the
Equity Interests in Subsidiaries that constitute Collateral in accordance with
Article II of this Security Agreement will be delivered to the Administrative
Agent; provided further that the Equity Interests in the First Tier Foreign
Subsidiaries required to be delivered hereunder may be delivered after the
Closing Date in accordance with Section 5.09 and subject to the conditions of
the Credit Agreement. All originals of all Chattel Paper, Securities (to the
extent certificated) and Instruments constituting Collateral and required to be
delivered to the Administrative Agent under this Security Agreement shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Administrative Agent.

4.5 Uncertificated Securities and Certain Other Investment Property. Each
Grantor will, promptly upon any request therefor by the Administrative Agent
from time to time, cause Subsidiaries of such Grantor that are issuers of
uncertificated securities or other types of Investment Property not represented
by certificates and which are Collateral owned by such Grantor to mark their
books and records with the numbers and face amounts of all such uncertificated
securities or other types of Investment Property not represented by certificates
(and constituting Collateral) and all rollovers and replacements therefor to
reflect the Lien of the Administrative Agent granted pursuant to this Security
Agreement. In the case of each Grantor which is an issuer of shares or other
Equity Interests constituting Collateral, such Grantor agrees to be bound by the
terms of this Agreement relating to the Collateral issued by it and will comply
with such terms insofar as such terms are applicable to it.

4.6 Stock and Other Ownership Interests.

4.6.1 Reserved.

4.6.2 Issuance of Additional Securities. Except as permitted under the Credit
Agreement, no Grantor will permit or suffer any Subsidiary of such Grantor (in
which Subsidiary the corporate securities or other ownership interests
constitute Collateral) to issue any such securities or other ownership
interests, any right to receive any such securities or other ownership
interests, or any right to receive earnings, except to such Grantor.

4.6.3 Registration of Pledged Securities and Other Investment Property. Each
Grantor will, to the extent not prohibited by applicable law, permit any
registered Collateral owned by such Grantor to be registered in the name of the
Administrative Agent or its nominee at any time at the option of the Required
Lenders following the occurrence and during the continuance of a Payment Event
of Default or Acceleration Event and without any further consent of such
Grantor.

 

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4.6.4 Exercise of Rights in Pledged Securities and Other Investment Property. To
the extent not prohibited by applicable law, each Grantor will permit the
Administrative Agent or its nominee at any time following the occurrence and
during the continuance of a Payment Event of Default or Acceleration Event,
without notice, to exercise or refrain from exercising any and all voting and
other consensual rights pertaining to the Collateral owned by such Grantor or
any part thereof, and to receive all dividends and interest in respect of such
Collateral. At any time when no Payment Event of Default or Acceleration Event
has occurred and is continuing, each Grantor shall be entitled (a) to exercise
or refrain from exercising any and all such voting and other consensual rights
inuring to an owner of Equity Interests constituting Collateral, and each
Grantor agrees that it shall exercise such rights for purposes not in violation
with the terms of this Agreement, the Credit Agreement and the other Loan
Documents and (b) to receive and retain any and all dividends, interest,
principal and other distributions paid on or distributed in respect of the
Collateral to the extent and only to the extent that such dividends, interest,
principal and other distributions are permitted by, and otherwise paid or
distributed in accordance with, the terms and conditions of the Credit
Agreement, the other Loan Documents and applicable Laws; provided that any
noncash dividends, interest principal or other distributions that would
constitute Collateral, whether resulting from a subdivision, combination or
reclassification of the outstanding Equity Interests of the issuer of any such
Equity Interests constituting Collateral or received in exchange for Collateral
or any part thereof, or in redemption thereof, or as a result of any merger,
consolidation, acquisition or other exchange of assets to which such issuer may
be a party or otherwise, shall be and become part of the Collateral, and, if
received by a Grantor, shall not be commingled by such Grantor with any of its
other funds or property but shall be held separate and apart therefrom, shall be
held in trust for the benefit of the Administrative Agent and the Secured
Parties and shall be promptly (and in any event within thirty (30) days)
delivered to the Administrative Agent and the Secured Parties and shall be
promptly (and in any event within thirty (30) days) delivered to the
Administrative Agent in the same form as so received (with any necessary
endorsement reasonably requested by the Administrative Agent), and the
Administrative Agent shall, promptly upon any request therefor by a Grantor,
execute and deliver to such Grantor all such proxies, powers of attorney and
other instruments as such Grantor may reasonably request for the purposes of
enabling such Grantor to exercise such voting and consensual rights and to
receive such dividends and other earnings.

4.7 Deposit Accounts and Securities Accounts. Upon the Administrative Agent’s
request, each Grantor will use commercially reasonable efforts to cause each
bank or other financial institution in which it maintains a Deposit Account or
Securities Account to enter into a control agreement with the Administrative
Agent, in form and substance reasonably satisfactory to the Administrative
Agent, in order to give the Administrative Agent Control of such Deposit Account
or Securities Account; provided that no Grantor shall be liable to the
Administrative Agent or any other Person for the failure of a bank or other
financial institution to enter into such a control agreement to the extent that
such Grantor used its commercially reasonable efforts for a reasonable period of
time to procure such agreement as confirmed in a certificate of a Responsible
Officer of the Borrower delivered to the Administrative Agent and on which the
Administrative Agent shall be entitled to conclusively rely. The Administrative
Agent agrees that it will not give any notice of exclusive dominion or control
under any Deposit Account Control Agreement or Securities Account Control
Agreement unless and until a Payment Event of Default or Acceleration Event has
occurred and is continuing. If exclusive dominion and control of any Deposit
Account or Securities Account or dominion and control of any other deposit or
investment has been obtained by the Administrative Agent and no Event of Default
continues to exist, the Administrative Agent will promptly send notice to the
bank or financial institution at which such Deposit Account or Securities
Account or other

 

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deposit or investment is maintained to (a) terminate the Administrative Agent’s
exclusive dominion and control of such Deposit Account or Securities Account or
other deposit or investment and (b) reinstate Grantor’s access to such Deposit
Account or Securities Account or other deposit or investment. In the case of
deposits and investments maintained with Lenders, the terms of such notice shall
be subject to the provisions of the Credit Agreement regarding setoffs. The
provisions of this Section 4.7 shall not apply to Deposit Accounts or Securities
Accounts which are Excluded Deposit Accounts or Excluded Securities Accounts, as
applicable, it being understood and agreed that the Administrative Agent shall
not take, and no Grantor shall be required to take, any action to establish the
Control of the Administrative Agent in and to any of the Excluded Deposit
Accounts or Excluded Securities Accounts.

4.8 Letter-of-Credit Rights. Upon the Administrative Agent’s request, each
Grantor will use commercially reasonable efforts to cause each issuer of a
letter of credit (in respect of which such Grantor is the beneficiary) with a
face value in excess of $1,000,000 to consent to the assignment of proceeds of
such letter of credit in order to give the Administrative Agent Control of the
Letter-of-Credit Rights to such letter of credit.

4.9 Federal, State or Municipal Claims. Each Grantor will notify the
Administrative Agent of any Collateral owned by such Grantor which constitutes a
claim in an amount greater than $1,000,000 against the United States government
or any state or local government or any instrumentality or agency thereof, the
assignment of which claim is restricted by federal, state or municipal law.
Furthermore, each Grantor will execute and deliver to the Administrative Agent
such documents, agreements and instruments, and will use commercially reasonable
efforts to take such further actions (including, without limitations, the taking
of necessary actions under the Federal Assignment of Claims Act of 1940, as
amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.)), which the
Administrative Agent may, from time to time, reasonably request, to ensure
perfection and priority of the Liens hereunder in respect of Accounts and
General Intangibles owning by any government or instrumentality or agency
thereof, all at the expense of the Borrower. Notwithstanding anything to the
contrary in this Section 4.9, no Grantor will be required to provide any notice
or take any action hereunder if and to the extent prohibited by any federal,
state or municipal law.

4.10 No Interference. Each Grantor agrees that it will not interfere with any
right, power and remedy of the Administrative Agent provided for in this
Security Agreement or now or hereafter existing at law or in equity or by
statute or otherwise, or the exercise or beginning of the exercise by the
Administrative Agent of any one or more of such rights, powers or remedies.

4.11 Insurance. In the event any Collateral is located in any area that has been
designated by the Federal Emergency Management Agency as a “Special Flood Hazard
Area,” each Grantor shall purchase and maintain flood insurance on such
Collateral (including any personal property which is located on any real
property leased by such Grantor within a “Special Flood Hazard Area”). The
amount of flood insurance required by this Section 4.11 shall be in an amount
equal to the lesser of the total Commitment or the total replacement cost value
of the improvements.

4.12 Intellectual Property.

4.12.1 If, after the date hereof, any Grantor obtains rights to, including, but
not limited to filing and acceptance of a statement of use or an amendment to
allege use with the United States Patent and Trademark Office, or applies for or
seeks registration of, any new patentable invention, Trademark or Copyright in
addition to the Patents, Trademarks and Copyrights described in Exhibit “B,”
other than any of the foregoing constituting Excluded Assets, then such Grantor
shall give the Administrative Agent notice thereof to the extent such additional
rights and/or applications constitute Collateral, as part of each compliance
certificate provided to the Administrative Agent pursuant to the Credit
Agreement. Each Grantor agrees promptly upon request by the Administrative Agent
to execute and deliver to the Administrative Agent any

 

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supplement to this Security Agreement or any other document reasonably requested
by the Administrative Agent to evidence such security interest in a form
appropriate for recording in the applicable federal office. Each Grantor also
hereby authorizes the Administrative Agent to record in addition to and not in
substitution for this Security Agreement, Confirmatory Grants of Security
Interests in the forms attached in Annex II hereto for those Patents, Trademarks
and Copyrights listed in Exhibit “B” hereto.

4.12.2 This Agreement is effective to create a valid and continuing Lien on such
Copyrights, Licenses, Patents and Trademarks to the extent registered or applied
for in the United States Copyright Office or the United States Patent and
Trademark Office, as applicable, and, upon timely filing of the Confirmatory
Grant of Security Interest in Copyrights with the United States Copyright
Office, timely filing of the Confirmatory Grant of Security Interest in Patents
in the United States Patent and Trademark Office, timely filing of the
Confirmatory Grant of Security Interest in Trademarks with the United States
Patent and Trademark Office and the timely filing of appropriate financing
statements in the jurisdictions listed in Exhibit “E” hereto, all action
necessary or desirable to protect and perfect the security interest in, to and
on each Grantor’s Patents, Trademarks or Copyrights identified on Exhibit B has
been taken and such perfected security interest is enforceable as such as
against any and all subsequent creditors of and subsequent purchasers or
transferees from any Grantor, except as provided by applicable law. As of the
Effective Date, no Grantor has any interest in any registered United States
Copyright that is necessary in connection with the operation of such Grantor’s
business, except for those Copyrights identified in Exhibit “B” attached hereto
which have been registered with the United States Copyright Office.

4.12.3 Commercial Tort Claims. If, after the date hereof, any Grantor identifies
the existence of a Commercial Tort Claim belonging to such Grantor in an amount
greater than $1,000,000 that has arisen in the course of such Grantor’s business
in addition to the Commercial Tort Claims described in Exhibit “F,” which are
all of such Grantor’s Commercial Tort Claims as of the Effective Date, then such
Grantor shall give the Administrative Agent prompt notice thereof, but in any
event not less frequently than quarterly. Each Grantor agrees promptly upon
request by the Administrative Agent to execute and deliver to the Administrative
Agent any supplement to this Security Agreement or any other document reasonably
requested by the Administrative Agent to evidence the grant of a security
interest therein in favor of the Administrative Agent.

4.13 Updating of Exhibits to Security Agreement. The Borrower is permitted to,
and will, provide to the Administrative Agent, concurrently with the delivery of
the certificate of a Financial Officer of the Borrower as required by
Section 5.01(c) of the Credit Agreement, updated versions of the Exhibits to
this Security Agreement (provided that if there have been no changes to any such
Exhibits since the previous updating thereof required hereby, the Borrower shall
indicate that there has been “no change” to the applicable Exhibit(s)).

 

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ARTICLE V

DEFAULT

5.1 Reserved.

5.2 Remedies.

5.2.1 If any Event of Default has occurred and is continuing then the
Administrative Agent may, and at the direction of the Required Lenders shall,
exercise any or all of the following rights and remedies (provided that the
Administrative Agent shall endeavor, to the extent commercially reasonable, to
notify the Borrower prior to the exercise of the initial such right and remedy,
and provided further that any failure by the Administrative Agent to deliver any
such notice shall not be deemed to be a breach by the Administrative Agent of
this Security Agreement or give rise to any liability of the Administrative
Agent or otherwise affect the Administrative Agent’s exercise of the rights and
remedies hereunder in any manner):

 

  (i) Those rights and remedies provided in this Security Agreement, the Credit
Agreement, or any other Loan Document, provided that this clause (i) shall not
be understood to limit any rights or remedies available to the Administrative
Agent and the Secured Parties prior to an Event of Default.

 

  (ii) Those rights and remedies available to a secured party under the UCC
(whether or not the UCC applies to the affected Collateral) or under any other
applicable law (including, without limitation, any law governing the exercise of
a bank’s right of setoff or bankers’ lien) when a debtor is in default under a
security agreement.

 

  (iii) Give notice of exclusive control or any other instruction under any
Deposit Account Control Agreement or Securities Account Control Agreement and
take any action therein with respect to such Collateral, provided that if no
Event of Default shall continue to exist, the Administrative Agent shall
promptly notify the bank, financial institution or securities intermediary that
the Administrative Agent no longer exercises exclusive control over the Deposit
Account or Securities Account, and the applicable Grantor’s access to the
Deposit Account or Securities Account shall be reinstated.

 

  (iv) Only to the extent that a Payment Event of Default or Acceleration Event
has occurred and is continuing, to the extent permitted by applicable law,
without notice (or, except as specifically provided in Section 8.1 hereof or
elsewhere herein, demand or advertisement of any kind to any Grantor or any
other Person) enter the premises of any Grantor where any Collateral is located
(through self-help and without judicial process) to collect, receive, assemble,
process, appropriate, sell, lease, assign, grant an option or options to
purchase or otherwise dispose of, deliver, or realize upon, the Collateral or
any part thereof in one or more parcels at public or private sale or sales
(which sales may be adjourned or continued from time to time with or without
notice and may take place at any Grantor’s premises of elsewhere), for cash, on
credit or for future delivery without assumption of any credit risk, and upon
such other terms as the Administrative Agent may deem commercially reasonable.

 

  (v) Only to the extent that a Payment Event of Default or Acceleration Event
has occurred and is continuing, concurrently with written notice to the
applicable Grantor, to the extent not prohibited by applicable law, transfer and
register in its name or in the name of its nominee the whole or any part of the
Pledged Collateral, to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of smaller or
larger denominations, to exercise the voting and all other rights as a holder
with respect thereto, to collect and receive all cash dividends, interest,
principal and other distributions made thereon and to otherwise act with respect
to the Pledged Collateral as though the Administrative Agent was the outright
owner thereof.

 

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5.2.2 The Administrative Agent, on behalf of the Secured Parties, shall comply
with any applicable state or federal law requirements in connection with a
disposition of the Collateral, and such compliance will not be considered to
adversely affect the commercial reasonableness of any sale of the Collateral.

5.2.3 The Administrative Agent shall have the right upon any such public sale or
sales and, to the extent permitted by law, upon any such private sale or sales,
to purchase for the benefit of the Administrative Agent and the other Secured
Parties, the whole or any part of the Collateral so sold, free of any right of
equity redemption, which equity redemption the Grantor, upon consummation of
such sale, hereby expressly releases.

5.2.4 Until the Administrative Agent is able to effect a sale, lease, or other
disposition of Collateral, the Administrative Agent shall, to the extent not
prohibited by applicable law, have the right to hold or use Collateral, or any
part thereof, to the extent that it deems appropriate for the purpose of
preserving Collateral or its value or for any other purpose deemed appropriate
by the Administrative Agent. The Administrative Agent may, if it so elects, seek
the appointment of a receiver or keeper to take possession of Collateral and to
enforce any of the Administrative Agent’s remedies (for the benefit of the
Administrative Agent and other Secured Parties), with respect to such
appointment without prior notice or hearing as to such appointment.

5.2.5 If, after the Credit Agreement has terminated by its terms and all of the
Secured Obligations have been paid in full, there remain outstanding Swap
Obligations or Banking Services Obligations that constitute Secured Obligations,
the Required Lenders may exercise the remedies provided in this Section 5.2 upon
the occurrence and during the continuance of any event which would allow or
require the termination or acceleration of any Swap Obligations or Banking
Services Obligations.

5.2.6 Notwithstanding the foregoing, neither the Administrative Agent nor any
other Secured Party shall be required to (i) make any demand upon, or pursue or
exhaust any of their rights or remedies against, any Grantor, any other obligor,
guarantor, pledgor or any other Person with respect to the payment of the
Secured Obligations or to pursue or exhaust any of their rights or remedies with
respect to any Collateral therefor or any direct or indirect guarantee thereof,
(ii) marshal the Collateral or any guarantee of the Secured Obligations or to
resort to the Collateral or any such guarantee in any particular order, or
(iii) effect a public sale of any Collateral.

5.2.7 Each Grantor recognizes that the Administrative Agent may be unable to
effect a public sale of any or all the Pledged Collateral and may be compelled
to resort to one or more private sales thereof in accordance with Section 5.2.1
above. Each Grantor also acknowledges that any private sale may result in prices
and other terms less favorable to the seller than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall not be deemed to have been made in a commercially unreasonable manner
solely by virtue of such sale being private. The Administrative Agent shall be
under no obligation to delay a sale of any of the Pledged Collateral for the
period of time necessary to permit any Grantor or the issuer of the Pledged
Collateral to register such securities for public sale under the Securities Act
of 1933, as amended, or under applicable state securities laws, even if the
applicable Grantor and the issuer would agree to do so.

5.3 Grantors’ Obligations Upon a Payment Event of Default or Acceleration Event.
Upon the request of the Administrative Agent following the occurrence and during
the continuance of a Payment Event of Default or Acceleration Event, each
Grantor will:

5.3.1 Assembly of Collateral. Assemble and make available to the Administrative
Agent the Collateral and all books and records relating thereto at any place or
places specified by the Administrative Agent.

 

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5.3.2 Secured Party Access. Permit the Administrative Agent, by the
Administrative Agent’s representatives and agents, to enter, occupy and use any
premises where all or any part of the Collateral, or the books and records
relating thereto, or both, are located, to take possession of all or any part of
the Collateral, or the books and records relating thereto, or both, to remove
all or any part of the Collateral, or the books and records relating thereto, or
both, and to conduct sales of the Collateral, without any obligation to pay the
Grantor for such use and occupancy.

5.3.3 Furnish to the Administrative Agent, or cause an issuer of Pledged
Collateral to furnish to the Administrative Agent, any information regarding the
Pledged Collateral in such detail as the Administrative Agent may specify.

5.4 License. The Administrative Agent is hereby granted a license or other right
to use, following the occurrence and during the continuance of a Payment Event
of Default or Acceleration Event, without charge, each Grantor’s labels,
patents, copyrights, rights of use of any name, trade secrets, trade names,
trademarks, service marks, customer lists and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, solely for the
purpose of completing production of, advertising for sale, and selling any
Collateral. In addition, each Grantor hereby irrevocably (until the Credit
Agreement has terminated in accordance with its terms) agrees that the
Administrative Agent may, following the occurrence and during the continuance of
a Payment Event of Default or Acceleration Event, sell any of such Grantor’s
Inventory directly to any Person, including, without limitation, Persons who
have previously purchased such Grantor’s Inventory from such Grantor, and in
connection with any such sale or other enforcement of the Administrative Agent’s
rights under this Security Agreement may sell Inventory which bears any
trademark owned by or licensed to such Grantor and any Inventory that is covered
by any copyright owned by or licensed to such Grantor and the Administrative
Agent may (but shall have no obligation to) finish any work in process and affix
any trademark owned by or licensed to such Grantor and sell such Inventory as
provided herein.

ARTICLE VI

WAIVERS, AMENDMENTS AND REMEDIES

No delay or omission of the Administrative Agent or any Secured Party to
exercise any right or remedy granted under this Security Agreement shall impair
such right or remedy or be construed to be a waiver of any Event of Default or
an acquiescence therein, and any single or partial exercise of any such right or
remedy shall not preclude any other or further exercise thereof or the exercise
of any other right or remedy. No waiver, amendment or other variation of the
terms, conditions or provisions of this Security Agreement whatsoever shall be
valid unless in writing signed by the Administrative Agent and each Grantor, and
then only to the extent in such writing specifically set forth, provided that
the addition of any Domestic Subsidiary as a Grantor hereunder by execution of a
Security Agreement Supplement in the form of Annex I (with such modifications as
shall be acceptable to the Administrative Agent) shall not require receipt of
any consent from or execution of any documentation by any other Grantor party
hereto. All rights and remedies contained in this Security Agreement or by law
afforded shall be cumulative and all shall be available to the Administrative
Agent and the Secured Parties until the Secured Obligations have been paid in
full or, in the case of Letters of Credit, cash-collateralized on terms
reasonably satisfactory to the Administrative Agent.

 

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ARTICLE VII

PROCEEDS; COLLECTION OF RECEIVABLES

7.1 Lockboxes. Upon request of the Administrative Agent following the occurrence
and during the continuance of a Payment Event of Default or Acceleration Event,
each Grantor shall execute and deliver to the Administrative Agent, other than
with respect to Excluded Deposit Accounts, irrevocable lockbox agreements in the
form provided by or otherwise acceptable to the Administrative Agent, which
agreements shall be accompanied by an acknowledgment by the bank where the
lockbox is located of the Lien of the Administrative Agent granted hereunder and
of irrevocable instructions to wire all amounts collected therein to a special
collateral account with the Administrative Agent.

7.2 Collection of Receivables. The Administrative Agent may at any time
following the occurrence and during the continuance of a Payment Event of
Default or Acceleration Event, by giving each Grantor written notice, elect to
require that the Receivables be paid directly to the Administrative Agent for
the benefit of the Secured Parties. In such event, each Grantor shall, and shall
permit the Administrative Agent to, promptly notify the account debtors or
obligors under the Receivables owned by such Grantor of the Administrative
Agent’s interest therein and direct such account debtors or obligors to make
payment of all amounts then or thereafter due under such Receivables directly to
the Administrative Agent. Upon receipt of any such notice from the
Administrative Agent, each Grantor shall thereafter hold in trust for the
Administrative Agent, on behalf of the Secured Parties, all amounts and proceeds
received by it with respect to the Receivables and Other Collateral and
immediately and at all times thereafter deliver to the Administrative Agent all
such amounts and proceeds in the same form as so received, whether by cash,
check, draft or otherwise, with any necessary endorsements. The Administrative
Agent shall hold and apply funds so received as provided by the terms of
Sections 7.3 and 7.4 hereof.

7.3 Special Collateral Account. Following the occurrence and during the
continuance of a Payment Event of Default or Acceleration Event, the
Administrative Agent may require all cash proceeds of the Collateral to be
deposited in a special non-interest bearing cash collateral account with the
Administrative Agent and held there as security for the Secured Obligations. No
Grantor shall have any control whatsoever over such cash collateral account. If
no Event of Default has occurred or is continuing, the Administrative Agent
shall from time to time deposit the collected balances in such cash collateral
account into the applicable Grantor’s general operating account communicated in
writing to the Administrative Agent by the Borrower. If any Payment Event of
Default or Acceleration Event has occurred and is continuing, the Administrative
Agent may (and shall, at the direction of the Required Lenders), from time to
time, apply the collected balances in such cash collateral account to the
payment of the Secured Obligations whether or not the Secured Obligations shall
then be due.

7.4 Application of Proceeds. The proceeds of the Collateral shall be applied by
the Administrative Agent to payment of the Secured Obligations as provided under
Section 2.18 of the Credit Agreement.

ARTICLE VIII

GENERAL PROVISIONS

8.1 Notice of Disposition of Collateral; Condition of Collateral. Each Grantor
hereby waives, to the extent that it may do so under the UCC or any other
applicable law, notice of the time and place of any public sale or the time
after which any private sale or other disposition of all or any part of the
Collateral may be made. To the extent such notice may not be waived under
applicable law, any notice made shall be deemed reasonable if sent to the
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this Security Agreement, at least ten (10) days prior to (i) the date of any
such public sale or (ii) the time after which any such private sale or other
disposition may be made. The Administrative Agent shall have no obligation to
clean-up or otherwise prepare the Collateral for sale. To the maximum extent
permitted by applicable law, each Grantor waives all claims, damages, and
demands against the Administrative Agent or any other Secured Party arising out
of the repossession, retention or sale of the Collateral, except such as arise
solely out of the bad faith, gross negligence or willful misconduct of the
Administrative Agent or such other Secured Party as finally determined by a
court of competent jurisdiction. To the extent it may lawfully do so, each
Grantor absolutely and irrevocably waives and relinquishes the benefit and
advantage of, and covenants not to assert against the Administrative Agent or
any other Secured Party, any valuation, stay, appraisal, extension, moratorium,
redemption or similar laws and any and all rights or defenses it may have as a
surety now or hereafter existing (other than the defense that the Secured
Obligations shall have been fully paid in cash and performed in full) which, but
for this provision, might be applicable to the sale of any Collateral made under
the judgment, order or decree of any court, or privately under the power of sale
conferred by this Security Agreement, or otherwise. Except as otherwise
specifically provided herein or in any other Loan Document, each Grantor hereby
waives presentment, demand, protest or any notice (to the maximum extent
permitted by applicable law) of any kind in connection with this Security
Agreement or any Collateral.

8.2 Limitation on Administrative Agent’s and other Secured Parties’ Duty with
Respect to the Collateral. The Administrative Agent shall have no obligation to
clean-up or otherwise prepare the Collateral for sale. The Administrative Agent
and each other Secured Party shall use reasonable care with respect to the
Collateral in its possession or under its control. Neither the Administrative
Agent nor any other Secured Party shall have any other duty as to any Collateral
in its possession or control or in the possession or control of any agent or
nominee of the Administrative Agent or such other Secured Party, or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. To the extent that applicable law imposes duties on
the Administrative Agent to exercise remedies in a commercially reasonable
manner, each Grantor acknowledges and agrees that it is commercially reasonable
for the Administrative Agent (i) to fail to incur expenses deemed significant by
the Administrative Agent to prepare Collateral for disposition or otherwise to
transform raw material or work in process into finished goods or other finished
products for disposition, (ii) to fail to obtain third party consents for access
to Collateral to be disposed of, or to obtain or, if not required by other law,
to fail to obtain governmental or third party consents for the collection or
disposition of Collateral to be collected or disposed of, (iii) to fail to
exercise collection remedies against account debtors or other Persons obligated
on Collateral or to remove Liens on or any adverse claims against Collateral,
(iv) to exercise collection remedies against account debtors and other Persons
obligated on Collateral directly or through the use of collection agencies and
other collection specialists, (v) to advertise dispositions of Collateral
through publications or media of general circulation, whether or not the
Collateral is of a specialized nature, (vi) to contact other Persons, whether or
not in the same business as such Grantor, for expressions of interest in
acquiring all or any portion of such Collateral, (vii) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or
not the Collateral is of a specialized nature, (viii) to dispose of Collateral
by utilizing internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capacity of doing so, or
that match buyers and sellers of assets, (ix) to dispose of assets in wholesale
rather than retail markets, (x) to disclaim disposition warranties, such as
title, possession or quiet enjoyment, (xi) to purchase insurance or credit
enhancements to insure the Administrative Agent against risks of loss,
collection or disposition of Collateral or to provide to the Administrative
Agent a guaranteed return from the collection or disposition of Collateral, or
(xii) to the extent deemed appropriate by the Administrative Agent, to obtain
the services of other brokers, investment bankers, consultants and other
professionals to assist the Administrative Agent in the collection or
disposition of any of the Collateral. Each Grantor acknowledges that the purpose
of this Section 8.2 is to provide non-exhaustive indications of what actions or
omissions by the Administrative Agent would be commercially reasonable in the
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remedies against the Collateral and that other actions or omissions by the
Administrative Agent shall not be deemed commercially unreasonable solely on
account of not being indicated in this Section 8.2. Without limitation upon the
foregoing, nothing contained in this Section 8.2 shall be construed to grant any
rights to any Grantor or to impose any duties on the Administrative Agent that
would not have been granted or imposed by this Security Agreement or by
applicable law in the absence of this Section 8.2.

8.3 Compromises and Collection of Collateral. Each Grantor and the
Administrative Agent recognize that setoffs, counterclaims, defenses and other
claims may be asserted by obligors with respect to certain of the Receivables,
that certain of the Receivables may be or become uncollectible in whole or in
part and that the expense and probability of success in litigating a disputed
Receivable may exceed the amount that reasonably may be expected to be recovered
with respect to such Receivable. In view of the foregoing, each Grantor agrees
that the Administrative Agent may at any time and from time to time, if a
Payment Event of Default or Acceleration Event has occurred and is continuing,
compromise with the obligor on any Receivable, accept in full payment of any
Receivable such amount as the Administrative Agent in its sole discretion shall
determine or abandon any Receivable, and any such action by the Administrative
Agent shall be commercially reasonable so long as the Administrative Agent acts
in good faith based on information known to it at the time it takes any such
action.

8.4 Secured Party Performance of Grantor’s Obligations. Without having any
obligation to do so, the Administrative Agent may perform or pay any obligation
which any Grantor has agreed (but has failed) to perform or pay in this Security
Agreement and such Grantor shall reimburse the Administrative Agent for any
reasonable amounts paid by the Administrative Agent pursuant to this
Section 8.4. Each Grantor’s obligation to reimburse the Administrative Agent
pursuant to the preceding sentence shall be a Secured Obligation payable within
fifteen (15) days after demand.

8.5 Authorization for Secured Party to Take Certain Action. Each Grantor
irrevocably authorizes the Administrative Agent at any time and from time to
time in the sole discretion of the Administrative Agent and appoints the
Administrative Agent as its attorney in fact (i) to execute on behalf of such
Grantor as debtor and to file, in the central filing office of the jurisdiction
in which such Grantor is “located” within the meaning of that term in
Section 9-307 of the UCC, financing statements (including, fixture filings,
except to the extent that making such fixture filing would be an Excluded
Action) necessary or desirable in the Administrative Agent’s sole discretion to
perfect and to maintain the perfection and priority of the Administrative
Agent’s security interest in the Collateral, (ii) following the occurrence and
during the continuance of an Event of Default, to indorse and collect any cash
proceeds of the Collateral, (iii) to file a carbon, photographic or other
reproduction of this Security Agreement or any financing statement with respect
to the Collateral as a financing statement and to file any other financing
statement or amendment of a financing statement (which does not add new
collateral or add a debtor and which in any event does not add any Excluded
Assets), as the Administrative Agent in its sole discretion deems necessary or
desirable to perfect and to maintain the perfection and priority of the
Administrative Agent’s security interest in the Collateral, (iv) upon and during
the continuance of an Event of Default, to contact and enter into one or more
agreements with the issuers of uncertificated securities which are Collateral
owned by such Grantor and which are Securities or with financial intermediaries
holding other Investment Property as may be necessary or advisable to give the
Administrative Agent Control over such Securities or other Investment Property,
in each case to the extent constituting Collateral, (v) following the occurrence
and during the continuance of a Payment Event of Default or Acceleration Event
and subject to the terms of Section 4.1.5 hereof, to enforce payment of the
Instruments, Accounts and Receivables in the name of the Administrative Agent or
such Grantor, (vi) to apply the proceeds of any Collateral received by the
Administrative Agent to the Secured Obligations as provided in Article VII of
this Security Agreement and (vii) to discharge past due taxes, assessments,
charges, fees or Liens on the Collateral (except for such taxes, assessments,
charges, fees or Liens as are specifically permitted hereunder or under any
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Agent within fifteen (15) days after demand for any reasonable payment made or
any reasonable expense incurred by the Administrative Agent in connection
therewith, provided that this authorization shall not relieve any Grantor of any
of its obligations under this Security Agreement or under the Credit Agreement.
Notwithstanding this Section 8.5, the Administrative Agent is not authorized by
any Grantor to take any action that, if performed by a Grantor, would be an
Excluded Action, unless otherwise consented to by such Grantor in writing.

8.6 Specific Performance of Certain Covenants. Each Grantor acknowledges and
agrees that a breach of any of the covenants contained in Section 4.1.5, 4.1.6,
4.4, 5.3, or 8.8 hereof or in Article VII of this Security Agreement will cause
irreparable injury to the Administrative Agent and the Secured Parties, that the
Administrative Agent and the Secured Parties have no adequate remedy at law in
respect of such breaches and therefore agrees, without limiting the right of the
Administrative Agent or the Secured Parties to seek and obtain specific
performance of other obligations of the Grantors contained in this Security
Agreement, that the covenants of the Grantors contained in the Sections referred
to in this Section 8.6 shall be specifically enforceable against the Grantors.

8.7 Use and Possession of Certain Premises. Following the occurrence and during
the continuance of a Payment Event of Default or Acceleration Event, the
Administrative Agent shall be entitled to enter any premises owned or leased by
the Grantors where any of the Collateral or any records relating to the
Collateral are located solely for the purpose of exercising its remedies in the
Collateral and solely until the Secured Obligations are paid or the Collateral
is removed therefrom, whichever first occurs, without any obligation to pay any
Grantor for such use and occupancy.

8.8 Reserved.

8.9 Reinstatement. This Security Agreement shall remain in full force and effect
and continue to be effective should any petition be filed by or against any
Grantor for liquidation or reorganization, should any Grantor become insolvent
or make an assignment for the benefit of any creditor or creditors or should a
receiver or trustee be appointed for all or any significant part of any
Grantor’s assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Secured Obligations,
or any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the Secured
Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Secured Obligations shall be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.

8.10 Benefit of Agreement. The terms and provisions of this Security Agreement
shall be binding upon and inure to the benefit of the Grantors and the
Administrative Agent and their respective successors and assigns (including all
Persons who become bound as a debtor to this Security Agreement), except that
the Grantors shall not have the right to assign their rights or delegate their
obligations under this Security Agreement or any interest herein, without the
prior written consent of the Administrative Agent. No sales of participations,
assignments, transfers, or other dispositions of any agreement governing the
Secured Obligations or any portion thereof or interest therein shall in any
manner impair the Lien granted to the Administrative Agent, for the benefit of
the Administrative Agent and the other Secured Parties, hereunder.

8.11 Survival of Representations. All representations and warranties of the
Grantors contained in this Security Agreement shall survive the execution and
delivery of this Security Agreement.

 

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8.12 Taxes and Expenses. Any Taxes (other than Excluded Taxes) payable or ruled
payable by a Federal or State authority in respect of this Security Agreement
shall be paid by the Grantors, together with interest and penalties, if any,
except to the extent being contested in good faith by the Grantors and by
appropriate proceedings. The Grantors shall reimburse the Administrative Agent
for any and all reasonable out-of-pocket expenses and internal charges
(including reasonable attorney’s fees, but excluding time charges of attorneys,
paralegals, auditors and accountants who may be employees of the Administrative
Agent) paid or incurred by the Administrative Agent in connection with the
preparation, execution, delivery, administration, collection and enforcement of
this Security Agreement and in the audit, analysis, administration, collection,
preservation or sale of the Collateral (including the expenses and charges
associated with any periodic or special audit of the Collateral). Any and all
costs and expenses incurred by the Grantors in the performance of actions
required pursuant to the terms hereof shall be borne solely by the Grantors.

8.13 Headings. The title of and section headings in this Security Agreement are
for convenience of reference only, and shall not govern the interpretation of
any of the terms and provisions of this Security Agreement.

8.14 Termination. This Security Agreement shall continue in effect
(notwithstanding the fact that from time to time there may be no Secured
Obligations outstanding) until (i) any and all commitments to extend credit
under the Loan Documents have terminated, and (ii) all of the Secured
Obligations (other than Unliquidated Obligations) have been paid in cash and
performed in full (or with respect to any outstanding Letters of Credit, a cash
deposit or backup Letter of Credit has been delivered to the Administrative
Agent as required by the Credit Agreement). Upon any sale or other disposition
by any Grantor of any Collateral to a third party that is not a Grantor in a
transaction permitted under the Credit Agreement, or upon the effectiveness in
accordance with the Credit Agreement of any written consent to the release of
the security interest in any Collateral, any other release of Liens of the
Administrative Agent in any portion of the Collateral as provided by
Section 9.02(d) or Section 9.14 of the Credit Agreement upon the occurrence of
the applicable event provided for in Section 9.02(d) or Section 9.14 of the
Credit Agreement the security interests in such Collateral shall be
automatically released without further action by any party. In connection with
any termination or release pursuant to this Section 8.14, the Administrative
Agent shall execute and deliver to any Grantor, at such Grantor’s expense and
without recourse to or warranty by the Administrative Agent, all documents that
such Grantor shall reasonably request to evidence such termination or release,
including UCC termination statements and terminations of Deposit Account Control
Agreements and Securities Account Control Agreements.

8.15 Entire Agreement. This Security Agreement, together with the Credit
Agreement, embodies the entire agreement and understanding between the Grantors
and the Administrative Agent relating to the Collateral and supersedes all prior
agreements and understandings among the Grantors and the Administrative Agent
relating to the Collateral.

8.16 Governing Law; Jurisdiction; Waiver of Jury Trial.

8.16.1 THIS SECURITY AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

8.16.2 Each Grantor hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of the Supreme Court of the
State of New York sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate court from any
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relating to this Security Agreement or any other Loan Document, or for
recognition or enforcement of any judgment, and each Grantor hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each Grantor agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Security Agreement or any other Loan Document
shall affect any right that the Administrative Agent, the Issuing Bank or any
Lender may otherwise have to bring any action or proceeding relating to this
Security Agreement or any other Loan Document against any Grantor or its
properties in the courts of any jurisdiction.

8.16.3 Each Grantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Security Agreement or any other Loan Document
in any court referred to in Section 8.16.2 hereof. Each Grantor hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

8.16.4 Each party to this Security Agreement irrevocably consents to service of
process in the manner provided for notices in Article IX of this Security
Agreement, and each of the Grantors hereby appoints the Borrower as its agent
for service of process. Nothing in this Security Agreement or any other Loan
Document will affect the right of any party to this Security Agreement to serve
process in any other manner permitted by law.

8.16.5 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
SECURITY AGREEMENT (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
OF THE PARTIES (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO
THIS SECURITY AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

8.17 Indemnity. Each Grantor hereby agrees, jointly with the other Grantors and
severally, to indemnify the Administrative Agent and the Secured Parties, and
their respective successors, assigns, agents and employees, from and against any
and all losses, liabilities, damages, claims, penalties, suits, costs, and
expenses of any kind and nature (including, without limitation, all expenses of
litigation or preparation therefor whether or not the Administrative Agent or
any other Secured Party is a party thereto) imposed on, incurred by or asserted
against the Administrative Agent or the Secured Parties, or their respective
successors, assigns, agents and employees, in any way relating to or arising out
of this Security Agreement or any other Loan Document, or the manufacture,
purchase, acceptance, rejection, ownership, delivery, lease, possession, use,
operation, condition, sale, return or other disposition of any Collateral
(including, without limitation, latent and other defects, whether or not
discoverable by the Administrative Agent or the Secured Parties or any Grantor,
and any claim for patent, trademark or copyright infringement); provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such liabilities, damages, penalties, suits or related costs and expenses are
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court of competent jurisdiction by final and nonappealable judgment to have
resulted from (x) the bad faith, gross negligence or willful misconduct of such
Indemnitee or its Related Parties or (y) a material breach in bad faith by such
Indemnitee or its Related Parties of their express obligations under the Loan
Documents pursuant to a claim initiated by the Borrower.

8.18 Subordination of Intercompany Indebtedness. Each Grantor agrees that any
and all claims of such Grantor against any other Grantor (each an “Obligor”)
with respect to any “Intercompany Indebtedness” (as hereinafter defined), any
endorser, obligor or any other guarantor of all or any part of the Secured
Obligations, or against any of its properties shall be subordinate and subject
in right of payment to the prior payment, in full and in cash, of all Secured
Obligations, provided that, and not in contravention of the foregoing, so long
as no Payment Event of Default or Acceleration Event has occurred and is
continuing, such Grantor may make loans and extend other Intercompany
Indebtedness to and receive payments with respect to such Intercompany
Indebtedness from each such Obligor to the extent not prohibited by the terms of
this Security Agreement and the other Loan Documents. Notwithstanding any right
of any Grantor to ask, demand, sue for, take or receive any payment from any
Obligor, all rights, liens and security interests of such Grantor, whether now
or hereafter arising and howsoever existing, in any assets of any other Obligor
shall be and are subordinated to the rights of the Secured Parties and the
Administrative Agent in those assets. No Grantor shall have any right to
possession of any such asset or to foreclose upon any such asset, whether by
judicial action or otherwise, unless and until this Security Agreement has
terminated in accordance with Section 8.14 hereof. If all or any part of the
assets of any Obligor, or the proceeds thereof, are subject to any distribution,
division or application to the creditors of such Obligor, whether partial or
complete, voluntary or involuntary, and whether by reason of liquidation,
bankruptcy, arrangement, receivership, assignment for the benefit of creditors
or any other action or proceeding, or if the business of any such Obligor is
dissolved or if substantially all of the assets of any such Obligor are sold,
then, and in any such event (such events being herein referred to as an
“Insolvency Event”), any payment or distribution of any kind or character,
either in cash, securities or other property, which shall be payable or
deliverable upon or with respect to any indebtedness of any Obligor to any
Grantor (“Intercompany Indebtedness”) shall be paid or delivered directly to the
Administrative Agent for application on any of the Secured Obligations, due or
to become due, until such Secured Obligations (other than contingent indemnity
obligations) shall have first been fully paid and satisfied (or, in the case of
Letters of Credit, cash-collateralized pursuant to terms reasonably acceptable
to the Administrative Agent). Should any payment, distribution, security or
instrument or proceeds thereof be received by the applicable Grantor upon or
with respect to the Intercompany Indebtedness after any Insolvency Event and
prior to the termination of this Security Agreement in accordance with
Section 8.14 hereof, such Grantor shall receive and hold the same in trust, as
trustee, for the benefit of the Secured Parties and shall forthwith deliver the
same to the Administrative Agent, for the benefit of the Secured Parties, in
precisely the form received (except for the endorsement or assignment of the
Grantor where necessary), for application to any of the Secured Obligations, due
or not due, and, until so delivered, the same shall be held in trust by the
Grantor as the property of the Secured Parties. If any such Grantor fails to
make any such endorsement or assignment to the Administrative Agent, the
Administrative Agent or any of its officers or employees is irrevocably
authorized to make the same. Each Grantor agrees that until the termination of
this Security Agreement in accordance with Section 8.14 hereof, no Grantor will
assign or transfer to any Person (other than the Administrative Agent or the
Borrower or another Grantor) any claim any such Grantor has or may have against
any Obligor.

8.19 Severability. Any provision in this Security Agreement that is held to be
inoperative, unenforceable, or invalid in any jurisdiction shall, as to that
jurisdiction, be inoperative, unenforceable, or invalid without affecting the
remaining provisions in that jurisdiction or the operation, enforceability, or
validity of that provision in any other jurisdiction, and to this end the
provisions of this Security Agreement are declared to be severable.

 

-26-

--------------------------------------------------------------------------------

8.20 Counterparts. This Security Agreement may be executed in counterparts (and
by different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. Delivery of an executed counterpart of a signature page of this
Security Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Security Agreement.

ARTICLE IX

NOTICES

9.1 Sending Notices. Any notice required or permitted to be given under this
Security Agreement shall be sent (and deemed received) in the manner and to the
addresses set forth in Section 9.01 of the Credit Agreement. Any notice
delivered to the Borrower shall be deemed to have been delivered to all of the
Grantors.

9.2 Change in Address for Notices. Each of the Grantors, the Administrative
Agent and the Lenders may change the address for service of notice upon it in
the manner set forth in Section 9.01 of the Credit Agreement.

ARTICLE X

THE ADMINISTRATIVE AGENT

JPMorgan Chase Bank, N.A. has been appointed Administrative Agent for the
Secured Parties hereunder pursuant to Article VIII of the Credit Agreement. It
is expressly understood and agreed by the parties to this Security Agreement
that any authority conferred upon the Administrative Agent hereunder is subject
to the terms of the delegation of authority made by the Secured Parties to the
Administrative Agent pursuant to the Credit Agreement, and that the
Administrative Agent has agreed to act (and any successor Administrative Agent
shall act) as such hereunder only on the express conditions contained in such
Article VIII. Any successor Administrative Agent appointed pursuant to Article
VIII of the Credit Agreement shall be entitled to all the rights, interests and
benefits of the Administrative Agent hereunder.

[Signature Pages Follow]

 

-27-

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IN WITNESS WHEREOF, each of the Grantors and the Administrative Agent have
executed this Security Agreement as of the date first above written.

 

THE ADVISORY BOARD COMPANY, as a Grantor By:  

/s/ Michael Kirshbaum

Name:   Michael Kirshbaum Title:   CFO ADVISORY BOARD INVESTMENTS, INC., as a
Grantor By:  

/s/ Michael Kirshbaum

Name:   Michael Kirshbaum Title:   President ROYALL ACQUISITION CO., as a
Grantor By:  

/s/ Evan Farber

Name:   Evan Farber Title:   VP and Secretary ROYALL & COMPANY, as a Grantor By:
 

/s/ Seth Allyn

Name:   Seth Allyn Title:   Assistant Treasurer ROYALL & COMPANY HOLDING, INC.,
as a Grantor By:  

/s/ Evan Farber

Name:   Evan Farber Title:   VP and Secretary ADVANCEMENT SERVICES INC., as a
Grantor By:  

/s/ Seth Allyn

Name:   Seth Allyn Title:   Treasurer

--------------------------------------------------------------------------------

JPMORGAN CHASE BANK, N.A., as Administrative Agent By:  

/s/ James A. Knight

Name:   James A. Knight Title:   Vice President

--------------------------------------------------------------------------------

EXHIBIT “I”

(See Section 4.4 of Security Agreement)

AMENDMENT

This Amendment, dated             , 20     is delivered pursuant to Section 4.4
of the Security Agreement referred to below. All defined terms herein shall have
the meanings ascribed thereto or incorporated by reference in the Security
Agreement. The undersigned hereby certifies that the representations and
warranties in Article III of the Security Agreement with respect to the
Collateral described on Schedule 1 to this Amendment are true and correct in all
material respects as of the date hereof. The undersigned further agrees that
this Amendment may be attached to that certain Pledge and Security Agreement,
dated January 9, 2015, between the undersigned, as the Grantors, and JPMorgan
Chase Bank, N.A., as the Administrative Agent, (the “Security Agreement”) and
that the Collateral listed on Schedule I to this Amendment shall be and become a
part of the Collateral referred to in said Security Agreement and shall secure
all Secured Obligations referred to in said Security Agreement.

 

By:  

 

Name:   Title:  

 

1

--------------------------------------------------------------------------------

SCHEDULE I TO AMENDMENT

STOCKS

 

Name of Grantor

  

Issuer

  

Certificate

Number(s)

  

Number of

Shares

  

Class of Stock

  

Percentage

of

Outstanding

Shares

                             

BONDS

 

Name of Grantor

  

Issuer

  

Number

  

Face Amount

  

Coupon Rate

  

Maturity

                             

GOVERNMENT SECURITIES

 

Name of Grantor

  

Issuer

  

Number

  

Type

  

Face Amount

  

Coupon

Rate

  

Maturity

                                   

OTHER SECURITIES OR OTHER INVESTMENT PROPERTY

(CERTIFICATED AND UNCERTIFICATED)

 

Name of Grantor

  

Issuer

  

Description of Collateral

  

Percentage Ownership Interest

                 

[Add description of custody accounts or arrangements with securities
intermediary, if applicable]

 

2

--------------------------------------------------------------------------------

ANNEX I

to

PLEDGE AND SECURITY AGREEMENT

Reference is hereby made to the Pledge and Security Agreement (as amended,
restated, supplemented or otherwise modified from time to time, the
“Agreement”), dated as of January 9, 2015, made by each of THE ADVISORY BOARD
COMPANY, a Delaware corporation (the “Borrower”) and the other Subsidiaries of
the Borrower listed on the signature pages thereto (together with the Borrower,
the “Initial Grantors,” and together with any additional Subsidiaries, including
the undersigned, which become parties thereto by executing a Supplement in
substantially the form hereof, the “Grantors”), in favor of the Administrative
Agent. Capitalized terms used herein and not defined herein shall have the
meanings given to them in the Agreement.

By its execution below, the undersigned, [NAME OF NEW GRANTOR], a
[                    ] [corporation/limited liability company/limited
partnership] (the “New Grantor”) agrees to become, and does hereby become, a
Grantor under the Agreement and agrees to be bound by the Agreement as if
originally a party thereto. The New Grantor hereby collaterally assigns and
pledges to the Administrative Agent for the benefit of the Secured Parties, and
grants to the Administrative Agent for the benefit of the Secured Parties, a
security interest in all of the New Grantor’s right, title and interest in and
to the Collateral, whether now owned or hereafter acquired, to secure the prompt
and complete payment and performance of the Secured Obligations. For the
avoidance of doubt, the grant of a security interest herein shall not be deemed
to be an assignment of intellectual property rights owned by the New Grantor.

By its execution below, the undersigned represents and warrants as to itself
that all of the representations and warranties contained in the Agreement with
respect to the New Grantor and the Collateral owned by it, after giving effect
to the supplements to the Exhibits to the Agreement attached hereto, are true
and correct in all material respects as of the date hereof. The New Grantor
represents and warrants that the supplements to the Exhibits to the Agreement
attached hereto are true and correct in all respects and that such supplements
set forth all information required to be scheduled under the Agreement with
respect to the New Grantor. The New Grantor shall take all steps necessary and
required under the Agreement to perfect, in favor of the Administrative Agent, a
first-priority security interest in and lien against the New Grantor’s
Collateral, subject only to Liens permitted under Section 6.02 of the Credit
Agreement.

THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF
THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the New Grantor has executed and delivered this Security
Agreement Supplement as of this      day of             , 20    .

 

[NAME OF NEW GRANTOR] By:  

 

Title:  

 

 

1

--------------------------------------------------------------------------------

ANNEX II

Forms of Confirmatory Grants of Security Interest

[forms attached]

 

1

--------------------------------------------------------------------------------

CONFIRMATORY GRANT OF SECURITY INTEREST

IN UNITED STATES PATENTS

THIS CONFIRMATORY GRANT OF SECURITY INTEREST IN UNITED STATES PATENTS (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, the “Confirmatory Grant”) is made effective as of [            ], 20[    ]
by and from The Advisory Board Company, a Delaware corporation (the “Borrower”),
and [GRANTOR], a [            ] [            ] (a “Grantor” and, together with
The Advisory Board Company, each a “Grantor” and together, the “Grantors”) to
and in favor of JPMORGAN CHASE BANK, N.A., for itself and as Administrative
Agent for the Secured Parties (as defined in the Credit Agreement referenced
below) (in such capacities, “Grantee”).

WHEREAS, the Borrower, the Lenders and Grantee have entered into a Credit
Agreement dated January 9, 2015 (as may be amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”).

WHEREAS, certain Subsidiaries of the Borrower have guaranteed the repayment of
the Secured Obligations pursuant to a Guaranty dated January 9, 2015 (as may be
amended, restated, supplemented or otherwise modified from time to time).

WHEREAS, the Grantors and certain Subsidiaries of the Borrower have entered into
a Pledge and Security Agreement dated January 9, 2015 (as may be amended,
restated, supplemented or otherwise modified from time to time, the “Security
Agreement”).

WHEREAS, each Grantor owns the patents listed on Exhibit A attached hereto (the
“Patents”), which Patents are pending or registered with the United States
Patent and Trademark Office.

WHEREAS, this Confirmatory Grant has been executed and delivered by the Grantors
in conjunction with the security interest granted under the Security Agreement
to Grantee for the ratable benefit of the Secured Parties for the purpose of
recording the grant of security interest with the United States Patent and
Trademark Office.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed that:

1) Definitions. All capitalized terms not defined herein shall have the
respective meaning given to them in the Credit Agreement and the Security
Agreement.

2) The Security Interest.

(a) This Confirmatory Grant is made to secure the satisfactory performance and
payment of (i) all the Secured Obligations and (ii) all of the obligations and
liabilities of the Subsidiary Guarantors under the Credit Agreement. Upon the
payment in full of all Secured Obligations (other than Unliquidated
Obligations), Grantee shall promptly, upon such satisfaction, execute,
acknowledge, and deliver to the Borrower all reasonably requested instruments in
writing releasing the security interest in the Patents acquired under the
Security Agreement and this Confirmatory Grant.

 

2

--------------------------------------------------------------------------------

(b) Each Grantor hereby grants to Grantee a security interest in (1) all of such
Grantor’s right, title and interest in and to the Patents now owned or from time
to time after the date hereof owned or acquired by the Grantors, together with
(2) all proceeds of such Patents and (3) all causes of action arising prior to
or after the date hereof for infringement of such Patents regarding the same.

(c) Notwithstanding anything to the contrary herein, this Confirmatory Grant and
the security interests granted hereby are subject to the limitations set forth
in Article II of the Security Agreement (which are incorporated herein mutatis
mutandis by this reference).

(d) The rights and remedies of Grantee with respect to the security interest
granted herein are without prejudice to and are in addition to, and not in
limitation of, those set forth in the Security Agreement and the other Loan
Documents. The Grantors hereby acknowledge and affirm that the rights and
remedies of Grantee with respect to the Patents are more fully set forth in the
Security Agreement, the terms and provisions of which are incorporated herein by
reference as if fully set forth herein. In the event that any provisions of this
Confirmatory Grant are deemed to conflict with the Security Agreement, the
provisions of the Security Agreement shall govern.

3) Counterparts. This Confirmatory Grant may be executed in any number of
counterparts and by different parties in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Signature pages may be
detached from multiple separate counterparts and attached to a single
counterpart.

4) Governing Law. This Confirmatory Grant and the rights and obligations of the
parties hereto shall be governed by, and construed and interpreted in accordance
with, the law of the State of New York.

*******

 

3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Grantor has executed this Confirmatory Grant effective
as of the date first written above.

 

THE ADVISORY BOARD COMPANY By:  

 

  Name:   Title: [GRANTOR] By:  

 

  Name:   Title:

 

4

--------------------------------------------------------------------------------

CONFIRMATORY GRANT OF SECURITY INTEREST

IN UNITED STATES PATENTS

Exhibit A - SCHEDULE OF PATENTS

 

A.          PATENTS

   

Patent No.

 

Issue Date

 

Subject Matter

 

Grantor

     

B.           PATENT APPLICATIONS:

   

Application Serial No.

 

Application

Filing Date

 

Subject Matter

 

Grantor

     

 

5

--------------------------------------------------------------------------------

CONFIRMATORY GRANT OF SECURITY INTEREST

IN UNITED STATES TRADEMARKS

THIS CONFIRMATORY GRANT OF SECURITY INTEREST IN UNITED STATES TRADEMARKS (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, the “Confirmatory Grant”) is made effective as of [            ], 20[    ]
by and from The Advisory Board Company, a Delaware corporation (the “Borrower”)
and [GRANTOR], a [            ] [            ] (a “Grantor” and, together with
The Advisory Board Company, each a “Grantor” and together, the “Grantors”) to
and in favor of JPMORGAN CHASE BANK, N.A., for itself and as Administrative
Agent for the Secured Parties (as defined in the Credit Agreement referenced
below) (in such capacities, “Grantee”).

WHEREAS, the Borrower, the Lenders and Grantee have entered into a Credit
Agreement dated January 9, 2015 (as may be amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”).

WHEREAS, certain Subsidiaries of the Borrower have guaranteed the repayment of
the Secured Obligations pursuant to a Guaranty dated January 9, 2015 (as may be
amended, restated, supplemented or otherwise modified from time to time).

WHEREAS, the Grantors and certain Subsidiaries of the Borrower have entered into
a Pledge and Security Agreement dated January 9, 2015 (as may be amended,
restated, supplemented or otherwise modified from time to time, the “Security
Agreement”).

WHEREAS, each Grantor owns the trademarks listed on Exhibit A attached hereto
(the “Trademarks”), which Trademarks are pending or registered with the United
States Patent and Trademark Office.

WHEREAS, this Confirmatory Grant has been executed and delivered by the Grantors
in conjunction with the security interest granted under the Security Agreement
to Grantee for the ratable benefit of the Secured Parties for the purpose of
recording the grant of security interest with the United States Patent and
Trademark Office.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed that:

1) Definitions. All capitalized terms not defined herein shall have the
respective meaning given to them in the Credit Agreement and the Security
Agreement.

2) The Security Interest.

(a) This Confirmatory Grant is made to secure the satisfactory performance and
payment of (i) all the Secured Obligations and (ii) all of the obligations and
liabilities of the Subsidiary Guarantors under the Credit Agreement. Upon the
payment in full of all Secured Obligations (other than Unliquidated
Obligations), Grantee shall promptly, upon such satisfaction, execute,
acknowledge, and deliver to the Borrower all reasonably requested instruments in
writing releasing the security interest in the Trademarks acquired under the
Security Agreement and this Confirmatory Grant.

--------------------------------------------------------------------------------

(b) Each Grantor hereby grants to Grantee a security interest in (1) all of such
Grantor’s right, title and interest in and to the Trademarks now owned or from
time to time after the date hereof owned or acquired by the Grantors, together
with (2) all proceeds of such Trademarks, (3) the goodwill associated with such
Trademarks and (4) all causes of action arising prior to or after the date
hereof for infringement of such Trademarks or unfair competition regarding the
same.

(c) Notwithstanding anything to the contrary herein, this Confirmatory Grant and
the security interests granted hereby are subject to the limitations set forth
in Article II of the Security Agreement (which are incorporated herein mutatis
mutandis by this reference).

(d) The rights and remedies of Grantee with respect to the security interest
granted herein are without prejudice to and are in addition to, and not in
limitation of, those set forth in the Security Agreement and the other Loan
Documents. The Grantors hereby acknowledge and affirm that the rights and
remedies of Grantee with respect to the Trademarks are more fully set forth in
the Security Agreement, the terms and provisions of which are incorporated
herein by reference as if fully set forth herein. In the event that any
provisions of this Confirmatory Grant are deemed to conflict with the Security
Agreement, the provisions of the Security Agreement shall govern.

3) Counterparts. This Confirmatory Grant may be executed in any number of
counterparts and by different parties in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Signature pages may be
detached from multiple separate counterparts and attached to a single
counterpart.

4) Governing Law. This Confirmatory Grant and the rights and obligations of the
parties hereto shall be governed by, and construed and interpreted in accordance
with, the law of the State of New York.

* * * * * *

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Grantor has executed this Confirmatory Grant effective
as of the date first written above.

 

THE ADVISORY BOARD COMPANY By:  

 

  Name:   Title: [GRANTOR] By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

CONFIRMATORY GRANT OF SECURITY INTEREST

IN UNITED STATES TRADEMARKS

Exhibit A - SCHEDULE OF TRADEMARKS

 

A.          REGISTERED TRADEMARKS:

 

Trademark

 

Registration No.

 

Registration Date

 

Grantor

     

B.           TRADEMARK APPLICATIONS:

 

Trademark Applied For:

 

Application

Filing Date

 

Application

Serial No.

 

Grantor

     

--------------------------------------------------------------------------------

CONFIRMATORY GRANT OF SECURITY INTEREST

IN UNITED STATES COPYRIGHTS

THIS CONFIRMATORY GRANT OF SECURITY INTEREST IN UNITED STATES COPYRIGHTS (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, the “Confirmatory Grant”) is made effective as of [            ],
20[    ], by and from The Advisory Board Company, a Delaware corporation (the
“Borrower”), and [GRANTOR], a [            ] [            ] (a “Grantor” and,
together with The Advisory Board Company, each a “Grantor” and together, the
“Grantors”) to and in favor of JPMORGAN CHASE BANK, N.A., for itself and as
Administrative Agent for the Secured Parties (as defined in the Credit Agreement
referenced below) (in such capacities, “Grantee”).

WHEREAS, the Borrower, the Lenders and Grantee have entered into a Credit
Agreement dated January 9, 2015 (as may be amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”).

WHEREAS, certain Subsidiaries of the Borrower have guaranteed the repayment of
the Secured Obligations pursuant to a Guaranty dated January 9, 2015 (as may be
amended, restated, supplemented or otherwise modified from time to time).

WHEREAS, the Grantors and certain Subsidiaries of the Borrower have entered into
a Pledge and Security Agreement dated January 9, 2015 (as may be amended,
restated, supplemented or otherwise modified from time to time, the “Security
Agreement”).

WHEREAS, each Grantor owns the copyrights listed on Exhibit A attached hereto
(the “Copyrights”), which Copyrights are pending or registered with the United
States Copyright Office.

WHEREAS, this Confirmatory Grant has been executed and delivered by the Grantors
in conjunction with the security interest granted under the Security Agreement
to Grantee for the ratable benefit of the Secured Parties for the purpose of
recording the grant of security interest with the United States Copyright
Office.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed that:

1) Definitions. All capitalized terms not defined herein shall have the
respective meaning given to them in the Credit Agreement and the Security
Agreement.

2) The Security Interest.

(a) This Confirmatory Grant is made to secure the satisfactory performance and
payment of (i) all the Secured Obligations and (ii) all of the obligations and
liabilities of the Subsidiary Guarantors under the Credit Agreement. Upon the
payment in full of all Secured Obligations (other than Unliquidated
Obligations), Grantee shall promptly, upon such satisfaction, execute,
acknowledge, and deliver to the Borrower all reasonably requested instruments in
writing releasing the security interest in the Copyrights acquired under the
Security Agreement and this Confirmatory Grant.

(b) Each Grantor hereby grants to Grantee a security interest in (1) all of such
Grantor’s right, title and interest in and to the Copyrights now owned or from
time to time after the date hereof owned or acquired by the Grantors, together
with (2) all proceeds of such Copyrights and (3) all causes of action arising
prior to or after the date hereof for infringement of such Copyrights.

--------------------------------------------------------------------------------

(c) Notwithstanding anything to the contrary herein, this Confirmatory Grant and
the security interests granted hereby are subject to the limitations set forth
in Article II of the Security Agreement (which are incorporated herein mutatis
mutandis by this reference).

(d) The rights and remedies of Grantee with respect to the security interest
granted herein are without prejudice to and are in addition to, and not in
limitation of, those set forth in the Security Agreement and the other Loan
Documents. The Grantors hereby acknowledge and affirm that the rights and
remedies of Grantee with respect to the Copyrights are more fully set forth in
the Security Agreement, the terms and provisions of which are incorporated
herein by reference as if fully set forth herein. In the event that any
provisions of this Confirmatory Grant are deemed to conflict with the Security
Agreement, the provisions of the Security Agreement shall govern.

3) Counterparts. This Confirmatory Grant may be executed in any number of
counterparts and by different parties in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Signature pages may be
detached from multiple separate counterparts and attached to a single
counterpart.

4) Governing Law. This Confirmatory Grant and the rights and obligations of the
parties hereto shall be governed by, and construed and interpreted in accordance
with, the law of the State of New York.

* * * * * *

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Grantor has executed this Confirmatory Grant effective
as of the date first written above.

 

THE ADVISORY BOARD COMPANY By:  

 

  Name:   Title: [GRANTOR] By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

CONFIRMATORY GRANT OF SECURITY INTEREST

IN UNITED STATES COPYRIGHTS

Exhibit A - SCHEDULE OF COPYRIGHTS

 

Work

 

Registration No.

 

Registration Date

 

Grantor