Exhibit 10.2

EXECUTION COPY

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 May 21, 2008 by and among INNERWORKINGS, INC., a Delaware
corporation (the “Borrower”), and the 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 which become parties to this Security Agreement by executing a
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 the lenders party to the
Credit Agreement referred to below (collectively, the “Lenders”).

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 Holders
of Secured Obligations, hereby agree as follows:

ARTICLE I

DEFINITIONS

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

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

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

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

“Collateral” means all Accounts, Chattel Paper, Commercial Tort Claims,
Documents, Equipment, Fixtures, Goods, General Intangibles, Instruments,
Inventory, Investment Property, Pledged Deposits, Supporting Obligations, 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 not include the Excluded Collateral.

“Commercial Tort Claims” means those certain currently existing commercial tort
claims 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 New York UCC.

“Default” means an event described in Section 5.1 hereof.

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

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

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

“Excluded Collateral” means (i) contractual rights to the extent and for so long
as the grant of a security interest therein pursuant hereto would violate the
terms of the agreement under which such contractual rights arise or exist, or
would give any other party the right to terminate its obligations under such
agreement, to the extent such prohibition or right of termination is enforceable
under applicable law, (ii) rights under governmental licenses, authorizations or
any other asset of any Grantor, to the extent and for so long as the grant of a
security interest therein is prohibited by law, (iii) any intent-to-use
trademark or service mark application prior to the filing of a statement or use
or amendment to allege use, or any other intellectual property, to the extent
that applicable law or regulation prohibits the creation of a security interest
or would otherwise result in the loss of rights from the creation of such
security interest or from the assignment of such rights upon the occurrence and
continuance of a Default, (iv) with respect to any shares of stock or other
ownership interests in any First Tier Foreign Subsidiary, the excess over 65% of
all the voting shares of stock or Equity Interests in such First Tier Foreign
Subsidiary, (v) any stock or other ownership interests in any Foreign Subsidiary
that is not a First Tier Foreign Subsidiary, (vi) any stock or other ownership
interests in any Domestic Subsidiary that has not been designated a Material
Domestic Subsidiary and is not a subsidiary (as defined in the Credit Agreement)
of such Material Domestic Subsidiary, until such time, if any, as such Domestic
Subsidiary becomes a Material Domestic Subsidiary pursuant to the Credit
Agreement or a subsidiary (as defined in the Credit Agreement) of such Material
Domestic Subsidiary, (vii) interests of any Grantor in joint ventures which
cannot be pledged without the consent of a third party which consent has not
been obtained and cannot reasonably be obtained, and (viii) any Equipment owned
by any Grantor on the date hereof or hereafter acquired that is subject to a
Lien securing a purchase money obligation or Capital Lease

 

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Obligation permitted to be incurred pursuant to the Credit Agreement if the
contract or other agreement pursuant to which such Lien is granted or which
provides for such Capital Lease Obligation validly prohibits the creation of any
Lien on such Equipment (other than a Lien securing a purchase money obligation
(if applicable)).

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

“Fixtures” shall have the meaning set forth in Article 9 of the New York UCC.

“General Intangibles” shall have the meaning set forth in Article 9 of the New
York UCC.

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

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

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

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

“New York UCC” means the New York Uniform Commercial Code as in effect from time
to time.

“Other Collateral” means any property of the Grantors (other than Excluded
Collateral), not included within the defined terms Accounts, Chattel Paper,
Commercial Tort Claims, Documents, Equipment, Fixtures, General Intangibles,
Instruments, Inventory, Investment Property and Pledged Deposits, including,
without limitation, all cash on hand, letter-of-credit rights, letters of
credit, Stock Rights, Securities Accounts and Deposit Accounts or 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
personal property of the Grantors.

“Pledged Deposits” means 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
Holder of Secured Obligations as security for any Secured Obligations, and all
rights to receive interest on said deposits.

“Receivables” means 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” means a numbered section of this Security Agreement, unless another
document is specifically referenced.

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

“Security” has the meaning set forth in Article 8 of the New York UCC.

 

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“Stock Rights” means any securities, dividends 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 securities or other ownership interests in a corporation,
partnership, joint venture or limited liability company constituting Collateral
and any securities, any right to receive securities 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 New
York UCC.

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

ARTICLE II

GRANT OF SECURITY INTEREST

Each of the Grantors hereby pledges, assigns and grants to the Administrative
Agent, on behalf of and for the ratable benefit of the Holders of Secured
Obligations and (to the extent specifically provided herein) their Affiliates, 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. 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.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

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

3.1. Title, Authorization, Validity and Enforceability. Such Grantor has good
and valid rights in or the power to transfer the Collateral owned by it and
title to the Collateral 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 or partnership,
as applicable, other 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 it now owns
or hereafter acquires, except as enforceability may be limited by
(i) bankruptcy, insolvency, fraudulent conveyances,

 

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reorganization or similar laws relating to or affecting the enforcement of
creditors’ rights generally, (ii) general equitable principles (whether
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 on
Exhibit “E”, 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, subject only to Liens permitted under
Section 4.1.6 hereof.

3.2. Conflicting Laws and Contracts. Neither the execution and delivery by such
Grantor of this Security Agreement, the creation and perfection of the security
interest in the Collateral granted hereunder, nor compliance with the terms and
provisions hereof will violate (i) any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on such Grantor, or (ii) such
Grantor’s charter, articles, partnership agreement or by-laws (or similar
constitutive documents), or (iii) the provisions of any indenture, instrument or
agreement to which such Grantor is a party or is subject, or by which it, or its
property may be bound or affected, or conflict with or constitute a default
thereunder, or result in or require the creation or imposition of any Lien in,
of or on the property of such Grantor pursuant to the terms of any such
indenture, instrument or agreement (other than any Lien of the Administrative
Agent on behalf of the Holders of Secured Obligations or any Liens permitted by
Section 4.1.6 hereof).

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), is 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 said 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 last five (5) years, such Grantor has not
conducted business under any name, changed its jurisdiction of formation, merged
with or into or consolidated with any other corporation, 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
Effective Date.

3.6. No Default. No Default or Event of Default has occurred and is continuing.

3.7. Accounts and Chattel Paper. 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 and will be 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. As of the time when each Account or each item of Chattel Paper arises,
such Grantor shall be deemed to have represented and warranted that such Account
or Chattel Paper, as the case may be, and all records relating thereto, are
genuine and in all material respects what they purport to be.

 

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3.8. Filing Requirements. None of the Equipment owned by such Grantor is covered
by any certificate of title, except for the Equipment described in Part A of
Exhibit “B”. 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 (i) the Equipment described in Part B of Exhibit “B” and
(ii) patents, trademarks and copyrights held by such Grantor and described in
Part C of Exhibit “B”. The legal description, county and street address of the
property on which any Fixtures owned by such Grantor are located is set forth in
Exhibit “C” together with the name and address of the record owner of each such
property.

3.9. No Financing Statements. No financing statement describing all or any
portion of the Collateral which has not lapsed or been terminated naming such
Grantor as debtor has been filed in any jurisdiction except financing statements
(i) naming the Administrative Agent on behalf of the Holders of Secured
Obligations as the secured party and (ii) in respect of Liens permitted by
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.

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 is, as follows:

 

GRANTOR

   Federal Employer
Identification
Number   

Type of

Organization

   State of
Organization or
Incorporation    State
Organization
Number

InnerWorkings, Inc.

      Corporation    Delaware   

Graphography Limited LLC

      Limited Liability Company    New York   

Corporate Edge, Inc.

      Corporation    New Jersey   

Applied Graphics, Inc.

      Corporation    Hawaii   

IW - Spectrum, LLC

      Limited Liability Company    Delaware   

 

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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 delivered to the Administrative Agent. Each Grantor is the direct and
beneficial owner of each Instrument, Security and other type of Investment
Property listed on 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 Holders of Secured Obligations hereunder or as permitted by
Section 6.02 of the Credit Agreement. Each Grantor further represents and
warrants that (i) all such Instruments, Securities or other types of Investment
Property which are shares of stock in a corporation or ownership interests in a
partnership or limited liability company have been (to the extent such concepts
are relevant with respect to such Instrument, Security or other type of
Investment Property) duly 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 on Exhibit
“D” hereto and (ii) with respect to any certificates delivered to the
Administrative Agent representing an ownership interest in a partnership or
limited liability company, either such certificates are Securities as defined in
Article 8 of the New York 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.

3.12. Deposit Accounts. All of the Grantors’ respective Deposit Accounts
(excluding any payroll accounts or zero balance accounts) maintained with
(i) the Administrative Agent, a Lender or any Affiliate thereof with a balance
equal to or exceeding $500,000, or (ii) any Person other than the Administrative
Agent, a Lender or any Affiliate thereof with a balance equal to or exceeding
$250,000, are listed on Part A of Exhibit “G”.

3.13. Securities Accounts. All of the Grantors’ respective Securities Accounts
maintained with (i) the Administrative Agent, a Lender or any Affiliate thereof
with a balance equal to or exceeding $500,000, or (ii) any Person other than the
Administrative Agent, a Lender or any Affiliate thereof with a balance equal to
or exceeding $250,000, are listed on Part B of Exhibit “G”.

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 Supplement hereto substantially in the form of Annex I
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
Supplement) and thereafter until this Security Agreement is terminated, each
such subsequent Grantor agrees:

4.1. General.

4.1.1 Inspection. Each Grantor will permit the Administrative Agent or any
Holder of Secured Obligations, by its representatives and agents (i) to inspect
the Collateral, (ii) to examine and make copies of the records of such Grantor
relating to the Collateral and (iii) to discuss the Collateral and the related
records of such Grantor with, and to be advised as to the same by, such
Grantor’s officers and employees (and, in the case of any Receivable, with any
person or entity which is or may be obligated thereon so long as, if no Default
has occurred and is continuing, such Grantor shall be provided the opportunity
to be present during such discussions), all at such reasonable times and
intervals as the Administrative Agent or such Holder of Secured Obligations may
determine, and all at such Grantor’s expense; provided that, so long as no
Default has occurred and is continuing, only two inspections of the Collateral
per fiscal year pursuant to clause (i) of this Section 4.1.1 shall be at such
Grantor’s expense.

 

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4.1.2 Taxes. Such Grantor will pay when due all taxes, assessments and
governmental charges and levies upon the Collateral owned by such Grantor,
except (i) those which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been set aside in
accordance with GAAP and with respect to which no Lien exists, and (ii) where
the failure to make payment pending such contest could not reasonably be
expected to have a Material Adverse Effect.

4.1.3 Records and Reports; Notification of Default. Each Grantor shall keep and
maintain in all material respects complete, accurate and proper books and
records with respect to the Collateral owned by such Grantor, and furnish to the
Administrative Agent, with sufficient copies for each of the Holders of Secured
Obligations, such reports relating to the Collateral as the Administrative Agent
shall from time to time reasonably request. Each Grantor will give prompt notice
in writing to the Administrative Agent and the Lenders of the occurrence of any
Default and of any other development, financial or otherwise, which might
materially and adversely affect the Collateral.

4.1.4 Financing Statements and Other Actions; Defense of Title. Each Grantor
hereby authorizes the Administrative Agent to file, and if requested will
execute and deliver to the Administrative Agent, all financing statements
describing the Collateral owned by such Grantor and other documents and take
such other actions as may from time to time reasonably be requested by the
Administrative Agent in order to maintain a first 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, 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. 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
reasonable discretion, is necessary, advisable or prudent to ensure that the
perfection of the security interest in the Collateral granted to the
Administrative Agent herein, including, without limitation, describing such
property as “all assets” or “all personal property, whether now owned or

 

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hereafter acquired.” Each Grantor will take any and all actions reasonably
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 respective priority thereof (in accordance with the terms
hereof and the Credit Agreement) against any Lien.

4.1.5 Disposition of Collateral. No Grantor will sell, lease or otherwise
dispose of the Collateral owned by such Grantor except (i) prior to the
occurrence of a Default, dispositions specifically permitted pursuant to
Sections 6.03 of the Credit Agreement, (ii) until such time following the
occurrence of a Default as such Grantor receives a notice from the
Administrative Agent instructing such Grantor to cease such transactions, sales
or leases of Inventory in the ordinary course of business, and (iii) until such
time as such Grantor receives a notice from the Administrative Agent pursuant to
Article VII, proceeds of Inventory and Accounts collected in the ordinary course
of business.

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 pursuant to 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.

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

 

  (i) preserve its existence and corporate structure as in effect on the
Effective Date;

 

  (ii) not change its 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 on Exhibit “A;” and

 

  (iv) not (i) have any Inventory, Equipment or Fixtures or proceeds or products
thereof (other than Inventory and proceeds thereof disposed of as permitted by
Section 4.1.5) at a location other than a location specified in Exhibit “A” with
respect to such Grantor, (ii) change its name or taxpayer identification number
or (iii) change its mailing address,

unless, in each such case, such Grantor shall have given the Administrative
Agent not less than 30 days’ (or such shorter period agreed to by the
Administrative Agent) prior written notice of such event or occurrence and the
Administrative Agent shall have either (x) reasonably determined that such event
or occurrence will not adversely affect the validity, perfection or priority of
the Administrative Agent’s security interest in the Collateral, or (y) taken
such steps (with the cooperation of such Grantor to the extent necessary or
advisable) as are reasonably 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.

 

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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.

4.2. Receivables.

4.2.1 Certain Agreements on Receivables. During the occurrence and continuation
of a Default, 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. Prior to the
occurrence and continuation of a Default, such Grantor may reduce the amount of
Accounts arising from the sale of Inventory or the rendering of services in
accordance with its present policies and in the ordinary course of business and
as otherwise permitted under the Credit Agreement.

4.2.2 Collection of Receivables. Except as otherwise provided in this Security
Agreement, each Grantor will collect and enforce, at such Grantor’s sole
expense, all amounts due or hereafter due to such Grantor under the Receivables
owned by such Grantor.

4.2.3 Delivery of Invoices. Each Grantor will deliver to the Administrative
Agent immediately upon its request after the occurrence and continuation of a
Default, duplicate invoices with respect to each Account owned by such Grantor
bearing such language of assignment as the Administrative Agent shall specify.

4.2.4 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
Receivable owned by such Grantor in an amount in excess of $250,000.00 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 in an amount in excess of $250,000.00, such Grantor will
disclose such fact to the Administrative Agent in writing, electronic or
otherwise, 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.

4.2.5 Inventory and Equipment. Each Grantor will do all things necessary in its
reasonable business judgment to maintain, preserve, protect and keep the
Inventory and the Equipment owned by such Grantor in good repair, working order
and saleable condition (ordinary wear and tear excepted) and make all necessary
and proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

4.3. Instruments, Securities, Chattel Paper, Documents and Pledged Deposits.
Each Grantor will (i) deliver to the Administrative Agent immediately upon
execution of this Security

 

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Agreement the originals of all Chattel Paper, Securities and Instruments
constituting Collateral (if any then exist), (ii) hold in trust for the
Administrative Agent upon receipt and promptly thereafter deliver to the
Administrative Agent any Chattel Paper, Securities and Instruments constituting
Collateral that individually have a value in excess of $100,000 or, in
aggregate, have a value in excess of $250,000, (iii) upon the designation of any
Pledged Deposits (as set forth in the definition thereof) that individually have
a value in excess of $100,000 or, in aggregate, have a value in excess of
$250,000, deliver to the Administrative Agent such Pledged Deposits which are
evidenced by certificates included in the Collateral endorsed in blank, marked
with such legends and assigned as the Administrative Agent shall specify, and
(iv) upon the Administrative Agent’s request, after the occurrence and during
the continuance of a Default, deliver to the Administrative Agent (and
thereafter hold in trust for the Administrative Agent upon receipt and
immediately deliver to the Administrative Agent) any Document evidencing or
constituting Collateral. The rights of the Administrative Agent under any
allonge delivered in connection with any Instrument constituting Collateral
shall be exercised only upon the occurrence and during the continuance of an
Event of Default.

4.4. Uncertificated Securities and Certain Other Investment Property. Each
Grantor will permit the Administrative Agent from time to time to cause the
appropriate issuers (and, if held with a securities intermediary, such
securities intermediary) of uncertificated securities or other types of
Investment Property not represented by certificates 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 all rollovers and replacements
therefor to reflect the Lien of the Administrative Agent granted pursuant to
this Security Agreement. Each Grantor will use all commercially reasonable
efforts, with respect to Investment Property constituting Collateral owned by
such Grantor held with a financial intermediary, to cause such financial
intermediary to enter into a control agreement with the Administrative Agent in
form and substance reasonably satisfactory to the Administrative Agent.

4.5. Stock and Other Ownership Interests.

4.5.1 Changes in Capital Structure of Issuers. Except as permitted in the Credit
Agreement, no Grantor will (i) permit or suffer any issuer of privately held
corporate securities or other ownership interests in a corporation, partnership,
joint venture or limited liability company constituting Collateral owned by such
Grantor to dissolve, liquidate, retire any of its capital stock or other
Instruments or Securities evidencing ownership, reduce its capital or merge or
consolidate with any other entity, or (ii) vote any of the Instruments,
Securities or other Investment Property in favor of any of the foregoing except
to the extent permitted under Section 6.03 of the Credit Agreement.

4.5.2 Issuance of Additional Securities. No Grantor will permit or suffer the
issuer of privately held corporate securities or other ownership interests in a
corporation, partnership, joint venture or limited liability company
constituting Collateral to issue any such securities or other ownership
interests, any right to receive the same or any right to receive earnings,
except to such Grantor.

 

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4.5.3 Registration of Pledged Securities and other Investment Property. Each
Grantor will permit any registerable 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 Default and without any further consent of such Grantor.

4.5.4 Exercise of Rights in Pledged Securities and other Investment Property.
Each Grantor will permit the Administrative Agent or its nominee at any time
after the continuance of a Default, without prior 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; provided that the
Administrative Agent or its nominee shall provide notice to such Grantor within
five (5) Business Days of taking any such action.

4.6. Account Control Agreements.

4.6.1 Deposit Accounts. In accordance with Section 5.10 of the Credit Agreement,
each Grantor will, within thirty (30) days (or such later date as may be agreed
to by the Administrative Agent in its sole discretion) after the date on which
the balance of any of such Grantor’s Deposit Accounts (excluding any payroll
accounts and zero balance accounts) maintained with (i) the Administrative
Agent, a Lender, or any Affiliate thereof equals or exceeds $500,000, or
(ii) any Person other than the Administrative Agent, a Lender, or any Affiliate
thereof equals or exceeds $250,000, cause such Deposit Account to become subject
to an account control agreement, in form and substance reasonably acceptable to
the Administrative Agent, which grants the Administrative Agent, for the benefit
of the Holders of Secured Obligations, control over and a first-priority
perfected security interest in such Deposit Account, including, without
limitation, amounts and other items on deposit therein. Each Grantor hereby
authorizes the Administrative Agent to modify this Security Agreement
unilaterally by amending Part A of Exhibit “G” to include any Deposit Account of
such Grantor that becomes subject to an account control agreement pursuant to
the immediately preceding sentence or Section 5.10 of the Credit Agreement.

4.6.2 Securities Accounts. In accordance with Section 5.10 of the Credit
Agreement, each Grantor will, within thirty (30) days (or such later date as may
be agreed to by the Administrative Agent in its sole discretion) after the date
on which the balance of any of such Grantor’s Securities Accounts maintained
with (i) the Administrative Agent, a Lender, or any Affiliate thereof equals or
exceeds $500,000, or (ii) any Person other than the Administrative Agent, a
Lender, or any Affiliate thereof equals or exceeds $250,000, cause such
Securities Account to become subject to an account control agreement, in form
and substance reasonably acceptable to the Administrative Agent, which grants
the Administrative Agent, for the benefit of the Holders of Secured Obligations,
control over and a first-priority perfected security interest in such Securities
Account, including, without limitation, financial assets credited to such
Securities Account. Each Grantor hereby authorizes the Administrative Agent to
modify this Security Agreement unilaterally by amending Part B of Exhibit “G” to
include any Securities Account of such Grantor that becomes subject to an
account control agreement pursuant to the immediately preceding sentence or
Section 5.10 of the Credit Agreement.

 

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4.7. Letter-of-Credit Rights. Each Grantor will, upon the Administrative Agent’s
request, cause each issuer of a letter of credit, to consent to the assignment
of proceeds of the letter of credit in order to give the Administrative Agent
Control of the letter-of-credit rights to such letter of credit.

4.8. Federal, State or Municipal Claims. Each Grantor will notify the
Administrative Agent of any Collateral having a value in excess of $100,000
owned by such Grantor which constitutes a claim 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.

4.9. Intellectual Property. If, after the date hereof, any Grantor obtains
rights to, or applies for or seeks registration of, any new patentable
invention, trademark or copyright in addition to the patents, trademarks and
copyrights described in Part C of Exhibit “B”, which are all of such Grantor’s
patents, trademarks and copyrights as of the Effective Date, then such Grantor
shall give the Administrative Agent notice thereof, 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 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 modify this Security Agreement
unilaterally (i) by amending Part C of Exhibit “B” to include any future
patents, trademarks and/or copyrights of which the Administrative Agent receives
notification from such Grantor pursuant hereto and (ii) by recording, in
addition to and not in substitution for this Security Agreement, a duplicate
original of this Security Agreement containing in Part C of Exhibit “B” a
description of such future patents, trademarks and/or copyrights.

4.10. Commercial Tort Claims. If, after the date hereof, any Grantor identifies
the existence of a commercial tort claim belonging to such Grantor that has
arisen in the course of such Grantor’s business in an amount in excess of
$100,000.00 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.

ARTICLE V

DEFAULT

5.1. The occurrence of any one or more of the following events shall constitute
a Default:

5.1.1 The breach by any Grantor of any of the terms or provisions of Sections
4.1.5 or 4.1.6 or Article VII.

 

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5.1.2 The breach by any Grantor (other than a breach which constitutes a Default
under Section 5.1.1 hereof) of any of the terms or provisions of this Security
Agreement which is not remedied within 30 days after the giving of written
notice to such Grantor by the Administrative Agent.

5.1.3 The occurrence of any “Event of Default” under, and as defined in, the
Credit Agreement.

5.2. Acceleration and Remedies. Upon the acceleration of the Obligations under
the Credit Agreement pursuant to Article VII thereof, the Obligations under the
Credit Agreement and, to the extent provided for under the Swap Agreements and
the Banking Services Agreements evidencing the same, the Swap Obligations and
the Banking Services Obligations, shall immediately become due and payable
without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived, and the Administrative Agent may, with the concurrence
or at the direction of the Required Lenders, exercise any or all of the
following rights and remedies:

5.2.1 Those rights and remedies provided in this Security Agreement, the Credit
Agreement, or any other Loan Document, provided that this Section 5.2.1 shall
not be understood to limit any rights or remedies available to the
Administrative Agent and the Holders of Secured Obligations prior to a Default.

5.2.2 Those rights and remedies available to a secured party under the New York
UCC (whether or not the New York 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.

5.2.3 Without notice except as specifically provided in Section 8.1 hereof or
elsewhere herein and in accordance with applicable law, sell, lease, assign,
grant an option or options to purchase or otherwise dispose of the Collateral or
any part thereof in one or more parcels at public or private sale, for cash, on
credit or for future delivery, and upon such other terms as the Administrative
Agent may deem commercially reasonable.

The Administrative Agent, on behalf of the Holders of Secured Obligations, may
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.

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

 

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Notwithstanding the foregoing, the Administrative Agent and Lenders will be
subject to those limitations on rights and remedies set forth in Article VII of
the Credit Agreement.

5.3. Grantors’ Obligations Upon Default. Upon the request of the Administrative
Agent after the occurrence and continuance of a Default, each Grantor will:

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

5.3.2 Secured Party Access. Permit the Administrative Agent, or the
Administrative Agent’s representatives and agents, to enter 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 and
to remove all or any part of the Collateral.

5.4. License. The Administrative Agent is hereby granted a non-exclusive license
or other right to use, following the occurrence and during the continuance of a
Default, 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, in completing production of, advertising for sale,
and selling any Collateral, and, following the occurrence and during the
continuance of a Default, such Grantor’s rights under all licenses and all
franchise agreements shall inure to the Administrative Agent’s benefit. In
addition, each Grantor hereby irrevocably agrees that the Administrative Agent
may, following the occurrence and during the continuance of a Default, 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 finish any work in process and affix any trademark owned by or
licensed to such Grantor and sell such Inventory as provided herein.

5.5. Waiver. To the fullest extent permitted by applicable law, each Grantor
hereby waives:

5.5.1 In connection with any foreclosure or other exercise of remedies by the
Administrative Agent with respect to the Equity Interests in such Grantor or any
Equity Interests held by such Grantor, (i) any requirement that the
Administrative Agent or any transferee deliver to such Grantor or its counsel
any legal opinion or any other evidence of compliance with, exemption from
registration under or a lack of liability of such Grantor under the Securities
Act of 1933 or any other applicable state or federal law and (ii) any
requirement of the consent of such Grantor to any assignment or transfer.

5.5.2 Any rights and defenses that are or become available to such Grantor by
reason of (i) Sections 2787 to 2855, inclusive, of the California Civil Code,
(ii) Sections 580a, 580b, 580d, or 726 of the California Code of Civil
Procedure, and (iii) any rights and defenses that such Grantor may have as a
result of any of such Grantor’s real property becoming Collateral.

 

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5.5.3 Any rights or defenses at law or equity that are or become available to
such Grantor, including by reason of Section 580a of the California Code of
Civil Procedure, to a fair market value hearing or action to determine a
deficiency judgment after a foreclosure.

Each Grantor agrees that the waivers set forth in Sections 5.5.2 and 5.5.3 mean,
among other things, that: (i) such waivers are unconditional and irrevocable
waivers of any rights and defenses such Grantor may have as a result of any of
such Grantor’s real property becoming Collateral, (ii) with respect to each
Grantor other than the Borrower, the Administrative Agent or any Holder of
Secured Obligations may collect from such Grantor without first foreclosing on
any of the Borrower’s real or personal property, and (iii) if the Administrative
Agent or any Holder of Secured Obligations forecloses on any real property of
such Grantor: (1) the amount of Secured Obligations may be reduced only by the
price for which such real property is sold at the foreclosure sale, even if such
real property is worth more than the sale price, and (2) with respect to each
Grantor other than the Borrower, the Administrative Agent or any Holder of
Secured Obligations may collect from such Grantor even if the Administrative
Agent or any Holder of Secured Obligations, by foreclosing on such real
property, has terminated any right such Grantor may have to collect from the
Borrower.

ARTICLE VI

WAIVERS, AMENDMENTS AND REMEDIES

No delay or omission of the Administrative Agent or any Holder of Secured
Obligations 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 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 with the concurrence or at the direction of the
(a) Required Lenders and (b) each Grantor, and then only to the extent in such
writing specifically set forth, provided that the addition of any Material
Domestic Subsidiary as a Grantor hereunder by execution of a Supplement hereto
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 the Required Lenders or 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 Holders of Secured Obligations until the Secured Obligations have been paid
in full (other than Unliquidated Obligations).

 

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ARTICLE VII

PROCEEDS; COLLECTION OF RECEIVABLES

7.1. Lockboxes. Upon request of the Administrative Agent after the occurrence
and during the continuance of a Default, each Grantor shall execute and deliver
to the Administrative Agent irrevocable lockbox agreements in the form provided
by or otherwise reasonably 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 at the Administrative Agent.

7.2. Collection of Receivables. The Administrative Agent may at any time after
the occurrence and continuance of a Default, by giving each Grantor written
notice, elect to require that the Receivables be paid directly to the
Administrative Agent for the benefit of the Holders of Secured Obligations. 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 Holders of Secured
Obligations, 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. The Administrative Agent may, in its reasonable
discretion, 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 said cash collateral account. If no Default has
occurred or is continuing, the Administrative Agent shall from time to time
deposit the collected balances in said cash collateral account into the
applicable Grantor’s general operating account with the Administrative Agent. If
any Default 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 said 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.

 

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ARTICLE VIII

GENERAL PROVISIONS

8.1. Notice of Disposition of Collateral; Condition of Collateral. Each Grantor
hereby waives 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 Borrower, addressed as
set forth in Article IX, at least ten 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.

8.2. 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 a Receivable. In view of the foregoing, each Grantor agrees that
the Administrative Agent may at any time and from time to time, if a Default 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 reasonable 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.

8.3. 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 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 8.3. Each Grantor’s
obligation to reimburse the Administrative Agent pursuant to the preceding
sentence shall be a Secured Obligation payable no later than fifteen (15) days
after written demand therefor.

8.4. 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 financing statements 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) upon the occurrence and the continuance of a 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) in such offices 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) to contact and enter into one or more
agreements

 

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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 reasonably necessary or advisable to give the
Administrative Agent Control over such Securities or other Investment Property,
(v) upon the occurrence and the continuance of a Default, 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 and (vii) to discharge past due
taxes, assessments, charges, fees or Liens on the Collateral (except for such
Liens as are specifically permitted hereunder or under any other Loan Document
or which are being contested in good faith pursuant to any other Loan Document),
and each Grantor agrees to reimburse the Administrative Agent within fifteen
(15) days of written 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.

8.5. Specific Performance of Certain Covenants. Each Grantor acknowledges and
agrees that a breach of any of the covenants contained in Sections 4.1.5, 4.1.6,
4.4, 5.3, or 8.7 or in Article VII hereof will cause irreparable injury to the
Administrative Agent and the Holders of Secured Obligations, that the
Administrative Agent and Holders of Secured Obligations have no adequate remedy
at law in respect of such breaches and therefore agrees, without limiting the
right of the Administrative Agent or the Holders of Secured Obligations 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 8.5 shall be specifically enforceable
against the Grantors.

8.6. Use and Possession of Certain Premises. Upon the occurrence and during the
continuance of a Default, the Administrative Agent shall be entitled to occupy
and use any premises owned or leased by the Grantors where any of the Collateral
or any records relating to the Collateral are located until the Secured
Obligations (other than Unliquidated Obligations) are paid in full or the
Collateral is removed therefrom, whichever first occurs, without any obligation
to pay any Grantor for such use and occupancy.

8.7. Dispositions Not Authorized. No Grantor is authorized to sell or otherwise
dispose of the Collateral except as set forth in Section 4.1.5 hereof and
notwithstanding any course of dealing between any Grantor and the Administrative
Agent or other conduct of the Administrative Agent, no authorization to sell or
otherwise dispose of the Collateral (except as set forth in Section 4.1.5
hereof) shall be binding upon the Administrative Agent or the Holders of Secured
Obligations unless such authorization is in writing signed by the Administrative
Agent with the consent or at the direction of the Required Lenders.

8.8. Benefit of Agreement. The terms and provisions of this Security Agreement
shall be binding upon and inure to the benefit of the Grantors, the
Administrative Agent and the Holders of Secured Obligations 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.

 

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8.9. 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.

8.10. Taxes and Expenses. Any taxes (including income taxes) payable or ruled
payable by Federal or State authority in respect of this Security Agreement
shall be paid by the Grantors, together with interest and penalties, if any,
subject to Grantor’s right to contest such taxes pursuant to Section 5.04 of the
Credit Agreement. The Grantors shall reimburse the Administrative Agent for any
and all reasonable out-of-pocket expenses and internal charges (including
reasonable attorneys’, auditors’ and accountants’ fees and reasonable 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 reasonable expenses and charges associated with any periodic or special
audit of the Collateral; provided, however, that if no Default has occurred and
is continuing, only two such periodic or special audits of the Collateral in any
fiscal year shall be at the expense of the Grantors). 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.

8.11. 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.

8.12. 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) the Credit Agreement has terminated pursuant
to its express terms and (ii) all of the Secured Obligations (other than
Unliquidated Obligations) have been paid in cash and performed in full and no
commitments of the Administrative Agent or the Holders of Secured Obligations
which would give rise to any Secured Obligations are outstanding.

8.13. Entire Agreement. This Security 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 between
the Grantors and the Administrative Agent relating to the Collateral.

8.14. Governing Law; Jurisdiction; Waiver of Jury Trial.

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

8.14.2 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
thereof, in any action or proceeding arising out of or relating to this Security
Agreement or any other Loan

 

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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.

8.14.3 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 8.14.2. 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.

8.14.4 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.

8.14.5 WAIVER OF JURY TRIAL. EACH GRANTOR 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 OR ANY OTHER LOAN DOCUMENT (WHETHER BASED ON CONTRACT, TORT
OR ANY OTHER THEORY). EACH GRANTOR (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER GRANTOR HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER GRANTOR WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER GRANTORS 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.

8.15. Indemnity. Each Grantor hereby agrees, jointly with the other Grantors and
severally, to indemnify the Administrative Agent and the Holders of Secured
Obligations, and their respective successors, assigns, agents and employees,
from and against any and all liabilities, damages, penalties, suits, costs, and
expenses of any kind and nature (including, without limitation, all expenses of
litigation or preparation therefor whether or not the

 

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Administrative Agent or any Holder of Secured Obligations is a party thereto)
imposed on, incurred by or asserted against the Administrative Agent or the
Holders of Secured Obligations, or their respective successors, assigns, agents
and employees, in any way relating to or arising out of this Security Agreement,
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 Holders of Secured
Obligations 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 losses, claims, damages, penalties,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence, bad faith or willful misconduct of such indemnitee.

8.16. 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 (other than Unliquidated Obligations); provided that, and not in
contravention of the foregoing, so long as no Default or Event of Default has
occurred and is continuing, such Grantor may make loans to and receive payments
in the ordinary course of business 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 Holders of Secured
Obligations 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 all of the Secured
Obligations (other than Unliquidated Obligations) shall have been fully paid and
satisfied (in cash) and all Commitments and Letters of Credit issued under the
Credit Agreement have terminated or expired. 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 Unliquidated Obligations) shall have first been fully
paid and satisfied (in cash). 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 satisfaction of all of the Secured Obligations (other than
Unliquidated Obligations) and the termination or expiration of all Commitments
of the Lenders and Letters of Credit issued pursuant to the Credit Agreement

 

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have been terminated or expired, such Grantor shall receive and hold the same in
trust, as trustee, for the benefit of the Holders of Secured Obligations and
shall forthwith deliver the same to the Administrative Agent, for the benefit of
the Holders of Secured Obligations, in precisely the form received (except for
the endorsement or assignment of the Grantor where necessary), for application
to any of the Secured Obligations (other than Unliquidated Obligations), due or
not due, and, until so delivered, the same shall be held in trust by the Grantor
as the property of the Holders of Secured Obligations. 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 Secured
Obligations (other than Unliquidated Obligations) have been paid in full (in
cash) and satisfied and all Commitments and Letters of Credit issued under the
Credit Agreement have terminated or expired, 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.

8.17. 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.

8.18. 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 by a
notice in writing to the other parties.

ARTICLE X

THE ADMINISTRATIVE AGENT

JPMorgan Chase Bank, N.A. has been appointed Administrative Agent for the
Holders of Secured Obligations 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

 

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upon the Administrative Agent hereunder is subject to the terms of the
delegation of authority made by the Holders of Secured Obligations 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 TO FOLLOW]

 

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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.

 

INNERWORKINGS, INC.     GRAPHOGRAPHY LIMITED LLC By:  

/s/ Nicholas J. Galassi

    By:  

/s/ Nicholas J. Galassi

Name:   Nicholas J. Galassi     Name:   Nicholas J. Galassi Title:   Chief
Financial Officer & Secretary     Title:   Secretary CORPORATE EDGE, INC.    
APPLIED GRAPHICS, INC. By:  

/s/ Nicholas J. Galassi

    By:  

/s/ Nicholas J. Galassi

Name:   Nicholas J. Galassi     Name:   Nicholas J. Galassi Title:   Secretary  
  Title:   Secretary

IW - SPECTRUM, LLC

By:   INNERWORKINGS, INC., Its Manager   By:  

/s/ Nicholas J. Galassi

  Name:   Nicholas J. Galassi   Title:   Chief Financial Officer & Secretary

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

By:  

/s/ Timothy S. Irwin

Name:   Timothy S. Irwin Title:   Vice President