EXHIBIT 10.3


SECURITY AGREEMENT


 


THIS SECURITY AGREEMENT, dated as of April 24,
2015, among Roller Bearing Company of America, Inc., a Delaware corporation (“Borrower”), RBC Bearings Incorporated,
a Delaware corporation (“Holdings”), each of the Subsidiaries listed on the signature pages hereto or that becomes
a party hereto pursuant to Section 8.14 (each such entity being a “Subsidiary Grantor” and, collectively, the
“Subsidiary Grantors”; the Subsidiary Grantors, Holdings and the Borrower are referred to collectively as the
“Grantors”), and Wells Fargo Bank, National Association, as collateral agent (in such capacity, the “Collateral
Agent”) for its benefit and the benefit of the Secured Parties.


 


WITNESSETH:


 


WHEREAS, the Borrower is a party to the Credit
Agreement, dated as of the date hereof (as the same may be amended, restated, supplemented or otherwise modified, refinanced or
replaced from time to time, the “Credit Agreement”), among Holdings, the Borrower, the Lenders from time to
time party thereto and Wells Fargo Bank, National Association, as Administrative Agent and as Collateral Agent;


 


WHEREAS, (a) pursuant to the Credit Agreement,
the Lenders have severally agreed to make Loans to the Borrower, the Swingline Lender has agreed to make Swingline Loans and the
Letter of Credit Issuer has agreed to issue Letters of Credit for the account of the Borrower and the Restricted Subsidiaries upon
the terms and subject to the conditions set forth therein and (b) one or more Cash Management Banks or Hedge Banks may from
time to time enter into Secured Cash Management Agreements or Secured Hedge Agreements with Holdings and/or its Subsidiaries;


 


WHEREAS, pursuant to the Guarantee dated as of
the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Guarantee”),
each Grantor party thereto has agreed to unconditionally and irrevocably guarantee, as primary obligor and not merely as surety,
to the Collateral Agent for the benefit of the Secured Parties the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the Obligations;


 


WHEREAS, each Grantor is a Guarantor or the Borrower;


 


WHEREAS, the proceeds of the Loans, the issuance
of the Letters of Credit and the provision of Secured Cash Management Agreements and Secured Hedge Agreements will be used in part
to enable the Borrower to make valuable transfers to the Grantors in connection with the operation of their respective businesses;


 


WHEREAS, each Grantor acknowledges that it will
derive substantial direct and indirect benefit from the making of the Loans and the Swingline Loans and the issuance of the Letters
of Credit; and the provision of such Cash Management Agreements and Secured Hedge Agreements;


 


WHEREAS, it is a condition precedent to the obligation
of the Lenders to make their respective Loans, the Swingline Lender to make Swingline loans and to the obligation of the Letter
of Credit Issuer to issue Letters of Credit under the Credit Agreement that the Grantors shall have executed and delivered this
Security Agreement to the Collateral Agent for its benefit and the benefit of the Secured Parties;


 




    	 



    	 



    

 


NOW, THEREFORE, in consideration of the premises
and to induce the Administrative Agent, the Collateral Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective Loans, the Swingline Lender to make Swingline Loans and to induce the Letter of Credit Issuer
to issue Letters of Credit for the account of the Borrower and the Restricted Subsidiaries under the Credit Agreement and to induce
one or more Lenders or Affiliates of Lenders to enter into Secured Cash Management Agreements or Secured Hedge Agreements with
Holdings and/or its Subsidiaries, the Grantors hereby agree with the Collateral Agent, for its benefit and the benefit of the Secured
Parties, as follows:


 


1.           Defined
Terms.


 


(a)          Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit
Agreement. Sections 1.2 and 1.5 of the Credit Agreement are incorporated herein by reference, mutatis mutandis.


 


(b)          Terms
used herein without definition that are defined in the UCC have the meanings given to them in the UCC, including the following
terms (which are capitalized herein): Account, Chattel Paper, Commercial Tort Claims, Commodity Contract, Deposit Accounts, Documents,
Fixtures, Goods, Instruments, Inventory, Letter-of-Credit Right, Securities, Securities Accounts, Security Entitlement, Supporting
Obligation and Tangible Chattel Paper.


 


(c)          The
following terms shall have the following meanings:


 


“Borrower” shall have the meaning
assigned to such term in the recitals hereto.


 


“Collateral” shall have the
meaning provided in Section 2.


 


“Collateral Account” shall
mean any collateral account established by the Collateral Agent as provided in Section 5.1 or Section 5.3.


 


“Collateral Agent” shall have
the meaning provided in the preamble to this Security Agreement.


 


“Control” shall mean “control,”
as such term is defined in Section 9-104 or 9-106, as applicable, of the UCC.


 


“Copyright License” shall mean
any written agreement, now or hereafter in effect, granting any right to any third party under any Copyright now or hereafter owned
by any Grantor or that any Grantor otherwise has the right to license, or granting any right to any Grantor under any Copyright
now or hereafter owned by any third party, and all rights of any Grantor under any such agreement, including those material inbound
exclusive licenses in third party owned U.S. registered Copyrights listed on Schedule 2.


 


“Copyrights” shall mean, with
respect to any Person, all of the following now owned or hereafter acquired by such Person: (i) all copyright rights in any work
subject to the copyright laws of the United States or any other country, whether as author, assignee, transferee or otherwise,
and (ii) all registrations and applications for registration of any such copyright in the United States or any other country, including
registrations, recordings, supplemental registrations and pending applications for registration in the United States Copyright
Office, including those U.S. registered copyrights owned by any Grantor and listed on Schedule 1.


 


“Credit Agreement” shall have
the meaning assigned to such term in the recitals hereto.


 




    	-2-



    	 



    

 


“Equipment” shall mean all
“equipment,” as such term is defined in Article 9 of the UCC, now or hereafter owned by any Grantor or to which any
Grantor has rights and, in any event, shall include all machinery, equipment, furnishings, movable trade fixtures and vehicles
now or hereafter owned by any Grantor or to which any Grantor has rights and any and all Proceeds, additions, substitutions and
replacements of any of the foregoing, wherever located, together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto.


 


“Excluded Property” shall mean
(i) any Vehicles and other assets subject to certificates of title, (ii) Letter-of-Credit Rights except to the extent perfection
of a security interest therein may be accomplished by filing financing statements in appropriate form in the applicable jurisdiction
under the UCC, (iii) any property that is subject to a Lien permitted pursuant to clauses (6) (solely with respect to clause (d)
of Section 10.1 of the Credit Agreement) and (9) of the definition of “Permitted Liens” in the Credit Agreement if
the contract or other agreement in which such Lien is granted (or the documentation providing for such Indebtedness) prohibits
the creation of any other Lien on such property (other than to the extent that any such prohibition would be rendered ineffective
pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction
or any other applicable law); provided that such property shall be Excluded Property only to the extent and for so long
as such prohibition is in effect; provided further that immediately upon the repayment of all Indebtedness secured by such
Lien, such Grantor shall be deemed to have granted a Security Interest in all the rights and interests with respect to such property,
(iv) all leasehold interests in real property, (v) any fee owned real property with a value, on an individual basis, of less than
$15,000,000, (vi) any commercial tort claims with a value, on an individual basis, of less than $10,000,000, (vii) any foreign
assets other than to the extent a security interest therein may be accomplished by filing of financing statements in appropriate
form in the applicable jurisdiction under the UCC, (viii) any intent-to-use trademark application prior to the filing of a “Statement
of Use” or “Amendment to Allege Use” with respect thereto and (ix) any lease, license or other agreement or any
property subject to a purchase money security interest, capital lease obligation or similar arrangement, in each case permitted
under the Loan Documents to the extent that a grant of a security interest therein would violate or invalidate such lease, license
or agreement or purchase money, capital lease or similar arrangement or create a right of termination in favor of any other party
thereto (other than the Borrower or a Guarantor) after giving effect to the applicable anti-assignment provisions of the Uniform
Commercial Code), other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the
UCC notwithstanding such prohibition; provided that (x) the foregoing limitation shall not affect, limit, restrict or impair
the grant by such Grantor of a Security Interest pursuant to this Security Agreement in any Account or any money or other amounts
due or to become due under any such contract, agreement, instrument or indenture and (y) such property shall be Excluded Property
only to the extent and for so long as such prohibition is in effect; provided further that proceeds and products from any
and all of the of the foregoing that would constitute Excluded Property shall also not be considered Collateral and proceeds and
products from any and all of the of the foregoing that do not constitute Excluded Property shall be considered Collateral.


 


“General Intangibles” shall
mean all “general intangibles” as such term is defined in Article 9 of the UCC and, in any event, including with respect
to any Grantor, all contracts, agreements, instruments and indentures in any form, and portions thereof, to which such Grantor
is a party or under which such Grantor has any right, title or interest or to which such Grantor or any property of such Grantor
is subject, as the same may from time to time be amended, supplemented or otherwise modified, including (a) all rights of such
Grantor to receive moneys due and to become due to it thereunder or in connection therewith, (b) all rights of such Grantor to
receive proceeds of any insurance, indemnity, warranty or guarantee with respect thereto, (c) all claims of such Grantor for damages
arising out of any breach of or default thereunder and (d) all rights of such Grantor to terminate, amend, supplement, modify or
exercise rights or options thereunder, to perform thereunder and to compel performance and otherwise exercise all remedies thereunder.


 




    	-3-



    	 



    

 


“Grantor” shall have the meaning
assigned to such term in the recitals hereto.


 


“Guarantee” shall have the
meaning assigned to such term in the recitals hereto.


 


“Holdings” shall have the meaning
assigned to such term in the recitals hereto.


 


“Intellectual Property” shall
mean all U.S. and foreign intellectual property, whether owned or licensed, including all (i) (a) Patents, inventions, processes,
developments, technology and know-how; (b) Copyrights including Copyrights in graphics, advertising materials, labels, package
designs and photographs; (c) Trademarks; (d) trade secrets, confidential, proprietary or non-public information and (ii) all rights,
priorities and privileges related thereto and all rights to sue at law or in equity for any infringement or other impairment thereof,
including the right to receive all Proceeds therefrom.


 


“Intercreditor Agreement” shall
have the meaning assigned to such term in Section 8.1.


 


“Investment Property” shall
mean all Securities (whether certificated or uncertificated), Security Entitlements and Commodity Contracts of any Grantor (other
than Excluded Stock and Stock Equivalents), whether now or hereafter acquired by any Grantor.


 


“Patent License” shall mean
any written agreement, now or hereafter in effect, granting to any third party any right to make, use or sell any invention on
which a Patent, now or hereafter owned by any Grantor or that any Grantor otherwise has the right to license, is in existence,
or granting to any Grantor any right to make, use or sell any invention on which a Patent, now or hereafter owned by any third
party, is in existence, and all rights of any Grantor under any such agreement, including those material inbound exclusive licenses
in third party owned U.S. Patents and applications therefor listed on Schedule 4.


 


“Patents” shall mean, with
respect to any Person, all of the following now owned or hereafter acquired by such Person: (a) all letters patent of the United
States or the equivalent thereof in any other country, all registrations and recordings thereof, and all applications for letters
patent of the United States or the equivalent thereof in any other country, including registrations, recordings and pending applications
in the United States Patent and Trademark Office or any similar offices in any other country, and (b) all reissues, continuations,
divisions, continuations-in-part, renewals or extensions thereof, and the inventions disclosed or claimed therein, including the
right to make, use and/or sell the inventions disclosed or claimed therein, including those U.S. patents and applications therefor
owned by any Grantor and listed on Schedule 3.


 


“Proceeds” shall mean all “proceeds”
as such term is defined in Article 9 of the UCC and, in any event, shall include with respect to any Grantor, any consideration
received from the sale, exchange, license, lease or other disposition of any asset or property that constitutes Collateral, any
value received as a consequence of the possession of any Collateral and any payment received from any insurer or other Person or
entity as a result of the destruction, loss, theft, damage or other involuntary conversion of whatever nature of any asset or property
that constitutes Collateral, and shall include (a) all cash and negotiable instruments received by or held on behalf of the Collateral
Agent, (b) any claim of any Grantor against any third party for (and the right to sue and recover for and the rights to damages
or profits due or accrued arising out of or in connection with) (i) past, present or future infringement of any Patent now or hereafter
owned by any Grantor, or licensed under a Patent License, (ii) past, present or future infringement or dilution of any Trademark
now or hereafter owned by any Grantor or licensed under a Trademark License or injury to the goodwill associated with or symbolized
thereby, (iii) past, present or future infringement of any Copyright now or hereafter owned by any Grantor or licensed under a
Copyright License and (c) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral.


 




    	-4-



    	 



    

 


“Registered Intellectual Property”
shall mean all Copyrights, Patents and Trademarks issued by, registered with, renewed by or the subject of a pending application
before the United States Patent and Trademark Office or the United States Copyright Office (or any successor office).


 


“Security Agreement” shall
mean this Security Agreement, as the same may be amended, supplemented or otherwise modified from time to time.


 


“Security Interest” shall have
the meaning provided in Section 2.


 


“Short-form Intellectual Property Security
Agreement” shall have the meaning assigned to such term in Section 3.2(b).


 


“Subsidiary Guarantor” shall
have the meaning assigned to such term in the recitals hereto.


 


“Trademark License” shall mean
any written agreement, now or hereafter in effect, granting to any third party any right to use any Trademark now or hereafter
owned by any Grantor or that any Grantor otherwise has the right to license, or granting to any Grantor any right to use any Trademark
now or hereafter owned by any third party, and all rights of any Grantor under any such agreement, including those material inbound
exclusive licenses in third party owned U.S. registered Trademarks and applications therefor listed on Schedule 6.


 


“Trademarks” shall mean, with
respect to any Person, all of the following now owned or hereafter acquired by such Person: (i) all trademarks, service marks,
trade names, corporate names, company names, business names, fictitious business names, trade styles, trade dress, logos, other
source or business identifiers, designs and general intangibles of like nature, now existing or hereafter adopted or acquired,
all registrations and recordings thereof (if any), and all registration and recording applications filed in connection therewith,
including registrations and registration applications in the United States Patent and Trademark Office or any similar offices in
any State of the United States or any other country or any political subdivision thereof, and all extensions or renewals thereof
and (ii) all goodwill associated therewith or symbolized thereby, including those U.S. registered trademarks and applications therefor
owned by any Grantor and listed on Schedule 5 hereto.


 


“UCC” shall mean the Uniform
Commercial Code as from time to time in effect in the State of New York; provided, however, that, in the event that,
by reason of mandatory provisions of law, any of the attachment, perfection or priority of the Collateral Agent’s and the
Secured Parties’ security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction
other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions
related to such provisions.


 


“Vehicles” shall mean all cars,
trucks, trailers, and other vehicles covered by a certificate of title law of any state and all tires and other appurtenances to
any of the foregoing. 


 


(d)          The
words “hereof”, “herein”, “hereto” and “hereunder” and words of similar import
when used in this Security Agreement shall refer to this Security Agreement as a whole and not to any particular provision of this
Security Agreement, and Section, subsection, clause and Schedule references are to this Security Agreement unless otherwise specified.
The words “include”, “includes” and “including” shall be deemed to be followed by the phrase
“without limitation”.


 




    	-5-



    	 



    

 


(e)          The
meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.


 


(f)          Where
the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Grantor, shall refer to
such Grantor’s Collateral or the relevant part thereof.


 


2.           Grant
of Security Interest.


 


(a)          Each
Grantor hereby bargains, sells, conveys, assigns, sets over, mortgages, pledges, hypothecates and transfers to the Collateral Agent,
for the benefit of the Secured Parties, and grants to the Collateral Agent, for the benefit of the Secured Parties, a lien on and
security interest in (the “Security Interest”), all of its right, title and interest in, to and under all of
the following property now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time
in the future may acquire any right, title or interest (collectively, the “Collateral”), as collateral security
for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of
the Obligations:


 


(i)          all
Accounts;


 


(ii)         all
Chattel Paper;


 


(iii)        all
Commercial Tort Claims described on Schedule 7 (as such Schedule may be amended from time to time);


 


(iv)        all
Documents;


 


(v)         all
Equipment, Fixtures and Goods;


 


(vi)        all
General Intangibles;


 


(vii)       all
Instruments;


 


(viii)      all
Intellectual Property;


 


(ix)         all
Inventory;


 


(x)          all
Investment Property;


 


(xi)         all
Letter-of-Credit Rights;


 


(xii)        all
Money and all Deposit Accounts;


 


(xiii)       all
Supporting Obligations;


 


(xiv)      all
books and records pertaining to the Collateral; and


 


(xv)       the
extent not otherwise included, all Proceeds and products of any and all of the foregoing;


 




    	-6-



    	 



    

 


provided, that (x) the Collateral for any
Obligations shall not include any (A) Excluded Stock and Stock Equivalents with respect to such Obligations, (B) Excluded Property
or (C) assets with respect to which, (1) in the reasonable judgment of the Collateral Agent and the Borrower (as agreed in writing),
the cost or other consequences of granting a security interest in favor of the Secured Parties under the Security Documents shall
be excessive in view of the benefits to be obtained by the Lenders therefrom, or (2) granting a security interest in such assets
in favor of the Secured Parties under the Security Documents would result in materially adverse tax consequences or would require
obtaining the consent of any governmental authority, in each case as reasonably determined by the Borrower in consultation with
the Administrative Agent, and (y) none of the items included in clauses (i) through (xv) above shall constitute Collateral to the
extent (and only to the extent) that the grant of the Security Interest therein would violate any Requirement of Law applicable
to such Collateral; provided, however, that Collateral shall include any Proceeds, substitutions or replacements of any assets
referred to in the foregoing clauses (x) and (y) (unless such Proceeds, substitutions or replacements would constitute assets referred
to in clause (x) or (y)). No Grantor shall be required to take actions to (x) perfect security interests in Letter-of Credit Rights
except to the extent perfection of a security interest therein may be accomplished by filing of financing statements in appropriate
form in the applicable jurisdiction under the UCC or (y) enter into control agreements and perfection by “control”
(other than in respect of certificated pledged collateral) with respect to any Collateral (including, without limitation, deposit
accounts, commodities accounts or securities accounts) of the Grantors, as applicable.


 


(b)          Each
Grantor hereby irrevocably authorizes the Collateral Agent and its Affiliates, counsel and other representatives, at any time and
from time to time, to file or record financing statements, amendments to financing statements and, with notice to the applicable
Grantors, other filing or recording documents or instruments with respect to the Collateral in such form and in such offices as
the Collateral Agent reasonably determines appropriate to perfect the Security Interests of the Collateral Agent under this Security
Agreement, and such financing statements and amendments may describe the Collateral covered thereby as “all assets”,
“all personal property now owned or hereafter acquired” or words of similar effect, provided that with respect to fixtures
the Collateral Agent shall only file or record financing statements in the jurisdiction of organization of a Grantor, except in
connection with a Mortgage. Each Grantor hereby also authorizes the Collateral Agent and its Affiliates, counsel and other representatives,
at any time and from time to time, to file continuation statements with respect to previously filed financing statements.


 


Each Grantor hereby agrees to provide to the Collateral
Agent, promptly upon request, any information reasonably necessary to effectuate the filings or recordings authorized by this Section
2(b).


 


The Collateral Agent is further authorized to
file with the United States Patent and Trademark Office or United States Copyright Office (or any successor office), with the signature
of each applicable Grantor, such documents as the Collateral Agent reasonably determines as may be necessary or advisable for the
purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest granted hereunder by each Grantor
and naming any Grantor or the Grantors as debtors and the Collateral Agent, as the case may be, as secured party.


 


The Security Interests are granted as security
only and shall not subject the Collateral Agent or any other Secured Party to, or in any way alter or modify, any obligation or
liability of any Grantor with respect to or arising out of the Collateral.


 




    	-7-



    	 



    

 


3.          Representations
and Warranties.


 


Each Grantor hereby represents and warrants to
the Collateral Agent and each Secured Party on the date hereof that:


 


3.1           Title;
No Other Liens. Except for (a) the Security Interest granted to the Collateral Agent for the benefit of the Secured Parties
pursuant to this Security Agreement and (b) the Liens permitted by the Credit Agreement, such Grantor owns or has the right to
use each item of the Collateral free and clear of any and all Liens or claims of others. No security agreement, financing statement
or other public notice with respect to all or any part of the Collateral that evidences a Lien securing any material Indebtedness
is on file or of record in any public office, except such as (i) have been filed in favor of the Collateral Agent for its benefit
and the benefit of the Secured Parties pursuant to this Security Agreement, (ii) are permitted by the Credit Agreement or (iii)
relate to obligations no longer outstanding or are in respect of commitments to lend which have been terminated.


 


3.2           Perfected
Liens.


 


(a)          This
Security Agreement is effective to create in favor of the Collateral Agent, for the benefit of the Secured Parties, legal, valid
and enforceable Security Interests in the Collateral (with respect to Collateral consisting of Capital Stock of Foreign Subsidiaries,
to the extent the enforceability of such Security Interest is governed by the UCC), subject to the effects of bankruptcy, insolvency
or similar laws affecting creditors’ rights generally and general equitable principles.


 


(b)          Subject
to the limitations set forth in clause (c) of this Section 3.2, the Security Interests granted pursuant to this Security Agreement
(i) will constitute valid and perfected first priority Security Interests in the Collateral (subject to Permitted Liens to the
extent perfection may be obtained by the filings or other actions described in clause (A), (B) or (C) of this paragraph) in favor
of the Collateral Agent, for the benefit of the Secured Parties, as collateral security for the Obligations, upon (A) with respect
to Collateral in which perfection can be obtained by filing a financing statement, the filing in the applicable filing offices
of all financing statements, in each case, naming each Grantor as “debtor” and the Collateral Agent as “secured
party” and describing the Collateral, (B) with respect to Instruments, Chattel Paper, Certificated Securities and negotiable
Documents, delivery to the Collateral Agent (or its bailee) of all Instruments, Chattel Paper, Certificated Securities and negotiable
Documents in each case, properly endorsed for transfer in blank and (C) with respect to Intellectual Property, completion of the
filing of a fully executed agreement substantially in the form of Annex B hereof (the “Short-form Intellectual Property
Security Agreement”) and containing a description of all Collateral constituting Registered Intellectual Property in
the United States Patent and Trademark Office, with respect to U.S. registered and applied for Patents and Trademarks, within 90
days from the execution date of such Short-form Intellectual Property Security Agreement or in the United States Copyright Office,
with respect to U.S. registered Copyrights, within 30 days from the execution date of such Short-form Intellectual Property Security
Agreement, as applicable and (ii) are prior to all other Liens on the Collateral other than Liens permitted pursuant to Section
10.2 of the Credit Agreement.


 


(c)          Notwithstanding
anything to the contrary herein, no Grantor shall be required to perfect the Security Interests granted by this Security Agreement
by any means other than by (i) filings pursuant to the Uniform Commercial Code of the relevant State(s), (ii) filings in the United
States Patent and Trademark Office or United States Copyright Office (as applicable) with respect to Registered Intellectual Property,
(iii) delivery to the Collateral Agent (or its bailee) to be held in its possession of all Collateral consisting of Tangible Chattel
Paper, Instruments or Certificated Securities with a fair market value in excess of $10,000,000 individually and (iv) actions to
perfect a security interest in Commercial Tort Claims to the extent set forth in Section 4.1(f).


 




    	-8-



    	 



    

 


(d)          It
is understood and agreed that the Security Interests created hereunder in cash and Investment Property shall not prevent the Grantors
from using such assets in the ordinary course of their respective businesses.


 


4.          Covenants.


 


Each Grantor hereby covenants and agrees with
the Collateral Agent and the Secured Parties that, from and after the date of this Security Agreement until the Obligations are
paid in full and the Commitments are terminated and all Letters of Credit have expired or terminated and all Letter of Credit Outstandings
have been reduced to zero (or all such Letters of Credit and Letter of Credit Outstandings have been Cash Collateralized):


 


4.1          Maintenance
of Perfected Security Interest; Further Documentation.


 


(a)          Such
Grantor shall maintain the Security Interest created by this Security Agreement as a perfected Security Interest having at least
the priority described in Section 3.1 and shall take commercially reasonable actions necessary to defend such Security Interest
against the claims and demands of all Persons whomsoever, in each case subject to Section 3.2(c).


 


(b)          Such
Grantor will furnish to the Collateral Agent and the Lenders from time to time statements and schedules further identifying and
describing the assets and property of such Grantor and such other reports in connection therewith as the Collateral Agent may reasonably
request.


 


(c)          Such
Grantor will furnish to the Collateral Agent at the time of the delivery of the financial statements provided for in Sections 9.1(a)
of the Credit Agreement (or, if the Credit Agreement is no longer in effect, on an annual basis), a schedule setting forth any
additional (A) (i) Registered Intellectual Property owned by any Grantor or (ii) material Registered Intellectual Property exclusively
licensed from a third party to any Grantor, in each case, which has not been previously disclosed to the Collateral Agent, following
the Closing Date (or following the date of the last supplement provided to the Collateral Agent pursuant to this Section 4.1(c)),
all in reasonable detail and (B) within thirty (30) days following the delivery of such financial statements, execute and file
appropriate documents or instruments with the United States Patent and Trademark Office or the United States Copyright Office,
as applicable, evidencing the Collateral Agent’s security interest in such new or additional Registered Intellectual Property.


 


(d)          Subject
to clause (e) below and Section 3.2(c), each Grantor agrees that at any time and from time to time, at the expense of such Grantor,
it will execute any and all further documents, financing statements, agreements and instruments, and take all such further actions
(including the filing and recording of financing statements and other documents, including all applicable documents required under
Section 3.2(b)(C)), which may be required under any applicable law, or which, subject to the terms of the Intercreditor Agreement,
the Collateral Agent may reasonably request, in order (i) to grant, preserve, protect and perfect the validity and priority of
the Security Interests created or intended to be created hereby or (ii) to enable the Collateral Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral, including the filing of any financing or continuation statements
under the Uniform Commercial Code in effect in any jurisdiction with respect to the Security Interests created hereby and all applicable
documents required under Section 3.2(b)(C), all at the expense of such Grantor.


 


(e)          Notwithstanding
anything in this Section 4.1 to the contrary, (i) with respect to any assets acquired by such Grantor after the date hereof that
are required by the Credit Agreement to be subject to the Lien created hereby or (ii) with respect to any Person that, subsequent
to the date hereof, becomes a Subsidiary that is required by the Credit Agreement to become a party hereto, the relevant Grantor
after the acquisition or creation thereof shall promptly take all actions required by the Credit Agreement, this Section 4.1.


 




    	-9-



    	 



    

 


(f)          If
any Grantor shall at any time hold or acquire a Commercial Tort Claim, such Grantor shall promptly (and in any event within 45
days upon obtaining knowledge thereof, or such longer period as the Collateral Agent may reasonably agree) notify the Collateral
Agent in a writing signed by such Grantor of the brief details (in summary form) thereof and grant to the Collateral Agent in such
writing a security interest therein and in the Proceeds thereof, all upon the terms of this Security Agreement, with such writing
to be in form and substance reasonably satisfactory to the Collateral Agent. The requirements in the preceding sentence shall not
apply to the extent that the amount of such Commercial Tort Claim, together with the amount of all other Commercial Tort Claims
held by any Grantor in which the Collateral Agent does not have a security interest, does not exceed $10,000,000 in the aggregate
for all Grantors.


 


(g)          With
respect to each material item of Intellectual Property owned by such Grantor and included in the Collateral, each Grantor agrees
to take, at its expense, commercially reasonable steps to preserve and protect such material Intellectual Property, including,
without limitation, to (i) maintain the validity and enforceability of such material Intellectual Property and maintain such material
Intellectual Property in full force and effect, and (ii) pursue the registration and maintenance of each Patent, Trademark or servicemark
registration or application, or Copyright registration or application, now or hereafter included in such material Intellectual
Property of such Grantor, including, without limitation, the payment of required fees and taxes, the filing of responses to office
actions issued by the United States Patent and Trademark Office and the United States Copyright Office, the filing of affidavits
under Sections 8 and 15 of the U.S. Trademark Act, and the payment of maintenance fees. Each Grantor shall take commercially reasonable
steps which it (or the Collateral Agent during the continuation of an Event of Default) deems reasonable and appropriate under
the circumstances to maintain the quality of any and all products or services used or provided in connection with any of the material
Trademarks, at least substantially consistent with the quality of the products and services as of the date hereof, and taking commercially
reasonable steps necessary to ensure that all licensed users of any of the material Trademarks use such consistent standards of
quality.


 


4.2           Damage
or Destruction of Collateral. The Grantors agree promptly to notify the Collateral Agent if any portion of the Collateral is
damaged or destroyed in any manner which could reasonably be expected to have a Material Adverse Effect.


 


4.3           Notices.
Each Grantor will advise the Collateral Agent and the Lenders promptly, in reasonable detail, of any Lien of which it has knowledge
(other than the Security Interests created hereby or Liens permitted under the Credit Agreement) on any of the Collateral which
would adversely affect, in any material respect, the ability of the Collateral Agent to exercise any of its remedies hereunder.


 


4.4           Changes
in Locations, Name, etc. Each Grantor will furnish to the Collateral Agent promptly (and in any event within 45 days (or such
longer period as the Collateral Agent may reasonably agree) of such change) a written notice of any change (i) in its legal
name, (ii) in its jurisdiction of organization or location for purposes of the UCC, (iii) in its identity or type of
organization or corporate structure or (iv) in its Federal Taxpayer Identification Number or organizational identification
number. Each Grantor agrees promptly to provide the Collateral Agent with certified organizational documents reflecting any of
the changes described in the first sentence of this paragraph and take all other action reasonably necessary to maintain the perfection
and priority of the security interest of the Collateral Agent for the benefit of the Secured Parties in the Collateral and take
all other action reasonably necessary to maintain the perfection and priority of the security interest of the Collateral Agent
for the benefit of the Secured Parties in the Collateral.


 




    	-10-



    	 



    

 


4.5           Investment
Property. If any of the Collateral (other than any property included in the definition of “Collateral” in the Pledge
Agreement) is or shall become evidenced or represented by any Instrument, Chattel Paper and Certificated Securities, such Instrument,
Chattel Paper and Certificated Securities shall, in each case, be promptly delivered to the Collateral Agent, duly endorsed in
a manner reasonably satisfactory to the Collateral Agent, to be held as Collateral pursuant to this Security Agreement, if the
fair market value of any such individual Instrument, Chattel Paper or Certificated Securities exceeds $10,000,000, in each case
except to the extent constituting Excluded Property.


 


5.             Remedial
Provisions.


 


5.1           Certain
Matters Relating to Accounts.


 


(a)          At
any time after the occurrence and during the continuance of an Event of Default and after giving reasonable notice to the Borrower
and any other relevant Grantor, the Administrative Agent shall have the right, but not the obligation, to instruct the Collateral
Agent to (and upon such instruction, the Collateral Agent shall) make test verifications of the Accounts in any manner and through
any medium that the Administrative Agent reasonably considers advisable, and each Grantor shall furnish all such assistance and
information as the Collateral Agent may require in connection with such test verifications. The Collateral Agent shall have the
absolute right to share any information it gains from such inspection or verification with any Secured Party.


 


(b)          The
Collateral Agent hereby authorizes each Grantor to collect such Grantor’s Accounts and the Collateral Agent may curtail or
terminate said authority at any time after the occurrence and during the continuance of an Event of Default. If required in writing
by the Collateral Agent at any time after the occurrence and during the continuance of an Event of Default, any payments of Accounts,
when collected by any Grantor, (i) shall be forthwith (and, in any event, within two Business Days) deposited by such Grantor in
the exact form received, duly endorsed by such Grantor to the Collateral Agent if required, in a Collateral Account maintained
under the sole dominion and control of and on terms and conditions reasonably satisfactory to the Collateral Agent, subject to
withdrawal by the Collateral Agent for the account of the Secured Parties only as provided in Section 5.5 and (ii) until so turned
over, shall be held by such Grantor in trust for the Collateral Agent and the Secured Parties, segregated from other funds of such
Grantor. Each such deposit of Proceeds of Accounts shall be accompanied by a report identifying in reasonable detail the nature
and source of the payments included in the deposit.


 


(c)          At
the Collateral Agent’s request at any time after the occurrence and during the continuance of an Event of Default, subject
to the terms of the Intercreditor Agreement, each Grantor shall deliver to the Collateral Agent all original and other documents
evidencing, and relating to, the agreements and transactions which gave rise to the Accounts, including all original orders, invoices
and shipping receipts.


 


(d)          Upon
the occurrence and during the continuance of an Event of Default, a Grantor shall not grant any extension of the time of payment
of any of the Accounts, compromise, compound or settle the same for less than the full amount thereof, release, wholly or partly,
any Person liable for the payment thereof, or allow any credit or discount whatsoever thereon if the Collateral Agent shall have
instructed the Grantors not to grant or make any such extension, credit, discount, compromise or settlement under any circumstances
during the continuance of such Event of Default.


 




    	-11-



    	 



    

 


(e)          Effective
solely upon the occurrence and during the continuance of an Event of Default, subject to the terms of the Intercreditor Agreement,
each Grantor hereby grants to the Collateral Agent a non-exclusive, fully paid-up, royalty-free, worldwide license to use, assign,
license or sublicense any of the Intellectual Property included in the Collateral and now owned or hereafter acquired by such Grantor
(subject to the rights of any person or entity under any pre-existing Copyright License, Patent License, Trademark License or other
agreements). Such license shall include access to all media in which any of the licensed items may be recorded or stored and to
all computer programs used for the compilation or printout thereof; provided, however, that nothing in this Section 5.1
shall require any Grantor to grant any license that is prohibited by any rule of law, statute or regulation or is prohibited by,
or constitutes a breach of default under or results in the termination of or gives rise to any right of acceleration, modification
or cancellation under any contract, license, agreement, instrument or other document evidencing, giving rise to a right to use
or theretofore granted with respect to such property, provided, further, that such licenses to be granted hereunder
with respect to Trademarks shall be subject to the commercially reasonable quality control standards applicable to each such Trademark
as in effect as of the date such licenses hereunder are granted.


 


5.2          Communications
with Credit Parties; Grantors Remain Liable.


 


(a)          The
Collateral Agent in its own name or in the name of others may at any time after the occurrence and during the continuance of an
Event of Default, subject to the terms of the Intercreditor Agreement, after giving reasonable notice to the relevant Grantor of
its intent to do so, communicate with obligors under the Accounts to verify with them to the Collateral Agent’s satisfaction
the existence, amount and terms of any Accounts. The Collateral Agent shall have the absolute right to share any information it
gains from such inspection or verification with any Secured Party.


 


(b)          Upon
the written request of the Collateral Agent at any time after the occurrence and during the continuance of an Event of Default,
subject to the terms of the Intercreditor Agreement, each Grantor shall notify obligors on the Accounts that the Accounts have
been assigned to the Collateral Agent for the benefit of the Secured Parties and that payments in respect thereof shall be made
directly to the Collateral Agent.


 


(c)          Anything
herein to the contrary notwithstanding, each Grantor shall remain liable under each of the Accounts to observe and perform all
the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement
giving rise thereto. Neither the Collateral Agent nor any Secured Party shall have any obligation or liability under any Account
(or any agreement giving rise thereto) by reason of or arising out of this Security Agreement or the receipt by the Collateral
Agent or any Secured Party of any payment relating thereto, nor shall the Collateral Agent or any Secured Party be obligated in
any manner to perform any of the obligations of any Grantor under or pursuant to any Account (or any agreement giving rise thereto),
to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency
of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect
the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.


 




    	-12-



    	 



    

 


5.3           Proceeds
to be Turned Over To Collateral Agent. In addition to the rights of the Collateral Agent and the Secured Parties specified
in Section 5.1 with respect to payments of Accounts, if an Event of Default shall occur and be continuing and the Collateral Agent,
subject to the terms of the Intercreditor Agreement, so requires by notice in writing to the relevant Grantor (it being understood
that the exercise of remedies by the Secured Parties in connection with an Event of Default under Section 11.5 of the Credit Agreement
shall be deemed to constitute a request by the Collateral Agent for the purposes of this sentence and in such circumstances, no
such written notice shall be required), all Proceeds received by any Grantor consisting of cash, checks and other near cash items
shall be held by such Grantor in trust for the Collateral Agent and the Secured Parties, segregated from other funds of such Grantor,
and shall, forthwith upon receipt by such Grantor, be turned over to the Collateral Agent in the exact form received by such Grantor
(duly endorsed by such Grantor to the Collateral Agent, if required). All Proceeds received by the Collateral Agent hereunder shall
be held by the Collateral Agent in a Collateral Account maintained under its dominion and control and on terms and conditions reasonably
satisfactory to the Collateral Agent. All Proceeds while held by the Collateral Agent in a Collateral Account (or by such Grantor
in trust for the Collateral Agent and the Secured Parties) shall continue to be held as collateral security for all the Obligations
and shall not constitute payment thereof until applied as provided in Section 5.4.


 


5.4           Application
of Proceeds. The Collateral Agent shall apply the proceeds of any collection or sale of the Collateral as well as any Collateral
consisting of cash, at any time after receipt in the order set forth in the order set forth in Section 11.13 of the Credit Agreement.


 


If, despite the provisions of this Security Agreement, any Secured
Party shall receive any payment or other recovery in excess of its portion of payments on account of the Obligations to which it
is then entitled in accordance with this Security Agreement, such Secured Party shall hold such payment or other recovery in trust
for its benefit and the benefit of all Secured Parties hereunder for distribution in accordance with this Section 5.4.


 


5.5           Code
and Other Remedies. Subject to the terms of the Intercreditor Agreement, if an Event of Default shall occur and be continuing,
the Collateral Agent may exercise in respect of the Collateral, in addition to all other rights and remedies provided for herein
or otherwise available to it, all the rights and remedies of a secured party upon default under the UCC or any other applicable
law and also may with notice to the relevant Grantor, sell the Collateral or any part thereof in one or more parcels at public
or private sale or sales, at any exchange, broker’s board or office of the Collateral Agent or any Secured Party or elsewhere
for cash or on credit or for future delivery at such price or prices and upon such other terms as are commercially reasonable irrespective
of the impact of any such sales on the market price of the Collateral. The Collateral Agent shall be authorized at any such sale
(if it deems it advisable to do so) to restrict the prospective bidders or purchasers of Collateral to Persons who will represent
and agree that they are purchasing the Collateral for their own account for investment and not with a view to the distribution
or sale thereof, and, upon consummation of any such sale, the Collateral Agent shall have the right to assign, transfer and deliver
to the purchaser or purchasers thereof the Collateral so sold. Each purchaser at any such sale shall hold the property sold absolutely
free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by law) all rights
of redemption, stay and/or appraisal that it now has or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. The Collateral Agent and any Secured Party shall have the right upon any such public sale, and,
to the extent permitted by law, upon any such private sale, to purchase the whole or any part of the Collateral so sold, and the
Collateral Agent or such Secured Party may pay the purchase price by crediting the amount thereof against the Obligations. Each
Grantor agrees that, to the extent notice of sale shall be required by law, at least ten days’ notice to such Grantor of
the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification.
The Collateral Agent shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The
Collateral Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and place to which it was so adjourned. To the extent permitted
by law, each Grantor hereby waives any claim against the Collateral Agent arising by reason of the fact that the price at which
any Collateral may have been sold at such a private sale was less than the price that might have been obtained at a public sale,
even if the Collateral Agent accepts the first offer received and does not offer such Collateral to more than one offeree. Each
Grantor further agrees, at the Collateral Agent’s request to assemble the Collateral and make it available to the Collateral
Agent, at places which the Collateral Agent shall reasonably select, whether at such Grantor’s premises or elsewhere. The
Collateral Agent shall apply the net proceeds of any action taken by it pursuant to this Section 5.5 in accordance with the provisions
of Section 5.4.


 




    	-13-



    	 



    

 


5.6           Deficiency.
Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient
to pay its Obligations and the fees and disbursements of any attorneys employed by the Collateral Agent or any Secured Party to
collect such deficiency.


 


5.7           Amendments,
etc. with Respect to the Obligations; Waiver of Rights. Each Grantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Grantor and without notice to or further assent by any Grantor, (a) any demand for
payment of any of the Obligations made by the Collateral Agent or any other Secured Party may be rescinded by such party and any
of the Obligations continued, (b) the Obligations, or the liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Collateral Agent or any other Secured
Party, (c) the Credit Agreement, the other Credit Documents and any other documents executed and delivered in connection therewith
and the Secured Cash Management Agreements, Secured Hedge Agreements and any other documents executed and delivered in connection
therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders, as the case may be, or, in the case of any Secured Hedge Agreement or Secured Cash Management Agreement, the Hedge Bank
or Cash Management Bank party thereto may deem advisable from time to time and (d) any collateral security, guarantee or right
of offset at any time held by the Collateral Agent or any other Secured Party for the payment of the Obligations may be sold, exchanged,
waived, surrendered or released. Neither the Collateral Agent nor any other Secured Party shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the Obligations or for this Security Agreement or any
property subject thereto. When making any demand hereunder against any Grantor, the Collateral Agent or any other Secured Party
may, but shall be under no obligation to, make a similar demand on any Grantor or any other Person, and any failure by the Collateral
Agent or any other Secured Party to make any such demand or to collect any payments from any Grantor or any other Person or any
release of any Grantor or any other Person shall not relieve any Grantor in respect of which a demand or collection is not made
or any Grantor not so released of its several obligations or liabilities hereunder, and shall not impair or affect the rights and
remedies, express or implied, or as a matter of law, of the Collateral Agent or any other Secured Party against any Grantor. For
the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.


 


6.             The
Collateral Agent.


 


6.1           Collateral
Agent’s Appointment as Attorney-in-Fact, etc.


 


(a)          Each
Grantor hereby appoints, which appointment is irrevocable (until termination of this Security Agreement in accordance with Section
6.5) and coupled with an interest, effective upon the occurrence and during the continuance of an Event of Default, the Collateral
Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of such Grantor or otherwise, for the purpose of carrying
out the terms of this Security Agreement, to take any and all appropriate action and to execute any and all documents and instruments
that may be necessary or desirable to accomplish the purposes of this Security Agreement, and, without limiting the generality
of the foregoing, each Grantor hereby gives the Collateral Agent the power and right, on behalf of such Grantor, either in the
Collateral Agent’s name or in the name of such Grantor or otherwise, without assent by such Grantor, to do any or all of
the following, in each case after the occurrence and during the continuance of an Event of Default and after written notice by
the Collateral Agent of its intent to do so:


 




    	-14-



    	 



    

 


(i)          take
possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due
under any Account or with respect to any other Collateral and file any claim or take any other action or proceeding in any court
of law or equity or otherwise deemed appropriate by the Collateral Agent for the purpose of collecting any and all such moneys
due under any Account or with respect to any other Collateral whenever payable;


 


(ii)         in
the case of any Intellectual Property, execute and deliver, and have recorded, any and all agreements, instruments, documents and
papers as the Collateral Agent may reasonably request to evidence the Collateral Agent’s and the Secured Parties’ Security
Interest in such Intellectual Property and the goodwill and general intangibles of such Grantor relating thereto or represented
thereby;


 


(iii)        pay
or discharge taxes and Liens levied or placed on or threatened against the Collateral;


 


(iv)        execute,
in connection with any sale provided for in Section 5.5, any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral;


 


(v)         obtain
and adjust insurance required to be maintained by such Grantor pursuant to Section 9.3 of the Credit Agreement;


 


(vi)        direct
any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder
directly to the Collateral Agent or as the Collateral Agent shall direct;


 


(vii)       ask
or demand for, collect and receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due
at any time in respect of or arising out of any Collateral;


 


(viii)      sign
and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the Collateral;


 


(ix)         commence
and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral
or any portion thereof and to enforce any other right in respect of any Collateral;


 


(x)          defend
any suit, action or proceeding brought against such Grantor with respect to any Collateral (with such Grantor’s consent to
the extent such action or its resolution could materially affect such Grantor or any of its Affiliates in any manner other than
with respect to its continuing rights in such Collateral);


 


(xi)         settle,
compromise or adjust any such suit, action or proceeding and, in connection therewith, give such discharges or releases as the
Collateral Agent may deem appropriate (with such Grantor’s consent to the extent such action or its resolution could materially
affect such Grantor or any of its Affiliates in any manner other than with respect to its continuing rights in such Collateral);


 




    	-15-



    	 



    

 


(xii)        assign
any Intellectual Property (along with the goodwill of the business to which any such Intellectual Property pertains), throughout
the world for such term or terms, on such conditions, and in such manner, as the Collateral Agent shall in its sole discretion
determine; and


 


(xiii)       generally,
sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely
as though the Collateral Agent were the absolute owner thereof for all purposes, and do, at the Collateral Agent’s option
and such Grantor’s expense, at any time, or from time to time, all acts and things that the Collateral Agent deems necessary
to protect, preserve or realize upon the Collateral and the Collateral Agent’s and the Secured Parties’ Security Interests
therein and to effect the intent of this Security Agreement, all as fully and effectively as such Grantor might do.


 


Anything in this Section 6.1(a) to the contrary notwithstanding,
the Collateral Agent agrees that it will not exercise any rights under the power of attorney provided for in this Section 6.1(a)
unless an Event of Default shall have occurred and be continuing.


 


(b)          If
any Grantor fails to perform or comply with any of its agreements contained herein, the Collateral Agent, at its option, but without
any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement.


 


(c)          The
expenses of the Collateral Agent incurred in connection with actions undertaken as provided in this Section 6.1, together with
interest thereon at a rate per annum equal to the highest rate per annum at which interest would then be payable on any category
of past due ABR Loans under the Credit Agreement, from the date of payment by the Collateral Agent to the date reimbursed by the
relevant Grantor, shall be payable by such Grantor to the Collateral Agent on demand.


 


(d)          Each
Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations
and agencies contained in this Security Agreement are coupled with an interest and are irrevocable until this Security Agreement
is terminated and the Security Interests created hereby are released.


 


6.2           Duty
of Collateral Agent. The Collateral Agent’s sole duty with respect to the custody, safekeeping and physical preservation
of the Collateral in its possession, under Section 9-207 of the UCC or otherwise, shall be to deal with it in the same manner as
the Collateral Agent deals with similar property for its own account. The Collateral Agent shall be deemed to have exercised reasonable
care in the custody and preservation of any Collateral in its possession if such Collateral is accorded treatment substantially
equal to that which the Collateral Agent accords its own property. Neither the Collateral Agent, any Secured Party nor any of their
respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral
or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of
any Grantor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Collateral Agent and the Secured Parties hereunder are solely to protect the Collateral Agent’s and the
Secured Parties’ interests in the Collateral and shall not impose any duty upon the Collateral Agent or any Secured Party
to exercise any such powers. The Collateral Agent and the Secured Parties shall be accountable only for amounts that they actually
receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents
shall be responsible to any Grantor for any act or failure to act hereunder, except for their own respective gross negligence or
willful misconduct as determined in a final non-appealable judgment of a court of competent jurisdiction. The Collateral Agent
shall not be responsible for or have any duty to ascertain or inquire into any representation or warranty regarding the existence,
value or collectability of the Collateral, the existence, priority or perfection of the Collateral Agent’s Lien thereon,
or any certificate prepared by any Grantor in connection therewith, nor shall the Collateral Agent be responsible or liable to
the Secured Parties for any failure to monitor or maintain any portion of the Collateral.


 




    	-16-



    	 



    

 


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


 


6.4           Security
Interest Absolute. All rights of the Collateral Agent hereunder, the Security Interest and all obligations of the Grantors
hereunder shall be absolute and unconditional.


 


6.5          Continuing
Security Interest; Assignments Under the Credit Agreement; Release.


 


(a)          This
Security Agreement shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon
each Grantor and the successors and assigns thereof and shall inure to the benefit of the Collateral Agent and the other Secured
Parties and their respective successors, indorsees, transferees and assigns until all Obligations (other than, in each case, any
contingent indemnity obligations not then due, any Secured Hedge Obligations or any Secured Cash Management Obligations) shall
have been satisfied by payment in full, the Commitments shall be terminated and all Letters of Credit have expired or terminated
and after all Letter of Credit Outstandings have been reduced to zero (or all such Letters of Credit and Letter of Credit Outstandings
have been Cash Collateralized) notwithstanding that from time to time during the term of the Credit Agreement, the Credit Parties
may be free from any Obligations.


 


(b)          A
Grantor shall automatically be released from its obligations hereunder if it ceases to be a Credit Party in accordance with Section
13.1 of the Credit.


 


(c)          The
Security Interest granted hereby in any Collateral shall automatically be released (i) to the extent provided in Section 13.1 of
the Credit Agreement and (ii) upon the effectiveness of any written consent to the release of the Security Interest granted hereby
in such Collateral pursuant to Section 13.1 of the Credit Agreement. Any such release in connection with any sale, transfer or
other disposition of such Collateral to a Person that is not a Credit Party permitted under the Credit Agreement shall result in
such Collateral being sold, transferred or disposed of, as applicable, free and clear of the Lien and Security Interest created
hereby.


 


(d)          In
connection with any termination or release pursuant to paragraph (a), (b) or (c), the Collateral Agent shall execute and deliver
to any Grantor, at such Grantor’s expense, all documents that such Grantor shall reasonably request to evidence such termination
or release. Any execution and delivery of documents pursuant to this Section 6.5 shall be without recourse to or warranty by the
Collateral Agent.


 




    	-17-



    	 



    

 


6.6           Reinstatement.
Each Grantor further agrees that, if any payment made by any Credit Party or other Person and applied to the Obligations is at
any time annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required
to be refunded or repaid, or the proceeds of Collateral are required to be returned by any Secured Party to such Credit Party,
its estate, trustee, receiver or any other Person, including any Grantor, under any bankruptcy law, state or federal law, common
law or equitable cause, then, to the extent of such payment or repayment, any Lien or other Collateral securing such liability
shall be and remain in full force and effect, as fully as if such payment had never been made or, if prior thereto the Lien granted
hereby or other Collateral securing such liability hereunder shall have been released or terminated by virtue of such cancellation
or surrender, such Lien or other Collateral shall be reinstated in full force and effect, and such prior cancellation or surrender
shall not diminish, release, discharge, impair or otherwise affect any Lien or other Collateral securing the obligations of any
Grantor in respect of the amount of such payment.


 


7.            Collateral
Agent As Agent.


 


(a)          Wells
Fargo Bank, National Association has been appointed to act as the Collateral Agent under the Credit Agreement, by the Lenders under
the Credit Agreement and, by their acceptance of the benefits hereof, the other Secured Parties. The Collateral Agent shall be
obligated, and shall have the right hereunder, to make demands, to give notices, to exercise or refrain from exercising any rights,
and to take or refrain from taking any action (including the release or substitution of Collateral), solely in accordance with
this Security Agreement and the Credit Agreement, provided that the Collateral Agent shall exercise, or refrain from exercising,
any remedies provided for in Section 5 in accordance with the instructions of Required Lenders. In furtherance of the foregoing
provisions of this Section 7(a), each Secured Party, by its acceptance of the benefits hereof, agrees that it shall have no right
individually to realize upon any of the Collateral hereunder, except to the extent specifically set forth in Section 5 of the Guarantee,
it being understood and agreed by such Secured Party that all rights and remedies hereunder may be exercised solely by the Collateral
Agent for the ratable benefit of the applicable Lenders and Secured Parties in accordance with the terms of this Section 7(a).


 


(b)          The
Collateral Agent shall at all times be the same Person that is the Collateral Agent under the Credit Agreement. Written notice
of resignation by the Collateral Agent pursuant to Section 12.9 of the Credit Agreement shall also constitute notice of resignation
as Collateral Agent under this Security Agreement; removal of the Collateral Agent shall also constitute removal under this Security
Agreement; and appointment of a Collateral Agent pursuant to Section 12.9 of the Credit Agreement shall also constitute appointment
of a successor Collateral Agent under this Security Agreement. Upon the acceptance of any appointment as Collateral Agent under
Section 12.9 of the Credit Agreement by a successor Collateral Agent, that successor Collateral Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the retiring or removed Collateral Agent under this Security
Agreement, and the retiring or removed Collateral Agent under this Security Agreement shall promptly (i) transfer to such successor
Collateral Agent all sums, securities and other items of Collateral held hereunder, together with all records and other documents
necessary or appropriate in connection with the performance of the duties of the successor Collateral Agent under this Security
Agreement and (ii) execute and deliver to such successor Collateral Agent or otherwise authorize the filing of such amendments
to financing statements and take such other actions, as may be necessary or appropriate in connection with the assignment to such
successor Collateral Agent of the Security Interests created hereunder, whereupon such retiring or removed Collateral Agent shall
be discharged from its duties and obligations under this Security Agreement. After any retiring or removed Collateral Agent’s
resignation or removal hereunder as Collateral Agent, the provisions of this Security Agreement shall inure to its benefit as to
any actions taken or omitted to be taken by it under this Security Agreement while it was Collateral Agent hereunder.


 




    	-18-



    	 



    

 


(c)          Neither
the Collateral Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be liable to
any party for any action taken or omitted to be taken by any of them under or in connection with this Security Agreement or any
Security Document (except for its or such Person’s own gross negligence or willful misconduct, as determined in a final non-appealable
judgment of a court of competent jurisdiction).


 


8.             Miscellaneous.


 


8.1           Intercreditor
Agreement. Notwithstanding anything herein to the contrary, the liens and security interests granted to the Collateral Agent
pursuant to this Security Agreement and the exercise of any right or remedy by the Collateral Agent hereunder, are subject to the
provisions of any First Lien Intercreditor Agreement (the “Intercreditor Agreement”). In the event of any conflict
between the terms of the Intercreditor Agreement and the terms of this Security Agreement, the terms of the Intercreditor Agreement
shall govern and control. No right, power or remedy granted to the Collateral Agent hereunder shall be exercised by the Collateral
Agent, and no direction shall be given by the Collateral Agent, in contravention of the Intercreditor Agreement.


 


8.2           Amendments
in Writing. None of the terms or provisions of this Security Agreement may be waived, amended, supplemented or otherwise modified
except by a written instrument executed by the affected Grantor and the Collateral Agent in accordance with Section 13.1 of the
Credit Agreement.


 


8.3           Notices.
All notices, requests and demands pursuant hereto shall be made in accordance with Section 13.2 of the Credit Agreement. All communications
and notices hereunder to any Grantor shall be given to it in care of Holdings at Holdings’ address set forth in Section 13.2
of the Credit Agreement.


 


8.4           No
Waiver by Course of Conduct; Cumulative Remedies. Neither the Collateral Agent nor any Secured Party shall by any act (except
by a written instrument pursuant to Section 8.2), delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default or in any breach of any of the terms and conditions hereof.
No failure to exercise, nor any delay in exercising, on the part of the Collateral Agent or any other Secured Party, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver
by the Collateral Agent or any other Secured Party of any right or remedy hereunder on any one occasion shall not be construed
as a bar to any right or remedy that the Collateral Agent or such other Secured Party would otherwise have on any future occasion.
The rights, remedies, powers and privileges herein provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.


 


8.5          Enforcement
Expenses; Indemnification.


 


(a)          Each
Grantor agrees to pay any and all reasonable and documented out of pocket expenses (including all reasonable fees and disbursements
of one primary counsel and one local counsel in each relevant jurisdiction) that may be paid or incurred by any Secured Party in
enforcing, or obtaining advice of counsel in respect of, any rights with respect to, or collecting, any or all of the Obligations
and/or enforcing any rights with respect to, or collecting against, such Grantor under this Security Agreement.


 


(b)          Each
Grantor agrees to pay, and to save the Collateral Agent and the Secured Parties harmless from, any and all liabilities with respect
to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes that may be payable or determined to
be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Security Agreement.


 




    	-19-



    	 



    

 


(c)          Each
Grantor agrees to pay, and to save the Collateral Agent and the Secured Parties harmless from, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this Security Agreement to the extent the Borrower would
be required to do so pursuant to Section 13.5 of the Credit Agreement.


 


(d)          The
agreements in this Section 8.5 shall survive repayment of the Obligations and all other amounts payable under the Credit Agreement
and the other Credit Documents.


 


8.6           Successors
and Assigns. The provisions of this Security Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that no Grantor may assign, transfer or delegate any of its
rights or obligations under this Security Agreement without the prior written consent of the Collateral Agent except pursuant to
a transaction permitted by the Credit Agreement.


 


8.7           Counterparts.
This Security Agreement may be executed by one or more of the parties to this Security Agreement on any number of separate counterparts
(including by facsimile or other electronic transmission), and all of said counterparts taken together shall be deemed to constitute
one and the same instrument. A set of the copies of this Security Agreement signed by all the parties shall be lodged with the
Collateral Agent and Holdings.


 


8.8           Severability.
Any provision of this Security Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.


 


8.9           Section
Headings. The Section headings used in this Security Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation hereof.


 


8.10         Integration.
This Security Agreement together with the other Credit Documents represents the agreement of each of the Grantors with respect
to the subject matter hereof and there are no promises, undertakings, representations or warranties by the Collateral Agent or
any other Secured Party relative to the subject matter hereof not expressly set forth herein or in the other Credit Documents.


 


8.11         GOVERNING
LAW. THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.


 


8.12         Submission
To Jurisdiction Waivers. Each party hereto hereby irrevocably and unconditionally:


 


(a)          submits
for itself and its property in any legal action or proceeding relating to this Security Agreement and the other Credit Documents
to which it is a party, to the exclusive general jurisdiction of the courts of the State of New York sitting in New York County,
the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof;


 




    	-20-



    	 



    

 


(b)          consents
that any such action or proceeding shall be brought in such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same or to commence or support any such action or proceeding in any other courts;


 


(c)          agrees
that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such Person at its address referred to in Section 8.3 or at such
other address of which such Person shall have been notified pursuant thereto;


 


(d)          agrees
that nothing herein shall affect the right of the Administrative Agent, Lender or any Secured Party to effect service of process
in any other manner permitted by law or to commence legal proceedings or otherwise proceed against Holdings or the Borrower or
any other Credit Party in any other jurisdiction; and


 


(e)          waives,
to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred
to in this Section 8.12 any special, exemplary, punitive or consequential damages.


 


8.13         Acknowledgments.
Each party hereto hereby acknowledges that:


 


(a)          it
has been advised by counsel in the negotiation, execution and delivery of this Security Agreement and the other Credit Documents
to which it is a party;


 


(b)          neither
the Collateral Agent nor any other Secured Party has any fiduciary relationship with or duty to any Grantor arising out of or in
connection with this Security Agreement or any of the other Credit Documents, and the relationship between the Grantors, on the
one hand, and the Collateral Agent and the other Secured Parties, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor; and


 


(c)          no
joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders and any other Secured Party or among the Grantors and the Lenders and any other Secured Party.


 


8.14         Additional
Grantors. Each Subsidiary that is required to become a party to this Security Agreement pursuant to Section 9.11 of the Credit
Agreement shall become a Subsidiary Grantor, with the same force and effect as if originally named as a Grantor herein, for all
purposes of this Security Agreement upon execution and delivery by such Subsidiary of a written supplement substantially in the
form of Annex A hereto. The execution and delivery of any instrument adding an additional Grantor as a party to this Security Agreement
shall not require the consent of any other Grantor hereunder. The rights and obligations of each Grantor hereunder shall remain
in full force and effect notwithstanding the addition of any new Grantor as a party to this Security Agreement.


 


8.15         WAIVER
OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS SECURITY AGREEMENT, ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.


 


[SIGNATURE PAGES FOLLOW]


 




    	-21-



    	 



    

 


IN WITNESS WHEREOF, each of the undersigned has
caused this Security Agreement to be duly executed and delivered as of the date first above written.


 


	 	ROLLER BEARING COMPANY OF 
	 	AMERICA, INC.,
	 	as Grantor
	 	 
	 	By:	/s/ Daniel A. Bergeron
	 	 	Name:	Daniel A. Bergeron
	 	 	Title:	Vice President,

Chief Financial Officer and 

Assistant Secretary 
	 	 
	 	RBC BEARINGS INCORPORATED, 
	 	as Grantor
	 	 
	 	By:	/s/ Daniel A. Bergeron
	 	 	Name:	Daniel A. Bergeron
	 	 	Title:	Vice President, 

Chief Financial Officer and 

Assistant Secretary
	 	 	 
	 	RBC Precision Products - Plymouth, Inc.,
	 	Industrial Tectonics Bearings Corporation,
	 	RBC Precision Products - Bremen, Inc.,
	 	RBC Nice Bearings, Inc.,
	 	RBC Lubron Bearing Systems, Inc.,
	 	RBC Oklahoma, Inc.,
	 	RBC Aircraft Products, Inc.,
	 	RBC Southwest Products, Inc.,
	 	All Power Manufacturing Co. ,
	 	Western Precision Aero LLC,
	 	Climax Metal Products Company,
	 	RBC Turbine Components LLC,

each as Grantor
	 	 
	 	By:	/s/ Thomas J. Williams
	 	 	Name:	Thomas J. Williams 
	 	 	Title:	Corporate General Counsel and

Secretary  


 


[Signature Page to Security Agreement]


 




    	 



    	 



    

 


	 	RBC AeroStructures LLC,
	 	as Grantor
	 	 
	 	By:	/s/ Thomas J. Williams
	 	 	Name:	Thomas J. Williams 
	 	 	Title:	Manager 
	 	 
	 	Avborne Accessory Group, Inc.,
	 	Sonic Industries, Inc.,
	 	Sargent Aerospace & Defense, LLC, each as Grantor
	 	 
	 	By:	/s/ Thomas J. Williams
	 	 	Name:	Thomas J. Williams
	 	 	Title:	Assistant Treasurer and 

Assistant Secretary


 


[US Security Agreement]


 




    	 



    	 



    

 


	 	WELLS
    FARGO BANK, NATIONAL
	 	ASSOCIATION,
	 	as
    Collateral Agent
	 	
	 	By:	/s/ Neel A.
    Morey
	 	 	Name: Neel A. Morey
	 	 	Title:  Senior Vice President