Exhibit 10.71


 


PLEDGE AND SECURITY AGREEMENT,


 


dated as of December 7, 2020,


 


among


 


LANNETT COMPANY, INC.,


as the Parent Borrower,


 


each Guarantor from time to time party
hereto,


 


and


 


WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent and Collateral Agent


 


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	Table
of Contents

	 
	 	 
	 	Page  
	Article I.            DEFINITIONS	1
	Section 1.01	Credit Agreement	1
	Section 1.02	Other Defined Terms	1
	Article II.          PLEDGE OF SECURITIES	5
	Section 2.01	Pledge	5
	Section 2.02	Delivery of the Pledged Collateral	7
	Section 2.03	Representations and Warranties	8
	Section 2.04	Registration in Nominee Name; Denominations	9
	Section 2.05	Voting Rights; Dividends and Interest, Etc.	9
	Article III.         SECURITY INTERESTS IN OTHER PERSONAL PROPERTY	11
	Section 3.01	Security Interest	11
	Section 3.02	Representations and Warranties	15
	Section 3.03	Covenants	18
	Section 3.04	Other Actions	19
	Section 3.05	Covenants Regarding Patent, Trademark and Copyright Collateral	21
	Article IV.         REMEDIES	24
	Section 4.01	Remedies Upon Default	24
	Section 4.02	Application of Proceeds	26
	Section 4.03	Securities Act, Etc.	27
	Article V.          MISCELLANEOUS	28
	Section 5.01	Notices	28
	Section 5.02	Security Interest Absolute	28
	Section 5.03	Limitation By Law	28
	Section 5.04	Binding Effect; Several Agreement	29
	Section 5.05	Successors and Assigns	29
	Section 5.06	Administrative Agent’s and Collateral Agent’s Fees and Expenses; Indemnification	29
	Section 5.07	Collateral Agent Appointed Attorney-in-Fact	30
	Section 5.08	APPLICABLE LAW	30
	Section 5.09	Waivers; Amendment	30
	Section 5.10	WAIVER OF JURY TRIAL	31
	Section 5.11	Severability	31
	Section 5.12	Counterparts	31
	Section 5.13	Headings	31
	Section 5.14	Jurisdiction; Consent to Service of Process	31
	Section 5.15	Termination or Release	32
	Section 5.16	Additional Subsidiaries	33




 


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	Schedules	 
	 	 
	Schedule I	Pledged Equity Securities and Pledged Debt Securities
	Schedule II	Intellectual Property
	Schedule III	Filing Jurisdictions
	Schedule IV	Commercial Tort Claims
	Schedule V	Matters Relating to Accounts and Inventory
	Schedule VI	Letter of Credit Rights
	Schedule VII	Deposit Accounts



 


	Exhibits	 
	 	 
	Exhibit I	Form of Supplement to Security Agreement
	Exhibit II	Form of Intellectual Property Security Agreement



 


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This PLEDGE AND SECURITY
AGREEMENT, dated as of December 7, 2020 (as amended, amended and restated, supplemented, waived or otherwise modified from
time to time, this “Agreement”), among LANNETT COMPANY, INC., a Delaware corporation (the “Parent
Borrower”), each Guarantor from time to time a party hereto, and WELLS FARGO BANK, NATIONAL ASSOCIATION as administrative
agent (in such capacity and any successor in such capacity, the “Administrative Agent”) and as collateral agent
(in such capacity and any successor in such capacity, the “Collateral Agent”) for the Secured Parties.


 


Reference is made to
the Credit and Guaranty Agreement, dated as of December 7, 2020 (as amended, amended and restated, supplemented, waived or otherwise
modified from time to time, the “Credit Agreement”), among the Parent Borrower, the Subsidiary Borrowers from
time to time party thereto (together with the Parent Borrower, jointly and severally, collectively, the “Borrowers”
and each individually, a “Borrower”), certain subsidiaries of the Parent Borrower party thereto from time to
time as Guarantors, the Lenders party thereto from time to time, Administrative Agent, and Collateral Agent.


 


The Lenders have agreed
to extend credit to the Borrowers subject to the terms and conditions set forth in the Credit Agreement. The obligations of the
Lenders to extend such credit are conditioned upon, among other things, the execution and delivery of this Agreement. Each Guarantor
will derive substantial benefits from the extension of credit to the Borrowers pursuant to the Credit Agreement and is willing
to execute and deliver this Agreement in order to induce the Lenders to extend such credit. Accordingly, the parties hereto agree
as follows:


 


Article
I.



DEFINITIONS


 


Section
1.01          
Credit Agreement. (a) Capitalized terms used in this Agreement and not otherwise defined herein have the respective
meanings assigned thereto in the Credit Agreement. All capitalized terms defined in the New York UCC (as defined below) and not
defined in this Agreement or the Credit Agreement have the meanings specified in the New York UCC (as of the date hereof).


 


(b)       The
rules of construction specified in Section 1.2 and 1.3 of the Credit Agreement also apply to this Agreement.


 


Section
1.02          
Other Defined Terms. As used in this Agreement, the following terms have the meanings specified below:


 


“ABL Priority
Collateral” shall have the meaning assigned to such term in the ABL/Term Loan Intercreditor Agreement.


 


“Additional
Term Agent” shall have the meaning assigned to such term in the ABL/Term Loan Intercreditor Agreement.


 


“Administrative
Agent” shall have the meaning assigned to such term in the preliminary statement of this Agreement.


 


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“Agreement”
shall have the meaning assigned to such term in the preliminary statement of this Agreement.


 


“Article 9 Collateral”
shall have the meaning assigned to such term in Section 3.01(a).


 


“Borrower”
and “Borrowers” shall have the meaning assigned to such terms in the preliminary statement of this Agreement.


 


“Collateral”
shall mean, collectively, the Article 9 Collateral and the Pledged Collateral.


 


“Collateral
Agent” shall have the meaning assigned to such term in the preliminary statement of this Agreement.


 


“Control”
shall mean (i) in the case of each Deposit Account, “control,” as such term is defined in Section 9-104 of the New
York UCC, (ii) in the case of any Securities Account, “control,” as such term is defined in Section 8-106 of the New
York UCC, and (iii) in the case of any Commodity Account, “control,” as such term is defined in Section 9-106 of the
New York UCC.


 


“Control Agreement”
shall mean a deposit account control agreement, a securities account control agreement or a commodity account control agreement,
as applicable, which provides the Collateral Agent with Control of any Deposit Account, Security Account or Commodity Account in
form and substance reasonably satisfactory to the Collateral Agent.


 


“Copyright License”
shall mean any written agreement governed by the laws of any state of the United States to which a Credit Party is a party granting
any right to such Credit Party under any United States copyright owned by any third party.


 


“Copyrights”
shall mean all of the following which any Credit Party owns: (a) all copyright rights in any work subject to the copyright
laws of the United States, whether as author, assignee, transferee or otherwise, (b) all registrations and applications for
registration of any such Copyright in the United States, including registrations, supplemental registrations and pending applications
for registration in the United States Copyright Office and the right to obtain all renewals thereof, including those listed on
Schedule II, (c) all claims for, and rights to sue for, past or future infringements of any of the foregoing and
(d) all income, royalties, damages and payments now or hereafter due and payable with respect to any of the foregoing, including
damages and payments for past or future infringement thereof.


 


“Credit Agreement”
shall have the meaning assigned to such term in the preliminary statement of this Agreement.


 


“Discharge of
Term Loan Obligations” shall have the meaning assigned to such term in the ABL/Term Loan Intercreditor Agreement.


 


“Discharge of
Additional Term Obligations” shall have the meaning assigned to such term in the ABL/Term Loan Intercreditor Agreement.


 


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“Excluded Accounts”
shall have the meaning assigned to such term in Section 3.01(a).


 


“Excluded Assets”
shall have the meaning assigned to such term in Section 3.01(a).


 


“Excluded Equity
Interest” shall have the meaning assigned to such term in Section 2.01(a)(I).


 


“Excluded Instruments”
shall have the meaning assigned to such term in Section 2.01(b).


 


“Federal District
Court” shall have the meaning assigned to such term in Section 5.14(a).


 


“Federal Securities
Laws” shall have the meaning assigned to such term in Section 4.03.


 


“Intellectual
Property” shall mean all United States intellectual property of every kind which any Credit Party owns any right, title
or interest, including inventions, designs, Patents, Copyrights, Trademarks, Trade Secrets, domain names and IP Agreements.


 


“Intellectual
Property Collateral” shall have the meaning assigned to such term in Section 3.02(h).


 


“Intellectual
Property Security Agreement” shall mean a security agreement substantially in the form set forth in Exhibit II, with
any changes as may be reasonably acceptable to the Parent Borrower and the Collateral Agent.


 


“IP Agreements”
shall mean all Copyright Licenses, Patent Licenses and Trademark Licenses and all other written agreements governed by the laws
of any state of the United States to which a Credit Party is a party granting any right to such Credit Party under any United States
copyrights, patents, trademarks or names owned by any third party.


 


“Junior Lien
Intercreditor Agreement” means an intercreditor agreement substantially in the form attached to the Credit Agreement
as Exhibit M-2.


 


“New York Courts”
shall have the meaning assigned to such term in Section 5.14(a).


 


“New York Supreme
Court” shall have the meaning assigned to such term in Section 5.14(a).


 


“New York
UCC” shall mean the Uniform Commercial Code as from time to time in effect in the State of New York; provided
that if by reason of mandatory provisions of law, the perfection, the effect of perfection or non-perfection or the priority
of the Security Interests in any portion of the Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction in the United States other than New York, “New York UCC” shall mean the Uniform Commercial
Code as in effect in such other jurisdictions for purposes of the provisions hereof relating to such perfection, effect of
perfection or non-perfection or priority.


 


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“Patent License”
shall mean any written agreement governed by the laws of any state of the United States to which a Credit Party is a party granting
to such Credit Party any right to make, use or sell any invention covered by a United States patent owned by any third party (including,
without limitation, any such rights that such Credit Party has the right to license) and all rights of any Credit Party under any
such agreement.


 


“Patents”
shall mean all of the following which any Credit Party owns: (a) all letters patent of the United States, including those
listed on Schedule II, and all applications for letters patent of the United States, including those listed on Schedule II,
(b) all provisionals, reissues, extensions, continuations, divisions, continuations-in-part, reexaminations or revisions
thereof, and the inventions disclosed or claimed therein, including the right to make, use, import and/or sell the inventions disclosed
or claimed therein, (c) all claims for, and rights to sue for, past or future infringements of any of the foregoing and (d) all
income, royalties, damages and payments now or hereafter due and payable with respect to any of the foregoing, including damages
and payments for past or future infringement thereof.


 


“Pledged Collateral”
shall mean the Pledged Debt Securities and the Pledged Equity Securities.


 


“Pledged Debt
Securities” shall have the meaning assigned to such term in Section 2.01(b).


 


“Pledged Equity
Securities” shall have the meaning assigned to such term in Section 2.01(a).


 


“Security Interest”
shall have the meaning assigned to such term in Section 3.01(a).


 


“Term Loan Collateral
Agreement” means that certain Pledge and Security Agreement, dated as of November 25, 2015, among Parent Borrower, the
Guarantors and the Term Loan Agent for the benefit of the Term Loan Secured Parties.


 


“Term Loan Obligations”
shall have the meaning assigned to such term in the ABL/Term Loan Intercreditor Agreement.


 


“Term Loan Priority
Collateral” shall have the meaning assigned to such term in the ABL/Term Loan Intercreditor Agreement.


 


“Term Loan Secured
Parties” shall have the meaning assigned to such term in the ABL/Term Loan Intercreditor Agreement.


 


“Trademark
License” shall mean any written agreement governed by the laws of any state of the United States, now or hereafter
in effect, to which a Credit Party is a party granting to such Credit Party any right to use any United States trademark or
name owned by any third party (including, without limitation, any such rights that such Credit Party has the right to
license).


 


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“Trademarks”
shall mean all of the following which any Credit Party owns: (a) all trademarks, service marks, corporate names, company names,
business names, fictitious business names, trade dress, logos, other source or business identifiers and general intangibles of
like nature, now existing or hereafter adopted or acquired, all registrations 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 (except for “intent-to-use” applications
for trademark or service mark registrations filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051,
unless and until an Amendment to Allege Use or a Statement of Use under Sections 1(c) and 1(d) of the Lanham Act
has been filed and accepted, to the extent that, and solely during the period for which, any assignment of, or grant a security
interest in, an “intent-to-use” application prior to such filing and acceptance would violate the Lanham Act or impair
the validity or enforceability of, or render void or voidable or result in the cancellation of the applicable Credit Party’s
right, title or interest therein or any trademark or service mark registration that issues as a result of such application under
applicable federal law), and all renewals thereof, including those listed on Schedule II, (b) all goodwill associated
therewith or symbolized thereby, (c) all claims for, and rights to sue for, past or future infringements of any of the foregoing
and (d) all income, royalties, damages and payments now or hereafter due and payable with respect to any of the foregoing,
including damages and payments for past or future infringement thereof.


 


“Trade Secrets”
shall mean all United States trade secrets and all other confidential or proprietary technical and business information and know-how
governed by the laws of any state of the United States.


 


Article
II.     



PLEDGE OF SECURITIES


 


Section
2.01            
Pledge. As security for the payment or performance when due (whether at stated maturity, by acceleration or otherwise),
as the case may be, in full of its Obligations, each Credit Party hereby pledges to the Collateral Agent for the benefit of the
Secured Parties, and hereby grants to the Collateral Agent for the benefit of the Secured Parties, a security interest in all of
such Credit Party’s right, title and interest in, to and under:


 


(a)              
(i) the Equity Interests directly owned by it (including, as of the Closing Date, those Equity Interests listed on
Schedule I) and (ii) any other directly owned Equity Interests obtained in the future by such Credit Party and,
in each case, the certificates, if any, representing all such Equity Interests (the foregoing clauses (a)(i) and (ii), collectively,
the “Pledged Equity Securities”); provided that the Pledged Equity Securities shall not include:


 


(A)            
any Equity Interests in any Person that is not a wholly-owned subsidiary of the Parent Borrower;


 


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(B)              (1) more than 65% of the issued and outstanding Equity Interests of any class of Equity Interests of any Foreign Subsidiary
(or any FSHCO) and (2) to the extent a Foreign Subsidiary is a Credit Party, any issued and outstanding Equity Interests of any
class of Equity Interests of any subsidiary of such Foreign Subsidiary,


 


(C)              to
the extent applicable law requires that a subsidiary of such Credit Party issue directors’ qualifying shares, nominee shares
or similar shares which are required by law to be held by persons other than such Credit Party, such qualifying shares, nominee
shares or similar shares held by persons other than such Credit Party,


 


(D)            
any Equity Interests of any person (other than a wholly-owned Subsidiary that is a Restricted Subsidiary), to the extent
(x) restricted or not permitted by the terms of such person’s organizational documents or other agreements with holders
of such Equity Interests existing as of the date hereof or on the date of acquisition by a Credit Party of such Equity Interests
(in each case, other than to the extent that any such prohibition would be rendered ineffective pursuant to applicable anti-assignment
provisions of the New York UCC or any other applicable law); provided that such Equity Interests shall cease to be Excluded
Equity Interests at such time as such prohibition ceases to be in effect to the extent such Equity Interest is an Excluded Equity
Interest as a result of such prohibition or (y) such pledge would trigger a termination pursuant to any “change of control”
provision or other similar provision,


 


(E)              any
Equity Interests if, to the extent and for so long as the pledge of such Equity Interests hereunder is prohibited or restricted
by any applicable law, including any requirement to obtain consent or approval of any Governmental Authority (other than to the
extent such prohibition would be rendered ineffective pursuant to applicable anti-assignment provisions of the New York UCC or
any other applicable law); provided that such Equity Interests shall cease to be Excluded Equity Interests at such time
as such prohibition ceases to be in effect to the extent such Equity Interest is an Excluded Equity Interest as a result of such
prohibition,


 


(F)              any
Equity Interests if, to the extent and for so long as the pledge of such Equity Interests hereunder would result in material adverse
tax consequences to the Parent Borrower and its subsidiaries (taken as whole) as reasonably determined by the Parent Borrower,


 


(G)             any
Margin Stock,


 


(H)             any
Equity Interests in captive insurance subsidiaries, special purpose entities identified in writing at any time by the Parent Borrower
to the Administrative Agent and not-for-profit subsidiaries, and


 


(I)               any
Equity Interests that the Parent Borrower and the Collateral Agent shall have agreed in writing to treat as Excluded Equity Interests
for purposes hereof on account of the cost, difficulty, burden or consequences of pledging such Equity Interests hereunder being
excessive in relation to the practical benefit to the Secured Parties of the security to be afforded thereby (any Equity Interests
excluded pursuant to any of clauses (A) through (I) above, an “Excluded Equity Interest”),


 


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(b)               (i) promissory
notes and any instruments evidencing Indebtedness for borrowed money owed to it as of the Closing Date (including, as of the Closing
Date, those listed opposite the name of such Credit Party on Schedule I) and (ii) any promissory notes and any
instruments evidencing Indebtedness for borrowed money in the future issued to such Credit Party (the foregoing clauses (b)(i) and
(b)(ii) collectively, the “Pledged Debt Securities”); provided that the Pledged Debt Securities
shall not include promissory notes and instruments evidencing Indebtedness for borrowed money (A) having an aggregate principal
amount not in excess of $5,000,000, (B) to the extent otherwise excluded from the Collateral pursuant to this Agreement,
(C) to the extent the pledge of such promissory note or instrument would violate applicable law (after giving effect to any
applicable anti-assignment provisions of the New York UCC or any other applicable law); provided that such promissory note
or instrument shall cease to be Excluded Instruments at such time as such prohibition ceases to be in effect to the extent such
promissory note or instrument is an Excluded Instrument as a result of such prohibition or (D) intercompany current liabilities
incurred in the ordinary course of business in connection with the cash management operations of the Parent Borrower and its subsidiaries
(such excluded promissory notes and instruments, the “Excluded Instruments”),


 


(c)              
subject to Section 2.05 hereof, all payments of principal or interest, dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all
other proceeds received in respect of, the Pledged Collateral (except to the extent otherwise excluded from the Collateral pursuant
to this Agreement),


 


(d)               subject
to Section 2.05 hereof, all rights and privileges of such Credit Party with respect to the securities and other property
referred to in clauses (a), (b) and (c) above, and


 


(e)              
all proceeds of any of the foregoing.


 


Section
2.02              
Delivery of the Pledged Collateral. (a) Each Credit Party agrees promptly to (but in any event, within sixty
(60) days of the receipt by such Credit Party thereof) deliver or cause to be delivered to the Collateral Agent, for the benefit
of the Secured Parties, any and all Pledged Collateral (or, in the case of Pledged Collateral issued by Foreign Subsidiaries, if
necessary under any applicable law, to carry out all necessary and reasonable formalities and actions for the dispossession and
pledge thereof for the benefit of the Collateral Agent); provided that Pledged Debt Securities shall be required to be delivered
only to the extent described in paragraph (b) of this Section 2.02.


 


(b)              
Each Credit Party will cause any Pledged Debt Security (excluding, for the avoidance of doubt, any Excluded Instruments)
in its possession and owed to it to be delivered to the Collateral Agent, for the benefit of the Secured Parties, pursuant to the
terms hereof.


 


(c)              
Upon delivery to the Collateral Agent, (i) any Pledged Collateral required to be delivered pursuant to the foregoing
paragraphs (a) and (b) of this Section 2.02 shall be accompanied by stock powers or note powers, as applicable,
duly executed in blank or other instruments of transfer reasonably satisfactory to the Collateral Agent and by such other instruments
and documents as the Collateral Agent may reasonably request and (ii) all other property composing part of the Pledged Collateral
delivered pursuant to the terms of this Agreement shall be accompanied to the extent necessary to perfect the security interest
in or allow realization on the Pledged Collateral by proper instruments of assignment duly executed by the applicable Credit Party
and such other instruments or documents as the Collateral Agent may reasonably request, in each case, subject to the Collateral
and Guarantee Requirement. Each delivery of Pledged Collateral shall be accompanied by a supplement to Schedule I
hereto describing such Pledged Collateral, which supplement shall be attached hereto as a supplement to Schedule I
(such supplement may take the form of an amendment and restatement to Schedule I hereto) and made a part hereof; provided
that failure to attach any such schedule or supplement hereto shall not affect the validity of such pledge of such Pledged
Collateral. Each schedule so delivered shall supplement any prior schedules so delivered.


 


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Section 2.03             Representations,
Warranties and Covenants. Each Credit Party represents, warrants and covenants to the Collateral Agent, for the benefit of
the Secured Parties, that:


 


(a)              
Schedule I correctly sets forth the percentage of the issued and outstanding shares of each class of the Equity
Interests of the issuer thereof (other than Excluded Equity Interests) owned by such Credit Party as of the Closing Date and all
promissory notes or instruments evidencing Indebtedness for borrowed money (other than Excluded Instruments) owned by such Credit
Party on the Closing Date;


 


(b)              
(i) The Pledged Collateral has, in each case, been duly and validly authorized and issued by the issuers thereof, (ii) the
Pledged Equity Securities are fully paid and nonassessable and (iii) the Pledged Debt Securities are legal, valid and binding
obligations of the issuers thereof, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered
in a proceeding at law or in equity) and an implied covenant of good faith and fair dealing; provided, that with respect
to any Pledged Debt Securities or Pledges Equity Securities issued by a Person other than the Parent Borrower or any subsidiary
thereof, the foregoing representations are made to the knowledge of the Credit Parties;


 


(c)              
such Credit Party (i) is the beneficial owner of the Pledged Collateral indicated on Schedule I as owned
by such Credit Party, (ii) holds the same free and clear of all Liens, other than the security interests granted hereunder
and other than Permitted Liens and (iii) has made no assignment, pledge, hypothecation or transfer of, or created or permitted
to exist any security interest in or other Lien on, the Pledged Collateral, other than pursuant to the transactions contemplated
hereby and other transactions permitted by the Credit Agreement and other than Liens granted hereunder and other than Permitted
Liens;


 


(d)               other
than as permitted in the Credit Agreement, and except for restrictions and limitations imposed by the Credit Documents or
under applicable law generally or otherwise permitted to exist pursuant to the terms of the Credit Agreement, the Pledged
Equity Securities are freely transferable and assignable, and none of the Pledged Equity Securities is subject to any option,
right of first refusal, shareholders agreement, charter or by-law provisions or contractual restriction of any nature that
prohibits the pledge of such Pledged Equity Securities hereunder, the sale or disposition thereof pursuant hereto or the
exercise by the Collateral Agent of rights and remedies hereunder;


 





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(e)              
other than as set forth in the Credit Agreement or the schedules thereto, no consent or approval of any Governmental Authority,
any securities exchange or any other person was or is necessary to the validity of the pledge effected hereby (other than such
as have been obtained and are in full force and effect), except for any such consent or approval with respect to which the failure
to be obtained would not reasonably be expected to have a Material Adverse Effect; and


 


(f)               
as of the Closing Date, the Credit Parties have caused certificates in respect of all of the Pledged Equity Securities to
be delivered to the Collateral Agent pursuant to Section 2.02.


 


Section 2.04             Registration
in Nominee Name; Denominations. The Collateral Agent, on behalf of the Secured Parties, shall have the right (in its sole
and absolute discretion) to hold the Pledged Collateral in the name of the applicable Credit Party, endorsed or assigned in blank
or in favor of the Collateral Agent or, if an Event of Default shall have occurred and be continuing, in its own name as pledgee
or the name of its nominee (as pledgee or as sub-agent). If an Event of Default shall have occurred and be continuing, each Credit
Party will promptly give to the Collateral Agent copies of any notices or other communications received by it with respect to
Pledged Collateral registered in the name of such Credit Party. If an Event of Default shall have occurred and be continuing,
the Collateral Agent shall have the right to exchange the certificates representing Pledged Collateral for certificates of smaller
or larger denominations for any purpose consistent with this Agreement. Each Credit Party shall each use its commercially reasonable
efforts to cause any person that is not a party to this Agreement to comply with a request by the Collateral Agent, pursuant to
this Section 2.04, to exchange certificates representing Pledged Collateral of such Credit Party for certificates of smaller
or larger denominations.


 


Section 2.05            Voting
Rights; Dividends and Interest, Etc. (a) Unless and until an Event of Default shall have occurred and be continuing,
and after the Collateral Agent shall have given written notice (provided that with respect to any Event of Default pursuant
to Section 8.1(g) or (h) of the Credit Agreement, such notice shall have automatically, and without further action, been deemed
to have been delivered) to the Parent Borrower of the Collateral Agent’s intention to exercise its rights hereunder:


 


(i)                        Each
Credit Party shall be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner
of Pledged Collateral or any part thereof for any purpose consistent with the terms of this Agreement, the Credit Agreement
and the other Credit Documents; provided that, except as permitted under the Credit Agreement, such rights and powers
shall not be exercised in any manner that could materially and adversely affect the rights inuring to a holder of any Pledged
Collateral, the rights and remedies of the Collateral Agent or any of the other Secured Parties under this Agreement, the
Credit Agreement or any other Credit Document or the ability of the Secured Parties to exercise the same.


 


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(ii)                     
The Collateral Agent shall promptly execute and deliver to each Credit Party, or cause to be executed and delivered to such
Credit Party, all such proxies, powers of attorney and other instruments as such Credit Party may reasonably request for the purpose
of enabling such Credit Party to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to
subparagraph (i) above.


 


(iii)                    
Each Credit Party shall be entitled to receive and retain any and all dividends, interest, principal and other distributions
or payments paid on or distributed in respect of the Pledged Equity Interests to the extent and only to the extent that such dividends,
interest, principal and other distributions or payments are permitted by, and otherwise paid or distributed in accordance with,
the terms and conditions of the Credit Agreement, the other Credit Documents and applicable laws; provided that (A) any
non-cash dividends, interest, principal or other non-cash distributions, payments or other consideration in respect thereof, including
any rights to receive the same to the extent not so distributed or paid, that would constitute Pledged Equity Interests, whether
resulting from a subdivision, combination or reclassification of the outstanding Equity Interests of the issuer of any Pledged
Equity Interests, received in exchange for Pledged Equity Interests or any part thereof, or in redemption thereof, as a result
of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise and (B) any
non-cash dividends and other non-cash distributions or payments paid or payable in respect of any Pledged Equity Interests
that would constitute Pledged Equity Interests in connection with a partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or paid in surplus, shall be and become part of the Pledged Equity Interests, as applicable,
and, if received by any Credit Party, shall not be commingled by such Credit Party with any of its other funds or property but
shall be held separate and apart therefrom, shall be held in trust for the benefit of the Collateral Agent, for the benefit of
the Secured Parties, and shall be promptly delivered to the Collateral Agent, for the benefit of the Secured Parties, in the same
form as so received (endorsed in a manner reasonably satisfactory to the Collateral Agent).


 


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(b)               Upon
the occurrence and during the continuance of an Event of Default, and after the Collateral Agent shall have given written
notice (provided that with respect to any Event of Default pursuant to Section 8.1(g) or (h) of the Credit Agreement,
such notice shall be deemed to have been delivered automatically and without further action) to the Parent Borrower of the
Collateral Agent’s intention to exercise its rights hereunder, all rights of any Credit Party to dividends, interest,
principal or other distributions or payments that such Credit Party is authorized to receive pursuant to paragraph
(a)(iii) of this Section 2.05 shall cease, and all such rights shall thereupon become vested, for the benefit of
the Secured Parties, in the Collateral Agent which shall have the sole and exclusive right and authority to receive and
retain such dividends, interest, principal or other distributions or payments. All dividends, interest, principal or other
distributions or payments received by any Credit Party contrary to the provisions of this Section 2.05 shall not be
commingled by such Credit Party with any of its other funds or property but shall be held separate and apart therefrom, shall
be held in trust for the benefit of the Collateral Agent, for the benefit of the Secured Parties, and shall be promptly
delivered to the Collateral Agent, for the benefit of the Secured Parties, in the same form as so received (endorsed in a
manner reasonably satisfactory to the Collateral Agent). Any and all money and other property paid over to or received by the
Collateral Agent pursuant to the provisions of this paragraph (b) shall be retained by the Collateral Agent in an
account to be established by the Collateral Agent upon receipt of such money or other property and shall be applied in
accordance with the provisions of Section 4.02 hereof. After all Events of Default have been cured or waived, the
Collateral Agent shall promptly repay to each Credit Party, without interest, all dividends, interest, principal or other
distributions or payments that such Credit Party would otherwise be permitted to retain pursuant to the terms of paragraph
(a)(iii) of this Section 2.05 and that remain in such account.


 


(c)              
Upon the occurrence and during the continuance of an Event of Default, and after the Collateral Agent shall have given written
notice (provided that with respect to any Event of Default pursuant to Section 8.1(g) or (h) of the Credit Agreement, such
notice shall be deemed to have been delivered automatically and without further action) to the Parent Borrower of the Collateral
Agent’s intention to exercise its rights hereunder, all rights of any Credit Party to exercise the voting and/or consensual
rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section 2.05, and the obligations of
the Collateral Agent under paragraph (a)(ii) of this Section 2.05, shall cease, and all such rights shall thereupon become
vested in the Collateral Agent, for the benefit of the Secured Parties, which shall have the sole and exclusive right and authority
to exercise such voting and consensual rights and powers; provided that, unless otherwise directed by the Requisite Lenders,
the Collateral Agent shall have the right from time to time following the occurrence and during the continuance of an Event of
Default to permit the Credit Parties to exercise such rights. After all Events of Default have been cured or waived, each Credit
Party shall have the right to exercise the voting and/or consensual rights and powers that such Credit Party would otherwise be
entitled to exercise pursuant to the terms of paragraph (a)(i) above.


 


Article
III.  



SECURITY INTERESTS IN OTHER PERSONAL PROPERTY


 


Section 3.01             Security
Interest. (a) As security for the payment or performance when due (whether at the stated maturity, by acceleration or
otherwise), as the case may be, in full of the Obligations of the Credit Parties, each Credit Party hereby pledges to the Collateral
Agent, for the benefit of the Secured Parties, and hereby grants to the Collateral Agent, for the benefit of the Secured Parties,
a security interest (the “Security Interest”) in all right, title and interest in, to and under any and all
of the following assets and properties (wherever located) now owned or at any time hereafter acquired by such Credit Party or
in which such Credit Party now has or at any time in the future may acquire any right, title or interest (collectively, the “Article 9 Collateral”):


 


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(i)                        
 all Accounts;


 


(ii)                       
all Chattel Paper;


 


(iii)                      
all cash, cash equivalents and Deposit Accounts;


 


(iv)                      
all Documents;


 


(v)                       
all Equipment;


 


(vi)                      
all Goods;


 


(vii)                     
all General Intangibles;


 


(viii)                    
all Instruments (including the Pledged Debt Securities);


 


(ix)                      
all Inventory;


 


(x)                       
all Investment Property (including the Pledged Equity Interests);


 


(xi)                      
all Letters of Credit and Letter of Credit Rights;


 


(xii)                     
all Intellectual Property;


 


(xiii)                     all
Commercial Tort Claims, including, without limitation, those described on Schedule IV hereto;


 


(xiv)                     
(1) Securities Accounts, (2) Investment Property credited to Securities Accounts or Deposit Accounts from time
to time and all Security Entitlements in respect thereof, (3) all cash held in any Securities Account or Deposit Account
and (4) all other money in the possession of the Collateral Agent;


 


(xv)                     
all books and Records pertaining to the Article 9 Collateral; and


 


(xvi)                   
all Proceeds, Supporting Obligations and products of any and all of the foregoing and all collateral security and guarantees
given by any person with respect to any of the foregoing.


 


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Notwithstanding
anything to the contrary in this Agreement, this Agreement shall not constitute a grant of a security interest in
(a) any motor vehicle, aircraft, airframe, rolling stock and other assets subject to a certificate of title or
ownership, whether now owned or hereafter acquired, (b) any Excluded Equity Interests, (c) any Letter of Credit
Rights relating to any Letter of Credit with a face amount not in excess of $5,000,000, except to the extent constituting a
support obligation for other Collateral as to which perfection of a security interest therein can be perfected by the filing
of Uniform Commercial Code (or similar filing in any applicable jurisdiction), and to the extent such Credit Party is not
required by applicable law to apply the proceeds of a drawing of such Letter of Credit for a specified purpose, (d) any
Credit Party’s right, title or interest in any lease, license or agreement or any property subject to a purchase money
security interest, Capital Lease Obligation or similar arrangements to which such Credit Party is a party or any of its
right, title or interest thereunder, the property subject thereto, any insurance in respect thereof, any management or
operating agreement with respect thereto and deposits made in respect thereof and all rights, title or interest in relation
to any of the foregoing, in each case, to the extent that such a grant would, under the terms of such lease, license or
agreement, purchase money, capital lease or similar arrangement result in a breach of the terms of, or constitute a default
under, or result in the abandonment, invalidation or unenforceability of or create a right of termination in favor of or
require the consent of any other party (in each case, other than a Credit Party) to, such lease, license or agreement,
(e) (i) all owned real property; and (ii) all leasehold interests (it is understood that there shall be no requirement
to obtain landlord waivers, estoppels or collateral access agreements or acknowledgements, bailee waivers and similar
letters), (f)(i) payroll, healthcare and other employee wage and benefit accounts, (ii) tax accounts, including,
without limitation, sales tax accounts, (iii) escrow, defeasance, discharge and redemption accounts, (iv) fiduciary
or other trust accounts, and, in the case of clauses (i) through (iv), the funds or other property held in or maintained
in such account, (v) zero-balance accounts, (vi) accounts in jurisdictions other than in the jurisdiction of organization of
the applicable granting Credit Party, the United States or any state thereof, and (vii) accounts other than those described
in the preceding clauses with respect to which the average daily balance of the funds maintained on deposit therein does not
exceed $1,000,000 in the aggregate; provided that, no DDAs shall constitute Excluded Assets (such accounts in this
clause (f) being the “Excluded Accounts”) (g) any Commercial Tort Claim with an expected value not in
excess of $1,000,000, as determined in good faith by the Parent Borrower, (h) the Parent Borrower’s or its
subsidiaries’ rights in relation to aircraft and airframes, including rights under any lease, sublease, charter,
management, operating, crew, service, repair, maintenance, storage or other agreement relating to the aircraft, rights in the
aircraft and any parts, accessions and accessories thereto, rights under insurance policies and security deposits and rights
in income derived from and proceeds of any of the foregoing, in the ordinary course, (i) assets if the granting of a
security interest therein would result in material adverse tax consequences to any Credit Party as reasonably determined
by the Parent Borrower, (j) those assets as to which the Collateral Agent and the Parent Borrower reasonably determine
in good faith that any of the cost, burden or consequences (including adverse tax consequences) of obtaining or perfecting
such a security interest in such assets is excessive in relation to the practical benefit to the Secured Parties of the
security to be afforded thereby, (k) foreign intellectual property, (l) any United States “intent to use”
trademark application or intent-to-use service mark application filed pursuant to Section 1(b) of the Lanham Act, to the
extent and during the period that the grant of a security interest therein would impair the validity or enforceability of, or
render void or voidable or result in the cancellation of the applicable Credit Party’s right, title or interest therein
or any trademark or service mark registration that issues as a result of such application under applicable federal law
(including prior to the filing and acceptance of a “Statement of Use” or “Amendment to Allege Use”
with respect thereto), after which period such application shall be automatically subject to the security interest granted
herein and deemed to be included in the Collateral, (m) intellectual property specifically requiring a filing in a
jurisdiction outside of the United States, (n) any assets (including interests in partnerships, joint ventures and other
non-wholly owned entities) in respect of which and to the extent that pledges and security interests are prohibited by law or
prohibited by agreements containing anti-assignment clauses not overridden by the New York UCC or other applicable law,
(o) any assets and proceeds thereof subject to a Capital Lease Obligation or a purchase money lien permitted by
Section 6.2(ll) of the Credit Agreement to the extent such a grant would violate or invalidate the documents providing
for such Capital Lease Obligation or purchase money lien and (p) prior to the Discharge of Term Loan Collateral
Obligations (as defined in the ABL/Term Loan Intercreditor Agreement), any property that would otherwise constitute ABL
Priority Collateral but is an Excluded Asset (as such term is defined in the ABL Collateral Agreement); provided that
clauses (b), (d), (k) or (n) shall not include (x) items to the extent the prohibition or restriction on the
assignment or pledge thereof hereunder is ineffective under Section 9-406, 9-407, 9-408, or 9-409 of the UCC, any other
applicable anti-assignment provisions of the UCC or other applicable law (including without limitation Title 11 of the
United States Code) or (y) proceeds from the sale, license, lease or other disposition and receivables of the
assets referred to in such clause (including Accounts and other monies due or to become due under or in connection
therewith), the assignment of which is expressly deemed effective under Section 9-406, 9-407, 9-408, or 9-409 of the UCC, any
other applicable anti-assignment provisions of the UCC or other applicable law notwithstanding such prohibition (the
assets described in clauses (a) through (p) above, subject to the foregoing proviso, collectively, the
 “Excluded Assets”); provided that such exclusions shall not de facto apply to the proceeds of any
of the property referred to in the foregoing clauses (d), (k) and (n) of this Section 3.01 or in clauses (A) to and including
(I) of Section 2.01(a).


 


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(b)              
Each Credit Party hereby irrevocably authorizes the Collateral Agent at any time and from time to time to file in any relevant
jurisdiction any financing statements (including fixture filings) with respect to the Article 9 Collateral (including
Article 9 Collateral consisting of Pledged Collateral) or any part thereof and amendments thereto that contain the information
required by Article 9 of the Uniform Commercial Code of each applicable jurisdiction for the filing of any financing
statement or amendment, including (i) whether such Credit Party is an organization, the type of organization and any organizational
identification number issued to such Credit Party, (ii) in the case of a financing statement filed as a fixture filing in
a Uniform Commercial Code filing office, a sufficient description of the property to which such Article 9 Collateral
relates and (iii) a description of collateral that describes such property in any other manner as the Collateral Agent may
reasonably determine is necessary to ensure the perfection of the Security Interest in the Article 9 Collateral granted
under this Agreement, including describing such property as “all assets”, “all assets whether now owned or hereafter
acquired”, or words of similar effect. Each Credit Party agrees to provide such information to the Collateral Agent promptly
upon request.


 


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) such documents as may be reasonably necessary for the purpose of reflecting the Security Interest granted by each Credit
Party, and naming any Credit Party or the Credit Parties as debtors and the Collateral Agent as secured party. Notwithstanding
anything to the contrary herein, no Credit Party shall be required to take any action under the laws of any jurisdiction other
than the United States (or any political subdivision thereof) and its territories and possessions for the purpose of perfecting
the Security Interest in any Article 9 Collateral of such Credit Party constituting Intellectual Property.


 


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(c)              
 The Security Interest is 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 Credit Party with respect to or arising out of the Collateral.


 


(d)              
Notwithstanding anything to the contrary in this Agreement or the Credit Agreement, (i)  no perfection steps shall
be required by any means other than (A) filings pursuant to the Uniform Commercial Code in the office of the Secretary of
State (or equivalent filing office) of the relevant State(s) of the respective jurisdictions of organization of each Credit Party,
(B) filings in the United States Patent and Trademark Office and the United States Copyright Office of the Intellectual Property
Security Agreement, (C) delivery of Collateral consisting of promissory notes and instruments evidencing Indebtedness for
borrowed money; provided that such delivery shall not be required with respect to (1) promissory notes and instruments
evidencing Indebtedness for borrowed money having an aggregate principal amount not in excess of $5,000,000, (2) any promissory
notes and instruments evidencing Indebtedness for borrowed money that are promptly deposited into an investment or securities account,
(3) checks received in the ordinary course of business and (4) promissory notes and instruments evidencing Indebtedness
issued in connection with the extension of trade credit by the grantor of a security interest, (D) delivery of Collateral
consisting of certificated Equity Interests included in the Collateral to Collateral Agent, Term Loan Agent, Term Loan Representative
or any Additional Term Agent, as applicable, in accordance with the ABL/Term Loan Intercreditor Agreement and (E) other actions
expressly required by this Agreement or the Credit Agreement or as set forth in any local law security agreement; (ii) no
actions shall be required in order to create any security interest in assets located or titled outside of the United States or
make enforceable any such security interest; (iii) no security shall be taken or perfected over movable plant and equipment
to the extent requiring any labeling or segregation of such plant or equipment; (iv) no security shall be taken or perfected
over any stock in trade to the extent this would require any item-specific or periodic listing of stock in trade or any segregation
thereof; (v) no Control Agreement shall be required to be executed and delivered with respect to any Excluded Account; (vi) no
notice shall be required to be delivered to Account Debtors or other contractual third parties prior to the occurrence and during
the continuance of an Event of Default; and (vii) no action in addition to the filings contemplated under clause (i) above shall
be required to perfect the Security Interest in any Commercial Tort Claim or Letter of Credit Right included in the Collateral.


 


Section
3.02            
Representations and Warranties. Each Credit Party represents and warrants to the Collateral Agent, for itself and
for the benefit of the Secured Parties, that:


 


(a)               Such
Credit Party has good and valid legal title to, or valid license, leasehold interest, easement or other limited property
interest in, as applicable, the Article 9 Collateral with respect to which it has purported to grant a Security
Interest hereunder, except where the failure to have such title, interest or easement would not reasonably be expected to
have a Material Adverse Effect. Such Credit Party has full power and authority to grant to the Collateral Agent the Security
Interest in such Article 9 Collateral pursuant hereto and to execute, deliver and perform its obligations in
accordance with the terms of this Agreement, without the consent or approval of any other person other than (x) any consent
or approval that has been obtained and is in full force and effect or has otherwise been disclosed herein or in the Credit
Agreement or (y) any consent or approval with respect to which the failure to be obtained would not reasonably be expected to
have a Material Adverse Effect.


 


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(b)              
The Uniform Commercial Code financing statements containing a description of the Article 9 Collateral that have
been prepared by the Collateral Agent for filing in the office specified in Schedule III and attached as Annex I
to Schedule III constitute all the filings, recordings and registrations (except with respect to Intellectual Property)
that are, as of the Closing Date, necessary to publish notice of and protect the validity of and to establish a legal, valid and
perfected security interest in favor of the Collateral Agent (for the benefit of the Secured Parties) in respect of all Article 9 Collateral
in which a security interest may be perfected by filing such financing statements.


 


(c)              
A fully executed Intellectual Property Security Agreement containing a description of all Article 9 Collateral
consisting of United States Patents (and Patents for which United States applications are pending), United States registered Trademarks
(and Trademarks for which United States registration applications are pending) and United States registered Copyrights (and Copyrights
for which United States registration applications are pending) will have been delivered as of the Closing Date to the Collateral
Agent for recording with the United States Patent and Trademark Office and the United States Copyright Office pursuant to 35 U.S.C.
 § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations thereunder, as applicable, for the purpose of establishing
a legal, valid and perfected security interest in favor of the Collateral Agent, for the benefit of the Secured Parties, in respect
of all Article 9 Collateral consisting of such Intellectual Property in which a security interest may be perfected by
recording with the United States Patent and Trademark Office and the United States Copyright Office.


 


(d)              
The Security Interest constitutes (i) a legal and valid security interest in all the Article 9 Collateral
securing the payment and performance of the Obligations, (ii) subject to the filings described in Section 3.02(b), a
perfected security interest in all Article 9 Collateral in which a security interest may be perfected by filing, recording
or registering a financing statement or analogous document in the United States (or any political subdivision thereof) and its
territories and possessions pursuant to the Uniform Commercial Code or other applicable law in such jurisdictions and (iii) a
security interest that shall be perfected in all Article 9 Collateral in which a security interest may be perfected upon
the receipt and recording of the Intellectual Property Security Agreement with the United States Patent and Trademark Office and
the United States Copyright Office, as applicable. The Security Interest is and shall be prior to any other Lien on any of the
Article 9 Collateral other than (i) Liens permitted by Section 6.2 of the Credit Agreement having priority
either by operation of applicable law or (ii) Liens permitted by Section 6.2 of the Credit Agreement which are subject
to an Intercreditor Agreement.


 


(e)              
The Credit Parties own the Article 9 Collateral (or, to each Credit Party’s knowledge, in the case of licenses
in respect of Intellectual Property, own the right to use such licenses), free and clear of any Lien, other than Permitted Liens.


 


(f)               
Except as indicated on Schedule IV, none of the Credit Parties holds any Commercial Tort Claim with a value
estimated in good faith by the Parent Borrower to be in excess of $1,000,000 as of the Closing Date.


 


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(g)              
 Except as set forth in Schedule V, as of the Closing Date, all Accounts have been originated by the Credit
Parties and all Inventory has been produced or acquired by the Credit Parties in the ordinary course of business.


 


(h)              
As to itself and its Article 9 Collateral consisting of Intellectual Property owned by such Credit Party (the
 “Intellectual Property Collateral”), to each Credit Party’s actual knowledge:


 


(i)                       
Schedule II sets forth the Intellectual Property Collateral consisting of the Patents that are issued or the
subject of a pending application and the Trademarks and Copyrights that are registered or the subject of a pending application,
in each case, in the United States Patent and Trademark Office or United States Copyright Office, and, in each case, owned by such
Credit Party as of the date hereof.


 


(ii)                       The
Patents, Trademarks and Copyrights in such Intellectual Property Collateral are subsisting and, solely with respect to the issued
Patents and registered Trademarks and registered Copyrights included therein, have not been adjudged invalid or unenforceable
in whole or part (except for office actions issued in the ordinary course by the United States Patent and Trademark Office), and
are valid and enforceable, in each case except as would not reasonably be expected to have a Material Adverse Effect. Such Credit
Party does not have knowledge of any uses of any item of Intellectual Property Collateral that would be expected to lead to such
item becoming invalid or unenforceable, except as would not reasonably be expected to have a Material Adverse Effect.


 


(iii)                      Such
Credit Party has made or performed in the ordinary course of such Credit Party’s business, acts, including without limitation
filings, recordings and payment of fees and taxes, required to maintain and protect its interest in each and every Patent, Trademark
and Copyright set forth on Schedule II in full force and effect and such Credit Party has used proper statutory notice
in connection with its use of each Patent, Trademark and Copyright in such Intellectual Property Collateral, in each case, except
to the extent that the failure to do so would not reasonably be expected to have a Material Adverse Effect.


 


(iv)                      With
respect to each IP Agreement the absence, termination or violation of which would, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect: each such IP Agreement is subsisting, valid and enforceable against the counterparty
and is in full force and effect subject to (i) the effects of bankruptcy, insolvency, moratorium, reorganization, fraudulent
conveyance or other similar laws affecting creditors’ rights generally, (ii) general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at law) and (iii) implied covenants of good faith
and fair dealing.


 


(v)                       Except
as would not reasonably be expected to have a Material Adverse Effect, no Credit Party or Patent, Trademark, Copyright or
Trade Secret in the Intellectual Property Collateral is subject to any outstanding consent, settlement, decree, order,
injunction, judgment or ruling restricting the use of such Patent, Trademark, Copyright or Trade Secret by any Credit Party
or that would impair the validity or enforceability of such Patent, Trademark, Copyright or Trade Secret.


 


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(i)                
[Reserved].


 


(j)                
As of the Closing Date, such Credit Party is not a beneficiary or assignee under any letter of credit with a face amount
in excess of $5,000,000, other than the letters of credit described in Schedule VI hereto and additional letters of credit
as to which such Credit Party has complied with the requirements of Section 3.04(d).


 


Section
3.03           
Covenants(a). (a) Each Credit Party agrees to provide written notice to the Collateral Agent within 30 days
after any change in (i) its corporate or organization name, (ii) its identity or type of organization or corporate structure
or (iii) its organizational identification number (or equivalent). Each Credit Party agrees promptly to provide the Collateral
Agent with certified Organizational Documents reflecting any of the changes described in the immediately preceding sentence. Each
Credit Party agrees not to effect or permit any change referred to in the first sentence of this paragraph unless all filings have
been made, or will have been made within any applicable statutory period, that are required in order for the Collateral Agent to
continue at all times following such change to have a valid, legal and perfected security interest in all Collateral with the priority
required under the Credit Documents for the benefit of the applicable Secured Parties.


 


(b)              
Each Credit Party agrees, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such further actions as the Collateral Agent may from time to time reasonably request to
preserve, protect and perfect the Security Interest and the rights and remedies created hereby, including the payment of any fees
and taxes required in connection with the execution and delivery of this Agreement and the granting of the Security Interest and
the filing of any financing statements (including fixture filings) or other documents in connection herewith or therewith. If any
and all amounts payable under or in connection with any of the Article 9 Collateral (other than amounts that in the aggregate
for such Credit Party do not exceed $5,000,000) shall be or become evidenced by any promissory note or other instrument evidencing
Indebtedness for borrowed money, then, such note or instrument shall be promptly pledged and delivered to the Collateral Agent,
for the benefit of the Secured Parties, duly endorsed in a manner reasonably satisfactory to the Collateral Agent.


 


(c)               After
the occurrence of an Event of Default and during the continuance thereof, the Collateral Agent shall have the right to verify
under reasonable procedures the validity, amount, quality, quantity, value, condition and status of, or any other matter
relating to, the Article 9 Collateral, including, in the case of Accounts or Article 9 Collateral in the
possession of any third person, by contacting Account Debtors or the third person possessing such
Article 9 Collateral for the purpose of making such a verification. The Collateral Agent shall have the right to
share any information it gains from such inspection or verification with any Secured Party, subject to the confidentiality
restrictions set forth in Section 10.16 of the Credit Agreement.


 


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(d)               
At its option after the occurrence of an Event of Default and during the continuance thereof, the Collateral Agent may discharge
past due taxes, assessments, charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the
Article 9 Collateral and not constituting a Permitted Lien, and may pay for the maintenance and preservation of the Article 9 Collateral
to the extent any Credit Party fails to do so as required by the Credit Agreement or this Agreement, and each Credit Party jointly
and severally agrees to reimburse the Collateral Agent on demand for any payment made or any expense incurred by the Collateral
Agent pursuant to the foregoing authorization; provided, however, that nothing in this Section 3.03(d) shall
be interpreted as excusing any Credit Party from the performance of, or imposing any obligation on the Collateral Agent or any
Secured Party to cure or perform, any covenants or other promises of any Credit Party with respect to taxes, assessments, charges,
fees, Liens, security interests or other encumbrances and maintenance as set forth herein or in the other Credit Documents.


 


(e)               
Each Credit Party (rather than the Collateral Agent or any Secured Party) shall remain liable for the observance and performance
of all the conditions and obligations to be observed and performed by it under each contract, agreement or instrument relating
to the Article 9 Collateral.


 


(f)                 Each
Credit Party irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees, agents or sub-agents
designated by the Collateral Agent) as such Credit Party’s true and lawful agent (and attorney-in-fact) for the purpose,
after the occurrence and during the continuance of an Event of Default, of making, settling and adjusting claims in respect of
Article 9 Collateral under policies of insurance, endorsing the name of such Credit Party on any check, draft, instrument
or other item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect
thereto. In the event that any Credit Party at any time or times shall fail to obtain or maintain any of the policies of insurance
required under the Credit Agreement, the Collateral Agent may, after the occurrence and during the continuation of an Event of
Default, without waiving or releasing any obligation or liability of the Credit Parties hereunder or any Event of Default, in
its sole discretion, obtain and maintain such policies of insurance (including by paying premiums with respect thereto) and take
any other actions with respect thereto as the Collateral Agent reasonably deems advisable. All sums disbursed by the Collateral
Agent in connection with this Section 3.03(f), including attorneys’ fees, court costs, expenses and other charges relating
thereto, shall be payable, upon demand, by the Credit Parties to the Collateral Agent and shall be additional Obligations secured
hereby.


 


Section
3.04             
Other Actions. In order to further ensure the attachment, perfection and priority of, and the ability of the Collateral
Agent to enforce, for the benefit of the Secured Parties, the Collateral Agent’s Security Interest in the Article 9 Collateral,
each Credit Party agrees, in each case at such Credit Party’s own expense, to take the following actions:


 


(a)               Instruments
and Tangible Chattel Paper. Except with respect to Excluded Instruments, if any Credit Party shall at any time hold or
acquire any Instruments (other than checks received and processed in the ordinary course of business) or Tangible Chattel
Paper evidencing an amount in excess of $5,000,000, such Credit Party shall promptly endorse, assign and deliver the same to
the Collateral Agent, accompanied by such instruments of transfer or assignment duly executed in blank as the Collateral
Agent may from time to time reasonably request.


 


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(b)              
Investment Property. Except with respect to any Excluded Equity Interest and Excluded Instrument, if any Credit Party
shall at any time hold or acquire any Certificated Security constituting Pledged Collateral or Article 9 Collateral,
such Credit Party shall promptly endorse, assign and deliver the same to the Collateral Agent, accompanied by such instruments
of transfer or assignment duly executed in blank as the Collateral Agent may from time to time reasonably specify and in accordance
with Section 2.02 hereof. Each Credit Party hereby agrees that if any of the Pledged Equity Interests are at any time not evidenced
by certificates of ownership, then each applicable Credit Party shall, to the extent permitted by applicable law, (i) if necessary
or desirable to perfect a security interest in such Pledged Equity Interests, cause such pledge to be recorded on the equityholder
register or the books of the issuer, execute any customary pledge forms or other documents necessary or appropriate to complete
the pledge and give the Collateral Agent the right to transfer such Pledged Equity Interests under the terms hereof, and (ii) after
the occurrence and during the continuance of any Event of Default, upon request by the Collateral Agent, (A) cause the Organizational
Documents of each such issuer that is a subsidiary of such Credit Party to be amended to provide that such Pledged Equity Interests
shall be treated as “securities” for purposes of the UCC and (B) cause such Pledged Equity Interests to become certificated
and delivered to the Collateral Agent in accordance with the provisions of Section 2.02.


 


(c)               
Commercial Tort Claims. If any Credit Party shall at any time hold or acquire a Commercial Tort Claim with a value
estimated in good faith by the Parent Borrower to be in excess of $5,000,000, such Credit Party shall promptly notify the Collateral
Agent thereof in a writing signed by such Credit Party, including a summary description of such claim, and grant to the Collateral
Agent in writing a security interest therein and in the proceeds thereof, all under the terms and provisions of this Agreement,
with such writing to be in form and substance reasonably satisfactory to the Collateral Agent.


 


(d)                 Letter
of Credit Rights. With respect to any Letter of Credit Rights of any Credit Party relating to any Letter of Credit with a
face amount in excess of $5,000,000, such Credit Party shall use its commercially reasonable efforts to take all actions necessary
to provide the Collateral Agent a first priority perfected security interest in any such Letter of Credit Rights.


 


(e)                 Deposit
Accounts. Each Credit Party shall establish the Collateral Agent’s Control (as defined in Section 9-106 of the UCC),
subject to the terms of the ABL/Term Loan Intercreditor Agreement, with respect to any such Deposit Account, substantially simultaneously
with the delivery of a control agreement with respect to such Deposit Account in favor of the Term Loan Agent (which for the avoidance
of doubt may be a control agreement establishing control in favor of the Term Loan Agent as agent or bailee for the Collateral
Agent or establishing control in favor of the Collateral Agent on a basis junior in priority to the Term Loan Agent, in each case,
pursuant to the terms of the ABL/Term Loan Intercreditor Agreement).


 


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Section 3.05            Covenants
Regarding Patent, Trademark and Copyright Collateral. All references to Patents, Trademarks, Copyrights and Trade Secrets
in this Section 3.05 are referring to Patents, Trademarks, Copyrights and Trade Secrets that are included in the Intellectual
Property Collateral. Except as permitted by the Credit Agreement:


 


(a)           Each
Credit Party agrees that it will not knowingly do any act or omit to do any act (and will exercise commercially reasonable efforts
to contractually prohibit its licensees from doing any act or omitting to do any act; provided that no Credit Party shall
be obligated to amend any agreement existing as of the date hereof) whereby any issued Patent that is material to the normal conduct
of such Credit Party’s business would become prematurely invalidated, abandoned, lapsed or dedicated to the public (except,
in each case, to the extent such action or inaction is deemed advisable in such Credit Party’s reasonable business judgment
and except that nothing in this Section 3.05 shall prohibit such Credit Party from asserting such Patent against any other person).


 


(b)           Each
Credit Party will, and will use its commercially reasonable efforts to contractually require its licensees and its sublicensees
(provided that no Credit Party shall be obligated to amend any agreement existing as of the date hereof to so require)
to, for each material registered Trademark necessary to the normal conduct of such Credit Party’s business, use commercially
reasonable efforts to (i) maintain such Trademark in full force free from any adjudication of abandonment or invalidity for
non-use, (ii) maintain the quality of products and services offered under such Trademark, (iii) display such Trademark
with notice of federal registration or claim of trademark or service mark as required under applicable law and (iv) not knowingly
use, or knowingly permit its licensees’ use of, such Trademark in violation of any third party rights, except, in
the case of (i) and (ii) above, to the extent such action or inaction is deemed advisable in such Credit Party’s reasonable
business judgment.


 


(c)             Each
Credit Party will, and will use its commercially reasonable efforts to cause its licensees and its sublicensees (provided
that no Credit Party shall be obligated to amend any agreement existing as of the date hereof to so cause) to, for each material
Copyright necessary to the normal conduct of such Credit Party’s business that it publishes, displays and distributes, use
a copyright notice as necessary to establish and preserve its rights under applicable copyright laws.


 


(d)           Each
Credit Party shall promptly notify the Collateral Agent if it has received written notice, other than regular reports with respect
to Patents, Trademarks and Copyrights received in the ordinary course of business, that any issued Patent, registered Trademark
or registered Copyright material to the normal conduct of such Credit Party’s business may imminently become abandoned,
lapsed or dedicated to the public, in the case of such Patent or Copyright, prior to the end of its statutory term under applicable
law, or of any materially adverse determination or development, excluding office actions and similar determinations or developments
in the United States Patent and Trademark Office, United States Copyright Office, any court or any similar office of any country,
regarding such Credit Party’s ownership of any such material Patent, Trademark or Copyright or its right to register or
to maintain the same.


 


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(e)          Subject
to Section 3.01(d), each Credit Party, either itself or through any agent, employee, or designee, shall (i) inform the Collateral
Agent on an annual basis of each application by itself, or through any agent, employee, or designee, for any Patent with the United
States Patent and Trademark Office and each registration of any Trademark or Copyright with the United States Patent and Trademark
Office or the United States Copyright Office filed during the preceding twelve-month period, and (ii) upon the reasonable
request of the Collateral Agent, execute and deliver any and all agreements, instruments, documents and papers as the Collateral
Agent may reasonably request to evidence the Collateral Agent’s security interest in such Patent, Trademark, or Copyright.


 


(f)           Each
Credit Party shall exercise its reasonable business judgment in any proceeding before the United States Patent and Trademark Office
or the United States Copyright Office with respect to (i) maintaining and pursuing each application relating to any Patent, Trademark
and/or Copyright (and obtaining the relevant grant or registration) material to the normal conduct of the such Credit Party’s
business, and (ii) maintaining any registration or issuance of each Patent, Trademark, and Copyright that is material to the normal
conduct of such Credit Party’s business, including, when applicable and necessary in such Credit Party’s reasonable
business judgment, timely filings of applications for renewal, affidavits of use, affidavits of incontestability and payment of
maintenance fees, and, if any Credit Party believes necessary in its reasonable business judgment, to initiate opposition, interference
and cancellation proceedings against third parties.


 


(g)          In
the event that any Credit Party receives written notice that any Article 9 Collateral consisting of a Patent, Trademark, Copyright
or Trade Secret material to the normal conduct of its business has been materially infringed, misappropriated or diluted by a
third party, such Credit Party shall, if such Credit Party deems it necessary in its reasonable business judgment, promptly take
actions to stop such infringement, misappropriation or dilution and protect its rights in such Patent, Trademark, Copyright, or
Trade Secret, including, but not limited to, the initiation of a suit for injunctive relief and to recover damages, in each case,
to the extent it deems reasonably appropriate under the circumstances.


 


(h)          Each Credit Party shall exercise its reasonable business judgment in protecting the secrecy of all Trade Secrets
owned by such Credit Party that are material to the normal conduct of such Credit Party’s business, including, without limitation,
if such Credit Party deems it necessary in its reasonable business judgment, entering into confidentiality agreements with employees
and consultants and labeling and restricting access to secret information and documents.


 


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Section 3.06        Intercreditor
Relations. Notwithstanding anything herein to the contrary, it is the understanding of the parties that the Liens granted
pursuant to this Agreement shall (a) with respect to all Collateral constituting Term Loan Priority Collateral prior to the
Discharge of Term Loan Obligations (as defined in the ABL/Term Loan Intercreditor Agreement), be subject and subordinate to
the Liens granted to the Term Loan Agent for the benefit of the Term Loan Secured Parties to secure the Term Loan Obligations
pursuant to the Term Loan Collateral Agreement, to the extent set forth in the ABL/Term Loan Intercreditor Agreement, (b)
with respect to all Collateral constituting Term Loan Priority Collateral prior to the applicable Discharge of Additional
Term Obligations (as defined in the ABL/Term Loan Intercreditor Agreement), be subject and subordinate to the Liens granted
to any Additional Term Agent for the benefit of the holders of the applicable Additional Term Obligations to secure such
Additional Term Obligations pursuant to the applicable Additional Collateral Documents, and (c) with respect to all
Collateral, (x) prior to the Discharge of Original First Lien Obligations (as defined in the Junior Lien Intercreditor
Agreement), be at least pari passu and equal in priority to the Liens granted to any Senior Priority Agent (as defined in the
Junior Lien Intercreditor Agreement) for the benefit of the holders of the applicable Senior Priority Debt to secure such
Senior Priority Debt (as defined in the Junior Lien Intercreditor Agreement) pursuant to the applicable Senior Priority
Collateral Documents (as defined in the Junior Lien Intercreditor Agreement) (except as may be separately otherwise agreed
between the Collateral Agent, on behalf of itself and the Secured Parties, and any Senior Priority Agent (as defined in the
Junior Lien Intercreditor Agreement), on behalf of itself and the Senior Priority Creditors (as defined in the Junior Lien
Intercreditor Agreement) represented thereby). The Collateral Agent acknowledges and agrees that the relative priority of the
Liens granted to the Collateral Agent, the Administrative Agent, the Term Loan Agent, any Additional Term Agent and any
Second Priority Agent (as defined in the Junior Lien Intercreditor Agreement) shall be determined solely pursuant to the
Intercreditor Agreements, and not by priority as a matter of law or otherwise. Notwithstanding anything herein to the
contrary, the Liens and security interest granted to the Collateral Agent pursuant to this Agreement and the exercise of any
right or remedy by the Collateral Agent hereunder are subject to the provisions of the applicable Intercreditor Agreements.
In the event of any conflict between the terms of any Intercreditor Agreement and this Agreement, the terms of the
Intercreditor Agreement shall govern and control as among (i) the Collateral Agent, the Term Loan Agent and any Additional
Term Agent, in the case of the ABL/Term Loan Intercreditor Agreement and (ii) the Collateral Agent, any other First Priority
Agent (as defined in the Junior Lien Intercreditor Agreement) and any Second Priority Agent (as defined in the Junior Lien
Intercreditor Agreement). In the event of any such conflict, each Credit Party may act (or omit to act) in accordance with
the Junior Lien Intercreditor Agreement, and shall not be in breach, violation or default of its obligations hereunder by
reason of doing so. Notwithstanding any other provision hereof, (x) prior to the Discharge of the Term Loan Obligations (as
defined in the ABL/Term Loan Intercreditor Agreement) and the Discharge of Additional Term Obligations (as defined in the
ABL/Term Loan Intercreditor Agreement), any obligation hereunder to deliver to the Collateral Agent any Collateral
constituting Term Loan Priority Collateral shall be satisfied by causing such Term Loan Priority Collateral to be delivered
to the Term Loan Agent, or the applicable Term Loan Collateral Representative (as defined in the ABL/Term Loan Intercreditor
Agreement) or any Additional Term Agent, as applicable, to be held in accordance with the ABL/Term Loan Intercreditor
Agreement and (y) until the Discharge of the Senior Priority Obligations (as defined in the Junior Lien Intercreditor
Agreement), any obligation hereunder to deliver to the Collateral Agent any Collateral shall be satisfied by causing such
Collateral to be delivered to the Senior Priority Representative (as defined in the Junior Lien Intercreditor Agreement).


 


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Article
IV.  



REMEDIES


 


Section 4.01        Remedies
Upon Default. Upon the occurrence and during the continuance of an Event of Default, each Credit Party agrees to deliver
each item of Collateral to the Collateral Agent on demand, and it is agreed that the Collateral Agent shall have the right,
subject to applicable law, to take any of or all the following actions at the same or different times: (a) with respect
to any Article 9 Collateral consisting of Intellectual Property owned by such Credit Party for the purpose of
enabling the Collateral Agent, during the continuance of an Event of Default, to exercise rights and remedies under this
Section 4.01 at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, and for no
other purpose, each Credit Party hereby grants to the Collateral Agent, subject to pre-existing rights and licenses, an
irrevocable (but solely during the continuance of an Event of Default), non-exclusive world-wide (to the extent it has such
rights) license (exercisable without payment of royalty or other compensation to such Credit Party), subject, in the case of
Trademarks, to any quality standards and quality control practices in effect by each applicable Credit Party, with respect to
its Trademarks and sufficient to avoid the risk of invalidation or dilution of such Trademarks, to use, license or sublicense
any of the Intellectual Property now owned or hereafter acquired, developed or created by such Credit Party, wherever the
same may be located; provided, that 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 hereof to the extent permitted by
the terms of the applicable licenses; provided further that the Collateral Agent shall retain the confidentiality of
any Trade Secrets licensed under this Section 4.01 consistent with the practices in effect by each applicable Credit Party,
with respect to its confidential information, immediately prior to such Event of Default; (b) to take possession of the
Collateral and without liability for trespass to the applicable Credit Party to enter any premises where the Collateral may
be located for the purpose of taking possession of, removing or selling the Collateral and, generally, to exercise any and
all rights afforded to a secured party under the applicable Uniform Commercial Code or other applicable law and in
furtherance of the foregoing, each Credit Party hereby grants to the Collateral Agent, for the purpose of enabling the
Collateral Agent to exercise rights and remedies during the continuance of an Event of Default, an irrevocable license
(without payment of rent or other compensation to such Credit Party) to use, operate and occupy all real property owned,
operated, leased, subleased or otherwise occupied by such Credit Party; (c) notify Account Debtors of any Credit Party that
the Accounts of such Credit Party have been assigned to the Collateral Agent, for the benefit of the Secured Parties, or that
Collateral Agent has a security interest therein and direct Account Debtors to make payment directly to the Collateral Agent;
and (d) exercise in respect of the Collateral, in addition to other rights and remedies provided for herein, in the other
Credit Documents, or otherwise available to the Collateral Agent, all other rights and remedies of a secured party on default
under the Uniform Commercial Code or any other applicable law. Without limiting the generality of the foregoing rights and
remedies, each Credit Party agrees that the Collateral Agent shall have the right, subject to the mandatory requirements of
applicable law (including the Uniform Commercial Code), to sell or otherwise dispose of all or any part of the Collateral at
a public or private sale or at any broker’s board or on any securities exchange, for cash, upon credit or for future
delivery as the Collateral Agent shall deem appropriate. The Collateral Agent shall be authorized in connection with any sale
of a security (if it deems it advisable to do so) pursuant to the foregoing to restrict the prospective bidders or purchasers
to persons who represent and agree that they are purchasing such security for their own account, for investment, and not with
a view to the distribution or sale thereof. Upon consummation of any such sale of Collateral pursuant to this
Section 4.01, the Collateral Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers
thereof the Collateral so sold. Each such purchaser at any such sale shall hold the property sold absolutely, free from any
claim or right on the part of any Credit Party, and each Credit Party hereby waives and releases (to the extent permitted by
law) all rights of redemption, stay, valuation and appraisal that such Credit Party now has or may at any time in the future
have under any rule of law or statute now existing or hereafter enacted.


 


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The Collateral Agent
shall give the Parent Borrower and each applicable Credit Party not less than ten (10) Business Days’ prior written notice
(which each Credit Party agrees is reasonable notice within the meaning of Section 9-611 of the New York UCC or its equivalent
in other jurisdictions) of the Collateral Agent’s intention to make any sale of Collateral. Such notice, in the case of a
public sale, shall state the time and place for such sale and, in the case of a sale at a broker’s board or on a securities
exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral, or portion thereof,
will first be offered for sale at such board or exchange. Any such public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Collateral Agent may fix and state in the notice of such sale. The Collateral,
or the portion thereof, to be sold at any such sale may be sold in one lot as an entirety or in separate parcels in the Collateral
Agent’s own right or by one or more agents and contractors, upon any premises owned, leased, or occupied by any Credit Party
and the Collateral Agent and any such agent or contractor, in conjunction with any such sale, may augment the Inventory to be sold
with other goods (all of which other goods shall remain the sole property of the Collateral Agent or such agent or contractor),
all as the Collateral Agent may (in its sole and absolute discretion) determine. The Collateral Agent shall not be obligated to
make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral
shall have been given. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further
notice, be made at the time and place to which the same was so adjourned. In the case of any sale of all or any part of the Collateral
made on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale price is paid
by the purchaser or purchasers thereof, but the Collateral Agent shall not incur any liability in the event that any such purchaser
or purchasers shall fail to take up and pay for the Collateral so sold and, in the case of any such failure, such Collateral may
be sold again upon notice given in accordance with provisions above. At any public (or, to the extent permitted by law, private)
sale made pursuant to this Section 4.01, any Secured Party may bid for or purchase, free (to the extent permitted by law)
from any right of redemption, stay, valuation or appraisal on the part of any Credit Party (all such rights being also hereby waived
and released to the extent permitted by law), the Collateral or any part thereof offered for sale and may make payment on account
thereof by using any claim then due and payable to such Secured Party from any Credit Party as a credit against the purchase price,
and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such property in accordance with
Section 4.02 hereof without further accountability to any Credit Party therefor. As an alternative to exercising the power
of sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at law or in equity to foreclose this Agreement
and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction
or pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the provisions of this Section 4.01 shall
be deemed to conform to the commercially reasonable standards as provided in Section 9-610(b) of the New York UCC or
its equivalent in other jurisdictions.


 


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Section 4.02        Application
of Proceeds.


 


(a)          The Collateral Agent shall promptly apply the proceeds, moneys or balances of any collection or sale of Collateral, as well
as any Collateral consisting of cash, in the following order of priority, subject to the terms of the ABL/Term Loan Intercreditor
Agreement: first, to pay all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees to
the extent provided in the Credit Agreement or any other Credit Document) and indemnities due and owing under the Credit Documents
of the Administrative Agent or the Collateral Agent (including to pay the Collateral Agent any sums advanced to the Collateral
Agent to preserve its security interest in the Collateral), second, to pay any fees then due to any Agent under the Credit
Documents, third, to pay interest on Agent Advances, fourth, to pay the principal of Agent Advances then outstanding,
fifth, to pay all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees to the extent
provided in the Credit Agreement or any other Credit Document) due and owing hereunder of each of the Lenders and each of the L/C
Issuer, sixth, to pay any fees then due to any of the Lenders and each of the L/C Issuers under the Credit Documents, seventh,
to pay interest accrued in respect of Swing Line Loans, eighth, to pay the principal of all Swing Line Loans then outstanding,
ninth, to pay (on a ratable basis) interest accrued in respect of (A) the Revolving Loans then outstanding and (B) any Unreimbursed
Amount then outstanding, tenth, to pay (on a ratable basis) (A) the principal of Revolving Loans then outstanding and any
Unreimbursed Amount then outstanding, and to cash collateralize any outstanding L/C Obligations on terms reasonably satisfactory
to the applicable L/C Issuer and (B) any outstanding obligations payable under (i) Designated Cash Management Agreements, up to
the amount of Designated Cash Management Reserves then in effect with respect thereto, and (ii) Designated Hedging Agreements,
up to the amount of Designated Hedging Reserves then in effect with respect thereto, eleventh, to pay (ratably) (A) Hedge
Obligations and (B) Cash Management Obligations, in each case with any Lender Counterparty (other than pursuant to any Designated
Cash Management Agreements or Designated Hedging Agreements, but including any amounts not paid pursuant to clause “tenth”(B)(i)
above) permitted under the Credit Agreement and secured by the Credit Documents (notwithstanding the foregoing, amounts received
from any Credit Party shall not be applied to any Excluded Swap Obligation of such Credit Party), twelfth to pay other Obligations
then due and owing, and thirteenth, to pay the surplus, if any, to whomever may be lawfully entitled to receive such surplus.
To the extent that any amounts available for distribution pursuant to clause “tenth” above are attributable to the
issued but undrawn amount of outstanding Letters of Credit which are then not yet required to be reimbursed hereunder, such amounts
shall be held by the Collateral Agent in a cash collateral account and applied (x) first, to reimburse the applicable L/C Issuer
from time to time for any drawings under such Letters of Credit and (y) then, following the expiration of all Letters of Credit,
to all other obligations of the types described in such clause “tenth”. To the extent any amounts available for distribution
pursuant to “ninth” are insufficient to pay all obligations described therein in full, such moneys shall be allocated
pro rata among the Lenders and L/C Issuers based on their respective Pro Rata Shares. To the extent any amounts available for distribution
pursuant to clause (A) of clause “tenth” are insufficient to pay all obligations described therein in full, such moneys
shall be allocated pro rata among the Lenders and L/C Issuers based on their respective Pro Rata Shares. Excluded Swap Obligations
with respect to any Guarantor shall not be paid with amounts received from such Guarantor or its assets, but appropriate adjustments
shall be made with respect to payments from other Credit Parties to preserve the allocation to Obligations otherwise set forth
above in this Section.


 


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(b)          If
any payment to any Secured Party pursuant to this Section 4.02 of its pro rata share of any distribution would result in
overpayment to such Secured Party, such excess amount shall instead be distributed in respect of the unpaid Obligations of
the other Secured Parties, with each Secured Party whose Obligations have not been paid in full to receive an amount equal to
such excess amount multiplied by a fraction the numerator of which is the unpaid Obligations of such Secured Party and the
denominator of which is the unpaid Obligations of all Secured Parties entitled to such distribution.


 


(c)          All
payments required to be made hereunder shall be made to the Administrative Agent for the account of such Secured Parties or as
the Administrative Agent may otherwise direct in accordance with the Credit Documents.


 


(d)          For
purposes of applying payments received in accordance with this Section 4.02, the Collateral Agent shall be entitled to rely
upon the applicable Secured Parties with respect to payments of Secured Hedge Agreements or Secured Cash Management Agreements
(which the Administrative Agent and each other Secured Party agrees (or shall agree) to provide upon request of the Collateral
Agent) of the outstanding Obligations of the Credit Parties owed to the Secured Parties.


 


(e)          Subject to the other limitations (if any) set forth herein and in the other Credit Documents, it is understood that the
Credit Parties shall remain liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the
aggregate amount of the Obligations of the Credit Parties.


 


(f)           It is understood and agreed by each Credit Party that the Collateral Agent shall have no liability for any determinations
made by it in this Section 4.02 except to the extent that any of the foregoing are found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from its own or its Related Party’s bad faith, gross negligence or
willful misconduct. Each Credit Party also agrees that the Collateral Agent may (but shall not be required to), at any time and
in its sole discretion, and with no liability resulting therefrom, petition a court of competent jurisdiction regarding any application
of Collateral in accordance with the requirements hereof and of any Intercreditor Agreement, and the Collateral Agent shall be
entitled to wait for, and may conclusively rely on, any such determination.


 


Section 4.03        Securities
Act, Etc. In view of the position of the Credit Parties in relation to the Pledged Collateral, or because of other current
or future circumstances, a question may arise under the Securities Act of 1933, as now or hereafter in effect, or any similar
federal statute hereafter enacted analogous in purpose or effect (such Securities Act and any such similar statute as from time
to time in effect being called the “Federal Securities Laws”) with respect to any disposition of the Pledged
Collateral permitted hereunder. Each Credit Party understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were to attempt to dispose of all or any part of the
Pledged Collateral, and might also limit the extent to which or the manner in which any subsequent transferee of any Pledged Collateral
could dispose of the same. Similarly, there may be other legal restrictions or limitations affecting the Collateral Agent in any
attempt to dispose of all or part of the Pledged Collateral under applicable “blue sky” or other state securities
laws or similar laws analogous in purpose or effect. Each Credit Party acknowledges and agrees that in light of such restrictions
and limitations, the Collateral Agent, in its sole and absolute discretion, (a) may proceed to make such a sale whether or
not a registration statement for the purpose of registering such Pledged Collateral or part thereof shall have been filed under
the Federal Securities Laws or, to the extent applicable, “blue sky” or other state securities laws and (b) may
approach and negotiate with a single potential purchaser to effect such sale. Each Credit Party acknowledges and agrees that any
such sale might result in prices and other terms less favorable to the seller than if such sale were a public sale without such
restrictions. In the event of any such sale, the Collateral Agent shall incur no responsibility or liability for selling all or
any part of the Pledged Collateral at a price that the Collateral Agent, in its sole and absolute discretion, may in good faith
deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might have been realized
if the sale were deferred until after registration as aforesaid or if more than a single purchaser were approached. The provisions
of this Section 4.03 will apply notwithstanding the existence of a public or private market upon which the quotations or
sales prices may exceed substantially the price at which the Collateral Agent sells.


 


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Article
V.  



MISCELLANEOUS


 


Section
5.01        Notices. All communications and notices hereunder shall (except as otherwise permitted herein) be in writing and
given as provided in Section 10.1 of the Credit Agreement. All communications and notices hereunder to any Guarantor shall
be given to it in care of the Parent Borrower, with such notice to be given as provided in Section 10.1 of the Credit Agreement.


 


Section 5.02        Security
Interest Absolute. All rights of the Collateral Agent hereunder, the Security Interest in the Article 9 Collateral,
the security interest in the Pledged Collateral and all obligations of each Credit Party hereunder shall be absolute and unconditional
irrespective of (a) any lack of validity or enforceability of the Credit Agreement, any other Credit Document, any agreement
with respect to any of the Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change
in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Credit Agreement, any other Credit Document or any other agreement or instrument,
(c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or
consent under or departure from any guarantee, securing or guaranteeing all or any of the Obligations or (d) subject only
to termination or release of a Credit Party’s obligations hereunder in accordance with the terms of Section 5.15 hereof,
any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Credit Party in respect
of the Obligations or this Agreement (other than a defense of payment or performance).


 


Section 5.03        Limitation
By Law. All rights, remedies and powers provided in this Agreement may be exercised only to the extent that the exercise
thereof does not violate any applicable provision of law, and all the provisions of this Agreement are intended to be subject
to all applicable mandatory provisions of law that may be controlling and to be limited to the extent necessary so that they
shall not render this Agreement invalid, unenforceable, in whole or in part, or not entitled to be recorded, registered or
filed under the provisions of any applicable law.


 


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Section 5.04        Binding
Effect; Several Agreement. This Agreement shall become effective as to any party to this Agreement when a counterpart hereof
executed on behalf of such party shall have been delivered to the Collateral Agent and a counterpart hereof shall have been executed
on behalf of the Collateral Agent, and thereafter shall be binding upon such party and the Collateral Agent and their respective
permitted successors and assigns, and shall inure to the benefit of such party, the Collateral Agent and the other Secured Parties
and their respective permitted successors and assigns, except that no party shall have the right to assign or transfer its rights
or obligations hereunder or any interest herein or in the Collateral (and any such assignment or transfer shall be void) except
as expressly contemplated by this Agreement or by the Credit Agreement. This Agreement shall be construed as a separate agreement
with respect to each Credit Party and may be amended, modified, supplemented, waived or released with respect to any Credit Party
without the approval of any other Credit Party and without affecting the obligations of any other Credit Party hereunder.


 


Section 5.05       Successors
and Assigns. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include
the permitted successors and assigns of such party, and all covenants, promises and agreements by or on behalf of any Credit Party
or the Collateral Agent that are contained in this Agreement shall bind and inure to the benefit of their respective permitted
successors and assigns. The Collateral Agent hereunder shall at all times be the same person that is the Collateral Agent under
the Credit Agreement. Upon the acceptance of any appointment as the Collateral Agent under 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 Collateral Agent pursuant hereto.


 


Section 5.06        Administrative
Agent’s and Collateral Agent’s Fees and Expenses; Indemnification.  The parties hereto agree that the Administrative
Agent and the Collateral Agent shall be entitled to (i) reimbursement of their respective expenses incurred hereunder and
(ii) indemnification for losses, claims, damages, liabilities and related expenses incurred or asserted, arising out of,
in connection with or as a result of this Agreement, in each case, as and to the extent provided in Section 10.5 of the Credit
Agreement and the provisions of Section 10.5 of the Credit Agreement shall be incorporated by reference herein and apply
to each Credit Party mutatis mutandis.


 


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Section 5.07        Collateral
Agent Appointed Attorney-in-Fact. Each Credit Party hereby appoints the Collateral Agent the attorney-in-fact of such
Credit Party for the purpose, after the occurrence and during the continuance of an Event of Default, of carrying out the
provisions of this Agreement and taking any action and executing any instrument that the Collateral Agent may deem necessary
or desirable to accomplish the purposes hereof, which appointment is irrevocable and coupled with an interest. The Collateral
Agent shall have the right, upon the occurrence and during the continuance of an Event of Default, with full power of
substitution either in the Collateral Agent’s name or in the name of such Credit Party, (a) to receive, endorse, assign
or deliver any and all notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the
Collateral or any part thereof, (b) to demand, collect, receive payment of, give receipt for and give discharges and releases
of all or any of the Collateral, (c) to ask for, demand, sue for, collect, receive and give acquittance for any and all
moneys due or to become due under and by virtue of any Collateral, (d) to sign the name of any Credit Party on any invoice or
bill of lading relating to any of the Collateral, (e) to send verifications of Accounts to any Account Debtor, (f) to
commence and prosecute any and all suits, actions or proceedings at law or in equity in any court of competent jurisdiction
to collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any Collateral, (g) to
settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any of the Collateral,
(h) to notify, or to require any Credit Party to notify, Account Debtors to make payment directly to the Collateral Agent,
and (i) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the
Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement, as fully and
completely as though the Collateral Agent were the absolute owner of the Collateral for all purposes; provided that nothing
herein contained shall be construed as requiring or obligating the Collateral Agent to make any commitment or to make any
inquiry as to the nature or sufficiency of any payment received by the Collateral Agent, or to present or file any claim or
notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in
respect thereof or any property covered thereby. The Collateral Agent and the other Secured Parties shall be accountable only
for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their
officers, directors, employees or agents shall be responsible to any Credit Party for any act or failure to act hereunder,
except for their own gross negligence, bad faith or willful misconduct.


 


Section
5.08        APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES
OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE
OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.


 


Section 5.09        Waivers;
Amendment. (a) No failure or delay by the Collateral Agent or any Lender in exercising any right, power or remedy hereunder
or under any other Credit Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy, or any abandonment or discontinuance of steps to enforce such a right, power or remedy, preclude any other or
further exercise thereof or the exercise of any other right, power or remedy. The rights, powers and remedies of the Collateral
Agent and the Lenders hereunder and under the other Credit Documents are cumulative and are not exclusive of any rights, powers
or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any Credit
Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 5.09,
and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.


 


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(b)         Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Collateral Agent and the Credit Party or Credit Parties with respect to which such
waiver, amendment or modification is to apply, subject to any consent required in accordance with Section 10.8 of the
Credit Agreement.


 


Section 5.10        WAIVER
OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 5.10.


 


Section 5.11        Severability.
In the event any one or more of the provisions contained in this Agreement or in any other Credit Document should be held invalid,
illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein
and therein shall not in any way be affected or impaired thereby. The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible
to that of the invalid, illegal or unenforceable provisions.


 


Section
5.12        Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original
but all of which, when taken together, shall constitute but one contract, and shall become effective as provided in Section 5.04
hereof. Delivery of an executed counterpart to this Agreement by facsimile or any other electronic transmission (e.g., “PDF”
or “TIFF”) shall be as effective as delivery of a manually signed original.


 


Section 5.13        Headings.
Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part
of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.


 


Section 5.14        Jurisdiction;
Consent to Service of Process. (a) Each party hereto irrevocably and unconditionally submits for itself and its
property in any legal action or proceeding relating to this Agreement to the exclusive general jurisdiction of the Supreme
Court of the State of New York for the County of New York (the “New York Supreme Court”), and the United
States District Court for the Southern District of New York (the “Federal District Court”, and together
with the New York Supreme Court, the “New York Courts”) and appellate courts from either of them and
agrees that any such action or proceeding shall be brought solely in such New York Courts; provided that nothing in this
agreement shall be deemed or operate to preclude (i) the Collateral Agent from bringing suit or taking other legal action in
any other jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or
other court order in favor of the Collateral Agent, (ii) any party from bringing any legal action or proceeding in any
jurisdiction for the recognition and enforcement of any judgment, (iii) if all such New York Courts decline jurisdiction over
any person, or decline (or, in the case of the Federal District Court, lack) jurisdiction over any subject matter of such
action or proceeding, a legal action or proceeding may be brought with respect thereto in another court having jurisdiction
and (iv) in the event a legal action or proceeding is brought against any party hereto or involving any of its assets or
property in another court (without any collusive assistance by such party or any of its subsidiaries or affiliates), such
party from asserting a claim or defense (including any claim or defense that this Section 5.14 would otherwise require to be
asserted in a legal action or proceeding in a New York Court) in any such action or proceeding.


 


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(b)         Each
of the parties hereto 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 Agreement in any New York Court. Each of the parties hereto 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.


 


(c)          Each
party hereto hereby irrevocably and unconditionally agrees that service of process in any such action or proceeding may be effected
by delivering by registered or certified mail (or substantially similar form of mail), postage prepaid, return receipt requested,
a copy of such process to the applicable party at its address provided in accordance with Section 10.1 of the Credit Agreement.


 


(d)         Each party hereto
irrevocably and unconditionally agrees that the Collateral Agent retains the right to serve process in any other manner permitted
by law or to bring proceedings against any Credit Party in the courts of any other jurisdiction in connection with the exercise
of any rights under this Agreement or the enforcement of any judgment. Without limiting the foregoing, each Credit Party hereby
agrees that service of process may be effected on the Authorized Agent designated in the Credit Agreement for such Credit Party,
in the manner provided in Section 10.15 of the Credit Agreement.


 


Section
5.15        Termination or Release. (a) This Agreement, the pledges made herein, the Security Interest and all other security
interests granted hereby shall terminate when all the Obligations have been paid in full in cash in accordance with Section 1.15
of the Credit Agreement.


 


(b)         A
Credit Party shall automatically be released from its obligations hereunder and the security interests created hereunder in the
Collateral of such Credit Party shall be automatically released upon the consummation of any transaction that is permitted by
the Credit Agreement, as a result of which such Credit Party ceases to be a subsidiary, or, to the extent the procedures for designation
are complied with under the Credit Agreement, such Credit Party otherwise becomes an Immaterial Subsidiary or an Unrestricted
Subsidiary.


 


(c)          Upon
any sale or other transfer by any Credit Party of any Collateral that is permitted by the Credit Agreement, or, upon the effectiveness
of any written consent to the release of a security interest granted in any Collateral pursuant to Section 10.8 of the Credit
Agreement, the security interest in such Collateral shall be automatically released.


 


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(d)          In
connection with any termination or release pursuant to paragraph (a), (b) or (c) of this Section 5.15, the Collateral
Agent shall, in each case, at such Credit Party’s expense, (i) execute and deliver to any Credit Party, and make any
filing of, all documents that such Credit Party shall reasonably request to evidence such termination or release (including, without
limitation, making any filings (such as filings of Uniform Commercial Code termination statements or releases in the United States
Patent and Trademark Office or the United States Copyright Office)), (ii) duly assign and transfer to such Credit Party such
of the Pledged Collateral that may be in the possession of the Collateral Agent and has not theretofore been sold or otherwise
applied or released pursuant to this Agreement and (iii) take any other action reasonably requested or demanded to effectuate
such release (including making any filing); provided that the Collateral Agent shall not be required to take any action
under this Section 5.15(d) unless such Credit Party shall have delivered to the Collateral Agent together with such
request, which may be incorporated into such request, (1) a reasonably detailed description of the Collateral, which in any
event shall be sufficient to effect the appropriate termination or release without causing the release of any other Collateral
and (2) a certificate of an Authorized Officer of the Parent Borrower or such Credit Party certifying that the transaction
giving rise to such termination or release is permitted by the Credit Agreement and was, or will concurrently with the release
be, consummated in compliance with the Credit Documents. Any execution and delivery of documents pursuant to this Section 5.15
shall be without recourse to or warranty by the Collateral Agent.


 


Section 5.16        Additional
Subsidiaries. Upon execution and delivery by the Collateral Agent and any subsidiary that is required to become a party hereto
by Section 5.11 of the Credit Agreement of an instrument in substantially the form of Exhibit I hereto (or in such other
form reasonably satisfactory to the Collateral Agent), such subsidiary shall become a Guarantor hereunder with the same force
and effect as if originally named as a Guarantor on the date hereof. The execution and delivery of any such instrument shall not
require the consent of any other party to this Agreement. The rights and obligations of each party to this Agreement shall remain
in full force and effect notwithstanding the addition of any new party to this Agreement.


 


[Signature Pages Follow]


 


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IN WITNESS WHEREOF, the
parties hereto have duly executed this Agreement as of the day and year first above written.


 


	 	LANNETT COMPANY, INC.
	 	 
	 	By: 	/s/Timothy C. Crew
	 	 	Name:   Timothy C. Crew
	 	 	Title:     Chief Executive Officer
	 	 
	 	LANNETT HOLDINGS, INC.
	 	 
	 	By:	 /s/Robert Ehlinger
	 	 	Name:   Robert Ehlinger
	 	 	Title:     President
	 	 
	 	CODY LABORATORIES, INC.
	 	 
	 	By: 	/s/John M. Abt
	 	 	Name:   John M. Abt
	 	 	Title:     President
	 	 
	 	SILARX PHARMACEUTICALS, INC.
	 	 
	 	By:	 /s/Neha Desai-Jimenez
	 	 	Name:   Neha Desai-Jimenez
	 	 	Title:     President and Director of Operations
	 	 
	 	KREMERS URBAN

 PHARMACEUTICALS
    INC.
	 	 
	 	By:	/s/Grant Brock
	 	 	Name:   Grant Brock
	 	 	Title:     President




 


[Signature Page to Pledge and Security Agreement]


 






     


     


    

 


	 	WELLS FARGO BANK, NATIONAL 

ASSOCIATION, as Administrative Agent and 

Collateral Agent
	 	 
	 	By:	 /s/ Salvatore Tulumello
	 	 	Name:   Salvatore Tulumello
	 	 	Title:     Vice President




 


[Signature Page to Pledge and Security Agreement]


 






     


     


    

 


Exhibit I

to Security Agreement


 


SUPPLEMENT NO. ____ TO THE PLEDGE AND SECURITY
AGREEMENT


 


SUPPLEMENT NO. ____, dated as of ____________________
(this “Supplement”), to the Pledge and Security Agreement dated as of December 7, 2020 (as amended, restated,
supplemented, waived or otherwise modified from time to time, the “Security Agreement”), among Lannett Company,
Inc., a Delaware corporation (the “Parent Borrower”), each Guarantor from time to time party thereto, Wells
Fargo Bank, National Association as administrative agent (in such capacity and any successor in such capacity, the “Administrative
Agent”) and as collateral agent (in such capacity and any successor in such capacity, the “Collateral Agent”)
for the Secured Parties.


 


A.       Reference
is made to (i) the Credit and Guaranty Agreement dated as of December 7, 2020, (as amended, restated, supplemented, waived or otherwise
modified from time to time, the “Credit Agreement”), among the Parent Borrower, the Subsidiary Borrowers from
time to time party thereto (together with the Parent Borrower, jointly and severally, collectively, the “Borrowers”
and each individually, a “Borrower”), certain subsidiaries of the Parent Borrower party thereto from time to
time as Guarantors, the Lenders party thereto from time to time, Administrative Agent, and Collateral Agent and (ii) the Credit
Agreement Joinder dated as of ______________ entered into by ______________, a ______________ (the “New Subsidiary”),
as required by Section 5.11 of the Credit Agreement.


 


B.       Capitalized
terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement and the
Security Agreement.


 


C.       The
Credit Parties have entered into the Security Agreement in order to induce the Lenders to make extensions of credit under the Credit
Agreement. Section 5.16 of the Security Agreement provides that additional subsidiaries may become Guarantors under the Security
Agreement by execution and delivery of an instrument in the form of this Supplement. The New Subsidiary is executing this Supplement
in accordance with the requirements of the Credit Agreement to become a Guarantor under the Security Agreement in order to induce
the Lenders to make extensions of credit (if available under the Credit Agreement) and as consideration for extensions of credit
previously made under the Credit Agreement.


 


Accordingly, the Administrative
Agent, the Collateral Agent and the New Subsidiary agree as follows:


 


Pledge and Security Agreement


 






    Exhibit I-1


     


    

 


SECTION 1. In
accordance with Section 5.16 of the Security Agreement, the New Subsidiary by its signature below becomes a Guarantor
under the Security Agreement and agrees to be bound by all terms, covenants and conditions thereunder with the same force and
effect as if originally named therein as a Guarantor and the New Subsidiary hereby (a) agrees to all the terms,
covenants and provisions of the Security Agreement applicable to it as a Guarantor thereunder and (b) represents and
warrants that (i) with respect to representations and warranties made by it under the Security Agreement that are not
qualified by materiality, such representations and warranties are true and correct in all material respects, and (ii) with
respect to the representations and warranties made by it under the Security Agreement that are qualified by materiality, such
representations and warranties are true and correct in all respects, in each case, on and as of the date hereof. In
furtherance of the foregoing, the New Subsidiary, as security for the payment and performance in full of the Obligations when
due (whether at stated maturity, by acceleration or otherwise), does hereby create, grant and pledge to the Collateral Agent,
for the benefit of the Secured Parties, a security interest in and Lien on all the New Subsidiary’s right, title and
interest in and to the Collateral of the New Subsidiary and expressly assumes all obligations and liabilities of a Guarantor
under the Security Agreement. Each reference to a “Guarantor” or “Credit Party” in the Security
Agreement shall be deemed to include the New Subsidiary. The Security Agreement is hereby incorporated herein by
reference.


 


SECTION 2. The New Subsidiary
represents and warrants to the Administrative Agent and the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with
its terms, subject to (i) the effects of bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance or other
similar laws affecting creditors’ rights generally, (ii) general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law) and (iii) implied covenants of good faith and fair dealing.


 


SECTION 3. This Supplement
may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall
constitute but one contract. Delivery of an executed counterpart to this Agreement by facsimile or any other electronic transmission
(e.g., “PDF” or “TIFF”) shall be as effective as delivery of a manually signed original. This Supplement
shall become effective when (a) the Collateral Agent shall have received a counterpart of this Supplement that bears the signature
of the New Subsidiary and (b) the Agents have executed a counterpart hereof.


 


SECTION 4. The New Subsidiary
hereby represents and warrants that (a) set forth on Schedule I attached hereto is a true, correct and complete
schedule of all the Pledged Collateral of the New Subsidiary as of the date hereof, (b) set forth on Schedule II
attached hereto is a true, correct and complete schedule of all of the material issued Patents, registered Trademarks and registered
Copyrights owned by the New Subsidiary as of the date hereof, (c) set forth on Schedule III attached hereto is
a true, correct and complete schedule of all Commercial Tort Claims of the New Subsidiary individually in excess of $5,000,000
as of the date hereof, (d) set forth on Schedule IV attached hereto, is the true, correct and complete legal name
of the New Subsidiary, its jurisdiction of formation and the location of its chief executive office , (e) except as set forth
in Schedule V, all Accounts of the New Subsidiary have been originated by the New Subsidiary and all Inventory has
been produced or acquired by the New Subsidiary in the ordinary course of business, and (f) set forth on Schedule VI
attached hereto is a true, correct and complete schedule of all Letter of Credit Rights of the New Subsidiary relating to Letters
of Credit with a face amount in excess of $5,000,000 as of the date hereof.


 


SECTION 5. Except as
expressly supplemented hereby, the Security Agreement shall remain in full force and effect.


 


Pledge and Security Agreement


 






    Exhibit I-2


     


    

 


SECTION 6. THIS SUPPLEMENT
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH
PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.


 


SECTION 7. In the event
any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained herein and in the Security Agreement shall not
in any way be affected or impaired thereby. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal
or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.


 


SECTION 8. All communications
and notices hereunder shall be in writing and given as provided in Section 5.01 of the Security Agreement.


 


SECTION 9. The New Subsidiary
agrees to reimburse the Collateral Agent for its reasonable and documented out-of-pocket expenses in connection with this Supplement,
including the reasonable and documented fees, disbursements and other charges of counsel for the Collateral Agent.


 


[REMAINDER OF THIS PAGE
IS LEFT BLANK INTENTIONALLY]


 


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    Exhibit I-3


     


    

 


 


IN WITNESS WHEREOF, the
New Subsidiary and the Agents have duly executed this Supplement to the Security Agreement as of the day and year first above written.


 


	 	[Name of New Subsidiary]
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 



 


Pledge and Security Agreement


 






    Exhibit I-4


     


    

 


	 	WELLS FARGO, NATIONAL ASSOCIATION, as

 Administrative Agent and Collateral Agent
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title :






 


Pledge and Security Agreement


 






    Exhibit I-5


     


    

 


Schedule I

to Supplement No. ___ to the

Security Agreement


 


Pledged Collateral of the New Subsidiary


 


PLEDGED EQUITY SECURITIES


 


	
        Name of
        Issuer

         
	
        Registered
        Owner

         
	
        Number
        and Class of Pledged Equity Security

         
	
        Number
        of Issuer Certificate (if applicable)

         
	
        Percentage
        of Equity Interests

         

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 


 


PLEDGED DEBT SECURITIES


 


	
        Holder

         
	
        Issuer

         
	
        Principal
        Amount

         
	
        Date of
        Pledged Debt Security

         
	
        Maturity
        Date

         

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 


 


Pledge and Security Agreement


 






    Exhibit I-6


     


    

 


Schedule II

to Supplement No. ___ to the

Security Agreement


 


PATENTS, TRADEMARKS AND COPYRIGHTS


 


Pledge and Security Agreement


 






    Exhibit I-7


     


    

 


Schedule III

to Supplement No. ___ to the

Security Agreement


 


COMMERCIAL TORT CLAIMS


 


Pledge and Security Agreement


 






    Exhibit I-8


     


    

 


Schedule IV

to Supplement No. ___ to the

Security Agreement


 


LEGAL NAME, JURISDICTION OF FORMATION
AND ADDRESS


 


Pledge and Security Agreement


 






    Exhibit I-9


     


    

 


Schedule V

to Supplement No. ___ to the

Security Agreement


 


MATTERS RELATING TO ACCOUNTS AND INVENTORY


 


Pledge and Security Agreement


 






    Exhibit I-10


     


    

 


Schedule VI

to Supplement No. ___ to the

Security Agreement


 


LETTER OF CREDIT RIGHTS


 


Pledge and Security Agreement


 






    Exhibit I-11


     


    

 


Exhibit II

to Security Agreement


 


[FORM OF]


INTELLECTUAL PROPERTY SECURITY AGREEMENT


 


This INTELLECTUAL PROPERTY
SECURITY AGREEMENT (this “IP Security Agreement”) dated December 7, 2020, is made by the persons listed on the
signature pages hereof (collectively, the “Grantors”) in favor of Wells Fargo, National Association, as collateral
agent (in such capacity and any successor in such capacity, the “Collateral Agent”) for the Secured Parties
(as defined in the Credit Agreement referred to below). Capitalized terms used in this IP Security Agreement and not otherwise
defined herein have the respective meanings assigned thereto in the Credit Agreement (as defined below).


 


WHEREAS, the Grantors
have entered into that certain Credit and Guaranty Agreement, dated as of December 7, 2020 (as amended, amended and restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”), with Lannett Company, Inc., a corporation
incorporated under the laws of the State of Delaware (the “Parent Borrower”), the other Credit Parties party
thereto, Wells Fargo, National Association, as the Administrative Agent and Collateral Agent, and the Lenders party thereto from
time to time;


 


WHEREAS, as a condition
precedent to the making of Loans by the Lenders and the entry into Hedge Agreements and Cash Management Agreements by the Lender
Counterparties from time to time, each Grantor has executed and delivered that certain Pledge and Security Agreement, dated as
of December 7, 2020 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Security
Agreement”), by and among the Grantors, the Administrative Agent and the Collateral Agent; and


 


WHEREAS, under the terms
of the Security Agreement, the Grantors have granted to the Collateral Agent, for the benefit of the Secured Parties, a security
interest in, among other property, certain intellectual property of the Grantors, and have agreed as a condition thereof to execute
this IP Security Agreement for recording with the United States Patent and Trademark Office and the United States Copyright Office;


 


NOW, THEREFORE, for good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Grantor agrees as follows:


 


SECTION 1. Grant
of Security. Each Grantor hereby grants to the Collateral Agent for the benefit of the Secured Parties a security interest
in such Grantor’s right, title and interest in and to the following (collectively, the “IP Collateral”):


 


(i)         the
patents and patent applications set forth in Schedule A hereto;


 


(ii)        the
trademark and service mark registrations and applications set forth in Schedule B hereto (provided that no
security interest shall be granted in United States intent-to-use trademark applications or intent-to-use service
mark applications filed pursuant to Section 1(b) of the Lanham Act, to the extent that, the grant of a security
interest therein would impair the validity or enforceability of, or render void or voidable or result in the cancellation of
the applicable Grantor’s right, title or interest therein or any trademark or service mark issued as a result of such
application under applicable federal law), together with the goodwill symbolized thereby;


 


Pledge and Security Agreement


 






    Exhibit II-1


     


    

 


(iii)       the copyright
registrations and applications set forth in Schedule C hereto;


 


(iv)       all
reissues, divisions, continuations, continuations-in-part, extensions, renewals and reexaminations of any of the foregoing;


 


(v)        any
and all claims for damages and injunctive relief for past, present and future infringement of any of the foregoing; and


 


(vi)       any
and all proceeds of, collateral for, income, royalties and other payments now or hereafter due and payable with respect to, and
supporting obligations relating to, any and all of the foregoing or arising from any of the foregoing.


 


SECTION 2. Security
for Obligations. The grant of a security interest in the IP Collateral by each Grantor under this IP Security Agreement secures
the payment of all Obligations of such Grantor now or hereafter existing under or in respect of the Credit Documents, whether
direct or indirect, absolute or contingent, and whether for principal, reimbursement obligations, interest, premiums, penalties,
fees, indemnifications, contract causes of action, costs, expenses or otherwise.


 


SECTION 3. Recordation.
Each Grantor authorizes and requests that the Register of Copyrights, the Commissioner for Patents and the Commissioner for Trademarks
and any other applicable government officer record this IP Security Agreement.


 


SECTION 4. Counterparts.
This IP Security Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart to
this Agreement by facsimile or any other electronic transmission (e.g., “PDF” or “TIFF”) shall be as effective
as delivery of a manually signed original.


 


SECTION 5. Grants,
Rights and Remedies. This IP Security Agreement has been entered into in conjunction with the provisions of the Security Agreement.
Each Grantor does hereby acknowledge and confirm that the grant of the security interest hereunder to, and the rights and remedies
of, the Collateral Agent with respect to the IP Collateral are more fully set forth in the Security Agreement, the terms and provisions
of which are incorporated herein by reference as if fully set forth herein.


 


SECTION 6. Governing
Law. THIS IP SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS IP SECURITY AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES
OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE
OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.


 


Pledge and Security Agreement


 






    Exhibit II-2


     


    

 


[Signatures pages to follow]


 


Pledge and Security Agreement


 






    Exhibit II-3


     


    

 


IN WITNESS WHEREOF, each
Grantor has caused this IP Security Agreement to be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.


 


	 	[NAME]
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:






 


Pledge and Security Agreement


 






    Exhibit II-4