Exhibit 10.2


 


EXECUTION VERSION


 


PLEDGE AND SECURITY AGREEMENT


 


THIS PLEDGE AND SECURITY
AGREEMENT (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Security Agreement”)
is entered into as of June 27, 2018 by and among CLARUS CORPORATION, a Delaware corporation (the “Company”),
BLACK DIAMOND EQUIPMENT, LTD., a Delaware corporation (“Black Diamond”), BLACK DIAMOND RETAIL, INC., a Delaware
corporation (“BDR”), SIERRA BULLETS, L.L.C., a Delaware limited liability company (“Sierra”),
EVEREST/SAPPHIRE ACQUISITION, LLC, a Delaware limited liability company (“Everest”), PIEPS SERVICE, LLC, a Delaware
limited liability company (“PIEPS”), BD EUROPEAN HOLDINGS, LLC, a Delaware limited liability company (“BDEH”),
BD NORTH AMERICAN HOLDINGS, LLC, a Delaware limited liability company (“BDNA”), BLACK DIAMOND RETAIL - ALASKA,
LLC, a Delaware limited liability company (“BD Alaska”), and any additional entities which become parties to
this Security Agreement by executing a Security Agreement Supplement hereto in substantially the form of Annex I hereto (such additional
entities, together with the Company, Black Diamond, BDR, Sierra, Everest, PIEPS, BDEH, BDNA and BD Alaska, each a “Grantor”,
and collectively, the “Grantors”), and JPMorgan Chase Bank, N.A., in its capacity as administrative agent (the
“Administrative Agent”) for the lenders party to the Credit Agreement referred to below.


 


PRELIMINARY STATEMENT


 


The Grantors, the Administrative
Agent, and the Lenders are entering into a Credit Agreement dated as of the date hereof (as it may be amended, restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”). Each Grantor is entering into this Security
Agreement in order to induce the Lenders to enter into and extend credit to the Borrowers under the Credit Agreement and to secure
the Secured Obligations that it has agreed to guarantee pursuant to Article X of the Credit Agreement.


 


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


 


ARTICLE I


DEFINITIONS


 


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


 


1.2.          Terms
Defined in UCC. The following terms are used herein as defined in Article 9 of the UCC: Accounts, Chattel Paper, Commercial
Tort Claims, Deposit Accounts, Documents, Equipment, Farm Products, Fixtures, General Intangibles, Goods, Instruments, Inventory,
Investment Property, Letter-of-Credit Rights and Supporting Obligations. The terms “Securities Account” and “Security”
are used herein as defined in Article 8 of the UCC.


 


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


 


“Applicable
IP Office” means the United States Patent and Trademark Office, the United States Copyright Office or any similar office
or agency within or, solely in the case of Section 4.7, outside the United States.


 


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


 




     


     


    

 


“Canadian
RBC Account” means Black Diamond’s deposit account maintained with Royal Bank of Canada with account number 0101400-046-2.


 


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


 


“Collateral
Access Agreement” means any landlord waiver or other agreement, in form and substance reasonably satisfactory to the
Administrative Agent, between the Administrative Agent and any third party (including any bailee, consignee, processor, customs
broker, or other similar Person) in possession of any Collateral or any landlord of any real property where any Collateral is located,
as such landlord waiver or other agreement may be amended, restated, supplemented or otherwise modified from time to time.


 


“Collateral
Deposit Account” shall have the meaning set forth in Section 7.1(a).


 


“Collateral
Report” means any Borrowing Base Certificate or report delivered by any Grantor to the Administrative Agent or any Lender
with respect to the Collateral pursuant to any Loan Document.


 


“Collection
Account” shall have the meaning set forth in Section 7.1(b).


 


“Confirmatory
Grant” shall have the meaning set forth in Section 3.10(e).


 


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


 


“Copyrights”
means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating
to copyrights and all mask works, database and design rights, whether or not registered or published, all registrations and recordations
thereof and all applications in connection therewith.


 


“Default”
means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.


 


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


 


“Dominion
Trigger Period” means the period (a) commencing on any day that Excess Availability is less than an amount equal to 10%
of the Aggregate Revolving Commitment, at any time, and (b) continuing until for the previous 31 consecutive calendar days, Excess
Availability at all times has been greater than or equal to an amount equal to 10% of the Aggregate Revolving Commitment; provided
that, if no Dominion Trigger Period is in effect, the Grantors may elect, by 5 Business Days prior written notice to the Administrative
Agent, to commence a Dominion Trigger Period (a “Grantors’ Elected Dominion Trigger Period”), and such
Grantors’ Elected Dominion Trigger Period shall continue until the date that Grantors elect to end such Grantors’ Elected
Dominion Trigger Period by 5 Business Days prior written notice to the Administrative Agent, so long as (i) such end date is at
least 31 consecutive calendar days after the start of such Grantors’ Elected Dominion Trigger Period and (ii) for the previous
31 consecutive calendar days prior to such end date, Excess Availability at all times has been greater than or equal to an amount
equal to 10% of the Aggregate Revolving Commitment.


 


“Event of
Default” means an event described in Section 5.1.


 




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“Excluded
Account” means the collective reference to: (i) Deposit Accounts of Grantors specially and exclusively used for payroll,
payroll taxes, trust or fiduciary purposes and other employee wage and benefit payments to or for the Grantors' employees, (ii)
Deposit Accounts specially and exclusively used for taxes, including sales taxes, and (iii) other Deposit Accounts which have a
balance of less than (a) $100,000 individually for any such Deposit Account at all times and (b) $250,000 in the aggregate for
all such Deposit Accounts at all times.


 


“Excluded
Property” means, collectively, (i) voting Equity Interests of any Foreign Subsidiary, solely to the extent that (1) such
Equity Interests represent more than 65% of the outstanding voting Equity Interests of such Foreign Subsidiary, and (2) pledging
more than 65% of the total outstanding voting Equity Interests of such Foreign Subsidiary would result in material adverse tax
consequences to the Loan Parties, (ii) any rights or interest in any contract, lease, permit, license, or license agreement covering
real or personal property of any Grantor if under the terms of such contract, lease, permit, license, or license agreement, or
applicable law with respect thereto, the grant of a security interest or lien therein is prohibited as a matter of law or under
the terms of such contract, lease, permit, license, or license agreement and such prohibition or restriction has not been waived
or the consent of the other party to such contract, lease, permit, license, or license agreement has not been obtained (provided,
that, (A) the foregoing exclusions of this clause (ii) shall in no way be construed (1) to apply to the extent that any described
prohibition or restriction is ineffective under Section 9-406, 9-407, 9-408, or 9-409 of the UCC or other applicable law, or (2)
to apply to the extent that any consent or waiver has been obtained that would permit the Administrative Agent’s security
interest or lien to attach notwithstanding the prohibition or restriction on the pledge of such contract, lease, permit, license,
or license agreement and (B) the foregoing exclusions of this clause (ii) shall in no way be construed to limit, impair, or otherwise
affect any of the Administrative Agent’s continuing security interests in and liens upon any rights or interests of any Grantor
in or to (1) monies due or to become due under or in connection with any described contract, lease, permit, license, license agreement,
or Equity Interests (including any Accounts), or (2) any proceeds from the sale, license, lease, or other dispositions of any such
contract, lease, permit, license, license agreement, or Equity Interests), (iii) any United States intent-to-use trademark applications
to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or
enforceability of such intent-to-use trademark applications under applicable federal law, provided that upon submission and acceptance
by the United States Patent and Trademark Office of an amendment to allege use pursuant to 15 U.S.C. Section 1060(a) (or any successor
provision), such intent-to-use trademark application shall be considered Collateral, (iv) any assets identified in writing by the
Administrative Agent (which writing shall expressly reference this Security Agreement and this definition) where the Administrative
Agent determines in its sole discretion that the costs of obtaining or perfecting a security interest in such assets is excessive
in relation to the value of the security afforded thereby, (v) all Equipment, machinery (other than Inventory), Commercial Tort
Claims, and Farm Products, (vi) any interest in any real property or Fixtures held by any Grantor; (vii) any Excluded Account pursuant
to subclause (i) or (ii) of the definition of “Excluded Account”, and (viii) any shares of the capital stock of the
Company held by the Company as treasury stock; provided, however, that “Excluded Property” shall not include
any proceeds, products, substitutions or replacements of Excluded Property (unless such proceeds, products, substitutions or replacements
would otherwise constitute Excluded Property).


 


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


 


“Industrial
Designs” means all right, title and interest (and all related IP Ancillary Rights) arising under any Requirement of Law
in or relating to registered industrial designs and industrial design applications.


 


“Intellectual
Property” means all rights, title and interests in or relating to intellectual property and industrial property arising
under any Requirement of Law and all IP Ancillary Rights relating thereto, including all Copyrights, Patents, Industrial Designs,
Software, Trademarks, Internet Domain Names, Trade Secrets and IP Licenses.


 


“Internet
Domain Name” means all right, title and interest (and all related IP Ancillary Rights) arising under any Requirement
of Law in or relating to internet domain names.


 




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“IP Ancillary
Rights” means, with respect to any Intellectual Property, as applicable, all foreign counterparts to, and all divisionals,
reversions, continuations, continuations-in-part, reissues, reexaminations, renewals and extensions of, such Intellectual Property
and all income, royalties, proceeds and Liabilities at any time due or payable or asserted under or with respect to any of the
foregoing or otherwise with respect to such Intellectual Property throughout the world, including all rights to sue or recover
at law or in equity for any past, present or future infringement, misappropriation, dilution, violation or other impairment thereof,
and, in each case, all rights to obtain any other IP Ancillary Right throughout the world.


 


“IP License”
means all contractual obligations (and all related IP Ancillary Rights), whether written or oral, granting any right, title and
interest in or relating to any Intellectual Property.


 


“Lenders”
means the lenders party to the Credit Agreement and their successors and assigns.


 


“Liabilities”
means all claims, actions, suits, judgments, damages, losses, liability, obligations, responsibilities, fines, penalties, sanctions,
costs, fees, Taxes, commissions, charges, disbursements and expenses (including those incurred upon any appeal or in connection
with the preparation for and/or response to any subpoena or request for document production relating thereto), in each case of
any kind or nature (including interest accrued thereon or as a result thereto and fees, charges and disbursements of financial,
legal and other advisors and consultants), whether joint or several, whether or not indirect, contingent, consequential, actual,
punitive, treble or otherwise.


 


“Lock Boxes”
shall have the meaning set forth in Section 7.1(a).


 


“Lock Box
Agreements” shall have the meaning set forth in Section 7.1(a).


 


“Material
Intellectual Property” means Intellectual Property that is owned by or licensed to any Grantor and material to the conduct
of such Grantor’s business.


 


“Patents”
means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating
to letters patent and applications therefor.


 


“Pledged Collateral”
means all Instruments, Securities and other Investment Property of the Grantors, whether or not physically delivered to the Administrative
Agent pursuant to this Security Agreement, except for shares of the capital stock of the Company held by the Company as treasury
stock.


 


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


 


“Required
Secured Parties” means (a) prior to an acceleration of the Obligations under the Credit Agreement, the Required Lenders,
(b) after an acceleration of the Obligations under the Credit Agreement but prior to the date upon which the Credit Agreement has
terminated by its terms and all of the obligations thereunder have been Paid in Full, Lenders holding in the aggregate at least
a majority of the total of the Aggregate Credit Exposure, and (c) after the Credit Agreement has terminated by its terms and all
of the Obligations thereunder have been Paid in Full (whether or not the Obligations under the Credit Agreement were ever accelerated),
the Secured Parties holding in the aggregate at least a majority of the aggregate net early termination payments and all other
amounts then due and unpaid from any Grantor to the Secured Parties in respect of the Secured Obligations, as determined by the
Administrative Agent in its reasonable discretion.


 


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


 




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“Security
Agreement Supplement” shall mean any Security Agreement Supplement to this Security Agreement in substantially the form
of Annex I hereto executed by an entity that becomes a Grantor under this Security Agreement after the date hereof.


 


“Software”
means (a) all computer programs, including source code and object code versions, (b) all data, databases and compilations of data,
whether machine readable or otherwise, and (c) all documentation, training materials and configurations related to any of the foregoing.


 


“Stock Rights”
means all dividends, instruments or other distributions and any other right or property which the Grantors shall receive or shall
become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for any Equity Interest
constituting Collateral, any right to receive an Equity Interest and any right to receive earnings, in which the Grantors now have
or hereafter acquire any right, issued by an issuer of such Equity Interest.


 


“Trademarks”
means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating
to trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks,
logos and other source or business identifiers and, in each case, all goodwill associated therewith, all registrations and recordations
thereof and all applications in connection therewith.


 


“Trade Secrets”
mean all right, title and interest (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to
proprietary, confidential and/or non-public information, however documented, including but not limited to confidential ideas, know-how,
concepts, methods, processes, formulae, reports, data, customer lists, mailing lists, business plans and all other trade secrets.


 


“UCC”
means the Uniform Commercial Code, as in effect from time to time, of the State of New York or of any other state the laws of which
are required as a result thereof to be applied in connection with the attachment, perfection or priority of, or remedies with respect
to, Administrative Agent’s or any other Secured Party’s Lien on any Collateral.


 


“U.S. Bank
Account” means Black Diamond’s deposit account maintained with U.S. Bank National Association with account number
1-5319506-3083.


 


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


 


ARTICLE II


GRANT OF SECURITY INTEREST


 


Each Grantor hereby
pledges, assigns and grants to the Administrative Agent, on behalf of and for the ratable benefit of the Secured Parties, a security
interest in all of its right, title and interest in, to and under all personal property and other assets, whether now owned by
or owing to, or hereafter acquired by or arising in favor of such Grantor (including under any trade name or derivations thereof),
and whether owned or consigned by or to, or leased or licensed from or to, such Grantor, and regardless of where located (all of
which will be collectively referred to as the “Collateral”), including:


 


		(i)	all Accounts;



 


		(ii)	all Chattel Paper;



 


		(iii)	all Copyrights, Patents and Trademarks;



 


		(iv)	all Documents;



 


		(v)	all General Intangibles;



 




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		(vi)	all Goods (other than Equipment and Fixtures);



 


		(vii)	all Instruments;



 


		(viii)	all Inventory;



 


		(ix)	all Investment Property;



 


		(x)	all cash or cash equivalents;



 


		(xi)	all letters of credit, Letter-of-Credit Rights and Supporting
Obligations;



 


		(xii)	all Deposit Accounts with any bank or other financial institution;
and



 


		(xiii)	all accessions to, substitutions for and replacements,
proceeds (including Stock Rights), insurance proceeds and products of the foregoing, together with all books and records, customer
lists, credit files, computer files, programs, printouts and other computer materials and records related thereto and any General
Intangibles at any time evidencing or relating to any of the foregoing;



 


to secure the prompt and complete payment
and performance of the Secured Obligations.


 


Notwithstanding the
foregoing, the term “Collateral” shall not include any Excluded Property, provided that, in the event that any property
ceases to constitute Excluded Property, such property shall be deemed to constitute Collateral at all times on and after the date
it so ceases to constitute Excluded Property.


 


ARTICLE III


REPRESENTATIONS AND WARRANTIES


 


Each Grantor represents
and warrants, and each Grantor that becomes a party to this Security Agreement pursuant to the execution of a Security Agreement
Supplement represents and warrants (after giving effect to supplements, if any, to each of the Exhibits hereto with respect to
such Grantor as attached to such Security Agreement Supplement), to the Administrative Agent and the Lenders that:


 


3.1.          Title,
Authorization, Validity, Enforceability, Perfection and Priority. Such Grantor has good and valid rights in or the power to
transfer the Collateral and title to the Collateral with respect to which it has purported to grant a security interest hereunder,
free and clear of all Liens except for Liens permitted under Section 4.1(e), and has full power and authority to grant to the Administrative
Agent the security interest in the Collateral pursuant hereto. The execution and delivery by such Grantor of this Security Agreement
has been duly authorized by proper corporate or limited liability company proceedings, as applicable, of such Grantor, and this
Security Agreement constitutes a legal valid and binding obligation of such Grantor and creates a security interest which is enforceable
against such Grantor in all Collateral it now owns or hereafter acquires, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law. When financing statements have been filed in the appropriate offices against
such Grantor in the locations listed on Exhibit F, the Administrative Agent will have a fully perfected first priority security
interest in that Collateral of such Grantor in which a security interest may be perfected by filing, subject only to Liens permitted
under Section 4.1(e).


 


3.2.          Type
and Jurisdiction of Organization, Organizational and Identification Numbers. The type of entity of such Grantor, its state
of organization, the organizational number issued to it by its state of organization and its federal employer identification number
are set forth on Exhibit A.


 


3.3.          Principal
Location. Such Grantor’s mailing address, which shall be its address for notices and other communications provided for
herein and the location of its places of business and its chief executive office (if it has more than one place of business), are
disclosed in Exhibit A; such Grantor has no other places of business except those set forth in Exhibit A.


 




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3.4.          Collateral
Locations. All of such Grantor’s locations where Collateral included in the Borrowing Base, having a value in excess
of $75,000, is located (other than any Collateral in transit in the ordinary course of business) are listed on Exhibit A.
All of said locations are owned by such Grantor except for locations (i) which are leased by the Grantor as lessee and designated
in Part VII(b) of Exhibit A and (ii) at which Inventory is held in a public warehouse or is otherwise held by a bailee
or on consignment as designated in Part VII(c) of Exhibit A.


 


3.5.          Deposit
Accounts and Securities Accounts. All of such Grantor’s Deposit Accounts and Securities Accounts are listed on Exhibit
B.


 


3.6.          Exact
Names. Such Grantor’s name in which it has executed this Security Agreement is the exact name as it appears in such Grantor’s
organizational documents, as amended, as filed with such Grantor’s jurisdiction of organization. Except as disclosed on Exhibit
A, such Grantor has not, during the past five years, been known by or used any other corporate or fictitious name, or been a party
to any merger or consolidation, or been a party to any acquisition.


 


3.7.          Letter-of-Credit
Rights and Chattel Paper. As of the Effective Date, Exhibit C lists all Letter-of-Credit Rights and Chattel Paper of
such Grantor. All action by such Grantor necessary or desirable to protect and perfect the Administrative Agent’s Lien on
(i) the Letter-of-Credit Rights listed on Exhibit C, with a value in excess of $500,000, individually, or $1,000,000, in
the aggregate, and (ii) the Chattel Paper listed on Exhibit C, with a value in excess of $25,000, individually (including
the delivery of all originals and the placement of a legend on all Chattel Paper as required hereunder) has been duly taken. The
Administrative Agent will have a fully perfected first priority security interest in (i) the Letter-of-Credit Rights listed on
Exhibit C, with a value in excess of $500,000, individually, or $1,000,000, in the aggregate, and (ii) the Chattel Paper
listed on Exhibit C, with a value in excess of $25,000, individually, subject only to Liens permitted under Section 4.1(e).


 


3.8.          Accounts
and Chattel Paper.


 


(a)          The
names of the obligors, amounts owing, due dates and other information with respect to its Accounts and Chattel Paper are and will
be correctly stated in all material respects in the records of such Grantor relating thereto and in all invoices and Collateral
Reports with respect thereto furnished to the Administrative Agent by such Grantor from time to time. As of the time when each
Account or each item of Chattel Paper arises, such Grantor shall be deemed to have represented and warranted that such Account
or Chattel Paper, as the case may be, and all records relating thereto, are genuine and in all material respects what they purport
to be.


 


(b)          With
respect to its Accounts included as Eligible Accounts in the Borrowing Base Certificate most recently delivered to the Administrative
Agent, except for those Accounts which are specifically disclosed on the most recent Collateral Report, (i) to such Grantor’s
knowledge, all such Accounts are Eligible Accounts; (ii) all Accounts represent bona fide sales of Inventory or rendering of services
to Account Debtors in the ordinary course of such Grantor’s business and are not evidenced by a judgment, Instrument or Chattel
Paper; (iii) there are no known setoffs, claims or disputes existing or asserted with respect thereto and such Grantor has not
made any agreement with any Account Debtor for any extension of time for the payment thereof, any compromise or settlement for
less than the full amount thereof, any release of any Account Debtor from liability therefor, or any deduction therefrom except
a discount or allowance allowed by such Grantor in the ordinary course of its business for prompt payment and disclosed to the
Administrative Agent; (iv) to such Grantor’s knowledge, there are no facts, events or occurrences which in any material way
may impair the validity or enforceability thereof or could reasonably be expected to reduce the amount payable thereunder as shown
on such Grantor’s books and records and any invoices, statements and Collateral Reports with respect thereto; (v) such Grantor
has not received any notice of proceedings or actions which are threatened or pending against any Account Debtor which could reasonably
be expected to result in any adverse change in such Account Debtor’s financial condition; and (vi) such Grantor has no knowledge
that any Account Debtor has become insolvent or is generally unable to pay its debts as they become due.


 




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(c)          In
addition, with respect to all of its Accounts, (i) the amounts shown on all invoices, statements and Collateral Reports with respect
thereto are actually and absolutely owing to such Grantor as indicated thereon and are not in any way contingent; (ii) no payments
have been or shall be made thereon except payments promptly delivered to a Lock Box or a Collateral Deposit Account as required
pursuant to Section 7.1; and (iii) to such Grantor’s knowledge, all Account Debtors have the capacity to contract.


 


3.9.          Inventory.
With respect to any of its Inventory scheduled or listed on the most recent Collateral Report as Eligible Inventory, (a) such Inventory
(other than Inventory in transit and Inventory in an amount not to exceed $150,000) is located at one of such Grantor’s locations
set forth on Exhibit A, (b) no Inventory (other than Inventory in transit and Inventory in an amount not to exceed $150,000)
is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such
Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security
interest or document whatsoever except for Liens permitted under Section 4.1(e), (d) except as disclosed in the most recent Collateral
Report (specifically or by exclusion of any such Inventory from the Borrowing Base Certificate), such Inventory is Eligible Inventory
of good and merchantable quality, free from any defects, (e) such Inventory is not subject to any licensing, patent, royalty, trademark,
trade name or copyright agreements with any third parties which would require any consent of any third party upon sale or disposition
of that Inventory or the payment of any monies to any third party upon such sale or other disposition, (f) such Inventory has been
produced in material compliance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders
thereunder and (g) the completion of manufacture, sale or other disposition of such Inventory by the Administrative Agent following
an Event of Default shall not require the consent of any Person and shall not constitute a breach or default under any contract
or agreement to which such Grantor is a party or to which such property is subject.


 


3.10.         Intellectual
Property.


 


(a)          Exhibit
D contains a complete and accurate listing as of the Effective Date and the date each compliance certificate (and such compliance
certificate shall update such Exhibit D with all of such Intellectual Property listings, except Copyrights and Patents that
do not constitute Material Intellectual Property) is required to be delivered under the Credit Agreement of the following Intellectual
Property such Grantor owns, licenses or otherwise has the right to use: (i) Intellectual Property that is registered or subject
to applications for registration, (ii) Internet Domain Names and (iii) Material Intellectual Property, separately identifying that
owned and licensed to such Grantor and including for each of the foregoing items (1) the owner, (2) the title, (3) the jurisdiction
in which such item has been registered or otherwise arises or in which an application for registration has been filed, (4) as applicable,
the registration or application number and registration or application date and (5) any IP Licenses or other rights (including
franchises) granted by such Grantor with respect thereto. Such Grantor owns directly or is entitled to use, by license or otherwise,
all Trademarks registered, or subject to application for registration, in the U.S. and all Material Intellectual Property, in each
case, necessary for the conduct of such Grantor’s business as currently conducted. All of the U.S. registrations, applications
for registration or applications for issuance of the Intellectual Property are in good standing and are recorded or in the process
of being recorded in the name of such Grantor, other than Copyrights and Patents, if any, that do not constitute Material Intellectual
Property.


 


(b)          On
the Effective Date, all Material Intellectual Property owned by such Grantor is valid, in full force and effect, subsisting, unexpired
and enforceable, and no Material Intellectual Property has been abandoned. The consummation of the transactions contemplated by
any Loan Documents will not limit or impair the ownership, use, validity or enforceability of, or any rights of such Grantor in,
any Material Intellectual Property. There are no pending (or, to the knowledge of such Grantor, threatened) actions, investigations,
suits, proceedings, audits, claims, demands, orders or disputes challenging the ownership, use, validity, enforceability of, or
such Grantor’s rights in, any Material Intellectual Property of such Grantor. To such Grantor’s knowledge, no Person
has been or is infringing, misappropriating, diluting, violating or otherwise impairing any Trademarks registered, or subject to
application for registration, in the U.S. or Material Intellectual Property of such Grantor.


 




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(c)          Such
Grantor has taken or caused to be taken steps so that none of its Material Intellectual Property, the value of which to such Grantor
is contingent upon maintenance of the confidentiality thereof, has been disclosed by such Grantor to any Person other than employees,
contractors, customers, representatives and agents of such Grantor who are parties to customary confidentiality and nondisclosure
agreements with such Grantor. Each employee and contractor of such Grantor involved in development or creation of any Material
Intellectual Property has assigned any and all inventions and ideas of such Person in and to such Material Intellectual Property
to such Grantor.


 


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


 


(e)          This
Agreement is effective to create a valid and continuing Lien on such Copyrights, Patents and Trademarks, in each case, registered,
or subject to application for registration, in the U.S., and IP Licenses and, upon filing with the Applicable IP Office within
the U.S. of the Confirmatory Grant of Security Interest in Copyrights, the Confirmatory Grant of Security Interest in Patents and
the Confirmatory Grant of Security Interest in Trademarks (each, a “Confirmatory Grant”), and the filing
of appropriate financing statements in the jurisdictions listed in Exhibit F hereto, all action necessary or desirable
to protect and perfect the security interest in, to and on Grantor’s Copyrights, Patents and Trademarks, in each case,
registered, or subject to application for registration, in the U.S., and IP Licenses have been taken and such perfected security
interest is enforceable as such as against any and all creditors of and purchasers from Grantor. Grantor has no interest
in any Copyright that is necessary in connection with the operation of Grantor’s business, except for those Copyrights identified
in Exhibit D attached hereto which have been registered with the United States Copyright Office.


 


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


 


3.12.         No
Financing Statements, Security Agreements. No financing statement or security agreement describing all or any portion of the
Collateral which has not lapsed or been terminated (by a filing authorized by the secured party in respect thereof) naming such
Grantor as debtor has been filed or is of record in any jurisdiction except for financing statements or security agreements (a)
naming the Administrative Agent on behalf of the Secured Parties as the secured party and (b) as permitted by Section 4.1(e).


 


3.13.         Pledged
Collateral.


 


(a)          Exhibit
E sets forth a complete and accurate list of all Pledged Collateral owned by such Grantor. Such Grantor is the direct, sole
beneficial owner and sole holder of record of the Pledged Collateral listed on Exhibit E as being owned by it, free and
clear of any Liens, except for any Liens permitted by Section 4.1(e). Such Grantor further represents and warrants that (i) all
Pledged Collateral owned by it constituting an Equity Interest has been (to the extent such concepts are relevant with respect
to such Pledged Collateral) duly authorized, validly issued, are fully paid and non-assessable, (ii) with respect to any certificates
delivered to the Administrative Agent representing an Equity Interest, either such certificates are Securities as defined in Article
8 of the UCC as a result of actions by the issuer or otherwise, or, if such certificates are not Securities, such Grantor has so
informed the Administrative Agent so that the Administrative Agent may take steps to perfect its security interest therein as a
General Intangible, (iii) all such Pledged Collateral held by a securities intermediary is covered by a control agreement among
such Grantor, the securities intermediary and the Administrative Agent pursuant to which the Administrative Agent has Control and
(iv) all Pledged Collateral which represents Indebtedness owed to such Grantor has been duly authorized, authenticated or issued
and delivered by the issuer of such Indebtedness, is the legal, valid and binding obligation of such issuer and such issuer is
not in default thereunder.


 




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(b)          In
addition, (i) none of the Pledged Collateral owned by it has been issued or transferred in violation of the securities registration,
securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject, (ii) no options, warrants,
calls or commitments of any character whatsoever (A) exist relating to such Pledged Collateral or (B) obligate the issuer of any
Equity Interest included in the Pledged Collateral to issue additional Equity Interests, and (iii) no consent, approval, authorization,
or other action by, and no giving of notice, filing with, any governmental authority or any other Person is required for the pledge
by such Grantor of such Pledged Collateral pursuant to this Security Agreement or for the execution, delivery and performance of
this Security Agreement by such Grantor, or for the exercise by the Administrative Agent of the voting or other rights provided
for in this Security Agreement or for the remedies in respect of the Pledged Collateral pursuant to this Security Agreement, except
as may be required in connection with such disposition by laws affecting the offering and sale of securities generally.


 


(c)          Except
as set forth in Exhibit E, such Grantor owns 100% of the issued and outstanding Equity Interests which constitute Pledged
Collateral owned by it and none of the Pledged Collateral which represents Indebtedness owed to such Grantor is subordinated in
right of payment to other Indebtedness or subject to the terms of an indenture.


 


ARTICLE IV


COVENANTS


 


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


 


4.1.          General.


 


(a)          Collateral
Records. Such Grantor will maintain complete and accurate books and records, in all material respects, with respect to the
Collateral owned by it, and furnish to the Administrative Agent, with sufficient copies for each of the Lenders, such reports relating
to such Collateral as the Administrative Agent shall from time to time reasonably request. 


 


(b)          Authorization
to File Financing Statements; Ratification. Such Grantor hereby authorizes the Administrative Agent to file, and if requested
will deliver to the Administrative Agent, all financing statements and other documents and take such other actions as may from
time to time be reasonably requested by the Administrative Agent in order to maintain a first perfected security interest in and,
if applicable, Control of, the Collateral owned by such Grantor. Any financing statement filed by the Administrative Agent may
be filed in any filing office in any UCC jurisdiction and may (i) indicate such Grantor’s Collateral (1) as all assets, other
than the Excluded Property, of the Grantor or words of similar effect, regardless of whether any particular asset comprised in
the Collateral falls within the scope of Article 9 of the UCC of such jurisdiction, or (2) by any other description which reasonably
approximates the description contained in this Security Agreement, and (ii) contain any other information required by the UCC for
the sufficiency or filing office acceptance of any financing statement or amendment, including whether such Grantor is an organization,
the type of organization and any organization identification number issued to such Grantor. Such Grantor also agrees to furnish
any such information described in the foregoing sentence to the Administrative Agent promptly upon reasonable request. Such Grantor
also ratifies its authorization for the Administrative Agent to have filed in any UCC jurisdiction any initial financing statements
or amendments thereto if filed prior to the date hereof. 


 




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(c)          Further
Assurances. Such Grantor will, if so requested by the Administrative Agent, furnish to the Administrative Agent, as often as
the Administrative Agent requests, in its Permitted Discretion, statements and schedules further identifying and describing the
Collateral owned by it and such other reports and information in connection with its Collateral as the Administrative Agent may
reasonably request, all in such detail as the Administrative Agent may specify. Such Grantor also agrees to take any and all commercially
reasonable actions necessary to defend title to the Collateral against all persons and to defend the security interest of the Administrative
Agent in its Collateral and the priority thereof against any Lien not expressly permitted hereunder.


 


(d)          Disposition
of Collateral. Such Grantor will not sell, lease or otherwise dispose of the Collateral owned by it except for dispositions
specifically permitted pursuant to Section 6.05 of the Credit Agreement. 


 


(e)          Liens.
Such Grantor will not create, incur, or suffer to exist any Lien on the Collateral owned by it except (i) the security interest
created by this Security Agreement, and (ii) other Liens permitted under Section 6.02 of the Credit Agreement. 


 


(f)          Other
Financing Statements. Such Grantor will not authorize the filing of any financing statement naming it as debtor covering all
or any portion of the Collateral owned by it, except for financing statements (i) naming the Administrative Agent on behalf of
the Secured Parties as the secured party, and (ii) in respect to other Liens permitted by Section 4.1(e). Such Grantor acknowledges
that it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement
without the prior written consent of the Administrative Agent, subject to such Grantor’s rights under Section 9-509(d)(2)
of the UCC.


 


(g)          Locations.
Such Grantor will not (i) maintain any Collateral included in the Borrowing Base (other than any Collateral in transit in the ordinary
course of business and Collateral in an amount not to exceed $150,000) owned by it at any location other than those locations listed
on Exhibit A, (ii) otherwise change, or add to, such locations without giving the Administrative Agent 10 days’ prior
written notice (or such other notice as may be agreed to by the Administrative Agent), and such Grantor will concurrently therewith
obtain a Collateral Access Agreement for each such location to the extent required by Section 4.13, or (iii) change its principal
place of business or chief executive office from the location identified on Exhibit A, other than as permitted by Section
4.15.


 


(h)          Compliance
with Terms. Such Grantor will perform and comply with all obligations in respect of the Collateral owned by it and all agreements
to which it is a party or by which it is bound relating to such Collateral.


 


4.2.          Receivables.


 


(a)          Certain
Agreements on Receivables. Such Grantor will not make or agree to make any discount, credit, rebate or other reduction in the
original amount owing on a Receivable or accept in satisfaction of a Receivable less than the original amount thereof, except that,
prior to the occurrence of an Event of Default, such Grantor may reduce the amount of Accounts arising from the sale of Inventory
in accordance with its present policies and in the ordinary course of business.


 




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(b)          Collection
of Receivables. Except as otherwise provided in this Security Agreement, such Grantor will use commercially reasonable efforts
to collect and enforce, at such Grantor’s sole expense, all amounts due or hereafter due to such Grantor under the Receivables
owned by it.


 


(c)          Delivery
of Invoices. Such Grantor will deliver to the Administrative Agent promptly upon its request duplicate invoices with respect
to each Account owned by it bearing such language of assignment as the Administrative Agent shall specify.


 


(d)          Disclosure
of Counterclaims on Receivables. If (i) any discount, credit or agreement to make a rebate or to otherwise reduce the amount
owing on any Receivable owned by such Grantor exists or (ii) if, to the knowledge of such Grantor, any dispute, setoff, claim,
counterclaim or defense exists or has been asserted or threatened with respect to any such Receivable having a value in excess
of $100,000, such Grantor will promptly disclose such fact to the Administrative Agent in writing. Such Grantor shall promptly
report each credit memorandum and each of the facts required to be disclosed to the Administrative Agent in accordance with this
Section 4.2(d) on the Borrowing Base Certificates submitted by it.


 


(e)          Electronic
Chattel Paper. Such Grantor shall take all steps necessary to grant the Administrative Agent Control of all electronic chattel
paper in accordance with the UCC and all “transferable records” as defined in each of the Uniform Electronic Transactions
Act and the Electronic Signatures in Global and National Commerce Act.


 


4.3.          Inventory.


 


(a)          Maintenance
of Goods. Such Grantor will do all things necessary to maintain, preserve, protect and keep its Inventory in good repair and
working and saleable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business.


 


(b)          Returned
Inventory. If an Account Debtor returns any Inventory to such Grantor when no Event of Default exists, then such Grantor shall
promptly determine the reason for such return and shall issue a credit memorandum to the Account Debtor in the appropriate amount.
Each such report shall indicate the reasons for the returns and the locations and condition of the returned Inventory. In the event
any Account Debtor returns Inventory to such Grantor when an Event of Default exists, such Grantor, upon the request of the Administrative
Agent, shall: (i) hold the returned Inventory in trust for the Administrative Agent; (ii) segregate all returned Inventory from
all of its other property; (iii) dispose of the returned Inventory solely according to the Administrative Agent’s written
instructions; and (iv) not issue any credits or allowances with respect thereto without the Administrative Agent’s prior
written consent. All returned Inventory shall be subject to the Administrative Agent’s Liens thereon. Whenever any Inventory
is returned, the related Account shall be deemed ineligible to the extent of the amount owing by the Account Debtor with respect
to such returned Inventory and such returned Inventory shall not be Eligible Inventory.


 


(c)          Inventory
Count; Perpetual Inventory System. Such Grantor will conduct a physical count of its Inventory at least once per fiscal year,
and upon the occurrence and during the continuation of an Event of Default, at such other times as the Administrative Agent reasonably
requests. Such Grantor, at its own expense, shall deliver to the Administrative Agent the results of each physical verification,
which such Grantor has made, or has caused any other Person to make on its behalf, of all or any portion of its Inventory. Such
Grantor will maintain a perpetual inventory reporting system at all times.


 


4.4.          Delivery
of Instruments, Securities, Chattel Paper and Documents. With respect to all Chattel Paper, Securities and Instruments constituting
Collateral owned by it (if any then exist) with an individual value in excess of $25,000, such Grantor will (a) deliver to the
Administrative Agent immediately upon execution of this Security Agreement the originals of all such Chattel Paper, Securities
and Instruments constituting Collateral, (b) hold in trust for the Administrative Agent upon receipt and promptly thereafter deliver
to the Administrative Agent any such Chattel Paper, Securities and Instruments constituting Collateral, (c) upon the Administrative
Agent’s request, deliver to the Administrative Agent (and thereafter hold in trust for the Administrative Agent upon receipt
and immediately deliver to the Administrative Agent) any Document evidencing or constituting Collateral and (d) promptly upon the
Administrative Agent’s request, deliver to the Administrative Agent a duly executed amendment to this Security Agreement,
in the form of Exhibit G hereto (the “Amendment”), pursuant to which such Grantor will pledge such additional
Collateral. Such Grantor hereby authorizes the Administrative Agent to attach each Amendment to this Security Agreement and agrees
that all additional Collateral owned by it set forth in such Amendments shall be considered to be part of the Collateral.


 




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4.5.          Uncertificated
Pledged Collateral. Such Grantor will permit the Administrative Agent from time to time to cause the appropriate issuers (and,
if held with a securities intermediary, such securities intermediary) of uncertificated securities or other types of Pledged Collateral
owned by it not represented by certificates to mark their books and records with the numbers and face amounts of all such uncertificated
securities or other types of Pledged Collateral not represented by certificates and all rollovers and replacements therefor to
reflect the Lien of the Administrative Agent granted pursuant to this Security Agreement. With respect to any Pledged Collateral
owned by it, such Grantor will take any actions necessary to cause (a) the issuers of uncertificated securities which are Pledged
Collateral and (b) any securities intermediary which is the holder of any such Pledged Collateral, to cause the Administrative
Agent to have and retain Control over such Pledged Collateral. Without limiting the foregoing, such Grantor will, with respect
to any such Pledged Collateral held with a securities intermediary, cause such securities intermediary to enter into a control
agreement with the Administrative Agent, in form and substance satisfactory to the Administrative Agent, giving the Administrative
Agent Control.


 


4.6.          Pledged
Collateral.


 


(a)          Changes
in Capital Structure of Issuers. Such Grantor will not (i) permit or suffer any issuer of an Equity Interest constituting Pledged
Collateral owned by it to dissolve, merge, liquidate, retire any of its Equity Interests or other Instruments or Securities evidencing
ownership, reduce its capital, sell or encumber all or substantially all of its assets (except for Liens permitted by Section 4.1(e)
and sales of assets permitted pursuant to Section 4.1(d)) or merge or consolidate with any other entity, or (ii) vote any
such Pledged Collateral in favor of any of the foregoing, except, in each case, to the extent permitted by the Credit Agreement
or any other Loan Document.


 


(b)          Issuance
of Additional Securities. Such Grantor will not permit or suffer the issuer of an Equity Interest constituting Pledged Collateral
owned by it to issue additional Equity Interests, any right to receive the same or any right to receive earnings, except to such
Grantor or as otherwise permitted by the Credit Agreement.


 


(c)          Registration
of Pledged Collateral. Such Grantor will permit any registerable Pledged Collateral owned by it to be registered in the name
of the Administrative Agent or its nominee at any time at the option of the Required Secured Parties upon and during the continuance
of an Event of Default.


 


(d)          Exercise
of Rights in Pledged Collateral.


 


(i)          Without
in any way limiting the foregoing and subject to clause (ii) below, such Grantor shall have the right to exercise all voting rights
or other rights relating to the Pledged Collateral owned by it for all purposes not inconsistent with this Security Agreement,
the Credit Agreement or any other Loan Document; provided however, that no vote or other right shall be exercised
or action taken which would have the effect of impairing the rights of the Administrative Agent in respect of such Pledged Collateral.


 


(ii)         Such
Grantor will permit the Administrative Agent or its nominee at any time after the occurrence and during the continuation of an
Event of Default, without notice, to exercise all voting rights or other rights relating to the Pledged Collateral owned by it,
including, without limitation, exchange, subscription or any other rights, privileges, or options pertaining to any Equity Interest
or Investment Property constituting such Pledged Collateral as if it were the absolute owner thereof.


 




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(iii)        Such
Grantor shall be entitled to collect and receive for its own use all cash dividends and interest paid in respect of the Pledged
Collateral owned by it to the extent not in violation of the Credit Agreement other than any of the following distributions
and payments (collectively referred to as the “Excluded Payments”): (A) dividends and interest paid or payable
other than in cash in respect of such Pledged Collateral, and instruments and other property received, receivable or otherwise
distributed in respect of, or in exchange for, any Pledged Collateral; (B) dividends and other distributions paid or payable in
cash in respect of such Pledged Collateral in connection with a partial or total liquidation or dissolution or in connection with
a reduction of capital, capital surplus or paid-in capital of an issuer; and (C) cash paid, payable or otherwise distributed, in
respect of principal of, or in redemption of, or in exchange for, such Pledged Collateral; provided however, that until
actually paid, all rights to such distributions shall remain subject to the Lien created by this Security Agreement; and


 


(iv)        All
Excluded Payments and all other distributions in respect of any Pledged Collateral owned by such Grantor, whenever paid or made,
shall be delivered to the Administrative Agent to hold as Pledged Collateral and shall, if received by such Grantor, be received
in trust for the benefit of the Administrative Agent, be segregated from the other property or funds of such Grantor, and be forthwith
delivered to the Administrative Agent as Pledged Collateral in the same form as so received (with any necessary endorsement).


 


(e)          Interests
in Limited Liability Companies and Limited Partnerships. Each Grantor agrees that no ownership interests in a limited liability
company or a limited partnership which are included within the Collateral owned by such Grantor shall at any time constitute a
Security under Article 8 of the UCC of the applicable jurisdiction.


 


4.7.          Intellectual
Property.


 


(a)          After
any change to Exhibit D (or the information required to be disclosed thereon), such Grantor shall provide the Administrative
Agent notification thereof in the next compliance certificate required to be delivered under the Credit Agreement and the respective
Confirmatory Grant as described in this Section 4.7 and any other documents that Administrative Agent reasonably requests with
respect thereto.


 


(b)          Such
Grantor shall (and shall use commercially reasonable efforts to cause all its licensees to) (i) (1) continue to use each Trademark
included in the Material Intellectual Property in order to maintain such Trademark in full force and effect with respect to each
class of goods for which such Trademark is currently used, free from any claim of abandonment for non-use, (2) maintain at least
the same standards of quality of products and services offered under such Trademark as are currently maintained, (3) use such Trademark
with the appropriate notice of registration and all other notices and legends required by applicable Requirements of Law and (4)
not adopt or use any other Trademark that is confusingly similar or a colorable imitation of such Trademark unless Administrative
Agent shall obtain a perfected security interest in such other Trademark pursuant to this Agreement and (ii) not do any act or
omit to do any act whereby (w) such Trademark (or any goodwill associated therewith) may become destroyed, invalidated, impaired
or harmed in any material respect, (x) any Patent included in the Material Intellectual Property may become forfeited, misused,
unenforceable, abandoned or dedicated to the public, (y) any portion of the Copyrights included in the Material Intellectual Property
may become invalidated, otherwise impaired or fall into the public domain or (z) any Trade Secret that is Material Intellectual
Property may become publicly available or otherwise unprotectable.


 




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(c)          Such
Grantor shall notify the Administrative Agent immediately if it knows, or has reason to know, that any application or registration
relating to any Trademark or other Material Intellectual Property may become forfeited, misused, unenforceable, abandoned or dedicated
to the public, or of any adverse determination or development regarding the validity or enforceability or such Grantor’s
ownership of, interest in, right to use, register, own or maintain any Trademark or other Material Intellectual Property (including
the institution of, or any such determination or development in, any proceeding relating to the foregoing in any Applicable IP
Office). Such Grantor shall take all actions that are necessary or reasonably requested by the Administrative Agent to maintain
and pursue each application (and to obtain the relevant registration or recordation) and to maintain each registration and recordation
included in the Material Intellectual Property.


 


(d)          Such
Grantor shall not knowingly do any act or omit to do any act to infringe, misappropriate, dilute, violate or otherwise impair the
Intellectual Property of any other Person. In the event that any Material Intellectual Property of such Grantor is or has been
infringed, misappropriated, violated, diluted or otherwise impaired by a third party, such Grantor shall use commercially reasonable
efforts, including suing for infringement, misappropriation or dilution, to recover any and all damages for such infringement,
misappropriation or dilution, and shall take such other commercially reasonable actions as the Administrative Agent shall deem
appropriate under the circumstances to protect such Material Intellectual Property.


 


(e)          Such
Grantor shall execute and deliver to the Administrative Agent in form and substance reasonably acceptable to Agent and suitable
for (i) filing in the Applicable IP Office within the U.S. the respective Confirmatory Grant in form and substance acceptable to
the Administrative Agent for all Copyrights, Trademarks, and Patents of such Grantor.


 


(f)          Such
Grantor shall take all commercially reasonable actions or actions reasonably requested by the Administrative Agent to maintain
and pursue each application, to obtain the relevant registration and to maintain the registration of all Material Intellectual
Property (now or hereafter existing), including the filing of applications for renewal, affidavits of use, affidavits of noncontestability
and opposition and interference and cancellation proceedings.


 


4.8           [Reserved].


 


4.9.          Letter-of-Credit
Rights. After the Effective Date, If such Grantor is or becomes the beneficiary of a letter of credit, except for letters of
credit in an amount not to exceed $500,000, individually, or $1,000,000, in the aggregate for all such letters of credit, then
it shall promptly, and in any event within five (5) Business Days after becoming a beneficiary, notify the Administrative Agent
thereof and cause the issuer and/or confirmation bank to (i) consent to the assignment of any Letter-of-Credit Rights to the Administrative
Agent and (ii) agree to direct all payments thereunder to a Deposit Account at the Administrative Agent or subject to a Deposit
Account Control Agreement for application to the Secured Obligations, in accordance with Section 2.18 of the Credit Agreement,
all in form and substance reasonably satisfactory to the Administrative Agent.


 


4.10.         Federal,
State or Municipal Claims. Such Grantor will promptly notify the Administrative Agent of any Collateral which constitutes a
claim against the United States government or any state or local government or any instrumentality or agency thereof, the assignment
of which claim is restricted by federal, state or municipal law.


 


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


 


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


 




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(b)          All
insurance policies required hereunder and under Section 5.10 of the Credit Agreement shall name the Administrative Agent (for the
benefit of the Administrative Agent and the Lenders) as an additional insured or as lender loss payee, as applicable, and shall
contain lender loss payable clauses or mortgagee clauses, through endorsements in form and substance satisfactory to the Administrative
Agent, in its Permitted Discretion, which provide that: (i) all proceeds thereunder with respect to any Collateral shall be payable
to the Administrative Agent; (ii) no such insurance shall be affected by any act or neglect of the insured or owner of the property
described in such policy; and (iii) such policy and lender loss payable clauses may be canceled, amended, or terminated only upon
at least thirty (30) days prior written notice given to the Administrative Agent.


 


(c)          All
premiums on any such insurance shall be paid when due by such Grantor, and copies of the policies delivered to the Administrative
Agent promptly upon request. If such Grantor fails to obtain any insurance as required by this Section, the Administrative Agent
may obtain such insurance at the Borrowers’ expense. By purchasing such insurance, the Administrative Agent shall not be
deemed to have waived any Default arising from the Grantor’s failure to maintain such insurance or pay any premiums therefor.


 


4.13.        Collateral
Access Agreements. Such Grantor shall use commercially reasonable efforts to obtain a Collateral Access Agreement, from the
lessor of each leased property, mortgagee of owned property or bailee or consignee with respect to any warehouse, processor or
converter facility or other location where Collateral included in the Borrowing Base and having a value in excess of $250,000 is
stored or located, which agreement or letter shall provide access rights, contain a waiver or subordination of all Liens or claims
that the landlord, mortgagee, bailee or consignee may assert against the Collateral at that location, and shall otherwise be reasonably
satisfactory in form and substance to the Administrative Agent. With respect to such locations or warehouse space leased as of
the Effective Date and thereafter, if the Administrative Agent has not received a Collateral Access Agreement as of the Effective
Date (or, if later, as of the date such location is acquired or leased), the Borrowers’ Eligible Inventory at that location
shall be subject to such Reserves as may be established by the Administrative Agent in its Permitted Discretion. After the Effective
Date, no real property or warehouse space shall be leased by such Grantor and no Inventory shall be shipped to a processor or converter
under arrangements established after the Effective Date, unless and until a satisfactory Collateral Access Agreement shall first
have been obtained with respect to such location and if it has not been obtained, the Borrowers’ Eligible Inventory at that
location shall be subject to the establishment of Reserves acceptable to the Administrative Agent in its Permitted Discretion.
Such Grantor shall timely and fully pay and perform its obligations under all leases and other agreements with respect to each
leased location or third party warehouse where any Collateral, included in the Borrowing Base with value in excess of $250,000,
is or may be located.


 


4.14.        Deposit
Account Control Agreements. Beginning with the date that is 15 days after the Effective Date (or such later date in Administrative
Agent’s sole discretion), such Grantor will provide to the Administrative Agent promptly upon the Administrative Agent’s
request, a Deposit Account Control Agreement or a securities account control agreement (in each case in form and substance satisfactory
to the Administrative Agent in its Permitted Discretion), as applicable, duly executed on behalf of each financial institution
holding a Deposit Account (other than an Excluded Account, Canadian RBC Account or the U.S. Bank Account, so long as the Canadian
RBC Account and/or the U.S. Bank Account, as applicable, is closed within 90 days of the Effective Date (or such later date in
Administrative Agent’s sole discretion)) or a Securities Account of such Grantor as set forth in this Security Agreement.


 


4.15.        Change of
Name or Location; Change of Fiscal Year. Such Grantor shall not (a) change its name as it appears in official filings in the
state of its incorporation or organization, (b) change its chief executive office, principal place of business, mailing address,
or the location of its records concerning the Collateral as set forth in this Security Agreement, (c) change the type of entity
that it is, (d) change its federal employee identification number or its organization identification number, if any, issued by
its state of incorporation or other organization, or (e) change its state of incorporation or organization, in each case, unless
the Administrative Agent shall have received at least thirty (30) days prior written notice (or such other notice as the Administrative
Agent may agree) of such change and the Administrative Agent shall have acknowledged in writing that either (1) such change will
not adversely affect the validity, perfection or priority of the Administrative Agent’s security interest in the Collateral,
or (2) any reasonable action requested by the Administrative Agent in connection therewith has been completed or taken (including
any action to continue the perfection of any Liens in favor of the Administrative Agent, on behalf of the Secured Parties, in any
Collateral), provided that, any new location shall be in the continental U.S. Such Grantor shall not change its fiscal year
which currently ends on December 31.


 




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ARTICLE V


EVENTS OF DEFAULT AND REMEDIES


 


5.1.         Events of Default.
The occurrence of any one or more of the following events shall constitute an Event of Default hereunder:


 


(a)          Any
representation or warranty made by or on behalf of any Grantor under or in connection with this Security Agreement shall be materially
false as of the date on which made.


 


(b)          Any
Grantor shall fail to observe or perform any of the terms or provisions of (I) Sections 4.1(d) through (f), 4.2(a) and (b), 4.3(a)
and (b), 4.6, 4.7(b) through (f), 4.11, 4.14, 4.15, or Article VII, in each case, at any time, or (II) Article IV
(other than as set forth in clause (I) of the foregoing) and such failure shall continue unremedied for a period of 5 Business
Day after the earlier of any Grantor’s knowledge of such breach or notice thereof from the Administrative Agent.


 


(c)          Any
Grantor shall fail to observe or perform any of the terms or provisions of this Security Agreement (other than a breach which constitutes
an Event of Default under any other Section of this Article V) and such failure shall continue unremedied for a period of ten (10)
days after the earlier of knowledge of such breach or notice thereof from the Administrative Agent.


 


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


 


(e)          Any
Equity Interest which is included within the Collateral shall at any time constitute a Security or the issuer of any such Equity
Interest shall take any action to have such interests treated as a Security unless (i) all certificates or other documents constituting
such Security have been delivered to the Administrative Agent and such Security is properly defined as such under Article 8 of
the UCC of the applicable jurisdiction, whether as a result of actions by the issuer thereof or otherwise, or (ii) the Administrative
Agent has entered into a control agreement with the issuer of such Security or with a securities intermediary relating to such
Security and such Security is defined as such under Article 8 of the UCC of the applicable jurisdiction, whether as a result of
actions by the issuer thereof or otherwise.


 


5.2.          Remedies.


 


(a)          Upon
the occurrence and during the continuance of an Event of Default, the Administrative Agent may exercise any or all of the following
rights and remedies:


 


(i)          those
rights and remedies provided in this Security Agreement, the Credit Agreement, or any other Loan Document; provided that,
this Section 5.2(a) shall not be understood to limit any rights or remedies available to the Administrative Agent and the other
Secured Parties prior to an Event of Default;


 


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


 




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(iii)        give
notice of sole control or any other instruction under any Deposit Account Control Agreement or other control agreement with any
securities intermediary and take any action therein with respect to such Collateral;


 


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


 


(v)         concurrently
with written notice to the applicable Grantor, transfer and register in its name or in the name of its nominee the whole or any
part of the Pledged Collateral, exchange certificates or instruments representing or evidencing Pledged Collateral for certificates
or instruments of smaller or larger denominations, exercise the voting and all other rights as a holder with respect thereto, to
collect and receive all cash dividends, interest, principal and other distributions made thereon and to otherwise act with respect
to the Pledged Collateral as though the Administrative Agent was the outright owner thereof. 


 


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


 


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


 


(d)          Until
the Administrative Agent is able to effect a sale, lease, or other disposition of Collateral, the Administrative Agent shall have
the right to hold or use Collateral, or any part thereof, to the extent that it deems appropriate for the purpose of preserving
Collateral or its value or for any other purpose deemed appropriate by the Administrative Agent. The Administrative Agent may,
if it so elects, seek the appointment of a receiver or keeper to take possession of Collateral and to enforce any of the Administrative
Agent’s remedies (for the benefit of the Administrative Agent and the other Secured Parties), with respect to such appointment
without prior notice or hearing as to such appointment.


 


(e)          If,
after the Credit Agreement has terminated by its terms and all of the Obligations have been Paid in Full, there remain Swap Agreement
Obligations outstanding, the Required Secured Parties may exercise the remedies provided in this Section 5.2 upon the occurrence
of any event which would allow or require the termination or acceleration of any Swap Agreement Obligations pursuant to the terms
of the Swap Agreement.


 


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


 




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


 


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


 


(a)          assemble
and make available to the Administrative Agent the Collateral and all books and records relating thereto at any place or places
specified by the Administrative Agent, whether at such Grantor’s premises or elsewhere;


 


(b)          permit
the Administrative Agent, by the Administrative Agent’s representatives and agents, to enter, occupy and use any premises
where all or any part of the Collateral, or the books and records relating thereto, or both, are located, to take possession of
all or any part of the Collateral or the books and records relating thereto, or both, to remove all or any part of the Collateral
or the books and records relating thereto, or both, and to conduct sales of the Collateral, without any obligation to pay the Grantor
for such use and occupancy;


 


(c)          prepare
and file, or cause an issuer of Pledged Collateral to prepare and file, with the Securities and Exchange Commission or any other
applicable government agency, registration statements, a prospectus and such other documentation in connection with the Pledged
Collateral as the Administrative Agent may request, all in form and substance satisfactory to the Administrative Agent, and furnish
to the Administrative Agent, or cause an issuer of Pledged Collateral to furnish to the Administrative Agent, any information regarding
the Pledged Collateral in such detail as the Administrative Agent may specify;


 


(d)          take,
or cause an issuer of Pledged Collateral to take, any and all actions necessary to register or qualify the Pledged Collateral to
enable the Administrative Agent to consummate a public sale or other disposition of the Pledged Collateral; and


 


(e)          at
its own expense, cause the independent certified public accountants then engaged by each Grantor to prepare and deliver to the
Administrative Agent and each Lender, at any time, and from time to time, promptly upon the Administrative Agent’s request,
the following reports with respect to the applicable Grantor: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts;
(iii) trial balances; and (iv) a test verification of such Accounts.


 


5.4. Grant of Intellectual
Property License. For the purpose of enabling the Administrative Agent to exercise the rights and remedies under this Article
V at such time as the Administrative Agent shall be lawfully entitled to exercise such rights and remedies (including in order
to take possession of, collect, receive, assemble, process, appropriate, remove, realize upon, sell, assign, convey, transfer or
grant options to purchase any Collateral), each Grantor hereby (a) grants to the Administrative Agent, for the benefit of the Administrative
Agent and the other Secured Parties, an irrevocable, nonexclusive worldwide license (exercisable without payment of royalty or
other compensation to any Grantor), including in such license the right to use, license, sublicense or practice any Intellectual
Property now owned or hereafter acquired by such Grantor, and wherever the same may be located, and including in such license access
to all media in which any of the licensed items may be recorded or stored and to all Software and programs used for the compilation
or printout thereof and (b) irrevocably agrees that the Administrative Agent may sell any of such Grantor’s assets directly
to any person, including without limitation persons who have previously purchased the Grantor’s assets from such Grantor
and in connection with any such sale or other enforcement of the Administrative Agent’s rights under this Security Agreement,
may sell any asset which bears any Trademark owned by or licensed to such Grantor and any asset that is covered by any Copyright
owned by or licensed to such Grantor and the Administrative Agent may (but shall have no obligation to) finish any work in process
and affix any Trademark owned by or licensed to such Grantor and sell such asset as provided herein.


 




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ARTICLE VI


ACCOUNT VERIFICATION; ATTORNEY IN FACT;
PROXY


 


6.1.          Account
Verification. The Administrative Agent may at any time, in the Administrative Agent’s own name, in the name of a nominee
of the Administrative Agent, or in the name of any Grantor communicate (by mail, telephone, facsimile or otherwise) with the Account
Debtors of any such Grantor, parties to contracts with any such Grantor and obligors in respect of Instruments of any such Grantor
to verify with such Persons, to the Administrative Agent’s satisfaction, the existence, amount, terms of, and any other matter
relating to, Accounts, Instruments, Chattel Paper, payment intangibles and/or other Receivables.


 


6.2.          Authorization
for Administrative Agent to Take Certain Action.


 


(a)          Each
Grantor irrevocably authorizes the Administrative Agent at any time and from time to time in the sole discretion of the Administrative
Agent and appoints the Administrative Agent as its attorney in fact (i) to execute on behalf of such Grantor as debtor and to file
financing statements necessary or desirable in the Administrative Agent’s sole discretion to perfect and to maintain the
perfection and priority of the Administrative Agent’s security interest in the Collateral, (ii) in the case of any Intellectual
Property owned by or licensed to such Grantor, execute, deliver and have recorded any document that the Administrative Agent may
request to evidence, effect, publicize or record the Administrative Agent’s security interest in such Intellectual Property
and the goodwill and General Intangibles of such Grantor relating thereto or represented thereby, (iii) to endorse and collect
any cash proceeds of the Collateral, (iv) to file a carbon, photographic or other reproduction of this Security Agreement or any
financing statement with respect to the Collateral as a financing statement and to file any other financing statement or amendment
of a financing statement (which does not add new collateral or add a debtor) in such offices as the Administrative Agent in its
sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the Administrative Agent’s
security interest in the Collateral, (v) to contact and enter into one or more agreements with the issuers of uncertificated securities
which are Pledged Collateral or with securities intermediaries holding Pledged Collateral as may be necessary or advisable to give
the Administrative Agent Control over such Pledged Collateral, (vi) to apply the proceeds of any Collateral received by the Administrative
Agent to the Secured Obligations as provided in Section 7.3, (vii) to discharge past due taxes, assessments, charges, fees or Liens
on the Collateral (except for such Liens that are permitted by Section 4.1(e)), (viii) to contact Account Debtors for any reason,
(ix) to demand payment or enforce payment of the Receivables in the name of the Administrative Agent or such Grantor and to endorse
any and all checks, drafts, and other instruments for the payment of money relating to the Receivables, (x) to sign such Grantor’s
name on any invoice or bill of lading relating to the Receivables, drafts against any Account Debtor of the Grantor, assignments
and verifications of Receivables, (xi) to exercise all of such Grantor’s rights and remedies with respect to the collection
of the Receivables and any other Collateral, (xii) to settle, adjust, compromise, extend or renew the Receivables, (xiii) to settle,
adjust or compromise any legal proceedings brought to collect Receivables, (xiv) to prepare, file and sign such Grantor’s
name on a proof of claim in bankruptcy or similar document against any Account Debtor of such Grantor, (xv) to prepare, file and
sign such Grantor’s name on any notice of Lien, assignment or satisfaction of Lien or similar document in connection with
the Receivables, (xvi) to change the address for delivery of mail addressed to such Grantor to such address as the Administrative
Agent may designate and to receive, open and dispose of all mail addressed to such Grantor, and (xvii) to do all other acts and
things necessary to carry out this Security Agreement; and such Grantor agrees to reimburse the Administrative Agent on demand
for any payment made or any expense incurred by the Administrative Agent in connection with any of the foregoing; provided that,
this authorization shall not relieve such Grantor of any of its obligations under this Security Agreement or under the Credit Agreement.


 




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(b)          All
acts of said attorney or designee are hereby ratified and approved. The powers conferred on the Administrative Agent, for the benefit
of the Administrative Agent and the other Secured Parties, under this Section 6.2 are solely to protect the Administrative Agent’s
interests in the Collateral and shall not impose any duty upon the Administrative Agent or any other Secured Party to exercise
any such powers. The Administrative Agent agrees that, except for the powers granted in Section 6.2(a)(i)-(vii), it shall not exercise
any power or authority granted to it unless an Event of Default has occurred and is continuing.


 


6.3.          Proxy.
EACH GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE ADMINISTRATIVE AGENT AS ITS PROXY AND ATTORNEY-IN-FACT (AS SET FORTH
IN SECTION 6.2 ABOVE) WITH RESPECT TO ITS PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE ANY OF THE PLEDGED COLLATERAL, WITH FULL
POWER OF SUBSTITUTION TO DO SO. IN ADDITION TO THE RIGHT TO VOTE ANY OF THE PLEDGED COLLATERAL, THE APPOINTMENT OF THE ADMINISTRATIVE
AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH
A HOLDER OF ANY OF THE PLEDGED COLLATERAL WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS,
CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT
THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY OF THE PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF)
BY ANY PERSON (INCLUDING THE ISSUER OF THE PLEDGED COLLATERAL OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE OF A DEFAULT.


 


6.4.          Nature
of Appointment; Limitation of Duty. THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS ARTICLE
VI IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS SECURITY AGREEMENT IS TERMINATED IN ACCORDANCE
WITH SECTION 8.14. NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NONE OF THE ADMINISTRATIVE AGENT, ANY LENDER, ANY OTHER SECURED PARTY,
ANY OF THEIR AFFILIATES, OR ANY OF THEIR OR THEIR AFFILIATES’ RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES
SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE
FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO ITS OWN GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED THAT, IN NO EVENT SHALL THEY BE LIABLE
FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.


 


ARTICLE VII


COLLECTION AND APPLICATION OF COLLATERAL
PROCEEDS; DEPOSIT ACCOUNTS


 


7.1.          Collection
of Receivables. 


 


(a)          
On or prior to the date that is 15 days after the Effective Date (or such later date in Administrative
Agent’s sole discretion), each Grantor shall (a) execute and deliver to the Administrative Agent Deposit Account Control
Agreements (unless such Deposit Account is maintained with the Administrative Agent and the Administrative Agent elects to forgo
a Deposit Account Control Agreement or with respect to the Canadian RBC Account or the U.S. Bank Account, so long as the Canadian
RBC Account and/or the U.S. Bank Account, as applicable, is closed within 90 days of the Effective Date (or such later date in
Administrative Agent’s sole discretion)) for each Deposit Account maintained by such Grantor into which all cash, checks
or other similar payments relating to or constituting payments made in respect of Receivables will be deposited (each, a “Collateral
Deposit Account”), which Collateral Deposit Accounts are identified as such on Exhibit B, and (b) establish lock
box service (the “Lock Boxes”) with the bank(s) set forth in Exhibit B, which Lock Boxes shall be subject
to irrevocable lockbox agreements in the form provided by or otherwise acceptable to the Administrative Agent in its Permitted
Discretion and shall be accompanied by an acknowledgment by the bank where the Lock Box is located of the Lien of the Administrative
Agent granted hereunder and of irrevocable instructions to wire all amounts collected therein to a Collection Account (each, a
“Lock Box Agreement”). After the Effective Date, each Grantor will comply with the terms of Section 7.2. 


 




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(b)          On
or prior to the date that is 15 days after the Effective Date (or such later date in Administrative Agent’s sole discretion),
each Grantor shall direct all of its Account Debtors to forward payments directly (and the Grantors shall forward such payments
directly to the extent any Account Debtor sends it to the Grantors notwithstanding such direction) to Lock Boxes subject to Lock
Box Agreements or Collateral Deposit Accounts subject to Deposit Account Control Agreements (unless such Deposit Account is maintained
with the Administrative Agent and the Administrative Agent elects to forgo a Deposit Account Control Agreement or with respect
to the Canadian RBC Account or the U.S. Bank Account, so long as the Canadian RBC Account and/or the U.S. Bank Account, as applicable,
is closed within 90 days of the Effective Date (or such later date in Administrative Agent’s sole discretion)). The Administrative
Agent shall have sole access to the Lock Boxes and the Collateral Deposit Accounts (other than (i) the Canadian RBC Account and
the U.S. Bank Account, so long as the Canadian RBC Account and/or the U.S. Bank Account, as applicable, is closed within 90 days
of the Effective Date (or such later date in Administrative Agent’s sole discretion) or (ii) Collateral Deposit Accounts
subject to Deposit Account Control Agreements maintained with ZB N.A. dba Zions First National Bank in the U.S. or Deposit Accounts
maintained with the Administrative Agent in Canada, in each case pursuant to this clause (ii), if no Activation Instruction has
been issued) at all times and each Grantor shall take all actions necessary to grant the Administrative Agent such sole access.
At no time shall any Grantor remove any item from a Lock Box or a Collateral Deposit Account (other than (i) the Canadian RBC Account
and the U.S. Bank Account, so long as the Canadian RBC Account and/or the U.S. Bank Account, as applicable, is closed within 90
days of the Effective Date (or such later date in Administrative Agent’s sole discretion) or (ii) the Collateral Deposit
Accounts subject to Deposit Account Control Agreements maintained with ZB N.A. dba Zions First National Bank in the U.S. or Deposit
Accounts maintained with the Administrative Agent in Canada, in each case pursuant to this clause (ii), if no Activation Instruction
has been issued) without the Administrative Agent’s prior written consent. If any Grantor should refuse or neglect to notify
any Account Debtor to forward payments directly to a Lock Box subject to a Lock Box Agreement or a Collateral Deposit Account subject
to a Deposit Account Control Agreement after notice from the Administrative Agent, the Administrative Agent shall, notwithstanding
the language set forth in Section 6.2(b) be entitled to make such notification directly to such Account Debtor. If notwithstanding
the foregoing instructions, any Grantor receives any proceeds of any Receivables, such Grantor shall receive such payments as the
Administrative Agent’s trustee, and shall immediately deposit all cash, checks or other similar payments related to or constituting
payments made in respect of Receivables received by it to a Collateral Deposit Account subject to a Deposit Account Control Agreement
(unless such Deposit Account is maintained with the Administrative Agent and the Administrative Agent elects to forgo a Deposit
Account Control Agreement or with respect to the Canadian RBC Account or the U.S. Bank Account, so long as the Canadian RBC Account
and/or the U.S. Bank Account, as applicable, is closed within 90 days of the Effective Date (or such later date in Administrative
Agent’s sole discretion)). All funds deposited into any Lock Box subject to a Lock Box Agreement or a Collateral Deposit
Account (other than (i) the Canadian RBC Account and the U.S. Bank Account, so long as the Canadian RBC Account and/or the U.S.
Bank Account, as applicable, is closed within 90 days of the Effective Date (or such later date in Administrative Agent’s
sole discretion) or (ii) the Collateral Deposit Accounts subject to Deposit Account Control Agreements maintained with ZB N.A.
dba Zions First National Bank in the U.S. or Deposit Accounts maintained with the Administrative Agent in Canada, in each case
pursuant to this clause (ii), if no Activation Instruction has been issued) will be swept on a daily basis into collection accounts
maintained by such Grantor with the Administrative Agent (the “Collection Accounts” and each a “Collection
Account”). The Administrative Agent shall hold and apply funds received into each Collection Account as provided by the
terms of Section 7.3. 


 




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7.2.          Covenant
Regarding New Deposit Accounts; Securities Accounts; Lock Boxes. Before opening or replacing any Collateral Deposit Account
or other Deposit Account or Securities Account, or establishing a new Lock Box, each Grantor shall, except with respect to any
Excluded Account, (a) obtain the Administrative Agent’s consent in writing to the opening of such Collateral Deposit Account
or other Deposit Account or Securities Account or establishing of such Lock Box, and (b) cause each bank or financial institution
in which it seeks to open (i) a Collateral Deposit Account or other Deposit Account (other than an Excluded Account) or Securities
Account, to enter into a Deposit Account Control Agreement or securities account control agreement (in each case, in form and substance
satisfactory to the Administrative Agent), as applicable, with the Administrative Agent in order to give the Administrative Agent
Control of such Collateral Deposit Account or other Deposit Account (and provide for a daily sweep into each Collection Account)
or Securities Account, or (ii) a Lock Box, to enter into a Lock Box Agreement with the Administrative Agent in order to give the
Administrative Agent Control of the Lock Box and provide for a daily sweep into a Collection Account. In the case of Deposit Accounts,
Securities Accounts or Lock Boxes maintained with Lenders, the terms of such letter shall be subject to the provisions of the Credit
Agreement regarding setoffs.


 


7.3.          Application
of Proceeds; Deficiency. All amounts deposited in each Collection Account shall be deemed received by the Administrative Agent
in accordance with Section 2.18 of the Credit Agreement and shall, after having been credited to each Collection Account, be applied
(and allocated) by Administrative Agent in accordance with Section 2.10(b) of the Credit Agreement; provided that, so long
as (x) no Default has occurred and is continuing and (y) no Dominion Trigger Period is in effect (or the Dominion Trigger Period
or the Default has been waived by the Administrative Agent in its sole discretion), collections which are received into each Collection
Account shall be deposited into the Borrowers’ Funding Account rather than being used to reduce amounts owing under the Credit
Agreement. All amounts deposited into the Deposit Accounts maintained with the Administrative Agent in Canada and all amounts deposited
into Collateral Deposit Accounts subject to Deposit Account Control Agreements maintained with ZB N.A. dba Zions First National
Bank in the U.S., in each case, will be forwarded by daily sweep into a Collection Account, upon the instruction of Administrative
Agent (an “Activation Instruction”). Administrative Agent agrees not to issue an Activation Instruction with
respect to the (i) Deposit Accounts maintained with the Administrative Agent in Canada unless a Dominion Trigger Period is in effect
or a Default has occurred and is continuing (in each case, if not otherwise waived by the Administrative Agent in its sole discretion),
at the time such Activation Instruction is issued and (ii) Collateral Deposit Accounts subject to Deposit Account Control Agreements
maintained with ZB N.A. dba Zions First National Bank in the U.S. unless an Event of Default has occurred and is continuing (if
not otherwise waived by the Administrative Agent in its sole discretion) at the time such Activation Instruction is issued. Administrative
Agent agrees to use commercially reasonable efforts to rescind an Activation Instruction with respect to the (i) Deposit Accounts
maintained with the Administrative Agent in Canada if: (1) no Default has occurred and is continuing and (2) no Dominion Trigger
Period is in effect (or the Administrative Agent has waived such Dominion Trigger Period or such Default in its sole discretion)
and (ii) the Collateral Deposit Accounts subject to Deposit Account Control Agreements maintained with ZB N.A. dba Zions First
National Bank in the U.S. if no Event of Default has occurred and is continuing. The Administrative Agent shall require all other
cash proceeds of the Collateral, which are not required to be applied to the Obligations pursuant to Section 2.11 of the Credit
Agreement, to be deposited in a special non-interest bearing cash collateral account with the Administrative Agent and held there
as security for the Secured Obligations. No Grantor shall have any control whatsoever over said cash collateral account. Any such
proceeds of the Collateral shall be applied in the order set forth in Section 2.18 of the Credit Agreement unless a court of competent
jurisdiction shall otherwise direct. The balance, if any, after all of the Secured Obligations have been satisfied, shall be deposited
by the Administrative Agent into such Grantor’s general operating account with the Administrative Agent. The Grantors shall
remain liable, jointly and severally, for any deficiency if the proceeds of any sale or disposition of the Collateral are insufficient
to pay all Secured Obligations, including any attorneys’ fees and other expenses incurred by Administrative Agent or any
other Secured Party to collect such deficiency. 


 




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ARTICLE VIII


GENERAL PROVISIONS


 


8.1.          Waivers.
Each Grantor hereby waives notice of the time and place of any public sale or the time after which any private sale or other disposition
of all or any part of the Collateral may be made. To the extent such notice may not be waived under applicable law, any notice
made shall be deemed reasonable if sent to the Grantors, addressed as set forth in Article IX, at least ten days prior to (i) the
date of any such public sale or (ii) the time after which any such private sale or other disposition may be made. To the maximum
extent permitted by applicable law, each Grantor waives all claims, damages, and demands against the Administrative Agent or any
other Secured Party arising out of the repossession, retention or sale of the Collateral, except such as arise solely out of the
gross negligence or willful misconduct of the Administrative Agent or such other Secured Party as finally determined by a court
of competent jurisdiction. To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives and relinquishes
the benefit and advantage of, and covenants not to assert against the Administrative Agent or any other Secured Party, any valuation,
stay, appraisal, extension, moratorium, redemption or similar laws and any and all rights or defenses it may have as a surety now
or hereafter existing which, but for this provision, might be applicable to the sale of any Collateral made under the judgment,
order or decree of any court, or privately under the power of sale conferred by this Security Agreement, or otherwise. Except as
otherwise specifically provided herein, each Grantor hereby waives presentment, demand, protest or any notice (to the maximum extent
permitted by applicable law) of any kind in connection with this Security Agreement or any Collateral.


 


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


 




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


 


8.4.          Secured
Party Performance of Debtor Obligations. Without having any obligation to do so, the Administrative Agent may perform or pay
any obligation which any Grantor has agreed to perform or pay in this Security Agreement and the Grantors shall reimburse the Administrative
Agent for any amounts paid by the Administrative Agent pursuant to this Section 8.4. The Grantors’ obligation to reimburse
the Administrative Agent pursuant to the preceding sentence shall be a Secured Obligation payable on demand.


 


8.5.          Specific
Performance of Certain Covenants. Each Grantor acknowledges and agrees that a breach of any of the covenants contained in Sections
4.1(d), 4.1(e), 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.12, 4.13, 4.14, 4.15, 5.3, or 8.7 or in Article VII will cause irreparable
injury to the Administrative Agent and the other Secured Parties, that the Administrative Agent and the other Secured Parties have
no adequate remedy at law in respect of such breaches and therefore agrees, without limiting the right of the Administrative Agent
or the other Secured Parties to seek specific performance of other obligations of the Grantors contained in this Security Agreement,
that the covenants of the Grantors contained in the Sections referred to in this Section 8.5 shall be specifically enforceable
against the Grantors.


 


8.6.          Dispositions
Not Authorized. No Grantor is authorized to sell or otherwise dispose of the Collateral except as set forth in Section 4.1(d)
and notwithstanding any course of dealing between any Grantor and the Administrative Agent or other conduct of the Administrative
Agent, no authorization to sell or otherwise dispose of the Collateral (except as set forth in Section 4.1(d)) shall be binding
upon the Administrative Agent or the other Secured Parties unless such authorization is in writing signed by the Administrative
Agent with the consent or at the direction of the Required Secured Parties.


 


8.7.          No
Waiver; Amendments; Cumulative Remedies. No delay or omission of the Administrative Agent or any other Secured Party to exercise
any right or remedy granted under this Security Agreement shall impair such right or remedy or be construed to be a waiver of any
Default or an acquiescence therein, and any single or partial exercise of any such right or remedy shall not preclude any other
or further exercise thereof or the exercise of any other right or remedy. No waiver, amendment or other variation of the terms,
conditions or provisions of this Security Agreement whatsoever shall be valid unless in writing signed by the Administrative Agent
with the concurrence or at the direction of the Lenders required under Section 9.02 of the Credit Agreement and then only to the
extent in such writing specifically set forth. All rights and remedies contained in this Security Agreement or by law afforded
shall be cumulative and all shall be available to the Administrative Agent and the other Secured Parties until the Secured Obligations
have been Paid in Full. 


 


8.8.          Limitation
by Law; Severability of Provisions. All rights, remedies and powers provided in this Security 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 Security
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 Security Agreement invalid, unenforceable or not entitled to be recorded
or registered, in whole or in part. Any provision in this Security Agreement that is held to be inoperative, unenforceable, or
invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining
provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and
to this end the provisions of this Security Agreement are declared to be severable.


 




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


 


8.10.         Benefit
of Agreement. The terms and provisions of this Security Agreement shall be binding upon and inure to the benefit of the Grantors,
the Administrative Agent and the other Secured Parties and their respective successors and assigns (including all persons who become
bound as a debtor to this Security Agreement), except that no Grantor shall have the right to assign its rights or delegate its
obligations under this Security Agreement or any interest herein, without the prior written consent of the Administrative Agent.
No sales of participations, assignments, transfers, or other dispositions of any agreement governing the Secured Obligations or
any portion thereof or interest therein shall in any manner impair the Lien granted to the Administrative Agent, for the benefit
of the Administrative Agent and the other Secured Parties, hereunder.


 


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


 


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


 


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


 


8.14.         Termination.
This Security Agreement shall continue in effect (notwithstanding the fact that from time to time there may be no Secured Obligations
outstanding) until (i) the Credit Agreement has terminated pursuant to its express terms and (ii) all of the Secured Obligations
have been indefeasibly paid and performed in full (or with respect to any outstanding Letters of Credit, a cash deposit or at the
discretion of the Administrative Agent, a backup standby Letter of Credit satisfactory to the Administrative Agent and the Issuing
Bank has been delivered to the Administrative Agent as required by the Credit Agreement) and no commitments of the Administrative
Agent or the other Secured Parties which would give rise to any Secured Obligations are outstanding.


 




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


 


8.16.         CHOICE
OF LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.


 


8.17.         CONSENT
TO JURISDICTION. EACH GRANTOR HEREBY IRREVOCABLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF ANY
U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT AND EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION.



 


8.18.         WAIVER
OF JURY TRIAL. EACH GRANTOR, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
SECURITY AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT
OR ANY OTHER THEORY).


 


8.19.         Indemnity.
Each Grantor hereby agrees to indemnify the Administrative Agent and the other Secured Parties, and their respective successors,
assigns, agents and employees, from and against any and all liabilities, damages, penalties, suits, fees, costs, and expenses of
any kind and nature (including, without limitation, all expenses of litigation or preparation therefor whether or not the Administrative
Agent or any other Secured Party is a party thereto) imposed on, incurred by or asserted against the Administrative Agent or the
other Secured Parties, or their respective successors, assigns, agents and employees, in any way relating to or arising out of
this Security Agreement, or the manufacture, purchase, acceptance, rejection, ownership, delivery, lease, possession, use, operation,
condition, sale, return or other disposition of any Collateral (including, without limitation, latent and other defects, whether
or not discoverable by the Administrative Agent or the other Secured Parties or any Grantor, and any claim for Patent, Trademark
or Copyright infringement).


 


8.20.         Counterparts.
This Security Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement,
and any of the parties hereto may execute this Security Agreement by signing any such counterpart. Delivery of an executed counterpart
of a signature page of this Security Agreement by facsimile or other electronic transmission shall be effective as delivery of
a manually executed counterpart of this Security Agreement. 


 




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ARTICLE IX


NOTICES


 


9.1.          Sending
Notices. Any notice required or permitted to be given under this Security Agreement shall be sent in accordance with Section
9.01 of the Credit Agreement.


 


9.2.          Change
in Address for Notices. Each of the Grantors, the Administrative Agent and the Lenders may change the address for service of
notice upon it by a notice in writing to the other parties.


 


ARTICLE X


THE ADMINISTRATIVE AGENT


 


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


 


[Signature Page Follows]


 




    	 	28	 



     


    

 


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


 


	 	CLARUS CORPORATION,
	 	a Delaware corporation,
	 	as a Grantor 
	 	 
	 	By 	/s/ Aaron J. Kuehne
	 	 	Name: Aaron J. Kuehne
	 	 	Title: Chief Financial Officer, Chief Administrative Officer, Treasurer and Secretary
	 	 
	 	BLACK DIAMOND EQUIPMENT, LTD.,
	 	a Delaware corporation, 
	 	as a Grantor
	 	 
	 	By 	/s/ Aaron J. Kuehne
	 	 	Name: Aaron J. Kuehne
	 	 	Title: Chief Financial Officer and Secretary 
	 	 
	 	BLACK DIAMOND RETAIL, INC.,
	 	a Delaware corporation, 
	 	as a Grantor
	 	 
	 	By 	/s/ Aaron J. Kuehne
	 	 	Name: Aaron J. Kuehne
	 	 	Title: Chief Financial Officer and Secretary
	 	 
	 	SIERRA BULLETS, L.L.C.,
	 	a Delaware limited liability company, 
	 	as a Grantor
	 	 
	 	By 	/s/ Aaron J. Kuehne
	 	 	Name: Aaron J. Kuehne
	 	 	Title: Secretary
	 	 
	 	EVEREST/SAPPHIRE ACQUISITION, LLC,
	 	a Delaware limited liability company, 
	 	as a Grantor
	 	 
	 	By 	/s/ Aaron J. Kuehne
	 	 	Name: Aaron J. Kuehne
	 	 	Title: Secretary and Treasurer


 


Signature Page to Pledge and Security Agreement


 




     


     


    

 


	 	PIEPS SERVICE, LLC,
	 	a Delaware limited liability company, 
	 	as a Grantor
	 	 
	 	By  	/s/ Aaron J. Kuehne
	 	 	Name: Aaron J. Kuehne
	 	 	Title: Secretary and Treasurer
	 	 
	 	BD EUROPEAN HOLDINGS, LLC,
	 	a Delaware limited liability company, 
	 	as a Grantor
	 	 
	 	By  	/s/ Aaron J. Kuehne
	 	 	Name: Aaron J. Kuehne
	 	 	Title: Secretary and Treasurer
	 	 
	 	BD NORTH AMERICAN HOLDINGS, LLC,
	 	a Delaware limited liability company, 
	 	as a Grantor
	 	 
	 	By  	/s/ Aaron J. Kuehne
	 	 	Name: Aaron J. Kuehne
	 	 	Title: Secretary and Treasurer
	 	 
	 	BLACK DIAMOND RETAIL - ALASKA, LLC,
	 	a Delaware limited liability company, 
	 	as a Grantor
	 	 
	 	By 	/s/ Aaron J. Kuehne
	 	 	Name: Aaron J. Kuehne
	 	 	Title: Chief Financial Officer and Secretary



 





Signature Page to Pledge and Security Agreement


 




     


     


    

   


	 	JPMORGAN
    CHASE BANK, N.A.,
	 	 as
    Administrative Agent
	 	 
	 	By:
     	/s/
    James Fallahay
	 	 	Name: James Fallahay
	 	 	Title: Authorized
    Officer


 


Signature Page to Pledge and Security Agreement