Pledge and Security Agreement


 Exhibit 10.2 

PLEDGE AND SECURITY AGREEMENT 

THIS PLEDGE AND SECURITY AGREEMENT (as it may be amended or modified from time to time, the “Security Agreement”) is
entered into as of September 23, 2010 by and between DDi Corp., a Delaware corporation, DDi Intermediate Holdings Corp., a California corporation, DDi Capital Corp., a California corporation, DDi Global Corp., a California corporation, DDi
Sales Corp., a Delaware corporation, DDi North Jackson Corp., an Ohio corporation, DDi Milpitas Corp., a Delaware corporation, Coretec Holdings Inc., a Delaware corporation, DDi Cleveland Holdings Corp., a Delaware corporation, DDi Denver Corp., a
Colorado corporation, Coretec Building Inc., a Colorado corporation, DDi Cleveland Corp., an Ohio corporation and Trumauga Properties, Ltd., an Ohio limited liability company (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, the Loan Parties, the Lenders and certain other financial institutions party thereto are entering
into a Credit Agreement dated as of the date hereof (as it may be amended or 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 DDi Global Corp., a California corporation, DDi Sales Corp., a Delaware corporation, DDi North Jackson Corp., an Ohio corporation, DDi Milpitas Corp., a Delaware corporation, DDi Denver Corp., a Colorado corporation, and DDi
Cleveland Corp., an Ohio corporation (individually and collectively, “U.S. Borrowers”), and DDi Toronto Corp., an entity organized under the laws of Ontario (“Canadian Borrower” and together with U.S. Borrowers,
each a “Borrower”, and collectively, 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 Lenders, hereby agree as follows: 

ARTICLE I 

DEFINITIONS 

1.1. Terms Defined in 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 and/or PPSA. Terms defined in the UCC and
the PPSA which are not otherwise defined in this Security Agreement are used herein as defined in the UCC and the PPSA. 
 1.3.
Definitions of Certain Terms Used Herein. As used in this Security Agreement, in addition to the terms defined in the Preliminary Statement, the following terms shall have the following meanings: 

“Accounts” shall have the meaning set forth in Article 9 of the UCC and, where applicable, the PPSA. 

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

 “Assigned Contracts” means, collectively, all of the Grantors’ rights and remedies under, and all
moneys and claims for money due or to become due to the Grantor under all material contracts, and any and all amendments, supplements, extensions, and renewals thereof including all rights and claims of the Grantors now or hereafter existing:
(a) under any insurance, indemnities, warranties, and guarantees provided for or arising out of or in connection with any of the foregoing agreements; (b) for any damages arising out of or for breach or default under or in connection with
any of the foregoing contracts; (c) to all other amounts from time to time 






 
paid or payable under or in connection with any of the foregoing agreements; or (d) to exercise or enforce any and all covenants, remedies, powers and privileges thereunder. 

“Chattel Paper” shall have the meaning set forth in Article 9 of the UCC and, where applicable, the PPSA. 

“Closing Date” means the date of the Credit Agreement. 

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

“Collateral Access Agreement” means any landlord waiver or other agreement, in form and substance satisfactory to the
Administrative Agent, between the Administrative Agent and any third party (including any bailee, consignee, customs broker, or other similar Person) in possession of any Collateral or any landlord of any Loan Party for any real property where any
Collateral is located, as such landlord waiver or other agreement may be amended, restated, 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 certificate (including any Borrowing Base Certificate), report or other document delivered
by any Grantor to the Administrative Agent or any Lender with respect to the Collateral pursuant to any Loan Document. 

“Commercial Tort Claims” shall have the meaning set forth in Article 9 of the UCC. 

“Control” shall have the meaning set forth in Article 8 or, if applicable, (a) in Section 9-104, 9-105, 9-106
or 9-107 of Article 9 of the UCC, and (b) the PPSA. 
 “Copyright Security Agreement” means each Copyright
Security Agreement, in form and substance satisfactory to the Administrative Agent, executed and delivered by Grantors, or any of them, and Administrative Agent. 

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

“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 any Loan Party with such banking institution. 
 “Deposit
Accounts” shall have the meaning set forth in Article 9 of the UCC. 
 “Documents” shall have the
meaning set forth in Article 9 of the UCC and, without limiting the foregoing, shall include, where applicable, “documents of title” (as defined in the PPSA). 

“Equipment” shall have the meaning set forth in Article 9 of the UCC and, where applicable, the PPSA. 

 

 2 







 “Excluded Collateral” means all of the following: (i) Equipment;
(ii) real property; (iii) leasehold improvements; (iv) Equity Interests of Holdings currently held as treasury shares by Holdings; (v) voting Equity Interests of any Foreign Subsidiary, solely to the extent that
(y) such Equity Interests represent more than 65% of the outstanding voting Equity Interests of such Foreign Subsidiary, and (z) pledging or hypothecating more than 65% of the total outstanding voting Equity Interests of
such Foreign Subsidiary would result in material adverse tax consequences; or (vi) any rights or interest in any contract, lease, permit, license, or license agreement covering 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 (vi) shall in no way be construed (1) to apply to the extent that any described prohibition or restriction is unenforceable 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 Administrative Agent’s security interest or lien notwithstanding the prohibition or restriction on the pledge of such contract, lease, permit,
license, or license agreement and (B) the foregoing exclusions of clauses (i) through (vi) shall in no way be construed to limit, impair, or otherwise affect any of Administrative Agent’s or any other Lender
Parties’ 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 Equity Interests), or (2) any proceeds from the sale, license, lease, or other dispositions of any such contract, lease, permit, license, license agreement, or Equity Interests). 

“Excluded Deposit Accounts” means the collective reference to: (i) the Deposit Accounts of Grantors specially and
exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the Grantors’ employees; and (ii) solely for the period commencing on the date hereof and ending on December 31, 2010, the Deposit
Account maintained at Key Bank with account number 352251000902; provided that the aggregate amount of funds on deposit in any such account shall not exceed the amount necessary to cover checks written against such account plus $100,000. 

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

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

“General Intangibles” shall have the meaning set forth in Article 9 of the UCC and, without limiting the foregoing,
shall include, where applicable, “intangibles” (as defined in the PPSA). 
 “Goods” shall have the
meaning set forth in Article 9 of the UCC and, where applicable, the PPSA. 
 “Instruments” shall have the
meaning set forth in Article 9 of the UCC and, where applicable, the PPSA. 
 “Inventory” shall have the
meaning set forth in Article 9 of the UCC and, where applicable, the PPSA. 
 “Investment Property” shall have
the meaning set forth in Article 9 of the UCC and, where applicable, the PPSA. 
 “Lenders” means the lenders
party to the Credit Agreement and their successors and assigns. 
 “Letter-of-Credit Rights” shall have the
meaning set forth in Article 9 of the UCC. 
 “Licenses” means, with respect to any Person, all of such
Person’s right, title, and interest in and to (a)
  

 3 







 
any and all licensing agreements or similar arrangements in and to its Patents, Copyrights, or Trademarks, (b) all income, royalties, damages, claims, and payments now or hereafter due or
payable under and with respect thereto, including, without limitation, damages and payments for past and future breaches thereof, and (c) all rights to sue for past, present, and future breaches thereof. 

“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). 

“Patent Security Agreement” means each Patent Security Agreement, in form and substance satisfactory to the
Administrative Agent, executed and delivered by Grantors, or any of them, and Administrative Agent. 

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

“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. 
 “PPSA” means the
Personal Property Security Act (Ontario), or to the extent applicable, similar legislation of any other jurisdiction, as amended from time to time, and includes the Civil Code of Quebec, where applicable. 

“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), Lenders 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 Lenders under Swap Agreements, 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.

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

“STA” means Securities Transfer Act (Ontario), or to the extent applicable, similar legislation of any other
jurisdiction, as amended from time to time. 
 “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 
  

 4 







 
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. 

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

“Trademark Security Agreement” means each Trademark Security Agreement, in form and substance satisfactory to the
Administrative Agent, executed and delivered by Grantors, or any of them, and Administrative Agent. 

“Trademarks” means, with respect to any Person, all of such Person’s right, title, and interest in and to the
following: (a) all trademarks (including service marks), trade names, trade dress, and trade styles and the registrations and applications for registration thereof and the goodwill of the business symbolized by the foregoing; (b) all
licenses of the foregoing, whether as licensee or licensor; (c) all renewals of the foregoing; (d) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including, without limitation, damages,
claims, and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements of the foregoing, including the right to settle suits involving claims and demands for royalties owing; and
(f) all rights corresponding to any of the foregoing throughout the world. 
 “U.S. Collection Account”
shall have the meaning set forth in Section 7.1(b). 
 “UCC” means the Uniform Commercial Code, as in
effect from time to time, of the State of California 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 Lender’s Lien on any Collateral. 
 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 Lender
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 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; 

  

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

  

	 	(vii)	all Instruments; 

  

	 	(viii)	all Inventory; 

  

	 	(ix)	all Investment Property; 

  

	 	(x)	all cash or cash equivalents; 

  

 5 








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


 

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

  

	 	(xiii)	all Commercial Tort Claims; 

  

	 	(xiv)	all Assigned Contracts; 

  

	 	(xv)	and 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 anything contained in the Security Agreement to the
contrary, the term “Collateral” shall not include any Excluded Collateral. 
 ARTICLE III 

REPRESENTATIONS AND WARRANTIES 

Each Grantor represents and warrants to the Administrative Agent and the Lenders that: 

3.1. Title, 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 such Collateral pursuant hereto. 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 the 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. As of the date hereof, such Grantor’s mailing address and the location of its place of business (if
it has only one) or its chief executive office (if it has more than one place of business), is disclosed in Exhibit A; such Grantor has no other places of business except those set forth in Exhibit A. 

3.4. Collateral Locations. As of the date hereof, all of such Grantor’s locations where Collateral is located 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 processor or on consignment as designated in Part VII(c) of Exhibit A. 

3.5. Deposit Accounts. As of the date hereof, all of such Grantor’s Deposit 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. 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. 
  

 6 







 3.7. Letter-of-Credit Rights and Chattel Paper. As of the date hereof, 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 each item listed on Exhibit C (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 the Collateral listed on Exhibit C,
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 all 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
respects what they purport to be. 
 (b) With respect to its Accounts, except as specifically disclosed on the
most recent Collateral Report, (i) all Accounts are Eligible Accounts; and (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. 
 (c) In addition, with respect to all of its
Accounts, (i) no payments have been or shall be made thereon except payments immediately delivered to a Lock Box or a Collateral Deposit Account as required pursuant to Section 7.1; and (ii) 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, (a) such Inventory (other than Inventory in transit) is located at one of such Grantor’s locations set forth on Exhibit A (as such Exhibit may be updated from time to time under the terms
of this Security Agreement), (b) no Inventory (other than Inventory in transit) 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) except as specifically
disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and merchantable quality, free from any defects, (d) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938,
as amended, and all rules, regulations and orders thereunder and (e) 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. As of the date hereof, such Grantor does not have any interest in, or title to, any registered
Patent, Trademark (other than trade names) or Copyright except as set forth in Exhibit D. Each Copyright Security Agreement, Patent Security Agreement and Trademark Security Agreement is effective to create a valid and continuing Lien and,
upon the filing of (a) the appropriate financing statements in the offices listed on Exhibit F, (b) the Copyright Security Agreements with the United States Copyright Office, and (c) the Patent Security Agreements and the
Trademark Security Agreements with the United States Patent and Trademark Office, fully perfected, first priority security interests in favor of the Administrative Agent on such Grantor’s Patents, Trademarks and Copyrights, such perfected
security interests are enforceable as such as against any and all creditors of and purchasers from such Grantor; and all action necessary or desirable to protect and perfect the Administrative Agent’s Lien on such Grantor’s Patents,
Trademarks or Copyrights shall have been duly taken. 
 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. 

 

 7 







 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 naming such Grantor as debtor has been filed or is of record in any jurisdiction except (a) for financing statements or security
agreements naming the Administrative Agent on behalf of the Lenders as the secured party and (b) as permitted by Section 4.1(e). 

3.13. Pledged Collateral. 

(a) As of the date hereof, 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 the security interest granted to the
Administrative Agent for the benefit of the Lender Parties hereunder. 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. 
 (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) there are existing no options, warrants, calls or commitments of any character whatsoever relating to such Pledged Collateral or which 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, each Grantor agrees that:

 4.1. General. 

(a) Collateral Records. Such Grantor will keep their books and records with respect to the Collateral owned by it
in accordance with GAAP, and furnish to the Administrative Agent, with sufficient 
  

 8 







 
copies for each of the Lenders, such reports relating to such Collateral as the Administrative Agent shall from time to time 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 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 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 or 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 part 5 of Article 9 of 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 to the
Administrative Agent promptly upon 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.

 (c) Further Assurances. Such Grantor will, if so requested by the Administrative Agent in its Permitted
Discretion, 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 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 Permitted Liens. 

(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 as 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 of Administrative Agent 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 owned by it at any location other than those
locations listed on Exhibit A (as updated from time to time as permitted under clause (ii) of this Section 4.1(g); (ii) otherwise change, or add to, such locations without the Administrative Agent’s prior written consent
(and if the Administrative Agent gives such consent, such Grantor will concurrently therewith obtain a Collateral Access Agreement 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. 
  

 9 







 (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, to the extent the failure to do so would have a Material Adverse Effect. 

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. 

(b) Collection of Receivables. Except as otherwise provided in clause (a) of this Section 4.2, such
Grantor will collect and enforce, at such Grantor’s sole expense, all amounts due or hereafter due to such Grantor under the Receivables owned by it. 

(c) Delivery of Invoices. Such Grantor will deliver to the Administrative Agent immediately upon its request after
the occurrence and during the continuation of an Event of Default 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, such Grantor will disclose such fact to the Administrative Agent in writing at the time of submission to the Administrative Agent of the next Borrowing Base Certificate in accordance with the terms of the Credit Agreement. Such
Grantor shall send the Administrative Agent a copy of each credit memorandum in excess of $200,000 promptly after issued, and such Grantor shall promptly report each credit memo 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 and Equipment. 

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

 (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. Such Grantor shall promptly report to the Administrative Agent any return
involving an amount in excess of $100,000. 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 
  

 10 







 
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 after and during the continuation of an Event of Default, at such other times as the Administrative Agent 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. 
 (d) Equipment. Such Grantor
shall promptly inform the Administrative Agent of any additions to or deletions from its Equipment which individually exceed $1,000,000. 

4.4. Delivery of Instruments, Securities, Chattel Paper and Documents. Such Grantor will (a) deliver to the Administrative
Agent immediately upon execution of this Security Agreement the originals of all Chattel Paper, Securities and Instruments constituting Collateral owned by it (if any then exist) to the extent the aggregate value or face amount for all such Chattel
Paper, Securities and Instruments for all Grantors exceeds $100,000, (b) hold in trust for the Administrative Agent upon receipt and immediately thereafter deliver to the Administrative Agent any such Chattel Paper, Securities and Instruments
constituting Collateral to the extent the aggregate value or face amount for all such Chattel Paper, Securities and Instruments for all Grantors exceeds $100,000, (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 to the extent the aggregate value or face amount for all such
Documents for all Grantors exceeds $100,000, and (d) 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. 
 4.5. Uncertificated
Pledged Collateral. 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. Except as otherwise expressly permitted under the Credit Agreement,
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 Permitted Liens 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. 
 (b) Issuance of Additional Securities. Except as
otherwise expressly permitted under the Credit Agreement, 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. 
  

 11 







 (c) Registration of Pledged Collateral. After the occurrence and
during the continuance of an Event of Default, each 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. 
 (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
continuance 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. 

(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 of the 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). 
 4.7. Intellectual Property. 

(a) Such Grantor will use its best efforts to secure all consents and approvals necessary or appropriate for the
assignment to or benefit of the Administrative Agent of any License material to the conduct of its business or operations held by such Grantor and to enforce the security interests granted hereunder. 

(b) Such Grantor shall notify the Administrative Agent immediately if it knows or has reason to know that any material
application or material registration relating to any Patent, Trademark or Copyright (now or hereafter existing) may become abandoned or dedicated, or of any adverse determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any court) regarding such Grantor’s ownership of any material Patent, Trademark or Copyright, its right to
register the same, or to keep and maintain the same. 
  

 12 







 (c) Within 20 days after the end of each calendar month and at such other
times as may be requested by the Administrative Agent, each Grantor shall provide the Administrative Agent with a list of all applications for the registration of any Patent, Trademark or Copyright with the United States Patent and Trademark Office,
the United States Copyright Office, the Canadian Intellectual Property Office or any similar office or agency, made in the prior month, and upon request of the Administrative Agent, such Grantor shall execute and deliver any and all security
agreements as the Administrative Agent may request to evidence the Administrative Agent’s first priority security interest on such Patent, Trademark or Copyright, and the General Intangibles of such Grantor relating thereto or represented
thereby. 
 (d) Such Grantor shall take all actions necessary or requested by the Administrative Agent to
maintain and pursue each application, to obtain the relevant registration and to maintain the registration of each of its Patents, Trademarks and Copyrights (now or hereafter existing), including the filing of applications for renewal, affidavits of
use, affidavits of noncontestability and opposition and interference and cancellation proceedings unless such Grantor shall determine that such Patent, Trademark or Copyright is not material to the conduct of such Grantor’s business.

 (e) Such Grantor shall, unless it shall reasonably determine that such Patent, Trademark or Copyright is in no
way material to the conduct of its business or operations, promptly sue for infringement, misappropriation or dilution and to recover any and all damages for such infringement, misappropriation or dilution, and shall take such other actions as the
Administrative Agent shall deem appropriate under the circumstances to protect such Patent, Trademark or Copyright. In the event that such Grantor institutes suit because any of its Patents, Trademarks or Copyrights constituting Collateral is
infringed upon, or misappropriated or diluted by a third party, such Grantor shall comply with Section 4.8. 
 4.8
Commercial Tort Claims. Such Grantor shall promptly, and in any event within two Business Days after the same is acquired by it in excess of $50,000 in the aggregate in value for all such commercial tort claims, notify the Administrative
Agent of any commercial tort claim (as defined in the UCC) acquired by it and, unless the Administrative Agent otherwise consents, such Grantor shall enter into an amendment to this Security Agreement, in the form of Exhibit G hereto,
granting to Administrative Agent a first priority security interest in such commercial tort claim. 
 4.9.
Letter-of-Credit Rights. If such Grantor is or becomes the beneficiary of a letter of credit, it shall promptly, and in any event within two 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; provided that the Grantors
shall not be required to take such actions with respect to letters of credit (or Letter-of-Credit Rights) of less than $50,000 in aggregate face amount for all such letters of credit. 

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 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 
  

 13 







 
maintain, if available, 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 amount of flood insurance required by this Section shall at a minimum comply with applicable law, including the Flood Disaster Protection Act of 1973, as amended. 

(b) All insurance policies required hereunder and under Section 5.09 of the Credit Agreement shall name the
Administrative Agent (for the benefit of the Administrative Agent and the Lender Parties) as an additional insured or as loss payee, as applicable, and shall contain loss payable clauses or mortgagee clauses, through endorsements in form and
substance satisfactory to the Administrative Agent, 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 days prior written notice given to the Administrative
Agent. To the extent any Lender receives any such proceeds thereunder, Lender will remit such proceeds to the Administrative Agent for application to the Obligations (or return to Borrowers) in accordance with the applicable provisions of the Credit
Agreement. 
 (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. If such Grantor fails to obtain any insurance as required by this Section, the Administrative Agent may obtain such insurance at the Borrower’s 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. Unless otherwise agreed to by the Administrative Agent in its Permitted Discretion, 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 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 Closing 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), each Borrower’s Eligible Inventory at that location shall be subject to such Reserves as may be established by
the Administrative Agent. After the Closing 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 Closing Date, unless and
until a satisfactory Collateral Access Agreement shall first have been obtained with respect to such location or if it has not been obtained, Borrower’s Eligible Inventory at that location shall be subject to the establishment of Reserves
acceptable to the Administrative Agent. Such Grantor shall timely and fully pay and perform its material obligations under all leases and other agreements with respect to each leased location or third party warehouse where any Collateral is or may
be located. 
 4.14. Deposit Account Control Agreements. Such Grantor will provide to the Administrative Agent upon the
Administrative Agent’s request, a Deposit Account Control Agreement duly executed on behalf of each financial institution holding a deposit account of such Grantor (other than Excluded Deposit Accounts) as set forth in the 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, corporate offices, or the location of its records concerning the Collateral, (c) change the type of
entity that it is, (d) change 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 days prior written notice of such change and the 
  

 14 







 
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 Lenders, 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. 

4.16 Assigned Contracts. Upon request by the Administrative Agent after the occurrence and during the continuation of an
Event of Default, each Grantor will use its best efforts to secure all consents and approvals necessary or appropriate for the assignment to or for the benefit of the Administrative Agent of any Assigned Contract held by such Grantor and to enforce
the security interests granted hereunder. Such Grantor shall fully perform all of its obligations under each of its Assigned Contracts, and shall enforce all of its rights and remedies thereunder, in each case, as it deems appropriate in its
business judgment; provided however, that such Grantor shall not take any action or fail to take any action with respect to its Assigned Contracts which would cause the termination of an Assigned Contract. Without limiting the
generality of the foregoing, such Grantor shall take all action necessary or appropriate to permit, and shall not take any action which would have any materially adverse effect upon, the full enforcement of all indemnification rights under its
Assigned Contracts. Such Grantor shall notify the Administrative Agent and the Lenders in writing, promptly after such Grantor becomes aware thereof, of any event or fact which could give rise to a material claim by it for indemnification under any
of its Assigned Contracts, and shall diligently pursue such right and report to the Administrative Agent on all further developments with respect thereto. Such Grantor shall deposit into 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 amounts received by such Grantor as indemnification or otherwise pursuant to its Assigned Contracts. If
such Grantor shall fail after the Administrative Agent’s demand to pursue diligently any right under its Assigned Contracts, or if an Event of Default then exists, the Administrative Agent may, and at the direction of the Required Secured
Parties shall, directly enforce such right in its own or such Grantor’s name and may enter into such settlements or other agreements with respect thereto as the Administrative Agent or the Required Secured Parties, as applicable, shall
determine. In any suit, proceeding or action brought by the Administrative Agent for the benefit of the Lender Parties under any Assigned Contract for any sum owing thereunder or to enforce any provision thereof, such Grantor shall indemnify and
hold the Administrative Agent and Lenders harmless from and against all expense, loss or damage suffered by reason of any defense, setoff, counterclaims, recoupment, or reduction of liability whatsoever of the obligor thereunder arising out of a
breach by such Grantor of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing from such Grantor to or in favor of such obligor or its successors. All such obligations of such Grantor shall be
and remain enforceable only against such Grantor and shall not be enforceable against the Administrative Agent or the Lenders. Notwithstanding any provision hereof to the contrary, such Grantor shall at all times remain liable to observe and perform
all of its duties and obligations under its Assigned Contracts, and the Administrative Agent’s or any Lender’s exercise of any of their respective rights with respect to the Collateral shall not release such Grantor from any of such duties
and obligations. Neither the Administrative Agent nor any Lender shall be obligated to perform or fulfill any of such Grantor’s duties or obligations under its Assigned Contracts or to make any payment thereunder, or to make any inquiry as to
the nature or sufficiency of any payment or property received by it thereunder or the sufficiency of performance by any party thereunder, or to present or file any claim, or to take any action to collect or enforce any performance, any payment of
any amounts, or any delivery of any property. 
 4.17 Securities. Each Grantor shall ensure that any Equity Interest
which is included within the Collateral shall at no time constitute a Security and the issuer of any such Equity Interest shall at no time 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 

 

 15 







 
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. 
 ARTICLE V 

EVENTS OF DEFAULT AND REMEDIES 

5.1. Intentionally Omitted. 

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 Lenders prior to an Event of Default; 

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

(iii) give notice of 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, to exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations, to exercise the voting and all other
rights as a holder with respect thereto, to collect and receive all cash dividends, interest, principal and other distributions made thereon and to otherwise act with respect to the Pledged Collateral as though the Administrative Agent was the
outright owner thereof. 
 (b) The Administrative Agent, on behalf of the Lenders, 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 
  

 16 







 
Agent and the Lender 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 Lender 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 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 Obligations pursuant to the terms of the Swap Agreement. 

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

 17 







 
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, each Grantor hereby (a) grants to the Administrative Agent, for the benefit of the Administrative Agent and the Lender Parties, an irrevocable, nonexclusive license (exercisable without payment of royalty or other
compensation to any Grantor) to use, license or sublicense any Intellectual Property Rights 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 computer 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 Inventory directly to
any person, including without limitation persons who have previously purchased the Grantor’s Inventory from such Grantor and in connection with any such sale or other enforcement of the Administrative Agent’s rights under this Security
Agreement, may sell Inventory which bears any Trademark owned by or licensed to such Grantor and any Inventory that is covered by any Copyright owned by or licensed to such Grantor and the Administrative Agent may finish any work in process and
affix any Trademark owned by or licensed to such Grantor and sell such Inventory as provided herein. 
 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 Secured Party 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) upon the occurrence and during the continuation of an Event of Default, to endorse and collect any
cash proceeds of the Collateral, (iii) to file a carbon, photographic or other reproduction of this Security Agreement or any financing statement with respect to the Collateral as a financing statement and to file any other financing statement
or amendment of a financing statement (which does not add new collateral or add a debtor) in such offices as the Administrative Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the
Administrative Agent’s security interest in the Collateral, (iv) to contact and enter into one or more agreements with the issuers of uncertificated securities which are Pledged Collateral or with securities intermediaries

  

 18 







 
holding Pledged Collateral as may be necessary or advisable to give the Administrative Agent Control over such Pledged Collateral, (v) to apply the proceeds of any Collateral received by the
Administrative Agent to the Secured Obligations as provided in Section 7.3, (vi) to discharge past due taxes, assessments, charges, fees or Liens on the Collateral (except for such Liens as are specifically permitted hereunder),
(vii) upon the occurrence and during the continuation of an Event of Default, to contact Account Debtors for any reason, (viii) upon the occurrence and during the continuation of an Event of Default, 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, (ix) upon the occurrence and during the continuation
of an Event of Default, 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, (x) upon the occurrence and
during the continuation of an Event of Default, to exercise all of such Grantor’s rights and remedies with respect to the collection of the Receivables and any other Collateral, (xi) upon the occurrence and during the continuation of an
Event of Default, to settle, adjust, compromise, extend or renew the Receivables, (xii) upon the occurrence and during the continuation of an Event of Default, to settle, adjust or compromise any legal proceedings brought to collect
Receivables, (xiii) upon the occurrence and during the continuation of an Event of Default, 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,
(xiv) upon the occurrence and during the continuation of an Event of Default, 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,
(xv) upon the occurrence and during the continuation of an Event of Default, 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 (xvi) 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. 

(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 Lender 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
Lender to exercise any such powers. 
 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 SUCH PLEDGED COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO SO. IN ADDITION TO THE
RIGHT TO VOTE ANY SUCH 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 SUCH 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 SUCH PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF SUCH PLEDGED COLLATERAL OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE AND DURING THE CONTINUATION OF AN
EVENT OF 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, NEITHER THE
ADMINISTRATIVE AGENT, 
  

 19 







 
NOR ANY LENDER, NOR ANY OF THEIR RESPECTIVE AFFILIATES, 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 THEIR 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 before the Closing Date, each Grantor shall (a) execute and deliver to the Administrative Agent Deposit
Account Control Agreements for each Deposit Account maintained by such Grantor (other than Excluded Deposit Accounts) into which all cash, checks or other similar payments relating to or constituting payments made in respect of Receivables (other
than such amounts as are permitted to be deposited into Excluded Deposit Accounts) will be deposited (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, upon notice from the Administrative Agent during any Dominion Trigger Period, be subject to irrevocable
lockbox agreements in the form provided by or otherwise reasonably acceptable to the Administrative Agent 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, upon notice from the Administrative Agent during any Dominion Trigger Period, to wire all amounts collected therein to the U.S. Collection Account (a “Lock Box Agreement”). After the
Closing Date, each Grantor will comply with the terms of Section 7.2. 
 (b) Each Grantor shall direct all
of its Account Debtors to forward payments directly to Lock Boxes subject to Lock Box Agreements. Upon notice from the Administrative Agent during any Dominion Trigger Period, the Administrative Agent shall have sole access to the Lock Boxes at all
times and each Grantor shall take all actions necessary to grant the Administrative Agent such sole access. At no time after notice from the Administrative Agent during any Dominion Trigger Period shall any Grantor remove any item from a Lock Box or
from a Collateral Deposit Account 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 after
notice from the Administrative Agent, the Administrative Agent shall be entitled to make such notification directly to 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. Upon notice from the Administrative Agent during any Dominion Trigger Period, all funds deposited into any Lock Box subject to a Lock Box Agreement or a Collateral Deposit Account will be swept on a daily basis into a collection
account maintained by such Grantor with the Administrative Agent (each such account, a “U.S. Collection Account”). The Administrative Agent shall hold and apply funds received into the U.S. Collection Accounts as provided by the
terms of Section 7.3. 
 7.2. Covenant Regarding New Deposit Accounts; Lock Boxes. Before opening or replacing any
Collateral Deposit Account, other Deposit Account, or establishing a new Lock Box, each Grantor shall (a) in the case of any Collateral Deposit Account or Lock Box, obtain the Administrative Agent’s consent in writing to the opening of
such Collateral Deposit Account or Lock Box, and (b) cause each bank or financial institution in which it seeks to open (i) a Deposit Account (other than an Excluded Deposit Account), to enter into a Deposit Account Control Agreement with
the Administrative Agent in order to give the Administrative Agent Control of such Deposit Account, or (ii) a Lock Box, to enter into a Lock Box Agreement with the Administrative Agent in

  

 20 







 
order to give the Administrative Agent Control of the Lock Box. In the case of Deposit 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. During any Dominion Trigger
Period, all amounts deposited in the U.S. Collection Accounts 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 the U.S. Collection Accounts, be
applied (and allocated) by Administrative Agent in accordance with Section 2.10(b) of the Credit Agreement. The Grantors shall remain liable 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 Lender to collect such deficiency. 

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 Lender 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 Lender
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 Lender, 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 Lenders’ 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 Lender shall use reasonable care with respect to the Collateral in its possession or under its control. Neither the Administrative
Agent nor any Lender 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 Lender, or any income thereon or as to the preservation of
rights against prior parties or any other rights pertaining thereto. To the extent that applicable law imposes duties on the Administrative Agent to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it
is commercially reasonable for the Administrative Agent (i) to fail to incur expenses deemed significant by the Administrative Agent to prepare Collateral for disposition or otherwise to transform raw material or work in process into finished
goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for
the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against Account Debtors or other Persons obligated on Collateral or to remove Liens on or any adverse claims against
Collateral, (iv) to exercise collection remedies against Account Debtors and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (v) to advertise dispositions of
Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in the same business as such Grantor, for expressions of interest in
acquiring all or any portion of such Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, 

 

 21 







 
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. 
 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 has failed to so perform or pay, 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, 4.16, 5.3, or 8.7 or in Article VII will cause irreparable injury to the Administrative Agent and the Lenders, that the Administrative Agent and
Lenders have no adequate remedy at law in respect of such breaches and therefore agrees, without limiting the right of the Administrative Agent or the Lenders to seek and obtain specific performance of other obligations of the Grantors contained in
this Security Agreement, that the covenants of the Grantors contained in the Sections referred to in this Section 8.5 shall be specifically enforceable against the Grantors. 

8.6. 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 Lenders 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 Lender to exercise any
right or remedy granted under this Security Agreement shall impair such 
  

 22 







 
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 specifically set forth in such writing. 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 Lenders 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. 

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

8.10. Benefit of Agreement. The terms and provisions of this Security Agreement shall be binding upon and inure to the benefit of
the Grantors, the Administrative Agent and the Lender 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 Lender 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 (subject to the limitations contained in
Section 5.11 of the Credit Agreement), analysis, administration, collection, preservation or sale of the Collateral (including the expenses and charges associated with any periodic or special audit (subject to the limitations contained in
Section 5.11 of the Credit Agreement) of the Collateral). Any and all costs and 
  

 23 







 
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 Supporting Letter of Credit has been delivered to the Administrative Agent as required by the Credit
Agreement) and no commitments of the Administrative Agent or the Lenders which would give rise to any Secured Obligations are outstanding. 

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
(AND NOT THE LAW OF CONFLICTS) OF THE STATE OF CALIFORNIA, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. 

8.17. CONSENT TO JURISDICTION. EACH GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR
CALIFORNIA STATE COURT SITTING IN LOS ANGELES, CALIFORNIA IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT AND EACH GRANTOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES 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 LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY GRANTOR AGAINST THE ADMINISTRATIVE AGENT OR ANY
LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN LOS
ANGELES, CALIFORNIA. 
 8.18. WAIVER OF JURY TRIAL; JUDICIAL REFERENCE.  

(a) EACH GRANTOR, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

 (b) IF ANY ACTION OR PROCEEDING IS FILED IN A COURT OF THE STATE OF CALIFORNIA BY OR AGAINST ANY PARTY
HERETO IN CONNECTION WITH ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS SECURITY AGREEMENT OR ANY DOCUMENT 
  

 24 







 
RELATED HERETO AND EACH PARTY HERETO OR THERETO (OTHER THAN THE ADMINISTRATIVE AGENT) DOES NOT SUBSEQUENTLY WAIVE IN AN EFFECTIVE MANNER UNDER CALIFORNIA LAW ITS RIGHT TO A TRIAL BY JURY, THE
COURT SHALL, AND IS HEREBY DIRECTED TO, MAKE A GENERAL REFERENCE PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638 TO A REFEREE OR REFEREES TO HEAR AND DETERMINE ALL OF THE ISSUES IN SUCH ACTION OR PROCEEDING (WHETHER OF FACT OR OF LAW) AND
TO REPORT A STATEMENT OF DECISION, PROVIDED THAT ANY SUCH ISSUES PERTAINING TO A “PROVISIONAL REMEDY” AS DEFINED IN CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1281.8 SHALL BE HEARD AND DETERMINED BY THE COURT. 

8.19. Indemnity. Each Grantor hereby agrees to indemnify the Administrative Agent and the Lenders (each, an “Indemnified
Person”), and their respective successors, assigns, agents and employees, from and against any and all liabilities, damages, penalties, suits, costs, and expenses of any kind and nature (including, without limitation, all expenses of
litigation or preparation therefor whether or not the Administrative Agent or any Lender is a party thereto) imposed on, incurred by or asserted against the Administrative Agent or the Lenders, 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 Lenders or any Grantor, and any claim for Patent, Trademark or Copyright infringement); provided that, in no event shall
Grantor be required to indemnify any Indemnified Person from any liabilities, damages, penalties, suits, costs, and expenses resulting from the gross negligence or willful misconduct, as finally determined by a court of competent jurisdiction, of
such Indemnified Person. 
 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. 

ARTICLE IX 

NOTICES 

9.1. Sending Notices. Any notice required or permitted to be given under this Security Agreement shall be sent by United States
mail, telecopier, personal delivery or nationally established overnight courier service, and shall be deemed received (a) when received, if sent by hand or overnight courier service, or mailed by certified or registered mail or (b) when
sent, if sent by telecopier (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient), in each case addressed to the Grantors
at the notice address set forth on Exhibit A, and to the Administrative Agent and the Lenders at the addresses set forth 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 Lenders 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 Lenders 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 
  

 25 







 
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] 
  

 26 







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

			
	 GRANTORS:
  

DDI CORP.,
 a Delaware corporation

DDI INTERMEDIATE HOLDINGS CORP.,
 a California
corporation
 DDI CAPITAL CORP.,
 a
California corporation
 DDI GLOBAL CORP.,

a California corporation
 DDI SALES
CORP.,
 a Delaware corporation
 DDI
NORTH JACKSON CORP.,
 an Ohio corporation

DDI MILPITAS CORP.,
 a Delaware
corporation
 CORETEC HOLDINGS INC.,
 a
Delaware corporation
 DDI CLEVELAND HOLDINGS CORP.,

a Delaware corporation
 DDI DENVER
CORP.,
 a Colorado corporation
 CORETEC
BUILDING INC.,
 a Colorado corporation

DDI CLEVELAND CORP.,
 an Ohio
corporation
 TRUMAUGA PROPERTIES LTD.,

an Ohio limited liability company

		
	By:	 	/s/ J. Michael Dodson
	Name:	 	J. Michael Dodson
	Title:	 	Chief Financial Officer
	
	ADMINISTRATIVE AGENT:
	
	JPMORGAN CHASE BANK, N.A.,
	as Administrative Agent
		
	By: 	 	/s/ Teresa B. Keckler
	Name:	 	Teresa B. Keckler
	Title:	 	Vice President