Exhibit 10.85


 


Execution
Version


 


SECOND LIEN PLEDGE AND SECURITY AGREEMENT,


 


dated as of April 22, 2021,


 


among


 


LANNETT COMPANY, INC.,


as the Borrower,


 


each Guarantor from time to time party hereto,


 


and


 


ALTER DOMUS (US) LLC,

as Administrative Agent and Collateral Agent


 


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	 	TABLE OF CONTENTS	 
	 	 	 
	 	 	Page
	 	 	 
	Article I.	DEFINITIONS	1
	 	 	 



	Section 1.01	Credit Agreement	1
	 	 	 
	Section 1.02	Other Defined Terms	1
	 	 	 



	Article II.	PLEDGE OF SECURITIES	5



	 	 	 
	Section 2.01	Pledge	5
	 	 	 
	Section 2.02	Delivery of the Pledged Collateral	7
	 	 	 
	Section 2.03	Representations and Warranties	7
	 	 	 
	Section 2.04	Registration in Nominee Name; Denominations	8
	 	 	 
	Section 2.05	Voting Rights; Dividends and Interest, Etc.	8
	 	 	 



	Article III.	SECURITY INTERESTS IN OTHER PERSONAL PROPERTY	10



	 	 	 
	Section 3.01	Security Interest	10
	 	 	 
	Section 3.02	Representations and Warranties	10
	 	 	 
	Section 3.03	Covenants	14
	 	 	 
	Section 3.04	Other Actions	16
	 	 	 
	Section 3.05	Covenants Regarding Patent, Trademark and Copyright Collateral	17
	 	 	 



	Article IV.	REMEDIES	20



	 	 	 
	Section 4.01	Remedies Upon Default	20
	 	 	 
	Section 4.02	Application of Proceeds	21
	 	 	 
	Section 4.03	Securities Act, Etc.	22
	 	 	 



	Article V.	MISCELLANEOUS	23



	 	 	 
	Section 5.01	Notices	23
	 	 	 
	Section 5.02	Security Interest Absolute	23
	 	 	 
	Section 5.03	Limitation By Law	23
	 	 	 
	Section 5.04	Binding Effect; Several Agreement	23
	 	 	 
	Section 5.05	Successors and Assigns	23
	 	 	 
	Section 5.06	Administrative Agent’s and Collateral Agent’s Fees and Expenses; Indemnification	24
	 	 	 
	Section 5.07	Collateral Agent Appointed Attorney-in-Fact	24
	 	 	 
	Section 5.08	APPLICABLE LAW	25
	 	 	 
	Section 5.09	Waivers; Amendment	25
	 	 	 
	Section 5.10	WAIVER OF JURY TRIAL	25
	 	 	 
	Section 5.11	Severability	25
	 	 	 
	Section 5.12	Counterparts	25



 


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	Section 5.13	Headings	26
	 	 	 
	Section 5.14	Jurisdiction; Consent to Service of Process	26
	 	 	 
	Section 5.15	Termination or Release	26
	 	 	 
	Section 5.16	Additional Subsidiaries	27



 


Schedules


 


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




 


Exhibits


 


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




 


 


+ This Schedule has been omitted pursuant to Item 601(a)(5) of Regulation
S-K.  The registrant undertakes to provide further information regarding such omitted materials to the Commission upon request.


 


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SECOND LIEN PLEDGE AND SECURITY
AGREEMENT, dated as of April 22, 2021 (as amended, amended and restated, supplemented, waived or otherwise modified from time to time,
this “Agreement”), among LANNETT COMPANY, INC., a Delaware corporation (as further defined in the Credit Agreement
(as defined below), the “Borrower”), each Guarantor from time to time a party hereto, Alter Domus (US) LLC, as administrative
agent (in such capacity and any successor in such capacity, the “Administrative Agent”) and Alter Domus (US) LLC, as
collateral agent (in such capacity and any successor in such capacity, the “Collateral Agent”) for the Secured Parties
(as defined below).


 


Reference is made to the Second
Lien Credit and Guaranty Agreement, dated as of April 22, 2021 (as amended, amended and restated, supplemented, waived or otherwise modified
from time to time, the “Credit Agreement”), among the Borrower, certain subsidiaries of the Borrower party thereto
from time to time as Guarantors, the Lenders party thereto from time to time and Alter Domus (US) LLC, as Administrative Agent and Collateral
Agent.


 


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


 


Article
I.        



DEFINITIONS


 


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


 


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


 


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


 


“ABL Collateral Agreement”
shall mean the Pledge and Security Agreement, dated as of December 7, 2020, among the Borrower, the Guarantors and the ABL Agent for the
benefit of the ABL Secured Parties.


 


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


 


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


 


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


 


“ABL/Term Loan Intercreditor
Agreement” shall mean the Intercreditor Agreement (as amended by the joinder, dated as of April 22, 2021 by the Collateral
Agent and by the joinder, dated as of April 22, 2021 by the Cash Flow Agent), dated as of December 7, 2020 among the ABL Agent and Alter
Domus (US) LLC, as administrative agent under that certain Credit and Guaranty Agreement, dated as of November 15, 2015 among the Borrower,
certain subsidiaries of the Borrower, the lenders party thereto and Alter Domus (US) LLC as administrative agent and collateral agent.


 


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“Account Debtor”
means each Person who is obligated on an Account.


 


“Additional Intercreditor
Agreement” means any other intercreditor agreement entered into from time to time in accordance with the Credit Agreement.


 


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


 


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


 


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


 


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


 


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


 


“Cash Flow Agent”
shall have the meaning assigned to such term in the Cash Flow Intercreditor Agreement.


 


“Cash Flow Intercreditor
Agreement” shall mean the Intercreditor Agreement, dated as of April 22, 2021 among the Collateral Agent and the Cash Flow Agent.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Discharge of Senior
Priority Obligations” shall have the meaning assigned to such term in the Cash Flow Intercreditor Agreement.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Intercreditor Agreements”
shall mean the ABL/Term Loan Intercreditor Agreement, the Cash Flow Intercreditor Agreement and any Additional Intercreditor Agreement.


 


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


 


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“Junior Priority Agent”
shall have the meaning assigned to such term in the Cash Flow Intercreditor Agreement.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Senior Priority Representative”
shall have the meaning assigned to such term in the Cash Flow Intercreditor Agreement.


 


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


 


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


 


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


 


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


 


Article
II.         



PLEDGE OF SECURITIES


 


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


 


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


 


(A)             
[Reserved];


 


(B)              
more than 65% of the issued and outstanding Equity Interests of “Darmantest Laboratories” Limited Liability Company,


 


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


 


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(D)             
 [Reserved],


 


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


 


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


 


(G)             
any Margin Stock,


 


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


 


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


 


(b)           
(i) promissory notes and any instruments evidencing Indebtedness for borrowed money owed to it as of the Closing Date (including,
as of the Closing Date, those listed opposite the name of such Credit Party on Schedule I) and (ii) any promissory notes
and any instruments evidencing Indebtedness for borrowed money in the future issued to such Credit Party (the foregoing clauses (b)(i) and
(b)(ii) collectively, the “Pledged Debt Securities”); provided that the Pledged Debt Securities shall not
include promissory notes and instruments evidencing Indebtedness for borrowed money (A) having an aggregate principal amount not
in excess of $5,000,000, (B) [reserved], or (C) to the extent the pledge of such promissory note or instrument would violate
applicable law (after giving effect to any applicable anti-assignment provisions of the New York UCC or any other applicable law); provided
that such promissory note or instrument shall cease to be Excluded Instruments at such time as such prohibition ceases to be in effect
to the extent such promissory note or instrument is an Excluded Instrument as a result of such prohibition, the “Excluded Instruments”),


 


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


 


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


 


(e)            
all proceeds of any of the foregoing.


 


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


 


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


 


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


 


(d)            
Notwithstanding the foregoing, prior to the Discharge of Senior Priority Obligations, the requirements of this Section 2.02
to deliver any Pledged Collateral to the Collateral Agent shall be deemed satisfied by delivery of such Pledged Collateral to the Senior
Priority Representative.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Section 2.06           
Delivery and Registration of Collateral. Notwithstanding anything herein to the contrary, prior to the Discharge of Senior
Priority Obligations, the requirements of this Agreement to deliver Collateral to the Collateral Agent or register the Collateral Agent
as the registered owner of any Collateral shall be deemed satisfied by delivery of such Collateral to, or the registration of such Collateral
in the name of, the Senior Priority Representative.


 


Article
III.      



SECURITY INTERESTS IN OTHER PERSONAL PROPERTY


 


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


 


(i)                       
all Accounts;


 


(ii)                      
all Chattel Paper;


 


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


 


(iv)                     
all Documents;


 


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(v)                       
 all Equipment;


 


(vi)                       
all Goods;


 


(vii)                      
all General Intangibles;


 


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


 


(ix)                       
all Inventory;


 


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


 


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


 


(xii)                       
all Intellectual Property;


 


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


 


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


 


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


 


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


 


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Notwithstanding anything to the contrary in
this Agreement, this Agreement shall not constitute a grant of a security interest in (a) any motor vehicle, aircraft,
airframe, rolling stock and other assets subject to a certificate of title or ownership, whether now owned or hereafter acquired,
(b) any Excluded Equity Interests, (c) any Letter of Credit Rights relating to any letter of credit with a face amount not
in excess of $5,000,000, except to the extent constituting a support obligation for other Collateral as to which perfection of a
security interest therein can be perfected by the filing of any financing statement under the Uniform Commercial Code (or similar
filing in any applicable jurisdiction), and to the extent the applicable Credit Party is not required by applicable law to apply the
proceeds of a drawing of such letter of credit for a specified purpose, (d) any Credit Party’s right, title or interest
in any lease, license or agreement or any property subject to a purchase money security interest, Financing Lease Obligation or
similar arrangements to which such Credit Party is a party or any of its right, title or interest thereunder, the property subject
thereto, any insurance in respect thereof, any management or operating agreement with respect thereto and deposits made in respect
thereof and all rights, title or interest in relation to any of the foregoing, in each case, to the extent that such a grant would,
under the terms of such lease, license or agreement, purchase money, financing lease or similar arrangement result in a breach of
the terms of, or constitute a default under, or result in the abandonment, invalidation or unenforceability of or create a right of
termination in favor of or require the consent of any other party (in each case, other than a Credit Party) to, such lease, license
or agreement, (e) (i) all owned real property interests with a fair market value (as reasonably determined by the Borrower in
good faith) equal to or less than $7,500,000; and (ii) all leasehold interests (it is understood that there shall be no requirement
to obtain landlord waivers, estoppels or collateral access agreements or acknowledgements, bailee waivers and similar letters),
(f)(i) payroll, healthcare and other employee wage and benefit accounts, (ii) tax accounts, including, without limitation,
sales tax accounts, (iii) escrow, defeasance, discharge and redemption accounts, (iv) fiduciary or other trust accounts,
and, in the case of clauses (i) through (iv), the funds or other property held in or maintained in such account, (v)
zero-balance accounts, (vi) accounts in jurisdictions other than in the jurisdiction of organization of the applicable granting
Credit Party, the United States or any state thereof, and (vii) accounts other than those described in the preceding clauses with
respect to which the average daily balance of the funds maintained on deposit therein does not exceed $1,000,000 in the aggregate
(such accounts in this clause (f) being the “Excluded Accounts”) (g) any Commercial Tort Claim with an
expected value not in excess of $1,000,000, as determined in good faith by the Borrower, (h) the Borrower’s or its
subsidiaries’ rights in relation to aircraft and airframes, including rights under any lease, sublease, charter, management,
operating, crew, service, repair, maintenance, storage or other agreement relating to the aircraft, rights in the aircraft and any
parts, accessions and accessories thereto, rights under insurance policies and security deposits and rights in income derived from
and proceeds of any of the foregoing, in the ordinary course, (i) assets if the granting of a security interest therein would
result in material adverse tax consequences to any Credit Party as reasonably determined by the Borrower, (j) those assets
as to which the Requisite Lenders and the Borrower reasonably determine in good faith that any of the cost, burden or consequences
(including adverse tax consequences) of obtaining or perfecting such a security interest in such assets is excessive in relation to
the practical benefit to the Secured Parties of the security to be afforded thereby, (k) foreign intellectual property, (l) any
United States “intent to use” trademark application or intent-to-use service mark application filed pursuant to
Section 1(b) of the Lanham Act, to the extent and during the period that the grant of a security interest therein would impair
the validity or enforceability of, or render void or voidable or result in the cancellation of the applicable Credit Party’s
right, title or interest therein or any trademark or service mark registration that issues as a result of such application under
applicable federal law (including prior to the filing and acceptance of a “Statement of Use” or “Amendment to
Allege Use” with respect thereto), after which period such application shall be automatically subject to the security interest
granted herein and deemed to be included in the Collateral, (m) intellectual property specifically requiring a filing in a
jurisdiction outside of the United States, (n) any assets (including interests in partnerships, joint ventures and other non-wholly
owned entities) in respect of which and to the extent that pledges and security interests are prohibited by law or prohibited by
agreements containing anti-assignment clauses not overridden by the New York UCC or other applicable law, (o) any assets and
proceeds thereof subject to a Financing Lease Obligation or a purchase money lien permitted by clause 13 of the definition of
 “Permitted Liens” in the Credit Agreement to the extent such a grant would violate or invalidate the documents providing
for such Financing Lease Obligation or purchase money lien and (p) prior to the Discharge of ABL Obligations, any property that
would otherwise constitute ABL Priority Collateral but is an Excluded Asset (as such term is defined in the ABL Collateral
Agreement); provided that clauses (b), (d), (k) or (n) shall not include (x) items to the extent the prohibition or
restriction on the assignment or pledge thereof hereunder is ineffective under Section 9-406, 9-407, 9-408, or 9-409 of the UCC, any
other applicable anti-assignment provisions of the UCC or other applicable law (including without limitation Title 11 of the United
States Code) or (y) proceeds from the sale, license, lease or other disposition and receivables of the assets referred to in
such clause (including Accounts and other monies due or to become due under or in connection therewith), the assignment of which is
expressly deemed effective under Section 9-406, 9-407, 9-408, or 9-409 of the UCC, any other applicable anti-assignment provisions
of the UCC or other applicable law notwithstanding such prohibition (the assets described in clauses (a) through
(p) above, subject to the foregoing proviso, collectively, the “Excluded Assets”); provided that such
exclusions shall not de facto apply to the proceeds of any of the property referred to in the foregoing clauses (d), (k) and (n) of
this Section 3.01 or in clauses (A) to and including (I) of Section 2.01(a).


 


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


 


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


 


(c)               
The Security Interest is granted as security only and shall not subject the Collateral Agent or any other Secured Party to, or
in any way alter or modify, any obligation or liability of any Credit Party with respect to or arising out of the Collateral.


 


(d)                Notwithstanding
anything to the contrary in this Agreement or the Credit Agreement, (i)  no perfection steps shall be required by any means
other than (A) filings pursuant to the Uniform Commercial Code in the office of the Secretary of State (or equivalent filing
office) of the relevant State(s) of the respective jurisdictions of organization of each Credit Party, (B) filings in the
United States Patent and Trademark Office and the United States Copyright Office of the Intellectual Property Security Agreement,
(C) delivery of Collateral consisting of promissory notes and instruments evidencing Indebtedness for borrowed money; provided
that such delivery shall not be required with respect to (1) promissory notes and instruments evidencing Indebtedness for
borrowed money having an aggregate principal amount not in excess of $5,000,000, (2) any promissory notes and instruments
evidencing Indebtedness for borrowed money that are promptly deposited into an investment or securities account, (3) checks
received in the ordinary course of business and (4) promissory notes and instruments evidencing Indebtedness issued in
connection with the extension of trade credit by the grantor of a security interest, (D) delivery of Collateral consisting of
certificated Equity Interests included in the Collateral to the Collateral Agent, Term Loan Agent, Term Loan Representative or any
Additional Term Agent, as applicable, in accordance with the ABL/Term Loan Intercreditor Agreement, (E) recording of mortgages
with respect to all owned real property interests with a fair market value Fair Market Value greater than $7,500,000 and (E) other
actions expressly required by this Agreement or the Credit Agreement or as set forth in any local law security agreement;
(ii) no actions shall be required in order to create any security interest in assets located or titled outside of the United
States or make enforceable any such security interest; (iii) no security shall be taken or perfected over movable plant and
equipment to the extent requiring any labeling or segregation of such plant or equipment; (iv) no security shall be taken or
perfected over any stock in trade to the extent this would require any item-specific or periodic listing of stock in trade or any
segregation thereof; (v) no Control Agreement shall be required to be executed and delivered with respect to any Excluded Account;
(vi) no notice shall be required to be delivered to Account Debtors or other contractual third parties prior to the occurrence and
during the continuance of an Event of Default; and (vii) no action in addition to the filings contemplated under clause (i) above
shall be required to perfect the Security Interest in any Commercial Tort Claim or Letter of Credit Right included in the
Collateral.


 


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


 


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


 


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


 


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


 


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


 


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


 


(f)                
Except as indicated on Schedule IV, none of the Credit Parties holds any Commercial Tort Claim with a value estimated
in good faith by the Borrower to be in excess of $5,000,000 as of the Closing Date.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(i)                
[Reserved].


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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(c)                  
Commercial Tort Claims. If any Credit Party shall at any time hold or acquire a Commercial Tort Claim with a value estimated
in good faith by the Borrower to be in excess of $1,000,000, such Credit Party shall promptly notify the Collateral Agent thereof in a
writing signed by such Credit Party, including a summary description of such claim, and grant to the Collateral Agent in writing a security
interest therein and in the proceeds thereof, all under the terms and provisions of this Agreement, with such writing to be in form and
substance reasonably satisfactory to the Collateral Agent.


 


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


 


(e)                  
Deposit Accounts. Each Credit Party shall establish the Collateral Agent’s Control (as defined in Section 9-104 of
the UCC), subject to the terms of the ABL/Term Loan Intercreditor Agreement, with respect to any such Deposit Account, substantially simultaneously
with the delivery of a control agreement with respect to such Deposit Account in favor of the ABL Agent (which for the avoidance of doubt
may be a control agreement establishing control in favor of the ABL Agent as agent or bailee for the Collateral Agent or establishing
control in favor of the Collateral Agent on a basis junior in priority to the ABL Agent, in each case, pursuant to the terms of the ABL/Term
Loan Intercreditor Agreement).


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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Article
IV.      



REMEDIES


 


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


 


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


 


Section 4.02           
Application of Proceeds. 


 


(a)               
The Collateral Agent shall promptly apply the proceeds, moneys or balances of any collection or sale of Collateral, as well as
any Collateral consisting of cash, in the following order of priority, subject to the terms of the ABL/Term Loan Intercreditor Agreement:
first, to, ratably, pay any fees, indemnities, or expense reimbursements then due to the Agents, including all amounts due to the
Agents under Section 10.5 of the Credit Agreement, second, ratably in accordance with the amounts owed under this clause second,
to pay any fees other than the Exit Fee or expense reimbursements then due to the Lenders from the Borrower, third, ratably, to
pay interest and the Exit Fee due and payable in respect of the Loans and any other Obligations, fourth, ratably, to payment of
that portion of the Obligations constituting unpaid principal of the Loans, fifth, to the payment of any other Obligation due to
the Agents or any other Secured Party; and sixth, after payment in full in cash of the amounts specified in clauses first through
fifth, subject to the terms of any Intercreditor Agreements or any other Collateral Document, to pay the surplus, if any to whomever may
be lawfully entitled to receive such surplus.


 


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


 


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


 


(d)               
[Reserved].


 


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


 


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


 


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


 


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Article
V.        



MISCELLANEOUS


 


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


 


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


 


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


 


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


 


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


 


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Section 5.06           
Administrative Agent’s and Collateral Agent’s Fees and Expenses; Indemnification.
  The parties hereto agree that the Administrative Agent and the Collateral Agent shall be entitled to (i) reimbursement of their
respective expenses incurred hereunder and (ii) indemnification for losses, claims, damages, liabilities and related expenses incurred
or asserted, arising out of, in connection with or as a result of this Agreement, in each case, as and to the extent provided in Section 10.5
of the Credit Agreement and the provisions of Section 10.5 of the Credit Agreement shall be incorporated by reference herein and
apply to each Credit Party mutatis mutandis. In connection with this Agreement, each Agent shall have all rights, privileges, protections,
indemnities, exculpations and immunities in favor of such Agent under the Credit Agreement and the other Credit Documents, including,
without limitation, (i) the right to request written instructions or confirmations from the Requisite Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as such Agent shall believe in good faith to be necessary) prior to taking any action
hereunder, (ii) with respect to any determination, designation, or judgment to be made by any Agent hereunder, the right to request that
the Requisite Lenders (or such other number or percentage of the Lenders as shall be necessary, or as such Agent shall believe in good
faith shall be necessary) make or confirm such determination, designation, or judgment, and (iii) the right to appoint designees, sub-agents,
or attorneys-in-fact to exercise any rights and powers conferred on such Agent hereunder. 


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(b)               
Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively
do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating
to this Agreement in any New York Court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law,
the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.


 


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


 


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


 


Section 5.15           
Termination or Release. (a) This Agreement, the pledges made herein, the Security Interest
and all other security interests granted hereby shall terminate when all the Obligations (other than contingent indemnification and reimbursement
obligations that are not yet due and payable and for which no claim has been asserted) have been paid in full in cash in accordance with
the provisions of the Credit Agreement.


 


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(b)               
 A Credit Party shall automatically be released from its obligations hereunder and the security interests created hereunder in
the Collateral of such Credit Party shall be automatically released upon the consummation of any transaction that is permitted by the
Credit Agreement, as a result of which such Credit Party ceases to be a subsidiary.


 


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


 


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


 


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


 


[Signature Pages Follow]


 


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


 


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



 


[Signature Page to Pledge and Security Agreement]


 






     


     


    

 


	 	ALTER DOMUS
    (US) LLC, as Administrative Agent and Collateral Agent
	 	 
	 	By: 	/s/ Matthew Trybula
	 	 	Name: Matthew Trybula
	 	 	Title: Associate Counsel



 


[Signature Page to Pledge and Security Agreement]


 






     


     


    





 


Exhibit I

to Security Agreement


 


SUPPLEMENT NO. ____ TO THE PLEDGE AND SECURITY
AGREEMENT


 


SUPPLEMENT NO. ____, dated as of ____________________
(this “Supplement”), to the Second Lien Pledge and Security Agreement dated as of April 22, 2021 (as amended, restated,
supplemented, waived or otherwise modified from time to time, the “Security Agreement”), among Lannett Company, Inc.,
a Delaware corporation (the “Borrower”), each Guarantor from time to time party thereto, Alter Domus (US) LLC, as administrative
agent (in such capacity and any successor in such capacity, the “Administrative Agent”) and as collateral agent (in
such capacity and any successor in such capacity, the “Collateral Agent”) for the Secured Parties (as defined therein).


 


A.       Reference
is made to (i) the Second Lien Credit and Guaranty Agreement dated as of April 22, 2021, (as amended, restated, supplemented, waived or
otherwise modified from time to time, the “Credit Agreement”), among the Borrower, certain subsidiaries of the Borrower
party thereto as Guarantors from time to time, the Lenders party thereto from time to time and Alter Domus (US) LLC, as Administrative
Agent and Collateral Agent and (ii) the Credit Agreement Joinder dated as of ______________ entered into by ______________, a ______________
(the “New Subsidiary”), as required by Section 5.11 of the Credit Agreement.


 


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


 


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


 


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


 


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


 


Pledge and Security Agreement






    Exhibit I-1


     


    

 


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


 


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


 


SECTION 4. The New Subsidiary
hereby represents and warrants that (a) set forth on Schedule I attached hereto is a true, correct and complete schedule
of all the Pledged Collateral of the New Subsidiary as of the date hereof, (b) set forth on Schedule II attached hereto
is a true, correct and complete schedule of all of the material issued Patents, registered Trademarks and registered Copyrights owned
by the New Subsidiary as of the date hereof, (c) set forth on Schedule III attached hereto is a true, correct and complete
schedule of all Commercial Tort Claims of the New Subsidiary individually in excess of $1,000,000 as of the date hereof, (d) set
forth on Schedule IV attached hereto, is the true, correct and complete legal name of the New Subsidiary, its jurisdiction
of formation and the location of its chief executive office , (e) except as set forth in Schedule V, all Accounts of
the New Subsidiary have been originated by the New Subsidiary and all Inventory has been produced or acquired by the New Subsidiary in
the ordinary course of business, and (f) set forth on Schedule VI attached hereto is a true, correct and complete schedule
of all Letter of Credit Rights of the New Subsidiary relating to Letters of Credit with a face amount in excess of $5,000,000 as of the
date hereof.


 


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


 


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


 


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


 


Pledge and Security Agreement






    Exhibit I-2


     


    

 





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


 


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


 


[REMAINDER OF THIS PAGE IS LEFT
BLANK INTENTIONALLY]


 


Pledge and Security Agreement






    Exhibit I-3


     


    

 





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


  


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






 


Pledge and Security Agreement




    Exhibit I-4


     


    

 


	 	ALTER DOMUS (US) LLC, as Administrative
    Agent and Collateral Agent
	 	 
	 	By:	         
	 	Name:
	 	Title:
	 	 




 


Pledge and Security Agreement




    Exhibit I-5


     


    

Schedule I

to Supplement No. ___ to the

Security Agreement


 


Pledged Collateral of the New Subsidiary


 


PLEDGED EQUITY SECURITIES


 


	
    Name of Issuer

     
	
    Registered Owner

     
	
    Number and Class
    of Pledged Equity Security

     
	
    Number of Issuer
    Certificate (if applicable)

     
	
    Percentage of
    Equity Interests

     

	 	 	 	 	 


 


PLEDGED DEBT SECURITIES


 


	
    Holder
	
    Issuer
	
    Principal
Amount
	
    Date of
Pledged Debt Security
	
    Maturity
Date

	 	 	 	 	 


 


Pledge and Security Agreement




    Exhibit I-6


     


    

Schedule II

to Supplement No. ___ to the

Security Agreement


 


PATENTS, TRADEMARKS AND COPYRIGHTS


 


 


Pledge and Security Agreement




    Exhibit I-7


     


    

Schedule III

to Supplement No. ___ to the

Security Agreement


 


COMMERCIAL TORT CLAIMS


 


Pledge and Security Agreement







    Exhibit I-8


     


    

Schedule IV

to Supplement No. ___ to the

Security Agreement


 


LEGAL NAME, JURISDICTION OF FORMATION AND ADDRESS


 


Pledge and Security Agreement




    Exhibit I-9


     


    

Schedule V

to Supplement No. ___ to the

Security Agreement


 


MATTERS RELATING TO ACCOUNTS AND INVENTORY


 


Pledge and Security Agreement




    Exhibit I-10


     


    

Schedule VI

to Supplement No. ___ to the

Security Agreement


 


LETTER OF CREDIT RIGHTS


 


Pledge and Security Agreement




    Exhibit I-11


     


    

Exhibit II

to Security Agreement


 


[FORM OF]


INTELLECTUAL PROPERTY SECURITY AGREEMENT


 


This INTELLECTUAL PROPERTY SECURITY
AGREEMENT (this “IP Security Agreement”) dated April 22, 2021, is made by the persons listed on the signature pages
hereof (collectively, the “Grantors”) in favor of Alter Domus (US) LLC, acting through one or more of its branches
or any Affiliate thereof, as collateral agent (in such capacity and any successor in such capacity, the “Collateral Agent”)
for the Secured Parties (as defined in the Credit Agreement referred to below). Capitalized terms used in this IP Security Agreement and
not otherwise defined herein have the respective meanings assigned thereto in the Credit Agreement (as defined below).


 


WHEREAS, the Grantors have entered
into that certain Second Lien Credit and Guaranty Agreement, dated as of April 22, 2021 (as amended, amended and restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”), with Lannett Company, Inc., a corporation incorporated
under the laws of the State of Delaware (the “Borrower”), the other Credit Parties party thereto, Alter Domus (US)
LLC, as the Administrative Agent and Collateral Agent, and the Lenders party thereto from time to time;


 


WHEREAS, in accordance with
the terms of the Credit Agreement, each Grantor has executed and delivered that certain Second Lien Pledge and Security Agreement, dated
as of April 22, 2021 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Security Agreement”),
by and among the Grantors, the Administrative Agent and the Collateral Agent; and


 


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


 


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


 


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


 


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


 


(ii)      the
trademark and service mark registrations and applications set forth in Schedule B hereto (provided that no security
interest shall be granted in United States intent-to-use trademark applications or intent-to-use service mark applications filed
pursuant to Section 1(b) of the Lanham Act, solely to the extent that, and only for so long as, the grant of a security interest
therein would impair the validity or enforceability of, or render void or voidable or result in the cancellation of the applicable Grantor’s
right, title or interest therein or any trademark or service mark issued as a result of such application under applicable federal law,
until a statement of use, amendment to allege use, or other similar filing is made and accepted by the United States Patent and Trademark
Officer), together with the goodwill symbolized thereby;


 


Pledge and Security Agreement




    Exhibit II-1


     


    

 


(iii)     the copyright
registrations, including the copyright registrations and applications subject to an exclusive license in favor of a Grantor, each as set
forth in Schedule C hereto;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


[Signatures pages to follow]


 


Pledge and Security Agreement




    Exhibit II-2


     


    

 


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


 


	 	[NAME]
	 	 
	 	By:	 
	 	Name:
	 	Title:



 


Pledge and Security Agreement






    Exhibit II-3