Exhibit 10.2


 







 






 


 Execution
Version


 


GUARANTY AND SECURITY
AGREEMENT


 


Dated as of November 18,
2014


 


by


 


IGI LABORATORIES, INC.,
IGEN, INC. and IGI LABS, INC., as Borrowers,


 


and


 


EACH OTHER GRANTOR


FROM TIME TO TIME PARTY
HERETO


 


in favor of


 


GENERAL ELECTRIC CAPITAL
CORPORATION,


as Agent


 





 



 


 




    	 



    	 



    

 


TABLE OF CONTENTS


 


	 	 	Page
	 	ARTICLE I	 
	 	DEFINED TERMS	 
	 	 	 
	Section 1.1.	Definitions	1
	Section 1.2.	Certain Other Terms	4
	 	 	 
	 	ARTICLE II	 
	 	GUARANTY	 
	 	 	 
	Section 2.1.	Guaranty	4
	Section 2.2.	Limitation of Guaranty	4
	Section 2.3.	Contribution	4
	Section 2.4.	Authorization; Other Agreements	4
	Section 2.5.	Guaranty Absolute and Unconditional	5
	Section 2.6.	Waivers	6
	Section 2.7.	Reliance	6
	 	 	 
	 	ARTICLE III	 
	 	GRANT OF SECURITY INTEREST	 
	 	 	 
	Section 3.1.	Collateral	6
	Section 3.2.	Grant of Security Interest in Collateral	7
	 	 	 
	 	ARTICLE IV	 
	 	Representations and Warranties	 
	 	 	 
	Section 4.1.	Title; No Other Liens	7
	Section 4.2.	Perfection and Priority	7
	Section 4.3.	Pledged Collateral	8
	Section 4.4.	Instruments and Tangible Chattel Paper	8
	Section 4.5.	Reserved	8
	Section 4.6.	Commercial Tort Claims	8
	Section 4.7.	Specific Collateral	8
	Section 4.8.	Enforcement	8
	 	 	 
	 	ARTICLE V	 
	 	Covenants	 
	 	 	 
	Section 5.1.	Maintenance of Perfected Security Interest; Further Documentation and Consents	9
	Section 5.2.	Pledged Collateral	9
	Section 5.3.	Accounts	10
	Section 5.4.	Commodity Contracts	10
	Section 5.5.	Delivery of Instruments and Tangible Chattel Paper and Control of Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper	10
	Section 5.6.	Reserved	11
	Section 5.7.	Notices	11
	Section 5.8.	Notice of Commercial Tort Claims	11


 




    	 



    	 



    

 


 


	Section 5.9.	Controlled Securities Account	11
	 	 	 
	 	ARTICLE VI	 
	 	Remedial Provisions	 
	 	 	 
	Section 6.1.	Code and Other Remedies	11
	Section 6.2.	Receivables	13
	Section 6.3.	Pledged Collateral	14
	Section 6.4.	Payments and Proceeds to be Turned over to and Held by Agent	15
	Section 6.5.	Sale of Pledged Collateral	15
	Section 6.6.	Deficiency	15
	 	 	 
	 	ARTICLE VII	 
	 	Agent	 
	 	 	 
	Section 7.1.	Agent’s Appointment as Attorney-in-Fact	15
	Section 7.2.	Authorization To File Financing Statements	16
	Section 7.3.	Authority of Agent	17
	Section 7.4.	Duty; Obligations and Liabilities	17
	 	 	 
	 	ARTICLE VIII	 
	 	Miscellaneous	 
	 	 	 
	Section 8.1.	Reinstatement	17
	Section 8.2.	Release of Collateral	17
	Section 8.3.	Independent Obligations	18
	Section 8.4.	No Waiver by Course of Conduct	18
	Section 8.5.	Amendments in Writing	18
	Section 8.6.	Additional Grantors; Additional Pledged Collateral	18
	Section 8.7.	Notices	18
	Section 8.8.	Successors and Assigns	18
	Section 8.9.	Counterparts	18
	Section 8.10.	Severability	18
	Section 8.11.	Governing Law	19
	Section 8.12.	Waiver of Jury Trial	19
	ANNEX 1	FORM OF PLEDGE AMENDMENT	 
	ANNEX 2	FORM OF JOINDER AGREEMENT	 
	SCHEDULE 1	COMMERCIAL TORT CLAIMS	 
	SCHEDULE 2	FILINGS	 
	SCHEDULE 3	PLEDGED COLLATERAL	 


 




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GUARANTY
AND SECURITY AGREEMENT


 


THIS GUARANTY AND
SECURITY AGREEMENT, dated as of November 18, 2014 (as amended, restated or supplemented from time to time, this “Agreement”),
IGI Laboratories, Inc., a Delaware corporation (“IGI”), Igen Inc., a Delaware corporation (“Igen”), IGI
Labs, Inc., a Delaware corporation (“IGI Labs”) (IGI, Igen and IGI Labs are sometimes referred to herein collectively
as the “Borrowers” and individually as a “Borrower”), and each of the other entities listed on the signature
pages hereof or that becomes a party hereto (collectively with Borrowers, “Grantors” and each, a “Grantor”),
in favor of General Electric Capital Corporation, as administrative agent (in such capacity, together with its successors and permitted
assigns, “Agent”) for the Secured Parties.


 


WITNESSETH:


 


WHEREAS, pursuant to
the Credit Agreement dated as of the date hereof (as amended, restated or supplemented from time to time, the “Credit Agreement”)
among Borrowers, IGI Labs, as borrower representative (“Borrower Representative”), the other Credit Parties party thereto,
Lenders, L/C Issuers from time to time party thereto and Agent, Lenders and L/C Issuers have severally agreed to extend credit
to Borrowers subject to the terms and conditions set forth therein;


 


WHEREAS, each Grantor
has agreed to guaranty the Obligations (as defined in the Credit Agreement);


 


WHEREAS, each Grantor
will derive substantial direct and indirect benefits from the extensions of credit under the Credit Agreement; and


 


WHEREAS, it is a condition
precedent to the obligation of Lenders and L/C Issuers to extend credit to Borrowers under the Credit Agreement that Grantors execute
and deliver this Agreement to Agent;


 


NOW, THEREFORE, in
consideration of the premises and to induce Lenders, L/C Issuers and Agent to enter into the Credit Agreement and the other Loan
Documents and to induce Lenders and L/C Issuers to extend credit to Borrowers thereunder, each Grantor hereby agrees as follows:


 


ARTICLE
I


 


DEFINED
TERMS


 


Section 1.1. Definitions.


 


(a)          Capitalized
terms used herein without definition are used as defined in the Credit Agreement, and to the extent not defined therein, as defined
in UCC have the meanings given to them in the UCC (such meanings to be equally applicable to both the singular and plural forms
of the terms defined).


 


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


 


“Applicable
IP Office” means the United States Patent and Trademark Office, the United States Copyright Office or any similar
office or agency within or outside the United States.


 


“Cash
Collateral Account” means a Deposit Account or Securities Account subject, in each instance, to a Control Agreement,
other than accounts established to cash collateralize L/C Reimbursement Obligations.


 




    	 



    	 



    

  


“Collateral”
has the meaning specified in Section 3.1.


 


“Controlled
Securities Account” means each Securities Account (including all Financial Assets held therein and all certificates and
instruments, if any, representing or evidencing such Financial Assets) that is the subject of an effective Control Agreement.


 


“Excluded
Equity” means any voting stock in excess of 65% of the outstanding voting stock of any Foreign Subsidiary, which, pursuant
to the terms of the Credit Agreement, is not required to guaranty the Obligations. The term “voting stock” means the
outstanding shares of each class of Stock entitled to vote (within the meaning of Treasury Regulations § 1.956-2(c)(2)).


 


“Excluded
Intellectual Property” means any Intellectual Property of any Grantor; provided, however, that “Excluded Intellectual
Property” shall not include any rights to payment or Proceeds from the sale, licensing or other disposition of all or any
part of, or rights in, any Intellectual Property of any Grantor.


  


“Excluded Property” means, collectively, (a) Excluded Equity, (b) any permit
or license or any Contractual Obligation entered into by any Grantor (i) that prohibits or requires the consent of any Person (other
than a Borrower or any of its Affiliates) that has not been obtained as a condition to the creation by such Grantor of a Lien on
any right, title or interest in such permit, license or Contractual Obligation or the subject matter thereof or (ii) to the extent
that any Requirement of Law applicable thereto prohibits the creation of a Lien thereon, but only, with respect to the prohibition
in clauses (i) and (ii), but only to the extent and while such prohibition is not terminated or rendered unenforceable or otherwise
deemed ineffective by the UCC or any other Requirement of Law, (c) Property owned by any Grantor (i) that is subject to a
purchase money Lien or a Capital Lease permitted under the Credit Agreement if the Contractual Obligation pursuant to which such
Lien is granted (or such Capital Lease) prohibits or requires the consent of any Person (other than a Borrower or any of its Affiliates)
that has not been obtained or (ii) to the extent that any Requirement of Law applicable thereto prohibits the creation of a Lien
thereon but only to the extent and while such prohibition is not terminated or rendered unenforceable or otherwise deemed ineffective
by the UCC or any other Requirement of Law, (d) any interests in joint ventures and similar investments which restrict pledges
or assignments of any Grantor’s interests therein, provided the terms of such joint venture agreement or similar contract
shall not have been adopted in contemplation of this provision, but only to the extent and while such prohibition is not terminated
or rendered unenforceable or otherwise deemed ineffective by the UCC or any other Requirement of Law and (e) any Excluded Intellectual
Property; provided, however, “Excluded Property” shall not include any Proceeds, products, substitutions or replacements
of Excluded Property (unless such Proceeds, products, substitutions or replacements would otherwise constitute Excluded Property).







 


“Final
Satisfaction” means the date on which (A) the Revolving Loan Commitments have terminated, (B) all Loans, all L/C Reimbursement
Obligations and all other Obligations under the Loan Documents that Agent has theretofore been notified in writing by the holder
of such Obligation are then due and payable have been paid and satisfied in full, and (C) there shall have been deposited cash
collateral with respect to all contingent Obligations (or, as an alternative to cash collateral, in the case of any Letter of Credit
Obligation, Agent shall have received a back-up letter of credit) in amounts and on terms and conditions and with parties satisfactory
to Agent and each Indemnitee that is, or may be, owed such Obligations (excluding contingent Obligations (other than L/C Reimbursement
Obligations) as to which no claim has been asserted).


 


“Fraudulent
Transfer Laws” has the meaning set forth in Section 2.2.


 


“Guaranteed
Obligations” has the meaning set forth in Section 2.1.


 


“Guarantor”
means each Grantor, including each Borrower with respect to the obligations of each other Borrower.


 




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“Guaranty”
means the guaranty of the Guaranteed Obligations made by the Guarantors as set forth in this Agreement.


 


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


 


“Joinder”
has the meaning set forth in Section 8.5.


 


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


 


“Mallinckrodt
Agreement” means that certain License Agreement, dated June 17, 2014, among Mallinckrodt LLC, Mallinckrodt, Inc., Nuvo
Research Inc., and IGI.


 


“Pledge
Amendment” has the meaning set forth in Section 8.5.


 


“Pledged
Certificated Stock” means all Certificated Securities and other Stock or Stock Equivalent of any Person evidenced by
a certificate, instrument or other similar document and any distribution of property made on, in respect of or in exchange for
the foregoing from time to time. Pledged Certificated Stock excludes any Excluded Property and any Cash Equivalents that are not
held in Controlled Securities Accounts to the extent permitted by Section 5.9 hereof.


 


“Pledged
Collateral” means the Pledged Stock and the Pledged Debt Instruments.


 


“Pledged
Debt Instruments” means Instruments evidencing any Indebtedness or other obligations owed to any Grantor, and any distribution
of property made on, in respect of or in exchange for the foregoing from time to time. Pledged Debt Instruments excludes any Cash
Equivalents that are not held in Controlled Securities Accounts to the extent permitted by Section 5.9 hereof.


 


“Pledged
Investment Property” means any Investment Property and any distribution of property made on, in respect of or in exchange
for the foregoing from time to time, other than any Pledged Stock or Pledged Debt Instruments. Pledged Investment Property excludes
any Cash Equivalents that are not held in Controlled Securities Accounts to the extent permitted by Section 5.9 hereof.


 


“Pledged
Stock” means all Pledged Certificated Stock and all Pledged Uncertificated Stock.


 


“Pledged
Uncertificated Stock” means any Stock or Stock Equivalent of any Person that is not Pledged Certificated Stock, and any
distribution of property made on, in respect of or in exchange for the foregoing from time to time, to the extent such interests
are not certificated. Pledged Uncertificated Stock excludes any Excluded Property and any Cash Equivalents that are not held in
Controlled Securities Accounts to the extent permitted by Section 5.9 hereof.


 


“Receivables”
means all Accounts, rights to payment evidenced by Chattel Paper or Instruments, Payment Intangibles and other rights to payments
under General Intangibles.


 


“Receivables
Obligor” means an Account Debtor and any other Person obligated under any Receivable.


 


“Rights
to Payment” has the meaning specified in Section 3.1.


 




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


 


“UCC”
means the Uniform Commercial Code as from time to time in effect in the State of New York; provided, however, that, to the
extent of any mandatory provisions of any applicable Requirement of Law, any of the attachment, perfection or priority of Agent’s
or any other Secured Party’s security interest in any Collateral is governed by the Uniform Commercial Code of a jurisdiction
other than the State of New York, “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction.


 


“Vehicles”
means all vehicles covered by a certificate of title law of any state.


 


Section 1.2. Certain
Other Terms. The provisions of Section 12.03 of the Credit Agreement shall apply to this Agreement, mutatis mutandis.


 


ARTICLE
II


 


GUARANTY


 


Section 2.1. Guaranty.
Each Guarantor hereby, jointly and severally, absolutely, unconditionally and irrevocably guarantees, as primary obligor and not
merely as surety, the full and punctual payment when due, whether at stated maturity or earlier, by reason of acceleration, mandatory
prepayment or otherwise in accordance with any Loan Document, of all the Obligations whether existing on the date hereof or hereinafter
incurred or created (the “Guaranteed Obligations”). This Guaranty by each Guarantor hereunder constitutes a guaranty
of payment and not of collection.


 


Section 2.2. Limitation
of Guaranty. The maximum aggregate amount for which any Guarantor shall be liable hereunder shall not exceed the maximum amount
for which such Guarantor can be liable without rendering this Guaranty or any other Loan Document, as it relates to such Guarantor,
subject to avoidance under applicable Requirements of Law relating to fraudulent conveyance or fraudulent transfer (including the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act and Section 548 of title 11 of the United States
Code or any applicable provisions of comparable Requirements of Law) (collectively, “Fraudulent Transfer Laws”). Any
analysis of the provisions of this Guaranty for purposes of Fraudulent Transfer Laws shall take into account the right of contribution
established in Section 2.3 and, for purposes of such analysis, give effect to any discharge of intercompany debt as a result
of any payment made under the Guaranty.


 


Section 2.3. Contribution.
To the extent that any Guarantor shall be required hereunder to pay any portion of any Guaranteed Obligation exceeding the greater
of (a) the amount of the value actually received by such Guarantor and its Subsidiaries from the Loans and other Obligations
and (b) the amount such Guarantor would otherwise have paid if such Guarantor had paid the aggregate amount of the Guaranteed
Obligations (excluding the amount thereof repaid by a Borrower that received the benefit of the funds advanced that constituted
Guaranteed Obligations) in the same proportion as such Guarantor’s net worth on the date enforcement is sought hereunder
bears to the aggregate net worth of all the Guarantors on such date, then such Guarantor shall be reimbursed by such other Guarantors
for the amount of such excess, pro rata, based on the respective net worth of such other Guarantors on such date.


 


Section 2.4. Authorization;
Other Agreements. The Secured Parties are hereby authorized, without notice to or demand upon any Guarantor and without discharging
or otherwise affecting the obligations of any Guarantor hereunder and without incurring any liability, from time to time, to do
each of the following:


 




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(a)          (i) subject
to compliance, if applicable, with Section 10.01 of the Credit Agreement, modify, amend, supplement or otherwise change, (ii) accelerate
or otherwise change the time of payment for or (iii) waive or otherwise consent to noncompliance with, any Guaranteed Obligation
or any Loan Document;


 


(b)          apply
to the Guaranteed Obligations any sums by whomever paid or however realized to any Guaranteed Obligation in such order as provided
in the Loan Documents;


 


(c)          refund
at any time any payment received by any Secured Party in respect of any Guaranteed Obligation;


 


(d)          (i) sell,
exchange, enforce, waive, substitute, liquidate, terminate, release, abandon, fail to perfect, subordinate, accept, substitute,
surrender, exchange, affect, impair or otherwise alter or release any Collateral for any Guaranteed Obligation or any other guaranty
therefor in any manner, (ii) receive, take and hold additional Collateral to secure any Guaranteed Obligation, (iii) add,
release or substitute any Credit Party or any other guarantor, maker or endorser of any Guaranteed Obligation or any part thereof
and (iv) otherwise deal in any manner with any Credit Party or any other guarantor, maker or endorser of any Guaranteed Obligation
or any part thereof; and


 


(e)          settle,
release, compromise, collect or otherwise liquidate the Guaranteed Obligations.


 


Section 2.5. Guaranty
Absolute and Unconditional. Each Guarantor hereby waives and agrees not to assert any defense and hereby agrees that its obligations
under this Guaranty are irrevocable, absolute and unconditional. No Guarantor shall be discharged (except as a result of payment
in full in cash of all Guaranteed Obligations) as a result of or otherwise affected by any of the following (which may not be pleaded
and evidence of which may not be introduced in any proceeding, in each case except as otherwise agreed in writing by Agent):


 


(a)          the
invalidity or unenforceability of any obligation of any Credit Party under any Loan Document or any other agreement or instrument
relating thereto (including any amendment, consent or waiver thereto), or any security for, or other guaranty of, any Guaranteed
Obligation or any part thereof, or the lack of perfection or continuing perfection or failure of priority of any security for the
Guaranteed Obligations or any part thereof;


 


(b)          the
absence of (i) any attempt to collect any Guaranteed Obligation or any part thereof from any Credit Party or other action
to enforce the same or (ii) any action to enforce any Loan Document or any Lien thereunder;


 


(c)          the
failure by any Person to take any steps to perfect and maintain any Lien on, or to preserve any rights with respect to, any Collateral;


 


(d)          any
workout, insolvency, bankruptcy proceeding, reorganization, arrangement, liquidation or dissolution by or against any Credit Party
or any Subsidiary or any procedure, agreement, order, stipulation, election, action or omission thereunder, including any discharge
or disallowance of, or bar or stay against collecting, any Guaranteed Obligation (or any interest thereon) in or as a result of
any such proceeding;


 


(e)          any
foreclosure, whether or not through judicial sale, and any other sale or other disposition of any Collateral or any election following
the occurrence of an Event of Default by any Secured Party to proceed separately against any Collateral in accordance with such
Secured Party’s rights under any applicable Requirement of Law; or


 




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(f)          any
other defense, setoff, counterclaim or any other circumstance that might otherwise constitute a legal or equitable discharge of
any Credit Party or any Subsidiary, in each case other than the payment in full of the Guaranteed Obligations.


 


Section 2.6. Waivers.
Each Guarantor hereby unconditionally and irrevocably waives and agrees not to assert any claim, defense, setoff or counterclaim
based on diligence, promptness, presentment, requirements for any demand or notice hereunder including any of the following: (a) any
demand for payment or performance and protest and notice of protest; (b) any notice of acceptance; (c) any presentment,
demand, protest or further notice or other requirements of any kind with respect to any Guaranteed Obligation (including any accrued
but unpaid interest thereon) becoming immediately due and payable; and (d) any other notice in respect of any Guaranteed Obligation
or any part thereof, and any defense arising by reason of any disability or other defense of any Credit Party. Each Guarantor further
unconditionally and irrevocably agrees not to (x) enforce or otherwise exercise any right of subrogation or any right of reimbursement
or contribution or similar right against any Credit Party by reason of any Loan Document or any payment made thereunder or (y) assert
any claim, defense, setoff or counterclaim it may have against any other Credit Party. No obligation of any Guarantor hereunder
shall be discharged other than by complete performance. Each Guarantor further waives any right such Guarantor may have under any
applicable Requirement of Law to require any Secured Party to seek recourse first against any Credit Party or any other Person,
or to realize upon any Collateral for any of the Obligations, as a condition precedent to enforcing such Guarantor’s liability
and obligations under this Guaranty.


 


Section 2.7. Reliance.
Each Guarantor hereby assumes responsibility for keeping itself informed of the financial condition of each Credit Party and any
other guarantor, maker or endorser of any Guaranteed Obligation or any part thereof, and of all other circumstances bearing upon
the risk of nonpayment of any Guaranteed Obligation or any part thereof that diligent inquiry would reveal, and each Guarantor
hereby agrees that no Secured Party shall have any duty to advise any Guarantor of information known to it regarding such condition
or any such circumstances. In the event any Secured Party, in its sole discretion, undertakes at any time or from time to time
to provide any such information to any Guarantor, such Secured Party shall be under no obligation to (a) undertake any investigation
not a part of its regular business routine, (b) disclose any information that such Secured Party, pursuant to accepted or reasonable
commercial finance or banking practices, wishes to maintain confidential or (c) make any future disclosures of such information
or any other information to any Guarantor.


 


ARTICLE
III


 


GRANT
OF SECURITY INTEREST


 


Section 3.1. Collateral.
For purposes of this Agreement, all of the following property is collectively referred to as the “Collateral”:


 


(a)          All
Accounts, Chattel Paper, Deposit Accounts, Documents, Equipment, General Intangibles (including, without limitation, all rights
under the Mallinckrodt Agreement), Instruments, Inventory, Investment Property, Letter of Credit Rights and any Supporting Obligations
related to any of the foregoing;


 


(b)          all
rights to payment and Proceeds from the sale, licensing or other disposition of all or any part of, or rights in, any Intellectual
Property (the “Rights to Payment”);


 


(c)          the
Commercial Tort Claims described on Schedule 1 and on any supplement thereto received by Agent pursuant to Section 5.8
or otherwise;


 


(d)          all
books and Records pertaining to the other property described in this Section;


 




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(e)          all
property held by any Secured Party, including all property of every description, in the custody of or in transit to such Secured
Party for any purpose, including safekeeping, collection or pledge, for the account of such Grantor or as to which such Grantor
may have any right or power, including but not limited to cash;


 


(f)          all
other Goods (including but not limited to Fixtures) and personal property, whether tangible or intangible and wherever located;
and


 


(g)          to
the extent not otherwise included, all Proceeds of the foregoing.


 


Section 3.2. Grant
of Security Interest in Collateral. Each Grantor, as collateral security for the prompt and complete payment and performance
when due (whether at stated maturity, by acceleration or otherwise) of the Obligations (the “Secured Obligations”),
hereby mortgages, pledges and hypothecates to Agent, for the benefit of the Secured Parties, and grants to Agent, for the benefit
of the Secured Parties a Lien on and security interest in, all of its right, title and interest in, to and under the Collateral
of such Grantor, whether now existing or hereinafter acquired; provided, however, notwithstanding the foregoing, no Lien or security
interest is hereby granted on any Excluded Property; provided, further, that if and when any property shall cease to be Excluded
Property, a Lien on and security interest in such property automatically shall be deemed granted therein; provided, further, that
if a judicial authority (including a U.S. Bankruptcy Court) holds that a security interest in the underlying Intellectual Property
is necessary to have a security interest in the Rights to Payment, then the Collateral shall automatically, and effective as of
the Closing Date, include such Intellectual Property to the extent necessary to permit perfection of Agent’s security interest
in the Rights to Payment (provided, however, that Agent’s enforcement rights with respect to any security interest in such
Intellectual Property shall be limited to the Rights to Payment only and Agent shall have no recourse with respect to the underlying
Intellectual Property). Each Grantor hereby represents and warrants that the Excluded Property, when taken as a whole is not material
to the business operations or financial condition of Grantors, taken as a whole, or could not have a Material Adverse Effect.


 


ARTICLE
IV


 


Representations
and Warranties


 


Each Grantor, jointly
and severally, represents and warrants to each Secured Party that the following are true, correct and complete:


 


Section 4.1. Title;
No Other Liens. Except for Permitted Liens, such Grantor owns each item of the Collateral free and clear of any and all Liens
or claims of others. Such Grantor is the record and beneficial owner of the Collateral pledged by it hereunder constituting Instruments
or Securities.


 


Section
4.2. Perfection and Priority. The security interest granted pursuant to this Agreement constitutes a valid and
continuing perfected security interest in favor of Agent in all Collateral, prior to all other Liens on the Collateral except
for Permitted Liens arising by operation of law or permitted pursuant to Sections 5.01(d), 5.01(e), 5.01(h), 5.01(i) or
5.01(k) of the Credit Agreement upon: (a) in the case of all Collateral in which a security interest may be perfected by
filing a financing statement under the UCC, the completion of the filings and other actions specified on Schedule 2
(which, in the case of all filings and other documents referred to on such schedule, have been delivered to Agent in
completed and duly authorized form), (b) with respect to any Deposit Account, the execution of Control Agreements,
(c) [reserved], (d) in the case of letter-of-credit rights that are not Supporting Obligations of Collateral, the
execution of a Contractual Obligation granting control to Agent over such letter-of-credit rights, (e) in the case of
Electronic Chattel Paper, the completion of all steps necessary to grant control to Agent over such Electronic Chattel Paper,
(f) [reserved], (g) in the case of all Pledged Certificated Stock, Pledged Debt Instruments and Pledged Investment Property,
the delivery thereof to Agent of such Pledged Certificated Stock, Pledged Debt Instruments and Pledged Investment
Property consisting of Instruments and certificates, in each case properly endorsed for transfer to Agent or in blank, (h) in
the case of all Pledged Investment Property not in certificated form, the execution of Control Agreements with respect to
such Investment Property and (i) in the case of all other Instruments and Tangible Chattel Paper that are not Pledged
Certificated Stock, Pledged Debt Instruments or Pledged Investment Property, the delivery thereof to Agent of such
Instruments and Tangible Chattel Paper. Except as set forth in this Section, all actions by each Grantor necessary or
desirable to protect and perfect the Lien granted hereunder on the Collateral have been duly taken other than actions (a)
required to perfect Agent’s security interest in (i) all Vehicles and other assets subject to certificates of title,
(ii) letter-of-credit rights less than $200,000, and (iii) Commercial Tort Claims less than $200,000, and (b) which the Agent
and such Grantor reasonably agree that the cost of obtaining such a security interest or perfection in such Liens are
excessive in relation to the benefit of the Lenders of the security to be afforded thereby.


 




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Section 4.3. Pledged
Collateral.


 


(a)          All
Pledged Stock held by such Grantor (i) is listed on Schedule 3 and constitutes that percentage of the issued and outstanding
equity of all classes of each issuer thereof as set forth on Schedule 3, (ii) has been duly authorized, validly issued
and is fully paid and as to Stock in corporations, non-assessable and (iii) constitutes the legal, valid and binding obligation
of the issuer thereof, enforceable in accordance with its terms.


 


(b)          As
of the Closing Date, all Pledged Collateral (other than Pledged Uncertificated Stock) and all Pledged Investment Property consisting
of Instruments and Security Certificates have been delivered to Agent in accordance with subsection 5.2(a).


 


(c)          Upon
the occurrence and during the continuance of an Event of Default, Agent shall be entitled to exercise all of the rights of such
Grantor in any Pledged Stock held by such Grantor, and a transferee or assignee of such Pledged Stock shall become a holder of
such Pledged Stock to the same extent as such Grantor and be entitled to participate in the management of the issuer of such Pledged
Stock and, upon the transfer of the entire interest of such Grantor, such Grantor shall, by operation of law, cease to be a holder
of such Pledged Stock.


 


Section 4.4. Instruments
and Tangible Chattel Paper. No amount payable to such Grantor under or in connection with any Receivable is evidenced by any
Instrument or Tangible Chattel Paper that has not been delivered to Agent, properly endorsed for transfer, to the extent delivery
is required by subsection 5.5(a).


 


Section 4.5. Reserved.


 


Section 4.6. Commercial
Tort Claims. The only Commercial Tort Claims of any Grantor existing on the date hereof (regardless of whether such Commercial
Tort Claim has been asserted, threatened or has otherwise been made known to the obligee thereof) are those listed on Schedule 1,
which sets forth such information separately for each Grantor.


 


Section 4.7. Specific
Collateral. None of the Collateral is or is Proceeds or products of Farm Products, As-Extracted Collateral, or timber to be
cut.


 


Section 4.8. Enforcement.
As of the date hereof, other than the filing of UCC financing statements, no Permit, notice to, consent from or filing with any
Governmental Authority or any other Person is required for the exercise or enforcement by Agent of its rights and remedies pursuant
to this Agreement, including the transfer of any Collateral, except as may be required in connection with the disposition of any
portion of the Pledged Collateral by laws affecting the offering and sale of Securities generally or any approvals that may be
required to be obtained from any bailees, financial institutions or landlords to collect the Collateral.


 




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ARTICLE
V


 


Covenants


 


Each Grantor covenants
and agrees that until Final Satisfaction:


 


Section 5.1. Maintenance
of Perfected Security Interest; Further Documentation and Consents.


 


(a)          Generally.
Such Grantor shall (i) not use or permit the use of any Collateral unlawfully or in violation of any provision of any Loan
Document, any Requirement of Law or any policy of insurance covering the Collateral and (ii) not enter into any Contractual
Obligation or undertaking restricting the right or ability of such Grantor or Agent to sell, assign, convey or transfer any Collateral,
if (in the case of either clause (i) or (ii)) such restriction would reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect.


 


(b)          Such
Grantor shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority
described in Section 4.2 and shall reasonably defend such security interest and such priority against the claims and demands
of all Persons.


 


(c)          Such
Grantor shall furnish to Agent from time to time statements and schedules further identifying and describing the Collateral and
such other documents in connection with the Collateral as Agent may reasonably request, all in reasonable detail and in form and
substance reasonably satisfactory to Agent.


 


(d)          To
ensure that a Lien and security interest is granted on any of the Excluded Property set forth in clause (b) of the definition
of “Excluded Property,” such Grantor shall use its commercially reasonable efforts to obtain any required consents
from any Person with respect to any permit or license or any Contractual Obligation that requires such consent as a condition to
the creation by such Grantor of a Lien on any right, title or interest in such permit, license or Contractual Obligation or any
Stock or Stock Equivalent related thereto.


 


Section 5.2. Pledged
Collateral.


 


(a)          Delivery
of Pledged Collateral. Such Grantor shall (i) deliver to Agent, in suitable form for transfer and in form and substance
satisfactory to Agent, (A) all Pledged Certificated Stock, (B) all Pledged Debt Instruments in an amount in excess of
$150,000 and (C) all certificates and instruments evidencing Pledged Investment Property in an amount in excess of $150,000
and (ii) maintain all other Pledged Investment Property in a Controlled Securities Account.


 


(b)          Event
of Default. During the continuance of an Event of Default, Agent shall have the right, at any time in its discretion and
without notice to Grantor, to (i) transfer to or to register in its name or in the name of its nominees any Pledged Collateral
or any Pledged Investment Property and (ii) exchange any certificate or instrument representing or evidencing any Pledged
Collateral or any Pledged Investment Property for certificates or instruments of smaller or larger denominations.


 


(c)          Cash
Distributions with respect to Pledged Collateral. Except as provided in Article VI and subject to the limitations
set forth in the Credit Agreement, such Grantor shall be entitled to receive all cash distributions paid in respect of the Pledged
Collateral.


 




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(d)          Voting
Rights. Except as provided in Article VI, such Grantor shall be entitled to exercise all voting, consent and corporate,
partnership, limited liability company and similar rights with respect to the Pledged Collateral; provided, however, that no vote
shall be cast, consent given or right exercised or other action taken by such Grantor that would impair the Collateral or be inconsistent
with or result in any material violation of any provision of any Loan Document.


 


Section 5.3. Accounts.


 


(a)          Such
Grantor shall not, other than in the ordinary course of business, (i) grant any extension of the time of payment of any Account,
(ii) compromise or settle any Account for less than the full amount thereof, (iii) release, wholly or partially, any
Person liable for the payment of any Account, (iv) allow any credit or discount on any Account or (v) amend, supplement
or modify any Account in any manner that could adversely affect the value thereof in any material way.


 


(b)          Agent
shall have the right to make test verifications of the Accounts in any manner and through any medium that it reasonably considers
advisable, and such Grantor shall furnish all such assistance and information as Agent may reasonably require in connection therewith.
At any time and from time to time, upon Agent’s reasonable request, such Grantor shall cause independent public accountants
or others satisfactory to Agent to furnish to Agent reports showing reconciliations, aging and test verifications of, and trial
balances for, the Accounts; provided, however, that unless an Event of Default shall be continuing, Agent shall request no more
than one such report during any Fiscal Quarter.


 


Section 5.4. Commodity
Contracts. Such Grantor shall not have any Commodity Contract unless subject to a Control Agreement.


 


Section 5.5. Delivery
of Instruments and Tangible Chattel Paper and Control of Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper.


 


(a)          If
any amount in excess of $150,000 payable under or in connection with any Collateral owned by such Grantor shall be or become evidenced
by an Instrument or Tangible Chattel Paper other than such Instrument delivered in accordance with subsection 5.2(a) and in
the possession of Agent, such Grantor shall mark all such Instruments and Tangible Chattel Paper with the following legend: “This
writing and the obligations evidenced or secured hereby are subject to the security interest of General Electric Capital Corporation,
as Agent” and, at the request of Agent, shall immediately deliver such Instrument or Tangible Chattel Paper to Agent, duly
Indorsed in a manner satisfactory to Agent.


 


(b)          Such
Grantor shall not grant “control” (within the meaning of such term under Article 9-106 of the UCC) over any Investment
Property to any Person other than Agent.


 


(c)          If
such Grantor is or becomes the beneficiary of a Letter of Credit that is (i) not a Supporting Obligations of any Collateral
and (ii) in excess of $200,000, such Grantor shall promptly, and in any event within two Business Days after becoming a beneficiary,
notify Agent thereof and enter into a Contractual Obligation with Agent, the issuer of such Letter of Credit or any nominated person
with respect to the letter-of-credit rights under such Letter of Credit. Such Contractual Obligation shall assign such letter-of-credit
rights to Agent and such assignment shall be sufficient to grant control for the purposes of Section 9-107 of the UCC (or
any similar section under any equivalent UCC). Such Contractual Obligation shall also direct all payments thereunder to a Cash
Collateral Account. The provisions of the Contractual Obligation shall be in form and substance reasonably satisfactory to Agent.


 


(d)          If
any amount in excess of $150,000 payable under or in connection with any Collateral shall be or become evidenced by Electronic
Chattel Paper, such Grantor shall take all steps necessary to grant Agent control of all such Electronic Chattel Paper for the
purposes of Section 9-105 of the UCC (or any similar section under any equivalent UCC) and all “transferable records”
as defined in each of the Uniform Electronic Transactions Act and the Electronic Signatures in Global and National Commerce Act.


 




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Section 5.6. Reserved.


 


Section 5.7. Notices.
Such Grantor shall promptly notify Agent in writing of its acquisition of any interest hereafter in property that is of a type
where a security interest or lien must be or may be registered, recorded or filed under, or notice thereof given under, any federal
statute or regulation.


 


Section 5.8. Notice
of Commercial Tort Claims. Such Grantor agrees that, if it shall acquire any interest in any Commercial Tort Claim in excess
of $200,000, (i) such Grantor shall immediately deliver to Agent, in each case in form and substance satisfactory to Agent,
a notice of the existence and nature of such Commercial Tort Claim and a supplement to Schedule 1 containing a specific description
of such Commercial Tort Claim, (ii) Section 3.1 shall apply to such Commercial Tort Claim and (iii) such Grantor
shall execute and deliver to Agent, in each case in form and substance satisfactory to Agent, any document, and take all other
action, deemed by Agent to be reasonably necessary or appropriate for Agent to obtain, for the benefit of the Secured Parties,
a perfected security interest having at least the priority set forth in Section 4.2 in all such Commercial Tort Claims. Any
supplement to Schedule 1 delivered pursuant to this Section shall, after the receipt thereof by Agent, become part of
Schedule 1 for all purposes hereunder other than in respect of representations and warranties made prior to the date of such
receipt.


 


Section 5.9. Controlled
Securities Account. Each Grantor shall deposit all of its Cash Equivalents in Securities Accounts that are Controlled Securities
Accounts in accordance with Section 4.11 of the Credit Agreement.


 


ARTICLE
VI


 


Remedial
Provisions


 


Section 6.1. Code
and Other Remedies.


 


(a)          UCC
Remedies. During the continuance of an Event of Default, Agent may exercise, in addition to all other rights and remedies
granted to it in this Agreement and in any other instrument or agreement securing, evidencing or relating to any Secured Obligation,
all rights and remedies of a secured party under the UCC or any other applicable law.


 


(b)          Disposition
of Collateral. Without limiting the generality of the foregoing, Agent may, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any
Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), during the
continuance of any Event of Default (personally or through its agents or attorneys), (i) enter upon, use, operate and occupy
the premises where any Collateral is located, without any obligation to pay rent or other compensation to any Person, through self-help,
without judicial process, without first obtaining a final judgment or giving any Grantor or any other Person notice or opportunity
for a hearing on Agent’s claim or action, (ii) to take possession of, remove or render unusable any Collateral, (iii) collect,
receive, appropriate and realize upon any Collateral and (iv) sell, assign, convey, transfer, grant option or options to purchase
and deliver any Collateral (enter into Contractual Obligations to do any of the foregoing), in one or more parcels at public or
private sale or sales, at any exchange, broker’s board or office of any Secured Party or elsewhere upon such terms and conditions
as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption
of any credit risk. Agent shall have the right, upon any such public sale or sales and, to the extent permitted by the UCC and
other applicable Requirements of Law, upon any such private sale, to purchase the whole or any part of the Collateral so sold,
free of any right or equity of redemption of any Grantor, which right or equity is hereby waived and released.


 




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(c)          Management
of the Collateral. Each Grantor further agrees, that, during the continuance of any Event of Default, (i) at Agent’s
request, such Grantor shall assemble the Collateral and make it available to Agent at places that Agent shall reasonably select,
whether at such Grantor’s premises or elsewhere, (ii) without limiting the foregoing, Agent also has the right to require
that each Grantor store and keep any Collateral pending further action by Agent and, while any such Collateral is so stored or
kept, provide such guards and maintenance services as shall be necessary to protect the same and to preserve and maintain such
Collateral in good condition, (iii) until Agent is able to sell, assign, convey or transfer any Collateral, Agent shall have
the right to hold or use such Collateral to the extent that it deems appropriate for the purpose of preserving the Collateral or
its value or for any other purpose deemed appropriate by Agent, and (iv) Agent may, if it so elects, seek the appointment
of a receiver or keeper to take possession of any Collateral and to enforce any of Agent’s remedies (for the benefit of the
Secured Parties), with respect to such appointment without prior notice or hearing as to such appointment. Agent shall not have
any obligation to any Grantor to maintain or preserve the rights of any Grantor as against third parties with respect to any Collateral
while such Collateral is in the possession of Agent.


 


(d)          Application
of Proceeds. Agent shall apply the cash proceeds of any action taken by it pursuant to this Section, after deducting all
reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any Collateral
or in any way relating to the Collateral or the rights of Agent and any other Secured Party hereunder, including reasonable attorneys’
fees and disbursements, to the payment in whole or in part of the Secured Obligations, as set forth in the Credit Agreement, and
only after such application and after the payment by Agent of any other amount required by any Requirement of Law, and remit the
surplus, if any, to any Grantor.


 


(e)          Direct
Obligation. Neither Agent nor any other Secured Party shall be required to make any demand upon, or pursue or exhaust any
right or remedy against, any Grantor, any other Credit Party or any other Person with respect to the payment of the Obligations
or to pursue or exhaust any right or remedy with respect to any Collateral therefor or any direct or indirect guaranty thereof.
All of the rights and remedies of Agent and any other Secured Party under any Loan Document shall be cumulative, may be exercised
individually or concurrently and not exclusive of any other rights or remedies provided by any Requirement of Law. To the extent
it may lawfully do so, each Grantor absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants
not to assert against Agent or any other Secured Party, any valuation, stay, appraisement, extension, redemption or similar laws
and any and all rights or defenses it may have as a surety, now or hereafter existing, arising out of the exercise by them of any
rights hereunder. If any notice of a proposed sale or other disposition of any Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.


 


(f)          Commercially
Reasonable. To the extent that applicable Requirements of Law impose duties on Agent to exercise remedies in a commercially
reasonable manner, each Grantor acknowledges and agrees that it is commercially reasonable for Agent to do any of the following:


 


(i)          fail
to incur significant costs, expenses or other Liabilities reasonably deemed as such by Agent to prepare any Collateral for disposition
or otherwise to complete raw material or work in process into finished Goods or other finished products for disposition;


 




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(ii)         fail
to obtain Permits, or other consents, for access to any Collateral to sell or for the collection or sale of any Collateral, or,
if not required by other Requirements of Law, fail to obtain Permits or other consents for the collection or disposition of any
Collateral;


 


(iii)        fail
to exercise remedies against any Receivables Obligor or other Persons obligated on any Collateral or to remove Liens on any Collateral
or to remove any adverse claims against any Collateral;


 


(iv)        advertise
dispositions of any Collateral through publications or media of general circulation, whether or not such Collateral is of a specialized
nature, or to contact other Persons, whether or not in the same business as any Grantor, for expressions of interest in acquiring
any such Collateral;


 


(v)         exercise
collection remedies against Receivables Obligors and other Persons obligated on any Collateral, directly or through the use of
collection agencies or other collection specialists, hire one or more professional auctioneers to assist in the disposition of
any Collateral, whether or not such Collateral is of a specialized nature, or, to the extent deemed appropriate by Agent, obtain
the services of other brokers, investment bankers, consultants and other professionals to assist Agent in the collection or disposition
of any Collateral, or utilize Internet sites that provide for the auction of assets of the types included in the Collateral or
that have the reasonable capacity of doing so, or that match buyers and sellers of assets to dispose of any Collateral;


 


(vi)        dispose
of assets in wholesale rather than retail markets;


 


(vii)       disclaim
disposition warranties, such as title, possession or quiet enjoyment; or


 


(viii)      purchase
insurance or credit enhancements to insure Agent against risks of loss, collection or disposition of any Collateral or to provide
to Agent a guaranteed return from the collection or disposition of any Collateral.


 


Each Grantor
acknowledges that the purpose of this Section is to provide a non-exhaustive list of actions or omissions that are commercially
reasonable when exercising remedies against any Collateral and that other actions or omissions by any Secured Party shall not be
deemed commercially unreasonable solely on account of not being indicated in this Section. Nothing contained in this Section shall
be construed to grant any rights to any Grantor or to impose any duties on Agent that would not have been granted or imposed by
this Agreement or by applicable Requirements of Law in the absence of this Section.


 


(g)          IP
Licenses. For the purpose of enabling Agent to exercise rights and remedies under this Section, each Grantor hereby grants
to Agent, for the benefit of the Secured Parties, an irrevocable, nonexclusive, worldwide license (exercisable without payment
of royalty or other compensation to such Grantor), including in such license the right to sublicense, use and practice any Intellectual
Property now owned or hereafter acquired by such Grantor and access to all media in which any of the licensed items may be recorded
or stored and to all Software and programs used for the compilation or printout thereof.


 


Section 6.2. Receivables.


 


(a)          If
required by Agent at any time during the continuance of an Event of Default, any payment of Receivables received by, or on behalf
of, any Grantor shall be promptly (and, in any event, within two Business Days) deposited by such Grantor in the exact form received,
duly Indorsed by such Grantor to Agent, in a Cash Collateral Account, subject to withdrawal by Agent as provided in Section 6.4.
Until so turned over, such payment shall be held by such Grantor in trust for Agent, segregated from other funds of such Grantor.
Each such deposit of payments shall be accompanied by a report identifying, in reasonable detail, the nature and source of such
payments.


 




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(b)          At
any time during the continuance of an Event of Default:


 


(i)          each
Grantor shall, upon Agent’s request, deliver to Agent all original and other documents evidencing, and relating to any Receivable,
including all original orders, invoices and shipping receipts and notify Receivable Obligors thereunder that the Receivables have
been collaterally assigned to Agent and that payments in respect thereof shall be made directly to Agent; and


 


(ii)         Agent
may, without notice, at any time during the continuance of an Event of Default, limit or terminate the authority of a Grantor to
collect any amounts due under any Receivable and, in its own name or in the name of others, communicate with the Receivable Obligors
thereunder and enforce such Grantor’s rights against such Receivables Obligors. Anything herein to the contrary notwithstanding,
each Grantor shall remain liable under each Receivable to observe and perform all the conditions and obligations to be observed
and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto. No Secured Party shall have
any obligation or liability, or be obligated in any manner to perform any obligation of any Grantor, under or pursuant to any agreement
giving rise to any Receivable.


 


Section 6.3. Pledged
Collateral.


 


(a)          Voting
Rights; Proxies. During the continuance of an Event of Default, upon notice by Agent to the relevant Grantor or Grantors, Agent
or its nominee may exercise (A) any voting, consent, corporate and other right pertaining to the Pledged Collateral and (B) any
right of conversion, exchange and subscription and any other right, privilege or option pertaining to the Pledged Collateral as
if it were the absolute owner thereof, all without liability except to account for property actually received by it; provided,
however, that Agent shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible
for any failure to do so or delay in so doing. Such Grantor hereby grants to Agent an irrevocable proxy to vote all or any part
of the Pledged Collateral and to exercise all other rights, powers, privileges and remedies to which a holder of the Pledged Collateral
would be entitled, which proxy shall be effective, automatically and without the necessity of any action (including any transfer
of any Pledged Collateral on the record books of the issuer thereof) by any other person (including the issuer of such Pledged
Collateral or any officer or agent thereof) during the continuance of an Event of Default and which proxy shall only terminate
upon Final Satisfaction. In addition, each Grantor shall promptly execute and deliver (or cause to be executed and delivered) to
Agent all such proxies, dividend payment orders and other instruments as Agent may from time to time reasonably request.


 


(b)          Authorization
of Issuers. Each Grantor hereby irrevocably authorizes and instructs each issuer of any Pledged Collateral to, without
further action by any Grantor, (i) comply with any instruction received by such issuer from Agent in writing that states that
an Event of Default is continuing and is otherwise in accordance with the terms of this Agreement and each Grantor agrees that
such issuer shall be fully protected from Liabilities to such Grantor in so complying and (ii) unless otherwise expressly
permitted hereby or the Credit Agreement, pay any dividend or make any other payment with respect to the Pledged Collateral directly
to Agent.


 




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Section 6.4. Payments
and Proceeds to be Turned over to and Held by Agent. Unless otherwise expressly provided in the Credit Agreement or this Agreement,
during the continuance of an Event of Default, all payments received under and all Proceeds of any Collateral received by any Grantor
hereunder in cash or Cash Equivalents shall be held by such Grantor in trust for Agent and the other Secured Parties, segregated
from other funds of such Grantor, and shall, promptly upon receipt by any Grantor, be turned over to Agent in the exact form received
(with any necessary endorsement). All such payments and Proceeds and any other payments under or Proceeds of any Collateral received
by Agent in cash or Cash Equivalents shall be held by Agent in a Cash Collateral Account. All payments and Proceeds being held
by Agent in a Cash Collateral Account (or by such Grantor in trust for Agent) shall continue to be held as collateral security
for the Secured Obligations and shall not constitute payment thereof until applied as provided in the Credit Agreement.


 


Section 6.5. Sale
of Pledged Collateral.


 


(a)          Each
Grantor recognizes that Agent may be unable to effect a public sale of any Pledged Collateral by reason of certain prohibitions
contained in the Securities Act and applicable state or foreign securities laws or otherwise or may determine that a public sale
is impracticable, not desirable or not commercially reasonable and, accordingly, may resort to one or more private sales thereof
to a restricted group of purchasers that shall be obliged to agree, among other things, to acquire such Securities for their own
account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding
such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. Agent
shall be under no obligation to delay a sale of any Pledged Collateral for the period of time necessary to permit the issuer thereof
to register such Securities for public sale under the Securities Act or under applicable state securities laws even if such issuer
would agree to do so.


 


(b)          Each
Grantor agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales
of any portion of the Pledged Collateral pursuant to Section 6.1 and this Section valid and binding and in compliance
with all applicable Requirements of Law. Each Grantor further agrees that a breach of any covenant contained herein will cause
irreparable injury to Agent and other Secured Parties, that Agent and the other Secured Parties have no adequate remedy at law
in respect of such breach and, as a consequence, that each and every covenant contained herein shall be specifically enforceable
against such Grantor, and such Grantor hereby waives and agrees not to assert any defense against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred under the Credit Agreement. Each Grantor waives any
and all rights of contribution or subrogation upon the sale or disposition of all or any portion of the Pledged Collateral by Agent.


 


Section 6.6. Deficiency.
Each Grantor shall remain liable for any deficiency if the Proceeds of any sale or other disposition of any Collateral are insufficient
to pay the Secured Obligations and the fees and disbursements of any attorney employed by Agent or any other Secured Party to collect
such deficiency.


 


ARTICLE
VII


 


Agent


 


Section 7.1. Agent’s
Appointment as Attorney-in-Fact. Each Grantor hereby irrevocably constitutes and appoints Agent and any Related Person thereof,
with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of the
Loan Documents, to take any appropriate action and to execute any document or instrument that may be necessary or desirable to
accomplish the purposes of the Loan Documents or to exercise any of Agent’s rights or remedies under the Loan Documents.
All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until Final
Satisfaction.


 




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(a)          Without
limiting the generality of the foregoing, each Grantor hereby gives Agent and its Related Persons the power and right, on behalf
of such Grantor, without notice to or assent by such Grantor, to do any of the following when an Event of Default shall be continuing:


 


(i)          (A) sign
and indorse any invoice, freight or express bill, bill of lading, storage or warehouse receipt, draft against debtors, assignment,
verification, notice and other document in connection with any Collateral, (B) commence and prosecute any suit, action or
proceeding at law or in equity in any court of competent jurisdiction to collect any Collateral and to enforce any other right
in respect of any Collateral, (C) defend any actions, suits, proceedings, audits, claims, demands, orders or disputes brought
against such Grantor with respect to any Collateral, (D) settle, compromise or adjust any such actions, suits, proceedings,
audits, claims, demands, orders or disputes and, in connection therewith, give such discharges or releases as Agent may deem appropriate,
(E) assign any Intellectual Property owned by such Grantor or any IP Licenses of such Grantor throughout the world on such
terms and conditions and in such manner as Agent shall in its sole discretion determine, including the execution and filing of
any document necessary to effectuate or record such assignment and (F) generally, sell, assign, convey, transfer or grant
a Lien on, make any Contractual Obligation with respect to and otherwise deal with, any Collateral as fully and completely as though
Agent were the absolute owner thereof for all purposes and do, at Agent’s option, at any time or from time to time, all acts
and things that Agent deems necessary to protect, preserve or realize upon any Collateral and the Secured Parties’ security
interests therein and to effect the intent of the Loan Documents, all as fully and effectively as such Grantor might do; or


 


(ii)         perform
or comply, or otherwise cause the performance or compliance, with any Contractual Obligation of such Grantor under any Loan Document.


 


(b)          The
expenses of Agent incurred in connection with actions undertaken as provided in this Section, together with interest thereon at
the Default Rate, from the date of payment by Agent to the date reimbursed by the relevant Grantor, shall be payable by such Grantor
to Agent on demand.


 


(c)          Each
Grantor hereby ratifies all actions taken, at any time, by Agent or its Related Persons by virtue of this Section.


 


Section 7.2. Authorization
To File Financing Statements. Each Grantor authorizes Agent and its Related Persons, at any time and from time to time, to
file or record financing statements, amendments thereto, and other filing or recording documents or instruments with respect to
any Collateral in such form and in such offices as Agent reasonably determines appropriate to perfect, or continue or maintain
perfection of, the security interests of Agent under this Agreement, and such financing statements and amendments may describe
the Collateral covered thereby as “all assets of the debtor” or words of similar import. Such Grantor also hereby ratifies
its authorization for Agent to have filed any initial financing statement or amendment thereto under the UCC (or other similar
laws) in effect in any jurisdiction if filed prior to the date hereof. Each Grantor hereby (i) waives any right under the
UCC or any other Requirement of Law to receive notice and/or copies of any filed or recorded financing statements, amendments thereto,
continuations thereof or termination statements and (ii) releases and excuses each Secured Party from any obligation under
the UCC or any other Requirement of Law to provide notice or a copy of any such filed or recorded documents.


 




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Section 7.3. Authority
of Agent. Each Grantor acknowledges that the rights and responsibilities of Agent under this Agreement and any related Collateral
Document shall, as between Agent and the other Secured Parties, be governed by the Credit Agreement, but, as between Agent and
any Grantor, Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so
to act or refrain from acting, and no Grantor shall be under any obligation or entitlement to make any inquiry respecting such
authority.


 


Section 7.4. Duty;
Obligations and Liabilities. Agent’s sole duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession shall be to deal with it in the same manner as Agent deals with similar property for its own account.
The powers conferred on Agent hereunder are solely to protect Agent’s interest in the Collateral and shall not impose any
duty upon Agent or any other Secured Party to exercise any such powers. Each Secured Party shall be accountable only for amounts
that it receives as a result of the exercise of such powers, and neither it nor any of its Related Persons shall be responsible
to any Grantor for any act or failure to act hereunder, except for such Secured Party’s own gross negligence or willful misconduct
as finally determined by a court of competent jurisdiction. No Secured Party and no Related Person thereof shall be liable for
failure to demand, collect or realize upon any Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever
with regard to any Collateral. In addition, Agent shall not be liable or responsible for any loss or damage to any Collateral,
or for any diminution in the value thereof, by reason of the act or omission of any warehousemen, carrier, forwarding agency, consignee
or other bailee if such Person has been selected by Agent in good faith.


 


ARTICLE
VIII


 


Miscellaneous


 


Section 8.1. Reinstatement.
Each Grantor agrees that, if any payment made by any Credit Party or other Person and applied to the Secured Obligations is at
any time annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required
to be refunded or repaid, or the Proceeds of any Collateral are required to be returned by any Secured Party to such Credit Party,
its estate, trustee, receiver or any other party, including any Grantor, under any bankruptcy law, state or federal law, common
law or equitable cause, then, to the extent of such payment or repayment, any Lien or other Collateral securing such liability
shall be and remain in full force and effect, as fully as if such payment had never been made. If, prior to any of the foregoing,
(a) any Lien or other Collateral securing such Grantor’s liability hereunder shall have been released or terminated
by virtue of the foregoing or (b) any provision of the Guaranty hereunder shall have been terminated, cancelled or surrendered,
such Lien, other Collateral or provision shall be reinstated in full force and effect and such prior release, termination, cancellation
or surrender shall not diminish, release, discharge, impair or otherwise affect the obligations of any such Grantor in respect
of any Lien or other Collateral securing such obligation or the amount of such payment.


 


Section 8.2. Release
of Collateral. Upon Final Satisfaction, the Collateral shall be released from the Lien created hereby and all obligations (other
than those expressly stated to survive such termination) of Agent and each Grantor hereunder shall terminate, all without delivery
of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to Grantors. If Agent shall
be directed or permitted pursuant to subsection 9.09(b) of the Credit Agreement to release any Lien or any Collateral, such
Collateral shall be released from the Lien created hereby to the extent provided under, and subject to the terms and conditions
set forth in, subsection 9.09(b). At the time provided in subsection 9.09(a) of the Credit Agreement, a Grantor that
is a Subsidiary of Borrower shall be released from its obligations hereunder to the extent provided in Section 9.09 of the Credit
Agreement.


 




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Section 8.3. Independent
Obligations. The obligations of each Grantor hereunder are independent of and separate from the Secured Obligations and the
Guaranteed Obligations. If any Secured Obligation or Guaranteed Obligation is not paid when due, or upon any Event of Default,
Agent may, at its sole election, proceed directly and at once, without notice, against any Grantor and any Collateral to collect
and recover the full amount of any Secured Obligation or Guaranteed Obligation then due, without first proceeding against any other
Grantor, any other Credit Party or any other Collateral and without first joining any other Grantor or any other Credit Party in
any proceeding.


 


Section 8.4. No
Waiver by Course of Conduct. No Secured Party shall by any act (except by a written instrument pursuant to Section 8.5),
delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default
or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any Secured Party, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder
shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any Secured
Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that such Secured
Party would otherwise have on any future occasion.


 


Section 8.5. Amendments
in Writing. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except
in accordance with Section 10.01 of the Credit Agreement; provided, however, that annexes to this Agreement may be supplemented
(but no existing provisions may be modified and no Collateral may be released) through a Pledge Amendment substantially in the
form of Annex 1 (a “Pledge Amendment”) or a Joinder Agreement substantially in the form of Annex 2 (“Joinder”),
in each case duly executed by Agent and each Grantor directly affected thereby.


 


Section 8.6. Additional
Grantors; Additional Pledged Collateral.


 


(a)          Joinder
Agreements. If required pursuant to Section 5.11 of the Credit Agreement, each Borrower shall cause each of its Subsidiaries
that is not a Grantor to become a Grantor hereunder, such Subsidiary shall execute and deliver to Agent a Joinder and shall thereafter
for all purposes be a party hereto and have the same rights, benefits and obligations as a Grantor party hereto on the Closing
Date.


 


(b)          Pledge
Amendments. To the extent any Pledged Collateral has not been delivered as of the Closing Date, such Grantor shall deliver
a Pledge Amendment duly executed by Grantor. Such Grantor authorizes Agent to attach each Pledge Amendment to this Agreement.


 


Section 8.7. Notices.
All notices, requests and demands to or upon Agent or any Grantor hereunder shall be effected in the manner provided for in Section 10.02
of the Credit Agreement; provided, however, that any such notice, request or demand to or upon any Grantor shall be addressed to
Borrower Representative’s notice address set forth in Section 10.02 of the Credit Agreement.


 


Section 8.8. Successors
and Assigns. This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit
of each Secured Party and their successors and assigns; provided, however, that no party hereto may assign, transfer or delegate
any of its rights or obligations under this Agreement other than in accordance with the Credit Agreement.


 


Section 8.9. Counterparts.
This Agreement may be executed in any number of counterparts and by different parties in separate 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 signature page of this Agreement by facsimile transmission or by Electronic Transmission shall be as effective as
delivery of a manually executed counterpart hereof.


 


Section 8.10. Severability.
Any provision of this Agreement being held illegal, invalid or unenforceable in any jurisdiction shall not affect any part of such
provision not held illegal, invalid or unenforceable, any other provision of this Agreement or any part of such provision in any
other jurisdiction.


 




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Section 8.11. Governing
Law. This Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted
in accordance with, the law of the State of New York.


 


Section 8.12. Waiver
of Jury Trial. THE PARTIES HERETO, TO THE EXTENT PERMITTED BY LAW, WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING ARISING OUT OF, IN CONNECTION WITH OR RELATING TO, THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ANY OTHER TRANSACTION
CONTEMPLATED HEREBY OR THEREBY. THIS WAIVER APPLIES TO ANY ACTION, SUIT OR PROCEEDING WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE.
EACH GRANTOR AGREES TO BE BOUND BY THE PROVISIONS OF SUBSECTIONS 10.18(b) AND 10.18(c) OF THE CREDIT AGREEMENT.


 


[Signature pages follow]


 




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


 


	 	IGI LABORATORIES, INC., as Grantor
	 	 
	 	By:	/s/ Jenniffer Collins
	 	Name:	Jenniffer Collins
	 	Title:	Chief Financial Officer
	 	 
	 	IGEN, INC., as Grantor
	 	 
	 	By:	/s/ Jenniffer Collins
	 	Name:	Jenniffer Collins
	 	Title:	Chief Financial Officer
	 	 
	 	IGI LABS, INC., as Grantor
	 	 
	 	By:	/s/ Jenniffer Collins
	 	Name:	Jenniffer Collins
	 	Title:	Chief Financial Officer


 


	ACCEPTED
    AND AGREED	 
	as
    of the date first above written:	 
	 	 
	GENERAL
    ELECTRIC CAPITAL

    CORPORATION, as Agent	 
	 	 






	By	/s/ Verleria King - Jones	 
	Name	Verleria King - Jones	 
	Its Duly Authorized Signatory	 







  


[SIGNATURE PAGE TO GUARANTY AND SECURITY AGREEMENT]


 




    	 



    	 



    

  


ANNEX 1


TO


GUARANTY
AND SECURITY AGREEMENT1


 


FORM OF
PLEDGE AMENDMENT


 


THIS PLEDGE AMENDMENT,
dated as of                                   ,
20      , is delivered pursuant to Section 8.6 of the Guaranty and Security Agreement,
dated as of November 18, 2014, by IGI Laboratories, Inc., a Delaware corporation (“IGI”), Igen Inc., a Delaware
corporation (“Igen”), IGI Labs, Inc., a Delaware corporation (“IGI Labs”) (collectively, the “Borrowers”
and individually as a “Borrower”), the undersigned Grantor and the other Persons from time to time party thereto as
Grantors in favor of General Electric Capital Corporation, as Agent for the Secured Parties referred to therein (such agreement
may be amended, restated or supplemented from time to time, the “Guaranty and Security Agreement”). Capitalized terms
used herein without definition are used as defined in the Guaranty and Security Agreement.


 


The undersigned hereby
agrees that this Pledge Amendment may be attached to the Guaranty and Security Agreement and that the Pledged Collateral listed
on Annex 1-A to this Pledge Amendment shall be and become part of the Collateral referred to in the Guaranty and Security
Agreement and shall secure all Obligations of the undersigned.


 


The undersigned hereby
represents and warrants that each of the representations and warranties contained in Sections 4.1, 4.2, 4.3 and 4.8 of the
Guaranty and Security Agreement is true and correct and as of the date hereof as if made on and as of such date.


 


	 	[GRANTOR]
	 	 
	 	By	 
	 	Name	 
	 	Title	 


 


	ACKNOWLEDGED AND AGREED	 
	as of the date first above written:	 
	 	 
	GENERAL ELECTRIC CAPITAL CORPORATION, as Agent	 
	 	 
	By	 	 
	Name	 	 
	Duly Authorized Signatory	 


 





 



1 To
be used for pledge of Additional Pledged Collateral by existing Grantor.


 




    	 



    	 



    

 


Annex 1-A


 


	PLEDGED STOCK
	 
	Issuer	Class	Certificate No(s).	Par Value	No. of Shares,

Units or 

Interests
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 


 


	PLEDGED DEBT INSTRUMENTS
	 
	Issuer	Description of Debt	Certificate 

No(s).	Final 

Maturity	Principal 

Amount
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 


 




    	A1-2



    	 



    

  


ANNEX 2


TO


GUARANTY
AND SECURITY AGREEMENT


 


FORM OF
JOINDER AGREEMENT


 


THIS JOINDER AGREEMENT,
dated as of                                   ,
20      , is delivered pursuant to Section 8.6 of the Guaranty and Security Agreement,
dated as of November 18, 2014, by IGI Laboratories, Inc., a Delaware corporation (“IGI”), Igen Inc., a Delaware
corporation (“Igen”), IGI Labs, Inc., a Delaware corporation (“IGI Labs”) (collectively, the “Borrowers”
and individually as a “Borrower”), and the other Persons from time to time party thereto as Grantors in favor of the
General Electric Capital Corporation, as Agent for the Secured Parties referred to therein (as such agreement may be amended, restated
or supplemented from time to time, the “Guaranty and Security Agreement”). Capitalized terms used herein without definition
are used as defined in the Guaranty and Security Agreement.


 


By executing and delivering
this Joinder Agreement, the undersigned, as provided in Section 8.6 of the Guaranty and Security Agreement, hereby becomes
a party to the Guaranty and Security Agreement as a Grantor thereunder with the same force and effect as if originally named as
a Grantor therein and, without limiting the generality of the foregoing, as collateral security for the prompt and complete payment
and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations, hereby mortgages,
pledges and hypothecates to Agent, for the benefit of the Secured Parties, and grants to Agent, for the benefit of the Secured
Parties, a lien on and security interest in, all of its right, title and interest in, to and under the Collateral of the undersigned
and expressly assumes all obligations and liabilities of a Grantor thereunder. The undersigned hereby agrees to be bound as a Grantor
for the purposes of the Guaranty and Security Agreement.


 


The information set
forth in Annex 1-A is hereby added to the information set forth in Schedules 1, 2, 3 to the Guaranty and Security Agreement
and Schedules 3.9, 3.16, 3.20, 3.21 and 3.22 to the Credit Agreement. By acknowledging and agreeing to this Joinder Agreement,
the undersigned hereby agree that this Joinder Agreement may be attached to the Guaranty and Security Agreement and that the Collateral
listed on Annex 1-A to this Joinder Amendment shall be and become part of the Collateral referred to in the Guaranty and Security
Agreement and shall secure all Secured Obligations of the undersigned.


 


The undersigned hereby
represents and warrants that each of the representations and warranties contained in Article IV of the Guaranty and Security
Agreement applicable to it is true and correct on and as the date hereof as if made on and as of such date.


 




    	 



    	 



    

 


 


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


 


	 	[ADDITIONAL GRANTOR]
	 	 
	 	By	 
	 	Name	 
	 	Title	 


 


	ACKNOWLEDGED AND AGREED	 
	as of the date first above written:	 
	 	 
	[EACH GRANTOR PLEDGING	 
	ADDITIONAL COLLATERAL]	 
	 	 
	By	 	 
	Name	 	 
	Title	 	 
	 	 
	GENERAL ELECTRIC CAPITAL CORPORATION, as 

Agent	 
	 	 
	By	 	 
	Name	 	 
	Duly Authorized Signatory	 


 




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