Document:

Exhibit 10.2

 

 

EXECUTION VERSION

 

PLEDGE AND SECURITY AGREEMENT

 

THIS PLEDGE AND SECURITY AGREEMENT (as it may
be amended, restated, supplemented or otherwise modified from time to time, this “Security Agreement”) is entered
into as of February 28, 2020 by and among THE JOINT CORP., a Delaware corporation (the “Borrower”), and any
additional entities which become parties to this Security Agreement by executing a Security Agreement Supplement hereto in substantially
the form of Annex I hereto (such additional entities, together with Borrower, each a “Grantor”, and collectively,
the “Grantors”), and JPMorgan Chase Bank, N.A., in its capacity as administrative agent (the “Administrative
Agent”), for the Lenders party to the Credit Agreement referred to below.

 

PRELIMINARY STATEMENT

 

The Borrower, the other Grantors, Administrative
Agent and the Lenders party thereto are entering into a Credit Agreement dated as of February 28, 2020 (as it may be amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”). The Grantors are entering into
this Security Agreement in order to induce the Lenders to enter into and extend credit to the Borrower under the Credit Agreement
and to secure the Secured Obligations that it has agreed to guarantee pursuant to Article X of the Credit Agreement.

 

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

 

ARTICLE I

DEFINITIONS

 

1.1.       Terms
Defined in Credit Agreement. All capitalized terms used herein and not otherwise defined shall have the meanings assigned to
such terms in the Credit Agreement. The terms and provisions of Sections 1.03 and 1.04 of the Credit Agreement are hereby incorporated
herein in their entirety by this reference thereto.

 

1.2.       Terms
Defined in UCC. Terms defined in the UCC which are not otherwise defined in this Security Agreement are used herein as defined
in the UCC.

 

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

 

“Account Debtor” means any
Person obligated on an Account.

 

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

 

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

 

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

 

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

 

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

 

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

 

    

    

    

“Commercial Tort Claims”
means the commercial tort claims as defined in Article 9 of the UCC, including each commercial tort claim specifically described
in Section 13 of each Perfection Certificate.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Excluded Equity” means subject
to Section 5.14(b) of the Credit Agreement, the issued and outstanding Equity Interests entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) of any Foreign Subsidiary, solely to the extent that such Equity Interests represent more than
the percentage of the outstanding Equity Interests of such Foreign Subsidiary that (i) could reasonably be expected to cause
the undistributed earnings of such Foreign Subsidiary as determined for U.S. federal income tax purposes to be treated as a deemed
dividend to such Foreign Subsidiary’s U.S. parent and (ii) could reasonably be expected to cause any material adverse
tax consequences.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Letter-of-Credit Rights”
shall have the meaning set forth in Article 9 of the UCC.

 

“Licenses” means, with respect
to any Person, all of such Person’s right, title, and interest in and to (a) any and all licensing agreements or similar
arrangements in and to its Patents, Copyrights, or Trademarks, (b) all income, royalties, damages, claims, and payments now or
hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future
breaches thereof, and (c) all rights to sue for past, present, and future breaches thereof.

 

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

 

“Perfection Certificate”
shall mean a certificate, completed (and supplemented, as necessary, in accordance with Section 4.6(f) hereof) by each Grantor
and duly executed by a Financial Officer of each Grantor.

 

“Pledged Collateral” means
all Instruments, Securities, other Investment Property and Pledged Equity Interests of the Grantors, whether or not physically
delivered to the Administrative Agent pursuant to this Security Agreement.

 

“Pledged Equity Interests”
means all Equity Interests held or owned by the Grantors from time to time including any Pledged Stock, Pledged Partnership Interests,
Pledged LLC Interests and Pledged Trust Interests, but excluding the Excluded Equity.

 

“Pledged LLC Interests” means
all interests of the Grantors now owned or hereafter acquired in any limited liability company and the certificates, if any, representing
such limited liability company interests and any interest of the Grantors on the books and records of such limited liability company
and all dividends, distributions, cash, warrants, rights (including, without limitation, all voting rights, consent rights and
waiver rights), options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such limited liability company interests and any other warrant, right
or option to acquire any of the foregoing, but excluding the Excluded Equity.

 

“Pledged Partnership Interests”
means all interests of the Grantors now owned or hereafter acquired in any general partnership, limited partnership, limited liability
partnership or other partnership and the certificates, if any, representing such partnership interests and any interest of the
Grantors on the books and records of such partnership and all dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such partnership interests and any other warrant, right or option to acquire any of the foregoing, but excluding
the Excluded Equity.

 

“Pledged Stock” means all
shares of capital stock now owned or hereafter acquired by the Grantors, and the certificates, if any, representing such shares
and any interest of the Grantors in the entries on the books of the issuer of such shares and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares and any other warrant, right or option to acquire any of
the foregoing, but excluding the Excluded Equity.

 

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“Pledged Trust Interests”
means all interests of the Grantors now owned or hereafter acquired in a Delaware statutory trust or other trust and the certificates,
if any, representing such trust interests and any interest of the Grantors on the books and records of such trust or on the books
and records of any securities intermediary pertaining to such interest and all dividends, distributions, cash, warrants, rights,
options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such trust interests and any other warrant, right or option to acquire any of the
foregoing.

 

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

 

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

 

“Secured Parties” shall have
the meaning set forth in the Credit Agreement.

 

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

 

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

 

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

 

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

 

“Trademarks” means, with
respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all trademarks (including
service marks), trade names, trade dress, and trade styles and the registrations and applications for registration thereof and
the goodwill of the business symbolized by the foregoing; (b) all licenses of the foregoing, whether as licensee or licensor; (c)
all renewals of the foregoing; (d) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto,
including, without limitation, damages, claims, and payments for past and future infringements thereof; (e) all rights to sue for
past, present, and future infringements of the foregoing, including the right to settle suits involving claims and demands for
royalties owing; and (f) all rights corresponding to any of the foregoing throughout the world.

 

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

 

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

 

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ARTICLE II

GRANT OF SECURITY INTEREST

 

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

 

	(i)		all Accounts;

	(ii)		all Chattel Paper;

	(iii)		all Copyrights, Patents and Trademarks;

	(iv)		all Documents;

	(v)		all Equipment;

	(vi)		all Fixtures;

	(vii)		all General Intangibles;

	(viii)		all Goods;

	(ix)		all Instruments;

	(x)		all Inventory;

	(xi)		all Investment Property;

	(xii)		all Pledged Equity Interests;

	(xiii)		all Securities;

	(xiv)		all cash or cash equivalents;

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

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

	(xvii)		all Commercial Tort Claims; and

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

 

provided, however, notwithstanding any provision contained
herein to the contrary, the term “Collateral” does not, and shall not, include any Excluded Equity.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

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

 

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3.1.            
Title, Authorization, Validity, Enforceability, Perfection and Priority. Such Grantor has good and valid rights in or the
power to transfer the Collateral and title to the Collateral with respect to which it has purported to grant a security interest
hereunder, free and clear of all Liens except for Liens permitted under Section 4.1(e), and has full power and authority to grant
to the Administrative Agent the security interest in the Collateral pursuant hereto. The execution and delivery by such Grantor
of this Security Agreement has been duly authorized by proper limited liability company proceedings of such Grantor, and this Security
Agreement constitutes a legal valid and binding obligation of such Grantor and creates a security interest which is enforceable
against such Grantor in all Collateral it now owns or hereafter acquires, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law. Each Perfection Certificate has been duly prepared, completed and executed
and the information set forth therein (including (x) the exact legal name of each Grantor and (y) the jurisdiction of organization
of each Grantor) is correct and complete as of the Closing Date. UCC financing statements (including fixture filings, as applicable)
or other appropriate filings, recordings or registrations containing a description of the Collateral have been prepared by the
Administrative Agent based upon the information provided to the Administrative Agent and the other Secured Parties in each Perfection
Certificate for filing in each governmental, municipal or other office specified in Section 4(c) of each Perfection Certificate
(or specified by notice from the Borrower Representative to the Administrative Agent after the Closing Date in the case of filings,
recordings or registrations required by Section 4.1 hereof or Section 5.14 of the Credit Agreement), which are all the filings,
recordings and registrations (other than filings required to be made in the United States Patent and Trademark Office and the United
States Copyright Office in order to perfect the Security Interest in the Collateral consisting of United States Patents, Trademarks
and Copyrights) that are necessary to publish notice of and protect the validity of and to establish a legal, valid and perfected
security interest in favor of the Administrative Agent (for the ratable benefit of the Secured Parties) in respect of all Collateral
in which the Security Interest may be perfected by filing, recording or registration in the United States (or any political subdivision
thereof) and its territories and possessions, and no further or subsequent filing, refiling, recording, rerecording, registration
or reregistration is necessary in any such jurisdiction, except as provided under applicable law with respect to the filing of
continuation statements.

 

3.2.            
Type and Jurisdiction of Organization, Organizational and Identification Numbers. The type of entity of such Grantor, its
state of organization, the organizational number issued to it by its state of organization and its federal employer identification
number are set forth in Sections 1 and 4 of its Perfection Certificate.

 

3.3.            
Principal Location. Such Grantor’s mailing address, which shall be its address for notices and other communications
provided for herein and the location of its place of business (if it has only one) or its chief executive office (if it has more
than one place of business), are disclosed in Section 4 of its Perfection Certificate; such Grantor has no other places of business
except those set forth in Section 4 of its Perfection Certificate.

 

3.4.            
Collateral Locations. All of such Grantor’s locations where Collateral is located are listed on Section 4 of its Perfection
Certificate. All of said locations are leased by the Grantor as lessee and designated in Section 4 of its Perfection Certificate.

 

3.5.            
Deposit Accounts. All of such Grantor’s Deposit Accounts are listed on Schedule 11 of the Perfection Certificate.

 

3.6.            
Exact Names. Such Grantor’s name in which it has executed this Security Agreement is the exact name as it appears
in such Grantor’s organizational documents, as amended, as filed with such Grantor’s jurisdiction of organization.
Such Grantor has not, during the past five years, been known by or used any other corporate or fictitious name, or been a party
to any merger or consolidation, or been a party to any acquisition other than as disclosed in Section 2 of the Perfection Certificate.

 

3.7.            
Letter-of-Credit Rights and Chattel Paper. All action by such Grantor necessary or desirable to protect and perfect the
Administrative Agent’s Lien on Letter-of-Credit Rights and Chattel Paper (including the delivery of all originals and the
placement of a legend on all Chattel Paper as required hereunder) has been duly taken. The Administrative Agent will have a fully
perfected first priority security interest such Collateral, subject only to Liens permitted under Section 4.1(e).

 

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3.8.            
Accounts and Chattel Paper.

 

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

 

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

 

(c)               
In addition, with respect to all of its Accounts, (i) the amounts shown on all invoices and statements with respect thereto are
actually and absolutely owing to such Grantor as indicated thereon and are not in any way contingent, and (ii) to such Grantor’s
knowledge, all Account Debtors have the capacity to contract.

 

3.9.            
Inventory. With respect to any of its Inventory (if any) (a) such Inventory (other than Inventory in transit) is located
at one of such Grantor’s locations set forth on the Perfection Certificate, (b) no Inventory (other than Inventory in transit)
is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such
Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security
interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder, for the benefit
of the Administrative Agent and the Secured Parties, and Permitted Encumbrances, (d) such Inventory is of good and merchantable
quality, free from any defects, (e) such Inventory is not subject to any licensing, patent, royalty, trademark, trade name or copyright
agreements with any third parties which would require any consent of any third party upon sale or disposition of that Inventory
or the payment of any monies to any third party upon such sale or other disposition, (f) such Inventory has been produced in accordance
with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunder, and (g) the completion
of manufacture, sale or other disposition of such Inventory by the Administrative Agent following an Event of Default shall not
require the consent of any Person and shall not constitute a breach or default under any contract or agreement to which such Grantor
is a party or to which such property is subject.

 

3.10.         
Intellectual Property. Such Grantor does not have any interest in, or title to, any Patent, Trademark or Copyright except
as set forth in Schedule 12 of the Perfection Certificate. This Security Agreement is effective to create a valid and continuing
Lien and, upon filing of appropriate financing statements in the offices listed on Schedule 12B of the Perfection Certificate and
this Security Agreement with the United States Copyright Office and the United States Patent and Trademark Office, as applicable,
fully perfected first priority security interests in favor of the Administrative Agent on such Grantor’s Patents, Trademarks
and Copyrights, such perfected security interests are enforceable as such as against any and all creditors of and purchasers from
such Grantor; and all action necessary or desirable to protect and perfect the Administrative Agent’s Lien on such Grantor’s
Patents, Trademarks or Copyrights shall have been duly taken, subject to the rights of Franchisees and franchise developers under
Franchise Agreements and Regional Franchise Development Agreements.

 

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3.11.         
Filing Requirements. None of its Equipment is covered by any certificate of title, except for the vehicles. None of the
Collateral owned by it is of a type for which security interests or liens may be perfected by filing under any federal statute
except for (a) the vehicles and (b) Patents, Trademarks and Copyrights held by such Grantor and described in Schedule 12 to the
Perfection Certificate. The legal description, county and street address of each property on which any Fixtures are located is
set forth in Schedule 4(d) of the Perfection Certificate together with the name and address of the record owner of each such property.

 

3.12.         
No Financing Statements, Security Agreements. No financing statement or security agreement describing all or any portion
of the Collateral which has not lapsed or been terminated (by a filing authorized by the secured party in respect thereof) naming
such Grantor as debtor has been filed or is of record in any jurisdiction except for financing statements or security agreements
(a) naming the Administrative Agent on behalf of the Secured Parties as the secured party and (b) in respect to other Liens permitted
under Section 6.02 of the Credit Agreement.

 

3.13.         
Pledged Collateral.

 

(a)               
Schedule 9 to the Perfection Certificate sets forth a complete and accurate list of all of the Pledged Collateral owned by such
Grantor. Such Grantor is the direct, sole beneficial owner and sole holder of record of the Pledged Collateral listed on Schedule
9 to the Perfection Certificate as being owned by it, free and clear of any Liens, except for the security interest granted to
the Administrative Agent for the benefit of the Secured Parties hereunder and Permitted Encumbrances. Such Grantor further represents
and warrants that (i) all Pledged Collateral owned by it constituting an Equity Interest has been (to the extent such concepts
are relevant with respect to such Pledged Collateral) duly authorized, validly issued, are fully paid and non-assessable, (ii)
with respect to any certificates delivered to the Administrative Agent representing an Equity Interest, either such certificates
are Securities as defined in Article 8 of the UCC as a result of actions by the issuer or otherwise, or, if such certificates are
not Securities, such Grantor has so informed the Administrative Agent so that the Administrative Agent may take steps to perfect
its security interest therein as a General Intangible, (iii) all such Pledged Collateral held by a securities intermediary is covered
by a control agreement among such Grantor, the securities intermediary and the Administrative Agent pursuant to which the Administrative
Agent has Control, (iv) all Pledged Collateral which represents Indebtedness owed to such Grantor has been duly authorized, authenticated
or issued and delivered by the issuer of such Indebtedness, is the legal, valid and binding obligation of such issuer and such
issuer is not in default thereunder, (v) none of the Pledged LLC Interests, Pledged Partnership Interests and Pledged Trust Interests
constitute Certificated Securities or Uncertificated Securities (as each such term is defined in the UCC in effect in the State
of Illinois on the date hereof), and (vi) such Grantor has the unencumbered right to grant a security interest in and pledge the
Pledged Collateral.

 

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

 

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(c)               
Except as set forth in Schedule 9 to the Perfection Certificate, such Grantor owns 100% of the issued and outstanding Equity Interests
which constitute Pledged Collateral owned by it and none of the Pledged Collateral which represents Indebtedness owed to such Grantor
is subordinated in right of payment to other Indebtedness or subject to the terms of an indenture.

 

(d)               
On or before the date of this Security Agreement, such Grantor has delivered to the Administrative Agent all certificates (if any)
evidencing its Pledged Equity Interests and owned by it on the date of this Security Agreement. Upon the later of the date of this
Security Agreement and the filing or recordation of the financing statements referred to in Sections 4.1(b) and 6.2(a), the Administrative
Agent holds a perfected first-priority security interest in such Pledged Equity Interests for the benefit of the Secured Parties,
to the extent a security interest can be perfected in such collateral either through the filing of financing statements described
in such Sections or the delivery of such certificates evidencing such collateral to, and possession of such collateral by, the
Administrative Agent.

 

ARTICLE IV

COVENANTS

 

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

 

4.1.       General.

 

(a)              
Collateral Records. Such Grantor will maintain complete and accurate books and records with respect to the Collateral owned
by it, and furnish to the Administrative Agent such reports relating to such Collateral as the Administrative Agent shall from
time to time request. 

 

(b)              
Authorization to File Financing Statements; Ratification. Such Grantor hereby authorizes the Administrative Agent to file,
and if requested will deliver to the Administrative Agent, all financing statements and other documents and take such other actions
as may from time to time be requested by the Administrative Agent in order to maintain a first perfected security interest in and,
if applicable, Control of, the Collateral owned by such Grantor. Any financing statement filed by the Administrative Agent may
be filed in any filing office in any UCC jurisdiction and may (i) indicate such Grantor’s Collateral (1) as all assets of
the Grantor or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the
scope of Article 9 of the UCC of such jurisdiction, or (2) by any other description which reasonably approximates the description
contained in this Security Agreement, and (ii) contain any other information required by part 5 of Article 9 of the UCC for the
sufficiency or filing office acceptance of any financing statement or amendment, including (A) whether such Grantor is an organization,
the type of organization and any organization identification number issued to such Grantor, and (B) in the case of a financing
statement filed as a fixture filing or indicating such Grantor’s Collateral as as-extracted collateral or timber to be cut,
a sufficient description of real property to which the Collateral relates. Such Grantor also agrees to furnish any such information
described in the foregoing sentence to the Administrative Agent promptly upon request. Such Grantor also ratifies its authorization
for the Administrative Agent to have filed in any UCC jurisdiction any initial financing statements or amendments thereto if filed
prior to the date hereof. 

 

    9 

    

    

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

 

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

 

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

 

(f)               
Other Financing Statements. Such Grantor will not authorize the filing of any financing statement naming it as debtor covering
all or any portion of the Collateral owned by it, except for financing statements (i) naming the Administrative Agent on behalf
of the Secured Parties as the secured party, and (ii) in respect to other Liens permitted under Section 6.02 of the Credit Agreement.
Such Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with
respect to any financing statement without the prior written consent of the Administrative Agent, subject to such Grantor’s
rights under Section 9-509(d)(2) of the UCC.

 

(g)              
Locations. Such Grantor will not (i) maintain any Collateral owned by it at any location other than those locations listed
on Schedule 4 of the Perfection Certificate or disclosed to Administrative Agent pursuant to clause (ii) of this Section, (ii)
otherwise change, or add to, such locations without the Administrative Agent’s prior written consent as required by the Credit
Agreement (and if the Administrative Agent gives such consent, such Grantor will concurrently therewith obtain a Collateral Access
Agreement for each such location to the extent required by the Credit Agreement), or (iii) change its principal place of business
or chief executive office from the location identified in Paragraph 4 of the Perfection Certificate, other than as permitted by
the Credit Agreement.

 

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

 

4.2.       Receivables.

 

(a)               
Certain Agreements on Receivables. Grantor may reduce amounts owing in respect of Receivables subject to credit card charge
backs arising from time to time not to exceed $250,000 in any annual period. Such Grantor will not make or agree to make any discount,
credit, rebate or other reduction in the original amount owing on a Receivable or accept in satisfaction of a Receivable less than
the original amount thereof, except that, prior to the occurrence of an Event of Default, such Grantor may reduce the amount of
Accounts arising from the sale of Inventory (if any) in accordance with its present policies and in the ordinary course of business.

 

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

 

(c)               
Delivery of Account Information. Such Grantor will deliver to the Administrative Agent immediately upon its request after
the occurrence and during the continuation of an Event of Default in reasonable detail (i) an accounting of its Accounts with respect
to its Chiropractic Care Facilities, and (ii) an accounting of its then current royalties payable in respect of its Franchise Agreements
and Regional Franchise Development Agreements.

 

    10 

    

    

(d)               
Disclosure of Counterclaims on Receivables. If (i) any material discount, credit or agreement to make a rebate or to otherwise
reduce the amount owing on any Receivable owned by such Grantor exists or (ii) if, to the knowledge of such Grantor, any material
dispute, setoff, claim, counterclaim or defense exists or has been asserted or threatened with respect to any such Receivable,
such Grantor will promptly disclose such fact to the Administrative Agent in writing.

 

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

 

4.3.       Inventory and Equipment.

 

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

 

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

 

(c)       [Intentionally
Omitted].

 

(d)       Equipment.
Such Grantor shall not permit any Equipment to become a fixture with respect to real property or to become an accession with respect
to other personal property with respect to which real or personal property the Administrative Agent does not have a Lien. Such
Grantor will not, without the Administrative Agent’s prior written consent, alter or remove any identifying symbol or number
on any of such Grantor’s Equipment constituting Collateral.

 

4.4.       Delivery
of Instruments, Securities, Chattel Paper and Documents. Such Grantor will (a) deliver to the Administrative Agent immediately
upon execution of this Security Agreement the originals of all Chattel Paper, Securities and Instruments constituting Collateral
owned by it (if any then exist) (excluding existing notes payable pursuant to the sale of Regional Franchise Development Agreements,
which notes do not exceed $500,000 in the aggregate), (b) hold in trust for the Administrative Agent upon receipt and immediately
thereafter deliver to the Administrative Agent any Chattel Paper, Securities and Instruments constituting Collateral, and (c) upon
the Administrative Agent’s request, deliver to the Administrative Agent (and thereafter hold in trust for the Administrative
Agent upon receipt and immediately deliver to the Administrative Agent) any Document evidencing or constituting Collateral.

 

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

 

    11 

    

    

4.6.       Pledged Collateral.

 

(a)               
Changes in Capital Structure of Issuers. Such Grantor will not (i) permit or suffer any issuer of an Equity Interest constituting
Pledged Collateral owned by it to dissolve, merge, liquidate, retire any of its Equity Interests or other Instruments or Securities
evidencing ownership, reduce its capital, sell or encumber all or substantially all of its assets (except for Permitted Encumbrances
and sales of assets permitted pursuant to Section 4.1(d)) or merge or consolidate with any other entity, or (ii) vote any
such Pledged Collateral in favor of any of the foregoing. Prior to or upon any merger or consolidation permitted by the Credit
Agreement of any issuer of any Pledged Equity Interest that is Controlled by such Grantor, (A) such Grantor shall cause such issuer
to create a security interest that is perfected by a filed financing statement (that is not effective solely under Section 9-508
of the UCC) in collateral in which such new debtor has or acquires rights, and (B) all of the outstanding capital stock or
other Equity Interests of the surviving or resulting corporation, limited liability company, partnership or other entity shall
be pledged hereunder and no cash, securities or other property shall be distributed in respect of the outstanding Equity Interests

 

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

 

(c)               
Registration of Pledged Collateral. Such Grantor will permit any registerable Pledged Collateral to be registered in the
name of the Administrative Agent or its nominee at any time at the option of the Administrative Agent.

 

(d)               
Exercise of Rights in Pledged Collateral.

 

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

 

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

 

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

 

    12 

    

    

(iv)             
All Excluded Payments and all other distributions not permitted by the Credit Agreement in respect of any of the Pledged Collateral
owned by such Grantor, whenever paid or made, shall be delivered to the Administrative Agent to hold as Pledged Collateral and
shall, if received by such Grantor, be received in trust for the benefit of the Administrative Agent, be segregated from the other
property or funds of such Grantor, and be forthwith delivered to the Administrative Agent as Pledged Collateral in the same form
as so received (with any necessary endorsement).

 

(v)               
Such Grantor shall cause its Subsidiaries and, if required by the Administrative Agent, each member of such Subsidiary, to enter
into the consent and acknowledgement of the security interest.

 

(e)               
Interests in Limited Liability Companies and Limited Partnerships. Each Grantor agrees that no ownership interests in a
limited liability company or a limited partnership which are included within the Collateral owned by such Grantor shall at any
time constitute a Security under Article 8 of the UCC of the applicable jurisdiction. Such Grantor shall comply with all obligations
under any partnership agreement or limited liability company agreement relating to the Pledged Partnership Interests and Pledged
LLC Interests and, other than as permitted under the Credit Agreement, shall enforce all of its rights with respect to any Pledged
Equity Interests.

 

(f)                
Updates to Perfection Certificate. In the event such Grantor acquires rights in any Pledged Collateral after the date hereof,
it shall deliver to the Administrative Agent an updated Perfection Certificate, reflecting such new Pledged Collateral and all
other Pledged Collateral. Notwithstanding the foregoing, it is understood and agreed that the security interest of the Administrative
Agent shall attach to all Pledged Collateral immediately upon such Grantor’s acquisition of rights therein and shall not
be affected by the failure of such Grantor to deliver an updated Perfection Certificate as required hereby.

 

4.7.            
Intellectual Property.

 

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

 

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

 

(c)               
Other than filing trademark applications in the Ordinary Course of Business and consistent with past practices for the purpose
of furthering its franchise concept, in no event shall such Grantor, either directly or through any agent, employee, licensee or
designee, file an application for the registration of any Patent, Trademark or Copyright with the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency without giving the Administrative Agent prior written
notice thereof, and, upon request of the Administrative Agent, such Grantor shall execute and deliver any and all security agreements
as the Administrative Agent may request to evidence the Administrative Agent’s first priority security interest on such Patent,
Trademark or Copyright, and the General Intangibles of such Grantor relating thereto or represented thereby.

 

    13 

    

    

(d)               
Such Grantor shall take all actions necessary or requested by the Administrative Agent to maintain and pursue each application,
to obtain the relevant registration and to maintain the registration of each of its Patents, Trademarks and Copyrights (now or
hereafter existing), including the filing of applications for renewal, affidavits of use, affidavits of noncontestability and opposition
and interference and cancellation proceedings, unless such Grantor shall determine that such Patent, Trademark or Copyright is
not material to the conduct of such Grantor’s business.

 

(e)               
Such Grantor shall, unless it shall reasonably determine that such Patent, Trademark or Copyright is in no way material to the
conduct of its business or operations, promptly sue for infringement, misappropriation or dilution and to recover any and all damages
for such infringement, misappropriation or dilution, and shall take such other actions as the Administrative Agent shall deem appropriate
under the circumstances to protect such Patent, Trademark or Copyright. In the event that such Grantor institutes suit because
any of its Patents, Trademarks or Copyrights constituting Collateral is infringed upon, or misappropriated or diluted by a third
party, such Grantor shall comply with Section 4.8.

 

4.8       Commercial
Tort Claims. Such Grantor shall promptly, and in any event within five (5) Business Days after the same is acquired by it,
notify the Administrative Agent of any commercial tort claim (as defined in the UCC) acquired by it and, unless the Administrative
Agent otherwise consents, such Grantor shall enter into an amendment to this Security Agreement, in the form of Exhibit A
hereto, granting to Administrative Agent a first priority security interest in such commercial tort claim.

 

4.9.       Letter-of-Credit
Rights. If such Grantor is or becomes the beneficiary of a letter of credit, it shall promptly, and in any event within two
(2) Business Days after becoming a beneficiary, notify the Administrative Agent thereof and cause the issuer and/or confirmation
bank to (i) consent to the assignment of any Letter-of-Credit Rights to the Administrative Agent and (ii) agree to direct all payments
thereunder to a Deposit Account at the Administrative Agent or subject to a Deposit Account Control Agreement for application to
the Secured Obligations, in accordance with Section 2.18 of the Credit Agreement, all in form and substance reasonably satisfactory
to the Administrative Agent.

 

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

 

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

 

4.12.
       Insurance. (a) In the event any Collateral is located in any area that
has been designated by the Federal Emergency Management Agency as a “Special Flood Hazard Area”, such Grantor
shall purchase and maintain flood insurance on such Collateral (including any personal property which is located on any real
property leased by such Grantor within a “Special Flood Hazard Area”). The amount of flood insurance required by
this Section shall at a minimum comply with applicable law, including the Flood Disaster Protection Act of 1973, as amended.
If applicable, such Grantor shall promptly deliver evidence to the Administrative Agent that “life of loan” flood
zone determinations and flood insurance in such amounts, and otherwise in form and substance satisfactory to the
Administrative Agent, have been obtained

 

    14 

    

    

(b) All insurance policies required
hereunder and under Section 5.10 of the Credit Agreement shall name the Administrative Agent (for the benefit of the
Administrative Agent and the Secured Parties) as an additional insured or as lender’s loss payee, as applicable, and
shall contain lender loss payable clauses or mortgagee clauses, through endorsements in form and substance satisfactory to
the Administrative Agent, which provide that: (i) all proceeds thereunder with respect to any Collateral shall be payable to
the Administrative Agent; (ii) no such insurance shall be affected by any act or neglect of the insured or owner of the
property described in such policy; and (iii) such policy and lender loss payable or mortgagee clauses may be canceled,
amended, or terminated only upon at least thirty (30) days prior written notice given to the Administrative Agent. In
addition to the above, Grantors shall use their best efforts to cause the medical malpractice insurance policies to be
maintained by the medical professionals pursuant to the terms of the Franchise Agreements to name the Administrative Agent
(for the benefit of the Administrative Agent and the Secured Parties) as an additional insured or as lender’s loss
payee, as applicable, as soon as practicable after the execution of this Security Agreement.

 

(c) All premiums on any such insurance
shall be paid when due by such Grantor, and copies of the policies delivered to the Administrative Agent. Unless a Grantor provides
the Administrative Agent with evidence of the insurance coverage required by this Security Agreement, the Administrative Agent
may purchase insurance at such Grantor’s or the Borrower’s expense to protect the Administrative Agent’s and
the other Secured Parties’ interests in the Collateral. This insurance may, but need not, protect such Grantor’s interests.
The coverage that the Administrative Agent purchases may not pay any claim that such Grantor makes or any claim that is made against
such Grantor in connection with the Collateral. Such Grantor may later cancel any insurance purchased by the Administrative Agent,
but only after providing the Administrative Agent with evidence that such Grantor has obtained insurance as required by this Security
Agreement. If the Administrative Agent purchases insurance for the Collateral, such Grantor and the Borrower will be responsible
for the costs of that insurance, including interest and any other charges the Administrative Agent may impose in connection with
the placement of the insurance, until the effective date of the cancellation or expiration of the insurance. The costs of the insurance
may be added to the Borrower’s or such Grantor’s total outstanding balance or obligation. The costs of the insurance
may be more than the cost of insurance such Grantor may be able to obtain on its own. By purchasing such insurance, the Administrative
Agent shall not be deemed to have waived any Default arising from the Grantor’s failure to maintain such insurance or pay
any premiums therefor.

 

4.13.        Collateral
Access Agreements. Such Grantor shall use commercially reasonable efforts to obtain a Collateral Access Agreement from the
lessor of Grantor’s corporate headquarters, which agreement or letter shall provide access rights, contain a waiver or subordination
of all Liens or claims that the landlord, mortgagee, bailee or consignee may assert against the Collateral at that location, and
shall otherwise be reasonably satisfactory in form and substance to the Administrative Agent.

 

4.14.       Deposit
Account Control Agreements. Such Grantor will provide to the Administrative Agent upon the Administrative Agent’s request,
a Deposit Account Control Agreement duly executed on behalf of each financial institution holding a deposit account of such Grantor
as set forth in this Security Agreement; provided, a Deposit Account Control Agreement shall not be required for any deposit account
that is to be moved to Administrative Agent within the post-closing time frame set forth in the Credit Agreement.

 

 

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

 

    15 

    

    

ARTICLE V

EVENTS OF DEFAULT AND REMEDIES

 

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

 

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

 

(b)               
Any Grantor shall fail to observe or perform any of the terms or provisions of Article IV.

 

(c)               
Any Grantor shall fail to observe or perform any of the terms or provisions of this Security Agreement (other than a breach which
constitutes an Event of Default under any other Section of this Article V), and such failure shall continue unremedied for a period
of fifteen (15) days after the earlier of knowledge of such breach or notice thereof from the Administrative Agent.

 

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

 

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

 

		5.2.	Remedies.

 

(a)               
Upon the occurrence of an Event of Default, the Administrative Agent, with the concurrence or at the direction of the Required
Lenders, may exercise any or all of the following rights and remedies:

 

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

 

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

 

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

 

    16 

    

    

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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5.3.       Grantor’s
Obligations Upon Default. Upon the request of the Administrative Agent after the occurrence of an Event of Default, each Grantor
will:

 

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

 

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

 

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

 

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

 

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

 

5.4.       Grant
of Intellectual Property License. For the purpose of enabling the Administrative Agent to exercise the rights and remedies
under this Article V at such time as the Administrative Agent shall be lawfully entitled to exercise such rights and remedies,
each Grantor hereby (a) grants to the Administrative Agent, for the benefit of itself and the other Secured Parties, an irrevocable,
nonexclusive license (exercisable without payment of royalty or other compensation to any Grantor) to use, license or sublicense
any intellectual property rights now owned or hereafter acquired by such Grantor, and wherever the same may be located, and including
in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and
programs used for the compilation or printout thereof and (b) irrevocably agrees that the Administrative Agent may sell any of
such Grantor’s Inventory directly to any person, including without limitation persons who have previously purchased the Grantor’s
Inventory from such Grantor and in connection with any such sale or other enforcement of the Administrative Agent’s rights
under this Security Agreement, may sell Inventory which bears any Trademark owned by or licensed to such Grantor and any Inventory
that is covered by any Copyright owned by or licensed to such Grantor and the Administrative Agent may finish any work in process
and affix any Trademark owned by or licensed to such Grantor and sell such Inventory as provided herein. Upon the termination of
the Credit Agreement, the grant under this Security Agreement shall co-terminate.

 

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ARTICLE VI

ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY

 

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

 

6.2.            
Authorization for Administrative Agent to Take Certain Action.

 

(a)       Each
Grantor irrevocably authorizes the Administrative Agent at any time and from time to time in the sole discretion of the Administrative
Agent and appoints the Administrative Agent as its attorney-in-fact (i) to endorse and collect any cash proceeds of the Collateral,
(ii) to file any financing statement with respect to the Collateral and to file any other financing statement or amendment of a
financing statement (which does not add new collateral or add a debtor) in such offices as the Administrative Agent in its sole
discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the Administrative Agent’s
security interest in the Collateral, (iii) to contact and enter into one or more agreements with the issuers of uncertificated
securities which are Pledged Collateral or with securities intermediaries holding Pledged Collateral as may be necessary or advisable
to give the Administrative Agent Control over such Pledged Collateral, (iv) to discharge past due taxes, assessments, charges,
fees or Liens on the Collateral (except for such Liens that are permitted under Section 6.02 of the Credit Agreement), (v) to contact
Account Debtors for any reason, (vi) to demand payment or enforce payment of the Receivables in the name of the Administrative
Agent or such Grantor and to endorse any and all checks, drafts, and other instruments for the payment of money relating to the
Receivables, (vii) to sign such Grantor’s name on any invoice or bill of lading relating to the Receivables, drafts against
any Account Debtor of the Grantor, assignments and verifications of Receivables, (viii) to exercise all of such Grantor’s
rights and remedies with respect to the collection of the Receivables and any other Collateral, (ix) to settle, adjust, compromise,
extend or renew the Receivables, (x) to settle, adjust or compromise any legal proceedings brought to collect Receivables, (xi)
to prepare, file and sign such Grantor’s name on a proof of claim in bankruptcy or similar document against any Account Debtor
of such Grantor, (xii) to prepare, file and sign such Grantor’s name on any notice of Lien, assignment or satisfaction of
Lien or similar document in connection with the Receivables, (xiii) to change the address for delivery of mail addressed to such
Grantor to such address as the Administrative Agent may designate and to receive, open and dispose of all mail addressed to such
Grantor, and (xiv) to do all other acts and things necessary to carry out this Security Agreement; and such Grantor agrees to reimburse
the Administrative Agent on demand for any payment made or any expense incurred by the Administrative Agent in connection with
any of the foregoing; provided that, this authorization shall not relieve such Grantor of any of its obligations under this
Security Agreement or under the Credit Agreement.

 

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

 

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

 

6.4.            
Nature of Appointment; Limitation of Duty. THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT IN
THIS ARTICLE VI IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS SECURITY AGREEMENT IS TERMINATED
IN ACCORDANCE WITH SECTION 7.14. NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NONE OF THE ADMINISTRATIVE AGENT, ANY LENDER, ANY OTHER
SECURED PARTY, ANY OF THEIR RESPECTIVE AFFILIATES, OR ANY OF THEIR OR THEIR AFFILIATES’ RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE
SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY
TO SUCH PARTY’S OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED
THAT, IN NO EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

 

ARTICLE VII

GENERAL PROVISIONS

 

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

 

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7.2.       Limitation
on Administrative Agent’s and Secured Parties’ Duty with Respect to the Collateral. The Administrative Agent shall
have no obligation to clean-up or otherwise prepare the Collateral for sale. The Administrative Agent and each other Secured Party
shall use reasonable care with respect to the Collateral in its possession or under its control. Neither the Administrative Agent
nor any other Secured Party shall have any other duty as to any Collateral in its possession or control or in the possession or
control of any agent or nominee of the Administrative Agent or such other Secured Party, or any income thereon or as to the preservation
of rights against prior parties or any other rights pertaining thereto. To the extent that applicable law imposes duties on the
Administrative Agent to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is
commercially reasonable for the Administrative Agent (i) to fail to incur expenses deemed significant by the Administrative Agent
to prepare Collateral for disposition or otherwise to transform raw material or work in process into finished goods or other finished
products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain
or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral
to be collected or disposed of, (iii) to fail to exercise collection remedies against Account Debtors or other Persons obligated
on Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies against Account
Debtors and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists,
(v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral
is of a specialized nature, (vi) to contact other Persons, whether or not in the same business as such Grantor, for expressions
of interest in acquiring all or any portion of the Collateral, (vii) to hire one or more professional auctioneers to assist in
the disposition of Collateral, whether or not the Collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing
internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity
of doing so, or that match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x)
to disclaim disposition warranties, such as title, possession or quiet enjoyment, (xi) to purchase insurance or credit enhancements
to insure the Administrative Agent against risks of loss, collection or disposition of Collateral or to provide to the Administrative
Agent a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate by the Administrative
Agent, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Administrative
Agent in the collection or disposition of any of the Collateral. The Grantor acknowledges that the purpose of this Section 7.2
is to provide non-exhaustive indications of what actions or omissions by the Administrative Agent would be commercially reasonable
in the Administrative Agent’s exercise of remedies against the Collateral and that other actions or omissions by the Administrative
Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 7.2. Without limitation
upon the foregoing, nothing contained in this Section 7.2 shall be construed to grant any rights to the Grantor or to impose any
duties on the Administrative Agent that would not have been granted or imposed by this Security Agreement or by applicable law
in the absence of this Section 7.2.

 

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

 

7.4.       Secured
Party Performance of Debtor Obligations. Without having any obligation to do so, the Administrative Agent may perform or pay
any obligation which any Grantor has agreed to perform or pay in this Security Agreement and the Grantors shall reimburse the Administrative
Agent for any amounts paid by the Administrative Agent pursuant to this Section 7.4. The Grantors’ obligation to reimburse
the Administrative Agent pursuant to the preceding sentence shall be a Secured Obligation payable on demand.

 

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7.5       Specific
Performance of Certain Covenants. Each Grantor acknowledges and agrees that a breach of any of the covenants contained in Sections
4.1(d), 4.1(e), 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.12, 4.13, 4.14, 4.15, 5.3, or 7.7 will cause irreparable injury to the Administrative
Agent and the other Secured Parties, that the Administrative Agent and the other Secured Parties have no adequate remedy at law
in respect of such breaches and therefore agrees, without limiting the right of the Administrative Agent and the other Secured
Parties to seek and obtain specific performance of other obligations of the Grantors contained in this Security Agreement, that
the covenants of the Grantors contained in the Sections referred to in this Section 7.5 shall be specifically enforceable against
the Grantors.

 

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

 

7.7.       No
Waiver; Amendments; Cumulative Remedies. No failure or delay by the Administrative Agent or any other Secured Party to exercise
any right or power under this Security Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent and the
other Secured Parties hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provision of this Security Agreement or consent to any departure by the Grantor therefrom shall in any event be
effective unless in writing signed by the Administrative Agent with the concurrence or at the direction of the Lenders required
under Section 9.02 of the Credit Agreement and then only to the extent in such writing specifically set forth.

 

7.8.       Limitation
by Law; Severability of Provisions. All rights, remedies and powers provided in this Security Agreement may be exercised only
to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions of this Security
Agreement are intended to be subject to all applicable mandatory provisions of law that may be controlling and to be limited to
the extent necessary so that they shall not render this Security Agreement invalid, unenforceable or not entitled to be recorded
or registered, in whole or in part. Any provision in this Security Agreement held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other jurisdiction, and to this end the provisions of this
Security Agreement are declared to be severable.

 

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

 

    22 

    

    

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

 

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

 

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

 

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

 

7.14.       Termination.
This Security Agreement shall continue in effect (notwithstanding the fact that from time to time there may be no Secured Obligations
outstanding) until (i) the Credit Agreement has terminated pursuant to its express terms and (ii) all of the Secured Obligations
other than contingent indemnification obligations as to which no claim has been made have been indefeasibly paid and performed
in full (or with respect to any outstanding Letters of Credit, a cash deposit has been delivered to the Administrative Agent as
required by the Credit Agreement) and no commitments of the Administrative Agent or the Lenders which would give rise to any Secured
Obligations are outstanding.

 

7.15.       Entire
Agreement. This Security Agreement and the other Loan Documents embody the entire agreement and understanding between the Grantors
and the Administrative Agent relating to the Collateral and supersedes all prior agreements and understandings between the Grantors
and the Administrative Agent relating to the Collateral.

 

7.16.       CHOICE
OF LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS
(INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET SEQ), BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

 

7.17.       CONSENT
TO JURISDICTION. EACH GRANTOR HEREBY IRREVOCABLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
ANY U.S. FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH GRANTOR HEREBY IRREVOCABLY
AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT
AND IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION IT MAY NOW
OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT
FORUM. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION.
ANY JUDICIAL PROCEEDING BY ANY GRANTOR AGAINST THE ADMINISTRATIVE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT
OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS SECURITY
AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.

 

    23 

    

    

7.18.       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 ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT, ANY OTHER
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OR OTHER AGENT (INCLUDING ANY 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 SECURITY AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

7.19.       Indemnity.
Each Grantor hereby agrees to indemnify the Administrative Agent, the other Secured Parties and their respective successors, assigns,
agents and employees (collectively, “Indemnitees”), from and against any and all liabilities, damages, penalties,
suits, fees, costs, and expenses of any kind and nature (including, without limitation, all expenses of litigation or preparation
therefor whether or not the Administrative Agent or any other Secured Party is a party thereto) imposed on, incurred by or asserted
against the Administrative Agent or any other Secured Party, or their respective successors, assigns, agents and employees, in
any way relating to or arising out of this Security Agreement, or the manufacture, purchase, acceptance, rejection, ownership,
delivery, lease, possession, use, operation, condition, sale, return or other disposition of any Collateral (including, without
limitation, latent and other defects, whether or not discoverable by any Secured Party or any Grantor, and any claim for Patent,
Trademark or Copyright infringement); provided that such indemnity shall not, as to any Indemnitee, be available to the
extent that such liabilities, damages, penalties, suits, fees, costs, and expenses are determined by a court of competent jurisdiction
by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.

 

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

 

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ARTICLE VIII

NOTICES

 

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

 

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

 

ARTICLE IX

THE ADMINISTRATIVE AGENT

 

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

 

[Signature Page Follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

    25 

    

    

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

 

GRANTORS:

 

THE JOINT CORP.

 

By: /s/ Jake Singleton

Name: Jake Singleton

Title: CFO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Pledge and Security Agreement - JPMorgan/The Joint
Corp. Financing]

 

    

    

    

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

By: /s/ Brendan Kelly

Name: Brendan Kelly

Title: Authorized Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Pledge and Security Agreement - JPMorgan/The Joint
Corp. Financing]

 

    

    

    

EXHIBIT A

(See Section 4.8 of Security Agreement)

 

AMENDMENT

 

 

 

This Amendment, dated ________________, ___ is delivered pursuant
to Section 4.8 of the Security Agreement referred to below. All defined terms herein shall have the meanings ascribed thereto or
incorporated by reference in the Security Agreement. The undersigned hereby certifies that the representations and warranties in
Article III of the Security Agreement are and continue to be true and correct. The undersigned further agrees that this Amendment
may be attached to that certain Pledge and Security Agreement, dated February __, 2020, between the undersigned, as the Grantors,
and JPMorgan Chase Bank, N.A., as the Administrative Agent, ([as amended, restated, supplemented or otherwise modified from time
to time prior to the date hereof,] the “Security Agreement”) and that the Collateral listed on Schedule I
to this Amendment shall be and become a part of the Collateral referred to in said Security Agreement and shall secure all Secured
Obligations referred to in the Security Agreement.

 

 

 

 

 

 

_________________________________

 

By: ______________________________

Name:____________________________

Title:_____________________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    2 

    

    

Schedule I to Amendment to Security Agreement

 

COMMERCIAL TORT CLAIMS

 

{NOTE: SPECIFICALLY DESCRIBE THE CLAIM (I.E. PARTIES, DESCRIPTION
OF THE DISPUTE, CASE NUMBER – IF AVAILABLE) - SEE OFFICIAL COMMENT 5 TO SECTION 9-108 OF THE UCC}.

 

	Name of Grantor	Description of Claim	Parties	Case Number; Name of Court where Case was Filed
	 	 	 	 
	 	 	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    3 

    

    

ANNEX I TO PLEDGE AND SECURITY AGREEMENT 

 

Reference is hereby made to the Pledge and
Security Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Security Agreement”),
dated as of February __, 2020 by and among The Joint Corp., a Delaware corporation (the “Borrower”) and certain
other entities which become parties to the Security Agreement from time to time, including, without limitation, those that become
party thereto by executing a Security Agreement Supplement in substantially the form hereof (such parties, including the undersigned,
the “Grantors”), in favor of JPMorgan Chase Bank, N.A., as Administrative Agent (the “Administrative
Agent”). Each capitalized terms used herein and not defined herein shall have the meanings given to it in the Security
Agreement.

 

By its execution below, the undersigned, [NAME OF NEW GRANTOR],
a [__________________________] [corporation] [partnership] [limited liability company] (the “New Grantor”) agrees
to become, and does hereby become, a Grantor under the Security Agreement and agrees to be bound by such Security Agreement as
if originally a party thereto. The New Grantor hereby pledges, assigns and grants to the Administrative Agent a security interest
in all of the New Grantor’s right, title and interest in and to the Collateral, whether now owned or hereafter acquired,
to secure the prompt and complete payment and performance of the Secured Obligations.

 

By its execution below, the New Grantor represents and warrants
as to itself that all of the representations and warranties contained in the Security Agreement are true and correct in all respects
as of the date hereof. The New Grantor represents and warrants that the supplements to the Perfection Certificate attached hereto
are true and correct in all respects and such supplements set forth all information required to be scheduled under the Security
Agreement. The New Grantor shall take all steps necessary to perfect, in favor of the Administrative Agent, a first-priority security
interest in and lien against the New Grantor’s Collateral, including, without limitation, delivering all certificated Pledged
Collateral to the Administrative Agent (and other Collateral required to be delivered under the Security Agreement), and taking
all steps necessary to properly perfect the Administrative Agent’s interest in any uncertificated Pledged Collateral.

 

IN WITNESS WHEREOF, [NAME OF NEW GRANTOR], a [__________________]
[corporation] [partnership] [limited liability company] has executed and delivered this Annex I counterpart to the Security Agreement
as of this ___________ day of ____________, ____.

 

[NAME OF NEW GRANTOR] 

 

By: 

Name:_______________________________

Title:________________________________

 

 

 

 

 

 

 

 

4Exhibit 10.3

 

 

EXECUTION VERSION

 

TERM A LOAN NOTE

 

	$5,500,000	 	Chicago, Illinois

February 28, 2020

 

FOR VALUE RECEIVED, the undersigned THE JOINT CORP., a Delaware corporation
(herein, together with its successors and assigns, the “Borrower”), hereby promises to pay to JPMORGAN CHASE
BANK, N.A. (the “Lender”) or its registered assignees, in lawful money of the United State of America and in
immediately available funds, at 10 South Dearborn, Floor L2, Suite IL1-1145, Chicago, Illinois 60603-2300, the principal sum of
FIVE MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($5,500,000.00) or, if less, the then unpaid principal amount of all Term
A Loans (such term and certain other terms used herein without definition shall have the meanings ascribed thereto in the Credit
Agreement referred to below), made by the Lender (or any of its predecessors in interest with respect hereto) to the Borrower pursuant
to the Credit Agreement, on the dates and in accordance with terms of Section 2.10 of the Credit Agreement.

 

The Borrower promises also to pay interest in like currency and funds
at 10 South Dearborn, Floor L2, Suite IL1-1145, Chicago, Illinois 60603-2300, on the unpaid principal amount of each Term Loan
made by the Lender from the date of such Term A Loan until paid at the rates and at the times provided in the Credit Agreement.

 

This Term A Loan note (the “Note”) is issued pursuant
to the Credit Agreement, dated as of the date hereof, among the Borrower, the Lenders party thereto, and JPMorgan Chase Bank, N.A.,
as Administrative Agent, (as amended, restated or otherwise modified and as from time to time in effect, the “Credit Agreement”),
and is entitled to the benefits thereof and of the other Loan Documents. This Note is subject to voluntary and mandatory prepayment
prior to the Term A Maturity Date, in whole or in part, as provided in Section 2.11 of the Credit Agreement.

 

In case an Event of Default shall occur and be continuing, the principal
of and accrued interest on this Note may become or be declared to be due and payable in full in the manner and with the effect
provided in the Credit Agreement.

 

The Borrower hereby waives presentment, demand, protest or notice
of any kind in connection with this Note. No failure to exercise, or delay in exercising, any rights hereunder on the part of the
holder hereof shall operate as a waiver of any such rights.

 

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF ILLINOIS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET SEQ), BUT GIVING EFFECT TO FEDERAL
LAWS APPLICABLE TO NATIONAL BANKS.

 

 

 

[Remainder of page intentionally left blank; signature page follows.]

 

 

 

    1 

    

    

THE JOINT CORP.

 

By: /s/ Jake Singleton

Name: Jake Singleton

Title: CFO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Term Loan Note JPMorgan/The Joint Corp.]

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