PLEDGE AND SECURITY AGREEMENT

Exhibit 10.14

EXECUTION COPY

PLEDGE AND SECURITY AGREEMENT

THIS PLEDGE AND SECURITY AGREEMENT (as it may be amended or modified from time to time, this “ Security Agreement ”) is entered into as of September 28, 2009 by and among Kelly Services, Inc., a Delaware corporation (the “Borrower”), Kelly Properties, LLC, a Delaware limited liability company, Kelly Receivables Services, LLC, a Delaware limited liability company, Kelly Services (Ireland), LTD., a Delaware corporation, Kelly Services of Denmark, Inc., a Delaware corporation, Kelly Services CIS, Inc., a Delaware corporation, Kelly Services (Australia), LTD., a Delaware corporation, Kelly Services (New Zealand), LTD., a Delaware corporation, Kelly Staff Leasing, Inc., a California corporation, KHCS, Inc., a Delaware corporation, and KSI Acquisition Corporation, a Delaware corporation (each a “ Guarantor ”, and collectively, the “ Guarantors ”, and collectively with the Borrower, each a “ Grantor ”, and collectively, the “ Grantors ”), and JPMorgan Chase Bank, N.A., a national banking association, in its capacity as collateral agent (the “ Collateral Agent ”) under the Intercreditor Agreement referred to below.

PRELIMINARY STATEMENTS

A. The Secured Parties (as defined in the Intercreditor Agreement) and JPMorgan Chase Bank, N.A., as Collateral Agent, are parties to a Collateral Agency and Intercreditor Agreement dated as of the date hereof (as amended or modified from time to time, the “ Intercreditor Agreement ”) relating to the collateral granted by the Grantors to the Secured Parties.

B. The Grantors have agreed to pledge to the Collateral Agent, for the benefit of the Secured Parties, and grant a first-priority security interest (subject to Liens permitted by the Financing Documents (as defined in the Intercreditor Agreement)) to the Collateral Agent, for the benefit of the Secured Parties, in and to the collateral described herein and to execute this Security Agreement.

C. Each Grantor has determined that it is to its benefit and in its financial interest to execute this Security Agreement, and is entering into this Security Agreement in order to induce the Secured Parties to enter into amendments to the agreements evidencing the Secured Obligations, to induce the Secured Parties to extend credit to the Borrower and to secure the Secured Obligations.

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

ARTICLE I
DEFINITIONS

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

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 Preliminary Statement, the following terms shall have the following meanings:

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

“ 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.

“ Business Day ” means a day (other than a Saturday or Sunday) on which banks generally are open in Chicago and New York City for the conduct of substantially all of their commercial lending activities.

“ Capital Stock ” means (i) in the case of any corporation, all capital stock and any securities exchangeable for or convertible into capital stock and any warrants, rights or other options to purchase or otherwise acquire capital stock or such securities or any other form of equity securities, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (iii) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited) and (iv) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

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

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

“ Collateral Access Agreement ” means any landlord waiver or other agreement between the Collateral 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 Grantor for any real property where any Collateral is located, which agreement shall provide access rights, contain a waiver or subordination of all Liens or claims that the landlord, bailee or consignee may assert against the Collateral at that location, and shall otherwise be reasonably satisfactory in form and substance to the Collateral Agent, as such landlord waiver or other agreement may be amended, restated, or otherwise modified from time to time.

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

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

“ Control Account ” means a Deposit Account maintained with the Collateral Agent or a Lender or subject to a Control Agreement or a Securities Account subject to a Control Agreement.

“ Control Agreement ” means a control agreement, in form and substance satisfactory to the Collateral Agent, entered into under any of Sections 4.4, 4.5 or 4.11, pursuant to which the Collateral Agent is granted Control over a Deposit Account, Securities or a Securities Account, as the case may be.

“ 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 an event described in Section 5.1 .

“ 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.

“ Domestic Subsidiary ” means each present and future Subsidiary which is not a Foreign Subsidiary.

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

“ Excluded Payments ” shall have the meaning set forth in Section 4.6(d)(iii).

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

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

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

“ Foreign Subsidiary ” means each Subsidiary organized under the laws of a jurisdiction outside of the United States that is owned directly by any Grantor.

“ 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.

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

“ 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.

“ Material Adverse Effect ” is defined in the Revolving Credit Agreement.

“ Material Foreign Subsidiary ” means (i) each Foreign Subsidiary organized under the laws of Russia, China or India, and (ii) each Foreign Subsidiary whose assets at any time constitute more than 1% of the Total Assets (as defined in the Revolving Credit Agreement).

“ 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.

“ Permitted Liens ” means Liens that are permitted by the Financing Documents.

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

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

“ Required Secured Parties ” is defined in the Intercreditor Agreement.

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

“ Secured Obligations ” is defined in the Intercreditor Agreement.

“ Securities Account ” is defined in Section 4.5 hereof.

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

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

“ 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 Capital Stock constituting Collateral, any right to receive Capital Stock and any right to receive earnings, in which the Grantors now have or hereafter acquire any right, issued by an issuer of such Capital Stock.

“ 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 Michigan 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, Collateral Agent’s or any 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.

ARTICLE II
GRANT OF SECURITY INTEREST

Each Grantor hereby pledges, assigns and grants to the Collateral 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:

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

Notwithstanding the foregoing or any other provision of this Agreement, “Collateral” and the defined terms used above to describe the Collateral shall not include any assets specifically excluded from the defined term “Collateral” under the Intercreditor Agreement.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

Each Grantor represents and warrants to the Collateral Agent and the Secured Parties that:

3.1. Title, Perfection and Priority . Such Grantor has good and valid rights in or the power to transfer the Collateral and title to the Collateral with respect to which it has purported to grant a security interest hereunder, free and clear of all Liens except for Liens permitted under Section 4.1(e) , and has full power and authority to grant to the Collateral Agent the security interest in such Collateral pursuant hereto. When financing statements fulfilling the requirement of the UCC and the applicable filing office have been filed in and the applicable fees paid to the appropriate offices against such Grantor in the locations listed on Exhibit H , the Collateral Agent will have a fully perfected first priority security interest in that Collateral of the Grantor in which a security interest may be perfected by filing, subject only to Liens permitted under Section 4.1(e) .

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

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

3.4. Collateral Locations . All of such Grantor’s locations where Collateral is located are listed on Exhibit A . All of said locations are owned by such Grantor except for locations (i) which are leased by the Grantor as lessee and designated in Part VII(b) of Exhibit A and (ii) at which Inventory is held in a public warehouse or is otherwise held by a bailee or on consignment as designated in Part VII(c) of Exhibit A.

3.5. Deposit Accounts . All of such Grantor’s Deposit Accounts are listed on Part I of Exhibit B .

3.6. Securities Held by Securities Intermediary . All Securities held by such Grantor through a Securities Intermediary are listed on Part I of Exhibit B in addition to the following information with respect to such Securities: the name of the owning Grantor, the type of account in which such Securities are held, the account number and the name and address of the Securities Intermediary holding such Securities.

3.7. 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. The Grantor has not, during the past five years, been known by or used any other corporate or fictitious name, except as listed on Exhibit A .

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

3.9. Accounts and Chattel Paper . The names of the obligors, amounts owing, due dates and other information with respect to its Accounts and Chattel Paper, to the knowledge of the Grantor, are and will be correctly stated in all records of the Grantor relating thereto and in all invoices and reports with respect thereto furnished to the Collateral 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.

3.10. Inventory . With respect to any of its Inventory, (a) such Inventory (other than Inventory in transit) is located at one of the locations set forth on Exhibit A designated as a location of Collateral for such Grantor, (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) , and (c) such Grantor has good and 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 Lien granted to the Collateral Agent, for the benefit of the Collateral Agent and Secured Parties, and except for Permitted Liens.

3.11. Intellectual Property . Such Grantor does not have any interest in, or title to, any Patent, Trademark or Copyright except as set forth in Exhibit D . This Security Agreement is effective to create a valid and continuing Lien and, upon filing of appropriate financing statements in the offices listed on Exhibit H and this Security Agreement with the United States Copyright Office and the United States Patent and Trademark Office, fully perfected first priority security interests in favor of the Collateral 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 the Grantor, and all action by such Grantor necessary or desirable to protect and perfect the Collateral Agent’s Lien on such Grantor’s Patents, Trademarks or Copyrights shall have been duly taken.

3.12. Filing Requirements . None of its Equipment is covered by any certificate of title, except for vehicles. Upon request of the Collateral Agent, each Grantor shall complete Part I of Exhibit E , setting forth a list of all certificated vehicles owned by such Grantor. 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) vehicles and (b) Patents, Trademarks and Copyrights held by such Grantor and described in Exhibit D . Upon request of the Collateral Agent, each Grantor shall complete Exhibit F setting forth the legal description, county and street address of each property on which any Fixtures are located together with the name and address of the record owner of each such property.

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

3.14. Pledged Collateral .

(a)  Exhibit G sets forth a complete and accurate list of all Pledged Collateral owned by such Grantor and not held by a Securities Intermediary. Such Grantor is the direct, sole beneficial owner and sole holder of record of the Pledged Collateral listed on Exhibit G as being owned by it, free and clear of any Liens, except for the security interest granted to the Collateral Agent for the benefit of the Secured Parties hereunder. Such Grantor further represents and warrants that (i) all Pledged Collateral listed on Exhibit G owned by it constituting Capital Stock has been (to the extent such concepts are relevant with respect to such Pledged Collateral and, if the issuer of such Pledged Collateral is not controlled by such Grantor, this representation is made to the best of such Grantor’s knowledge) duly authorized, validly issued, are fully paid and non-assessable, (ii) with respect to any certificates delivered to the Collateral Agent representing Capital Stock, 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 Collateral Agent so that the Collateral Agent may take steps to perfect its security interest therein as a General Intangible, (iii) upon the execution of Control Agreements with respect to Pledged Collateral held by a Securities Intermediary in favor of the Collateral Agent, all such Pledged Collateral held by a Securities Intermediary is covered by a Control Agreement among such Grantor, the Securities Intermediary and the Collateral Agent pursuant to which the Collateral Agent has Control and (iv) all Pledged Collateral which represents debt or similar obligations owed to such Grantor has, to the knowledge of such Grantor (1) been duly authorized, authenticated or issued and delivered by the issuer of such debt or similar obligation, and (2), is the legal, valid and binding obligation of such issuer and such issuer is not in default thereunder.

(b) In addition, (i) none of the Pledged Collateral owned by any Grantor and issued by a Person controlled by it has been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject, (ii) there are existing no options, warrants, calls or commitments of any character whatsoever relating to such Pledged Collateral or which obligate the issuer of any Capital Stock included in the Pledged Collateral to issue additional Capital Stock, 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 Collateral Agent of the voting or other rights provided for in this Security Agreement or for the remedies in respect of the Pledged Collateral pursuant to this Security Agreement, except as may be required in connection with such disposition by laws affecting the offering and sale of securities generally.

(c) Except as set forth in Exhibit G , such Grantor owns 100% of the issued and outstanding Capital Stock which constitutes Pledged Collateral. None of the Pledged Collateral which represents debt or similar obligations owed to such Grantor is subordinated in right of payment to other debt or similar obligations or subject to the terms of an indenture.

(d) Notwithstanding anything to the contrary in this Agreement or in any other Financing Document, each Grantor shall:

(i) on or before October 31, 2009 or such later date as the Collateral Agent may determine in its reasonable discretion, deliver to the Collateral Agent the originals of all “Notes or other Instruments Payable to the Company” as described in Exhibit G, together with appropriate endorsements duly executed in blank;

(ii) on or before November 30, 2009 or such later date as the Collateral Agent may determine in its reasonable discretion, deliver to the Collateral Agent executed Control Agreements required pursuant to this Security Agreement with respect to any account maintained in the United States;

(iii) on or before December 31, 2009 or such later date as the Collateral Agent may determine in its reasonable discretion, use reasonable efforts to deliver to the Collateral Agent executed Control Agreements required pursuant to this Security Agreement with respect to any account maintained outside of the United States or take such other action reasonably requested by the Collateral Agent in the local jurisdiction where any such account is held to create and perfect the first priority security interest in any such account, provided , that , the Collateral Agent may, in its discretion, waive the requirements of this clause (iii) with respect to any such account;

(iv) on the date of this Security Agreement, deliver to the Collateral Agent originals of all instruments and certificates evidencing the Capital Stock of all Domestic Subsidiaries described in Exhibit G , together with appropriate stock powers, endorsements or other powers duly executed in blank;

(v) on or before December 31, 2009 or such later date as the Collateral Agent may determine in its reasonable discretion, deliver to the Collateral Agent originals of all instruments and certificates evidencing Capital Stock of all Material Foreign Subsidiaries (to the extent the Capital Stock is certificated) described in Exhibit G , together with appropriate stock powers, endorsements or other powers duly executed in blank;

(vi) to the extent the Capital Stock of any Material Foreign Subsidiary is not certificated, take such additional actions reasonably requested by the Required Secured Parties in the local jurisdiction of any such Material Foreign Subsidiary to create and perfect the first priority security interest in any such Capital Stock, including without limitation opinions of counsel and other documents and requirements reasonably requested by the Required Secured Parties; and

(vii) after the occurrence of a Default, (A) deliver to the Collateral Agent originals of all instruments and certificates evidencing Capital Stock of all Foreign Subsidiaries (to the extent the Capital Stock is certificated and it has not previously been delivered to the Collateral Agent) described in Exhibit G , together with appropriate stock powers, endorsements or other powers duly executed in blank and (B) take such other action in the local jurisdiction of any Foreign Subsidiary with respect to the Capital Stock of any Foreign Subsidiary requested by the Collateral Agent to create and perfect the first priority security interest in any such Capital Stock, including without limitation opinions of counsel and other documents and requirements requested by the Collateral Agent.

3.15 Authorization and Validity . Each Grantor has the power and authority and legal right to execute and deliver this Security Agreement and to perform its obligations thereunder. The execution and delivery by each Grantor of this Security Agreement and the performance of its obligations thereunder have been duly authorized by proper corporate or limited liability company proceedings, and this Security Agreement constitutes the legal, valid and binding obligation of each Grantor, enforceable against each Grantor in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, fraudulent transfer or similar laws affecting the enforcement of creditors’ rights generally. Neither the execution and delivery by any Grantor of this Security Agreement, nor the consummation of the transactions herein contemplated, nor compliance with the provisions hereof will violate (i) any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on any Grantor, (ii) any Grantor’s articles or certificate of incorporation, partnership agreement, certificate of partnership, articles of organization or certificate of formation, by-laws, or operating or other management agreement, as the case may be, or (iii) the provisions of any indenture, instrument or agreement to which any Grantor is a party or is subject, or by which it, or its assets, is bound, or conflict with or constitute a default thereunder, or result in, or require, the creation or imposition of any Lien in, of or on the assets of any Grantor pursuant to the terms of any such indenture, instrument or agreement except where such violation would not reasonably be expected to have a Material Adverse Effect. No order, consent, adjudication, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, or other action in respect of any governmental or public body or authority, or any subdivision thereof, which has not been obtained by any Grantor, is required to be obtained by any Grantor in connection with the execution, delivery and performance of this Security Agreement except where such violation would not reasonably be expected to have a Material Adverse Effect.

3.16 Commercial Tort Claims . It has no Commercial Tort Claims as of the date hereof.

ARTICLE IV
COVENANTS

From the date of this Security Agreement, and thereafter until this Security Agreement is terminated, each Grantor agrees that:

4.1. General .

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

(b)  Authorization to File Financing Statements; Ratification . Such Grantor hereby authorizes the Collateral Agent to file, and if requested will deliver to the Collateral Agent, all financing statements and other documents and take such other actions as may from time to time be requested by the Collateral 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 Collateral Agent may be filed in any filing office in any UCC jurisdiction and may (i) indicate such Grantor’s Collateral (1) as all assets of the Grantor or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the UCC or such jurisdiction, or (2) by any other description which reasonably approximates the description contained in this Security Agreement, and (ii) contain any other information required by part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any financing statement or amendment, including (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 to the Collateral Agent promptly upon request.

(c)  Further Assurances . Such Grantor shall take such further actions, including the execution and delivery of additional security agreements and collateral assignments, as may be requested by the Collateral Agent from time to time to more fully evidence and perfect the Collateral Agent’s interest in the Collateral. Such Grantor will, if so requested by the Collateral Agent, furnish to the Collateral Agent, 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 Collateral Agent may reasonably request, all in such detail as the Collateral Agent may specify. Such Grantor also agrees to take any and all actions necessary to defend title to the Collateral owned by it against all persons and to defend the security interest of the Collateral Agent in its Collateral and the priority thereof against any Lien not expressly permitted hereunder. Upon the request of the Collateral Agent, each Grantor shall use commercially reasonable efforts to obtain a landlord waiver or other agreement, in form and substance satisfactory to the Collateral Agent, between the Collateral Agent and any third party (including any bailee, consignee, customs broker, or other similar Person) in possession of any material Collateral to the extent requested by the Collateral Agent. Each Grantor shall timely and fully pay and perform its obligations under all leases and other agreements with respect to each leased location or third party warehouse where any Collateral is or may be located.

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

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

(f)  Other Financing Statements . Such Grantor will not authorize the filing of any financing statement naming it as debtor covering all or any portion of the Collateral owned by it, except as permitted by Section 4.1(e) . Such Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement without the prior written consent of the Collateral Agent, subject to such Grantor’s rights under Section 9-509(4)(b) of the UCC.

(g)  Locations, Names, Etc . 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, 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 Collateral Agent shall have received at least thirty days prior written notice of such change and the Collateral Agent shall have acknowledged in writing that either (1) such change will not adversely affect the validity, perfection or priority of the Collateral Agent’s security interest in the Collateral, or (2) any reasonable action requested by the Collateral Agent in connection therewith has been completed or taken (including any action to continue the perfection of any Liens in favor of the Collateral Agent, on behalf of Secured Parties, in any Collateral), provided that , any new location shall be in the continental U.S.

(h)  Compliance with Terms . Such Grantor will perform and comply with all obligations in respect of the Collateral owned by it and all agreements to which it is a party or by which it is bound relating to such Collateral except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

4.2. Receivables .

(a)  Certain Agreements on Receivables. Such Grantor will not make or agree to make any discount, credit, rebate or other reduction in the original amount owing on a Receivable (other than early payment discounts, performance rebates and similar adjustments negotiated in the ordinary course of business) or accept in satisfaction of a Receivable less than the original amount thereof, except that, prior to the occurrence of a Default, such Grantor may reduce the amount of Accounts arising from the sale of Inventory and the provision of services 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, and will at all times (whether or not a Default then exists) promptly cause all proceeds of Receivables to be deposited into a Control Account.

(c)  Delivery of Invoices . After the occurrence and during the continuation of a Default upon written request of the Collateral Agent, such Grantor will deliver to the Collateral Agent within two Business Days after its request, duplicate invoices with respect to each Account owned by it bearing such language of assignment as the Collateral Agent shall specify.

(d)  Disclosure of Counterclaims on Receivables . If any material (i) discount, credit or agreement to make a rebate or to otherwise reduce the amount owing on any Receivable not in the ordinary course 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 disclose such fact on any report delivered to the Collateral Agent with respect to Receivables.

(e)  Electronic Chattel Paper . At the written request of Collateral Agent upon the occurrence and during the continuance of a Default, such Grantor shall take all steps reasonably necessary to grant the Collateral 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 (i) damaged or defective goods arising in the ordinary course of such Grantor’s business, (ii) Inventory and Equipment no longer used in its business, and (iii) ordinary wear and tear in respect of the Equipment.

(b)  Insurance . Such Grantor will (i) maintain fire and extended coverage insurance on the Inventory and Equipment containing a lender’s loss payable clause in favor of the Collateral Agent, on behalf of the Secured Parties, and providing that said insurance will not be terminated except after at least 30 days’ written notice from the insurance company to the Collateral Agent, (ii) maintain such other insurance on the Collateral for the benefit of the Collateral Agent as may be required by law or as the Collateral Agent shall from time to time reasonably request, (iii) furnish to the Collateral Agent upon the request of the Collateral Agent from time to time copies of all policies of insurance on the Collateral and certificates with respect to such insurance and (iv) maintain general liability insurance. All insurance policies required hereunder shall name the Collateral Agent (for the benefit of the Collateral Agent and the Secured Parties) as an additional insured or as lender loss payee, as applicable, and shall contain lender loss payable clauses or mortgagee clauses in form and substance satisfactory to the Collateral Agent. Any required insurance may include self insurance on reasonable and customary terms.

(c)  Titled Vehicles . Upon the request of the Required Secured Parties, such Grantor will give the Collateral Agent notice of its acquisition of any vehicle covered by a certificate of title and deliver to the Collateral Agent, the original of any vehicle title certificate and provide and/or file all other documents or instruments necessary to have the Lien of the Collateral Agent noted on any such certificate or with the appropriate state office.

4.4. Delivery of Instruments, Securities, Chattel Paper and Documents . Subject to the exclusion in the last paragraph of Article II hereof, such Grantor will (a) upon request of the Collateral Agent, deliver to the Collateral Agent the originals of all Chattel Paper, Securities and Instruments constituting Collateral owned by it (if any then exist), (b) hold in trust for the Collateral Agent upon receipt and within two Business Days after request of the Collateral Agent deliver to the Collateral Agent any such Chattel Paper, Securities and Instruments constituting Collateral, (c) upon the Collateral Agent’s request, deliver to the Collateral Agent (and thereafter hold in trust for the Collateral Agent upon receipt and within two Business Days deliver t