Exhibit 10.2

 
SECURITY AGREEMENT
 
This SECURITY AGREEMENT (this "Agreement"), dated as of October 24, 2012, among
the Persons listed on the signature pages hereof as "Grantors" and those
additional entities that hereafter become parties hereto by executing the form
of Joinder attached hereto as Annex 1 (each, a "Grantor" and collectively, the
"Grantors"), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association ("Wells Fargo"), in its capacity as administrative agent for the
Lenders (in such capacity, together with its successors and assigns in such
capacity, "Agent").
 
 
W I T N E S S E T H:
 
WHEREAS, pursuant to that certain Credit Agreement of even date herewith (as
amended, restated, supplemented, or otherwise modified from time to time, the
"Credit Agreement") by and among PATRICK INDUSTRIES, INC., an Indiana
corporation (the "Borrower"), the lenders party thereto as "Lenders" (such
Lenders, together with their respective successors and assigns in such capacity,
each, individually, a "Lender" and, collectively, the "Lenders"), and Agent, the
Lenders have agreed to make certain financial accommodations available to the
Borrower from time to time pursuant to the terms and conditions thereof; and
 
WHEREAS, Agent has agreed to act as administrative agent for the benefit of the
Lenders in connection with the transactions contemplated by the Credit Agreement
and this Agreement; and
 
WHEREAS, in order to induce the Lenders to enter into the Credit Agreement and
the other Loan Documents, and to induce the Lenders to make financial
accommodations to the Borrower as provided for in the Credit Agreement and the
other Loan Documents, Grantors have agreed to grant a continuing security
interest in and to the Collateral in order to secure the prompt and complete
payment, observance and performance of, among other things, the Secured
Obligations.
 
NOW, THEREFORE, for and in consideration of the recitals made above and other
good and valuable consideration, the receipt, sufficiency and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
 
1.           Defined Terms. All initially capitalized terms used herein
(including in the preamble and recitals hereof) without definition shall have
the meanings ascribed thereto in the Credit Agreement.  Any terms (whether
capitalized or lower case) used in this Agreement that are defined in the Code
shall be construed and defined as set forth in the Code unless otherwise defined
herein or in the Credit Agreement; provided, however, that to the extent that
the Code is used to define any term used herein and if such term is defined
differently in different Articles of the Code, the definition of such term
contained in Article 9 of the Code shall govern. In addition to those terms
defined elsewhere in this Agreement, as used in this Agreement, the following
terms shall have the following meanings:
 
(a)           "Account" means an account (as that term is defined in Article 9
of the Code).
 
(b)           "Account Debtor" means an account debtor (as that term is defined
in the Code).
 
(c)           "Administrative Agent's Lien" means the Liens granted by the
Borrower or its Subsidiary Guarantors to Administrative Agent under the Loan
Documents.
 
(d)           "Agent" has the meaning specified therefor in the preamble to this
Agreement.
 
(e)           "Agreement" has the meaning specified therefor in the preamble to
this Agreement.
 
 
 

--------------------------------------------------------------------------------

 
 
(f)            "Books" means books and records (including each Grantor's Records
indicating, summarizing, or evidencing such Grantor's assets (including the
Collateral) or liabilities, each Grantor's records relating to such Grantor's
business operations or financial condition, and each Grantor's goods or General
Intangibles related to such information).
 
(g)           "Borrower" has the meaning specified therefor in the recitals to
this Agreement.
 
(h)           "Capital Stock" has the meaning specified therefor in the Credit
Agreement.
 
(i)            "Cash Equivalents" has the meaning specified therefor in the
Credit Agreement.
 
(j)            "CFC" means a controlled foreign corporation (as that term is
defined in the Internal Revenue Code).
 
(k)           "Chattel Paper" means chattel paper (as that term is defined in
the Code), and includes tangible chattel paper and electronic chattel paper.
 
(l)            "Code" means the Illinois Uniform Commercial Code, as in effect
from time to time; provided, however, that in the event that, by reason of
mandatory provisions of law, any or all of the attachment, perfection, priority,
or remedies with respect to Administrative Agent's Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of Illinois, the term "Code" shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority, or remedies.
 
(m)           "Collateral" has the meaning specified therefor in Section 2.
 
(n)           "Commercial Tort Claims" means commercial tort claims (as that
term is defined in the Code), and includes those commercial tort claims with a
value in excess of $250,000 listed on Schedule 1.
 
(o)           "Controlled Account" has the meaning specified therefor in Section
6(k).
 
(p)           "Controlled Account Agreements" means those certain cash
management agreements, in form and substance reasonably satisfactory to Agent,
each of which is executed and delivered by a Grantor, Agent, and one of the
Controlled Account Banks.
 
(q)           "Controlled Account Bank" has the meaning specified therefor in
Section 6(k).
 
(r)            "Copyrights" means any and all rights in any works of authorship,
including (i) copyrights and moral rights, (ii) copyright registrations and
recordings thereof and all applications in connection therewith including those
listed on Schedule 2, (iii) income, license fees, royalties, damages, and
payments now and hereafter due or payable under and with respect thereto,
including payments under all licenses entered into in connection therewith and
damages and payments for past, present, or future infringements thereof, (iv)
the right to sue for past, present, and future infringements thereof, and  (v)
all of each Grantor's rights corresponding thereto throughout the world.
 
(s)           "Copyright Security Agreement" means each Copyright Security
Agreement executed and delivered by Grantors, or any of them, and Agent, in
substantially the form of Exhibit A.
 
(t)           "Credit Agreement" has the meaning specified therefor in the
recitals to this Agreement.
 
(u)           "Deposit Account" means a deposit account (as that term is defined
in the Code).
 
 
-2-

--------------------------------------------------------------------------------

 
 
(v)           "Equipment" means equipment (as that term is defined in the Code).
 
(w)           "Event of Default" has the meaning specified therefor in the
Credit Agreement.
 
(x)           "Fixtures" means fixtures (as that term is defined in the Code).
 
(y)           "General Intangibles" means general intangibles (as that term is
defined in the Code), and includes payment intangibles, contract rights, rights
to payment, rights under Hedge Agreements (including the right to receive
payment on account of the termination (voluntarily or involuntarily) of any such
Hedge Agreements), rights arising under common law, statutes, or regulations,
choses or things in action, goodwill, Intellectual Property, Intellectual
Property Licenses, purchase orders, customer lists, monies due or recoverable
from pension funds, route lists, rights to payment and other rights under any
royalty or licensing agreements, including Intellectual Property Licenses,
infringement claims, pension plan refunds, pension plan refund claims, insurance
premium rebates, tax refunds, and tax refund claims, interests in a partnership
or limited liability company which do not constitute a security under Article 8
of the Code, and any other personal property other than Commercial Tort Claims,
money, Accounts, Chattel Paper, Deposit Accounts, goods, Investment Related
Property, Negotiable Collateral, and oil, gas, or other minerals before
extraction.
 
(z)           "Grantor" and "Grantors" have the respective meanings specified
therefor in the preamble to this Agreement.
 
(aa)         "Insolvency Proceeding" has the meaning specified therefor in the
Credit Agreement.
 
(bb)         "Intellectual Property" means any and all Patents, Copyrights,
Trademarks, trade secrets, know-how, inventions (whether or not patentable),
algorithms, software programs (including source code and object code),
processes, product designs, industrial designs, blueprints, drawings, data,
customer lists, URLs and domain names, specifications, documentations, reports,
catalogs, literature, and any other forms of technology or proprietary
information of any kind, including all rights therein and all applications for
registration or registrations thereof.
 
(cc)         "Intellectual Property Licenses" means, with respect to any Person
(the "Specified Party"), (i) any licenses or other similar rights provided to
the Specified Party in or with respect to Intellectual Property owned or
controlled by any other Person, and (ii) any licenses or other similar rights
provided to any other Person in or with respect to Intellectual Property owned
or controlled by the Specified Party, in each case, including (A) any software
license agreements (other than license agreements for commercially available
off-the-shelf software that is generally available to the public which have been
licensed to a Grantor pursuant to end-user licenses), (B) the license agreements
listed on Schedule 3, and (C) the right to use any of the licenses or other
similar rights described in this definition in connection with the enforcement
of the Lenders' rights under the Loan Documents.
 
(dd)        "Internal Revenue Code" means the Internal Revenue Code of 1986, and
the rules and regulations promulgated thereunder, each as amended or modified
from time to time.
 
(ee)         "Inventory" means inventory (as that term is defined in the Code).
 
(ff)          "Investment Related Property" means (i) any and all investment
property (as that term is defined in the Code), and (ii) any and all of the
following (regardless of whether classified as investment property under the
Code):  all Pledged Interests, Pledged Operating Agreements, and Pledged
Partnership Agreements.
 
(gg)           "Joinder" means each Joinder to this Agreement executed and
delivered by Agent and each of the other parties listed on the signature pages
thereto, in substantially the form of Annex 1.
 
 
-3-

--------------------------------------------------------------------------------

 
 
(hh)        "Lender" and "Lenders" have the respective meanings specified
therefor in the Credit Agreement.
 
(ii)           "Loan Document" has the meaning specified therefor in the Credit
Agreement.
 
(jj)           "Negotiable Collateral" means letters of credit, letter-of-credit
rights, instruments, promissory notes, drafts and documents (as each such term
is defined in the Code).
 
(kk)         "Obligations" has the meaning specified therefor in the Credit
Agreement.
 
(ll)           "Patents" means patents and patent applications, including (i)
the patents and patent applications listed on Schedule 4, (ii) all
continuations, divisionals, continuations-in-part, re-examinations, reissues,
and renewals thereof and improvements thereon, (iii) all income, royalties,
damages and payments now and hereafter due or payable under and with respect
thereto, including payments under all licenses entered into in connection
therewith and damages and payments for past, present, or future infringements
thereof, (iv) the right to sue for past, present, and future infringements
thereof, and (v) all of each Grantor's rights corresponding thereto throughout
the world.
 
(mm)       "Patent Security Agreement" means each Patent Security Agreement
executed and delivered by Grantors, or any of them, and Agent, in substantially
the form of Exhibit B.
 
(nn)        "Permitted Liens" has the meaning specified therefor in the Credit
Agreement.
 
(oo)        "Person" has the meaning specified therefor in the Credit Agreement.
 
(pp)        "Pledged Companies" means each Person listed on Schedule 6 as a
"Pledged Company", together with each other Person, all or a portion of whose
Capital Stock is acquired or otherwise owned by a Grantor after the Closing
Date.
 
(qq)        "Pledged Interests" means, subject to the last paragraph of Section
2 hereof, all of each Grantor's right, title and interest in and to all of the
Capital Stock now owned or hereafter acquired by such Grantor, regardless of
class or designation, including in each of the Pledged Companies, and all
substitutions therefor and replacements thereof, all proceeds thereof and all
rights relating thereto, also including any certificates representing the
Capital Stock, the right to receive any certificates representing any of the
Capital Stock, all warrants, options, share appreciation rights and other
rights, contractual or otherwise, in respect thereof and the right to receive
all dividends, distributions of income, profits, surplus, or other compensation
by way of income or liquidating distributions, in cash or in kind, and all cash,
instruments, and other property from time to time received, receivable, or
otherwise distributed in respect of or in addition to, in substitution of, on
account of, or in exchange for any or all of the foregoing.
 
(rr)          "Pledged Interests Addendum" means a Pledged Interests Addendum
substantially in the form of Exhibit C.
 
(ss)         "Pledged Notes" has the meaning specified therefor in Section 5(i).
 
(tt)          "Pledged Operating Agreements" means all of each Grantor's rights,
powers, and remedies under the limited liability company operating agreements of
each of the Pledged Companies that are limited liability companies.
 
(uu)        "Pledged Partnership Agreements" means all of each Grantor's rights,
powers, and remedies under the partnership agreements of each of the Pledged
Companies that are partnerships.
 
(vv)        "Proceeds" has the meaning specified therefor in Section 2.
 
 
-4-

--------------------------------------------------------------------------------

 
 
(ww)       "PTO" means the United States Patent and Trademark Office.
 
(xx)          "Real Property" means any estates or interests in real property
now owned or hereafter acquired by any Grantor or any Subsidiary of any Grantor
and the improvements thereto.
 
(yy)         "Records" means information that is inscribed on a tangible medium
or which is stored in an electronic or other medium and is retrievable in
perceivable form.
 
(zz)           "Secured Obligations" means each and all of the following: (a)
all of the present and future obligations of each of the Grantors arising from,
relating to, owing under or pursuant to, this Agreement, the Credit Agreement,
or any of the other Loan Documents (including any Subsidiary Guaranty
Agreement), (b) all Secured Obligations as defined in the Credit Agreement, and
(c) all other Obligations of the Borrower (including, in the case of each of
clauses (a), (b) and (c), reasonable attorneys fees and expenses and any
interest, fees, or expenses that accrue after the filing of an Insolvency
Proceeding, regardless of whether allowed or allowable in whole or in part as a
claim in any Insolvency Proceeding).
 
(aaa)       "Securities Account" means a securities account (as that term is
defined in the Code).
 
(bbb)      "Security Interest" has the meaning specified therefor in Section 2.
 
(ccc)       "Subsidiary Guaranty Agreement" has the meaning specified therefor
in the Credit Agreement.
 
(ddd)      "Supporting Obligations" means supporting obligations (as such term
is defined in the Code), and includes letters of credit and guaranties issued in
support of Accounts, Chattel Paper, documents, General Intangibles, instruments
or Investment Related Property.
 
(eee)           "Trademarks" means any and all trademarks, trade names,
registered trademarks, trademark applications, service marks, registered service
marks and service mark applications, including (i) the trade names, registered
trademarks, trademark applications, registered service marks and service mark
applications listed on Schedule 5, (ii) all renewals thereof, (iii) all income,
royalties, damages and payments now and hereafter due or payable under and with
respect thereto, including payments under all licenses entered into in
connection therewith and damages and payments for past or future infringements
or dilutions thereof, (iv) the right to sue for past, present and future
infringements and dilutions thereof, (v) the goodwill of each Grantor's business
symbolized by the foregoing or connected therewith, and (vi) all of each
Grantor's rights corresponding thereto throughout the world.
 
(fff)         "Trademark Security Agreement" means each Trademark Security
Agreement executed and delivered by Grantors, or any of them, and Agent, in
substantially the form of Exhibit D.
 
(ggg)      "URL" means "uniform resource locator," an internet web address.
 
2.           Grant of Security.  Each Grantor hereby unconditionally grants,
assigns, and pledges to Agent, for the benefit of each of the Lenders, to secure
the Secured Obligations, a continuing security interest (hereinafter referred to
as the "Security Interest") in all of such Grantor's right, title, and interest
in and to the following, whether now owned or hereafter acquired or arising and
wherever located (the "Collateral"):
 
(a)           all of such Grantor's Accounts;
 
(b)           all of such Grantor's Books;
 
(c)           all of such Grantor's Chattel Paper;
 
 
-5-

--------------------------------------------------------------------------------

 
 
(d)           all of such Grantor's Deposit Accounts;
 
(e)           all of such Grantor's Equipment and Fixtures;
 
(f)            all of such Grantor's General Intangibles;
 
(g)           all of such Grantor's Inventory;
 
(h)           all of such Grantor's Investment Related Property;
 
(i)            all of such Grantor's Negotiable Collateral;
 
(j)            all of such Grantor's Supporting Obligations;
 
(k)           all of such Grantor's Commercial Tort Claims;
 
(l)            all of such Grantor's money, Cash Equivalents, or other assets of
such Grantor that now or hereafter come into the possession, custody, or control
of Agent (or its agent or designee) or any other Lender;
 
(m)           all of such Grantor's other personal property; and
 
(n)           all of the proceeds (as such term is defined in the Code) and
products, whether tangible or intangible, of any of the foregoing, including
proceeds of insurance or Commercial Tort Claims covering or relating to any or
all of the foregoing, and any and all Accounts, Books, Chattel Paper, Deposit
Accounts, Equipment, Fixtures, General Intangibles, Inventory, Investment
Related Property, Negotiable Collateral, Supporting Obligations, money, or other
tangible or intangible property resulting from the sale, lease, license,
exchange, collection, or other disposition of any of the foregoing, the proceeds
of any award in condemnation with respect to any of the foregoing, any rebates
or refunds, whether for taxes or otherwise, and all proceeds of any such
proceeds, or any portion thereof or interest therein, and the proceeds thereof,
and all proceeds of any loss of, damage to, or destruction of the above, whether
insured or not insured, and, to the extent not otherwise included, any
indemnity, warranty, or guaranty payable by reason of loss or damage to, or
otherwise with respect to any of the foregoing (the "Proceeds").  Without
limiting the generality of the foregoing, the term "Proceeds" includes whatever
is receivable or received when Investment Related Property or proceeds are sold,
exchanged, collected, or otherwise disposed of, whether such disposition is
voluntary or involuntary, and includes proceeds of any indemnity or guaranty
payable to any Grantor or Agent from time to time with respect to any of the
Investment Related Property.
 
Notwithstanding anything contained in this Agreement to the contrary, the term
"Collateral" shall not include: (i) voting Stock of any CFC, solely to the
extent that (y) such Stock represents more than 65% of the outstanding voting
Stock of such CFC, and (z) pledging or hypothecating more than 65% of the total
outstanding voting Stock of such CFC would result in material adverse tax
consequences; (ii) any rights or interest in any contract, lease, permit,
license, or license agreement covering real or personal property of any Grantor
if under the terms of such contract, lease, permit, license, or license
agreement, or applicable law with respect thereto, the grant of a security
interest or lien therein is prohibited as a matter of law or under the terms of
such contract, lease, permit, license, or license agreement and such prohibition
or restriction has not been waived or the consent of the other party to such
contract, lease, permit, license, or license agreement has not been obtained
(provided, that, (A) the foregoing exclusions of this clause (ii) shall in no
way be construed (1) to apply to the extent that any described prohibition or
restriction is unenforceable under Section 9-406, 9-407, 9-408, or 9-409 of the
Code or other applicable law, or (2) to apply to the extent that any consent or
waiver has been obtained that would permit Agent's security interest or lien
notwithstanding the prohibition or restriction on the pledge of such contract,
lease, permit, license, or license agreement and (B) the foregoing exclusions of
clauses (i) and (ii) shall in no way be construed to limit, impair, or otherwise
affect any of Agent's, any other Lender's continuing security interests in and
liens upon any rights or interests of any Grantor in or to (1) monies due or to
become due under or in connection with any described contract, lease, permit,
license, license agreement, or Stock (including any Accounts or Stock), or (2)
any proceeds from the sale, license, lease, or other dispositions of any such
contract, lease, permit, license, license agreement, or Stock); (iii) any United
States intent-to-use trademark applications to the extent that, and solely
during the period in which, the grant of a security interest therein would
impair the validity or enforceability of such intent-to-use trademark
applications under applicable federal law, provided that upon submission and
acceptance by the PTO of an amendment to allege use pursuant to 15 U.S.C.
Section 1060(a) (or any successor provision), such intent-to-use trademark
application shall be considered Collateral, or (iv) Equipment or other assets or
any proceeds thereof owned by any Grantor on the date hereof or hereafter
acquired that is subject to a Permitted Lien which is a permitted purchase money
Lien or the interest of a lessor under a Capital Lease if the contract or other
agreement in which such Permitted Lien is granted (or the documentation
providing for such Indebtedness in respect of purchase money financing)
prohibits the creation of any other Lien on such Equipment, other assets or
proceeds.
 
 
-6-

--------------------------------------------------------------------------------

 
 
3.           Security for Secured Obligations.  The Security Interest created
hereby secures the payment and performance of the Secured Obligations, whether
now existing or arising hereafter.  Without limiting the generality of the
foregoing, this Agreement secures the payment of all amounts which constitute
part of the Secured Obligations and would be owed by Grantors, or any of them,
to Agent, the Lenders or any of them, but for the fact that they are
unenforceable or not allowable (in whole or in part) as a claim in an Insolvency
Proceeding involving any Grantor due to the existence of such Insolvency
Proceeding.
 
4.           Grantors Remain Liable.  Anything herein to the contrary
notwithstanding, (a) each of the Grantors shall remain liable under the
contracts and agreements included in the Collateral, including the Pledged
Operating Agreements and the Pledged Partnership Agreements, to perform all of
the duties and obligations thereunder to the same extent as if this Agreement
had not been executed, (b) the exercise by Agent or any other Lender of any of
the rights hereunder shall not release any Grantor from any of its duties or
obligations under such contracts and agreements included in the Collateral, and
(c) none of the Lenders shall have any obligation or liability under such
contracts and agreements included in the Collateral by reason of this Agreement,
nor shall any of the Lenders be obligated to perform any of the obligations or
duties of any Grantors thereunder or to take any action to collect or enforce
any claim for payment assigned hereunder.  Until an Event of Default shall occur
and be continuing, except as otherwise provided in this Agreement, the Credit
Agreement, or any other Loan Document, Grantors shall have the right to
possession and enjoyment of the Collateral for the purpose of conducting the
ordinary course of their respective businesses, subject to and upon the terms
hereof and of the Credit Agreement and the other Loan Documents.  Without
limiting the generality of the foregoing, it is the intention of the parties
hereto that record and beneficial ownership of the Pledged Interests, including
all voting, consensual, dividend, and distribution rights, shall remain in the
applicable Grantor until (i) the occurrence and continuance of an Event of
Default and (ii) Agent has notified the applicable Grantor of Agent's election
to exercise such rights with respect to Pledged Interests pursuant to Section
15.
 
 
-7-

--------------------------------------------------------------------------------

 
 
5.           Representations and Warranties.  Each Grantor hereby represents and
warrants to Agent, for the benefit of the Lenders, which representations and
warranties shall be true, correct, and complete, in all material respects
(except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof), as of the Closing Date, and shall be true,
correct, and complete, in all material respects (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof), as of the
date of the making of each Advance (or other extension of credit) made
thereafter, as though made on and as of the date of such Advance (or other
extension of credit) (except to the extent that such representations and
warranties relate solely to an earlier date, in which case such representations
and warranties shall be true, correct and complete in all material respects as
of such earlier date) and such representations and warranties shall survive the
execution and delivery of this Agreement:
 
(a)           The exact legal name of each of the Grantors is set forth on the
signature pages of this Agreement or a written notice provided to Agent.
 
(b)           Schedule 7 sets forth all Real Property owned by any of the
Grantors as of the Closing Date.
 
(c)           As of the Closing Date: (i) Schedule 2 provides a complete and
correct list of all registered Copyrights owned by any Grantor and all
applications for registration of Copyrights owned by any Grantor,; (ii) Schedule
3 provides a complete and correct list of all Intellectual Property Licenses
entered into by any Grantor pursuant to which (A) any Grantor has provided any
license or other rights in Intellectual Property owned or controlled by such
Grantor to any other Person or (B) any Person has granted to any Grantor any
license or other rights in registered Intellectual Property owned or controlled
by such Person that is material to the business of such Grantor, including any
Intellectual Property that is incorporated in any Inventory, software, or other
product marketed, sold, licensed, or distributed by such Grantor; (iii) Schedule
4 provides a complete and correct list of all registered Patents owned by any
Grantor and all applications for Patents owned by any Grantor; and (iv) Schedule
5 provides a complete and correct list of all registered Trademarks owned by any
Grantor and all applications for registration of Trademarks owned by any
Grantor.
 
(d)           (i) (A) each Grantor owns exclusively or holds licenses in all
Intellectual Property that is necessary to the conduct of its business, and (B)
all employees and contractors of each Grantor who were involved in the creation
or development of any material Intellectual Property for such Grantor that is
necessary to the business of such Grantor have signed agreements containing
assignment of Intellectual Property rights to such Grantor and obligations of
confidentiality;
 
(ii)         to each Grantor's knowledge, no Person has infringed or
misappropriated or is currently infringing or misappropriating any Intellectual
Property rights owned by such Grantor, in each case, that either individually or
in the aggregate could reasonably be expected to result in a Material Adverse
Effect;
 
(iii)         (A) to each Grantor's knowledge, (1) such Grantor has never
infringed or misappropriated in the last five (5) years and is not currently
infringing or misappropriating any Intellectual Property rights of any Person,
and (2) no product manufactured, used, distributed, licensed, or sold by or
service provided by such Grantor has ever infringed or misappropriated in the
last five (5) years or is currently infringing or misappropriating any
Intellectual Property rights of any Person, in each case, except where such
infringement either individually or in the aggregate could not reasonably be
expected to result in a Material Adverse Effect, and (B) there are no pending,
or to any Grantor's knowledge, threatened infringement or misappropriation
claims or proceedings pending against any Grantor, and no Grantor has received
any notice or other communication of any actual or alleged infringement or
misappropriation of any Intellectual Property rights of any Person, in each
case, except where such infringement either individually or in the aggregate
could not reasonably be expected to result in a Material Adverse Effect;
 
(iv)         to each Grantor's knowledge, all registered Copyrights, registered
Trademarks, and issued Patents that are owned by such Grantor and necessary in
to the conduct of its business are valid, subsisting and enforceable and in
compliance with all legal requirements, filings, and payments and other actions
that are required to maintain such Intellectual Property in full force and
effect; and
 
(v)          each Grantor has taken commercially reasonable steps to maintain
the confidentiality of and otherwise protect and enforce its rights in all trade
secrets owned by such Grantor that are necessary in the business of such
Grantor;
 
 
-8-

--------------------------------------------------------------------------------

 
 
(e)           This Agreement creates a valid security interest in the Collateral
of each Grantor, to the extent a security interest therein can be created under
the Code, securing the payment of the Secured Obligations.  Except to the extent
a security interest in the Collateral cannot be perfected by the filing of a
financing statement under the Code, all filings and other actions necessary or
desirable to perfect and protect such security interest have been duly taken or
will have been taken upon the filing of financing statements listing each
applicable Grantor, as a debtor, and Agent, as secured party, in the
jurisdictions listed next to such Grantor's name on Schedule 8.  Upon the making
of such filings, Agent shall have a first priority perfected security interest
in the Collateral of each Grantor to the extent such security interest can be
perfected by the filing of a financing statement.  Upon filing of the Copyright
Security Agreement with the United States Copyright Office, filing of the Patent
Security Agreement and the Trademark Security Agreement with the PTO, and the
filing of appropriate financing statements in the jurisdictions listed on
Schedule 8, all action necessary or desirable to protect and perfect the
Security Interest in and to on each Grantor's Patents, Trademarks, or Copyrights
has been taken and such perfected Security Interest is enforceable as such as
against any and all creditors of and purchasers from any Grantor, except as
enforcement may be limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or limiting creditors'
rights generally.  All action by any Grantor necessary to protect and perfect
such security interest on each item of Collateral (to the extent perfection is
required hereby) has been duly taken or will be taken substantially
contemporaneously with the Closing Date.
 
(f)            (i) Except for the Security Interest created hereby, each Grantor
is and will at all times be the sole holder of record and the legal and
beneficial owner, free and clear of all Liens other than Permitted Liens, of the
Pledged Interests indicated on Schedule 6 as being owned by such Grantor and,
when acquired by such Grantor, any Pledged Interests acquired after the Closing
Date; (ii) all of the Pledged Interests owned by such Grantor are duly
authorized, validly issued, fully paid and nonassessable and the Pledged
Interests constitute or will constitute the percentage of the issued and
outstanding Stock of the Pledged Companies of such Grantor identified on
Schedule 6 as supplemented or modified by any Pledged Interests Addendum or any
Joinder to this Agreement; (iii) such Grantor has the right and requisite
authority to pledge, the Investment Related Property pledged by such Grantor to
Agent as provided herein; (iv) all actions necessary to perfect and establish
the first priority of Administrative Agent's Liens in the Investment Related
Property, and the proceeds thereof, have been duly taken, upon (A) the execution
and delivery of this Agreement; (B) the taking of possession by Agent (or its
agent or designee) of any certificates representing the Pledged Interests,
together with undated powers (or other documents of transfer reasonably
acceptable to Agent) endorsed in blank by the applicable Grantor; (C) the filing
of financing statements in the applicable jurisdiction set forth on Schedule 8
for such Grantor with respect to the Pledged Interests of such Grantor that are
not represented by certificates, and (D) with respect to any Securities
Accounts, the delivery of Controlled Account Agreements with respect thereto;
and (v) each Grantor has delivered to and deposited with Agent all certificates
representing the Pledged Interests owned by such Grantor to the extent such
Pledged Interests are represented by certificates, and undated powers (or other
documents of transfer reasonably acceptable to Agent) endorsed in blank with
respect to such certificates. None of the Pledged Interests owned or held by
such Grantor has been issued or transferred in violation of any securities
registration, securities disclosure, or similar laws of any jurisdiction to
which such issuance or transfer may be subject.
 
(g)           No consent, approval, authorization, or other order or other
action by, and no notice to or filing with, any Governmental Authority or any
other Person is required (i) for the grant of a Security Interest by such
Grantor in and to the Collateral pursuant to this Agreement or for the
execution, delivery, or performance of this Agreement by such Grantor, or (ii)
for the exercise by Agent of the voting or other rights provided for in this
Agreement with respect to the Investment Related Property or the remedies in
respect of the Collateral pursuant to this Agreement, except as may be required
in connection with such disposition of Investment Related Property by laws
affecting the offering and sale of securities generally.  No Intellectual
Property License of any Grantor that is necessary to the conduct of such
Grantor's business requires any consent of any other Person in order for such
Grantor to grant the security interest granted hereunder in such Grantor's
right, title or interest in or to such Intellectual Property License.
 
(h)           [Intentionally Omitted].
 
 
-9-

--------------------------------------------------------------------------------

 
 
(i)            There is no default, breach, violation, or event of acceleration
existing under any promissory note (as defined in the Code) constituting
Collateral and pledged hereunder (each a "Pledged Note") and no event has
occurred or circumstance exists which, with the passage of time or the giving of
notice, or both, would constitute a default, breach, violation, or event of
acceleration under any Pledged Note.  No Grantor that is an obligee under a
Pledged Note has waived any default, breach, violation, or event of acceleration
under such Pledged Note.
 
(j)            As to all limited liability company or partnership interests,
issued under any Pledged Operating Agreement or Pledged Partnership Agreement,
each Grantor hereby represents and warrants that the Pledged Interests issued
pursuant to such agreement (A) are not dealt in or traded on securities
exchanges or in securities markets, (B) do not constitute investment company
securities, and (C) are not held by such Grantor in a securities account.  In
addition, none of the Pledged Operating Agreements, the Pledged Partnership
Agreements, or any other agreements governing any of the Pledged Interests
issued under any Pledged Operating Agreement or Pledged Partnership Agreement,
provide that such Pledged Interests are securities governed by Article 8 of the
Uniform Commercial Code as in effect in any relevant jurisdiction.
 
6.           Covenants.  Each Grantor, jointly and severally, covenants and
agrees with Agent that from and after the date of this Agreement and until the
date of termination of this Agreement in accordance with Section 22:
 
(a)           Possession of Collateral.  In the event that any Collateral,
including Proceeds, is evidenced by or consists of Negotiable Collateral,
Investment Related Property, or Chattel Paper, in each case, having an aggregate
value or face amount of $100,000 or more for all such Negotiable Collateral,
Investment Related Property, or Chattel Paper, the Grantors shall promptly (and
in any event within two (2) Business Days after receipt thereof (or such longer
period as Agent in its Permitted Discretion may agree)), notify Agent thereof,
and if and to the extent that perfection or priority of Agent's Security
Interest is dependent on or enhanced by possession, the applicable Grantor,
promptly (and in any event within two (2) Business Days (or such longer period
as Agent in its Permitted Discretion may agree)) after request by Agent, shall
execute such other documents and instruments as shall be reasonably requested by
Agent or, if applicable, endorse and deliver physical possession of such
Negotiable Collateral, Investment Related Property, or Chattel Paper to Agent,
together with such undated powers (or other relevant document of transfer
reasonably acceptable to Agent) endorsed in blank as shall be reasonably
requested by Agent, and shall do such other acts or things deemed reasonably
necessary by Agent to protect Agent's Security Interest therein;
 
(b)           Chattel Paper.
 
(i)         Promptly (and in any event within two (2) Business Days (or such
longer period as Agent in its Permitted Discretion may agree)) after request by
Agent, each Grantor shall take all steps reasonably necessary to grant Agent
control of all electronic Chattel Paper in accordance with the Code and all
"transferable records" as that term is defined in Section 16 of the Uniform
Electronic Transaction Act and Section 201 of the federal Electronic Signatures
in Global and National Commerce Act as in effect in any relevant jurisdiction,
to the extent that the aggregate value or face amount of such electronic Chattel
Paper equals or exceeds $100,000;
 
(ii)        If any Grantor retains possession of any Chattel Paper or
instruments (which retention of possession shall be subject to the extent
permitted hereby and by the Credit Agreement), promptly (and in any event within
two (2) Business Days (or such longer period as Agent in its Permitted
Discretion may agree)) upon the request of Agent, such Chattel Paper and
instruments shall be marked with the following legend: "This writing and the
obligations evidenced or secured hereby are subject to the Security Interest of
Wells Fargo Bank, National Association, as Agent for the benefit of the Lenders
";
 
 
-10-

--------------------------------------------------------------------------------

 
 
(c)            Controlled Account Agreements.
 
(i)         Except to the extent otherwise permitted by Section 6(c)(iv) hereof,
each Grantor shall obtain an authenticated Controlled Account Agreement (which
may include a Controlled Account Agreement), from each bank maintaining a
Deposit Account for such Grantor;
 
(ii)        Except to the extent otherwise permitted by Section 6(c)(iv) hereof,
each Grantor shall obtain an authenticated Controlled Account Agreement, from
each issuer of uncertificated securities, securities intermediary, or
commodities intermediary issuing or holding any financial assets or commodities
to or for any Grantor;
 
(iii)       Except to the extent otherwise permitted by Section 6(c)(iv) hereof,
each Grantor shall obtain an authenticated Controlled Account Agreement with
respect to all of such Grantor's investment property;
 
(iv)       Grantors covenant and agree that, until termination of all of the
Commitments and payment in full of the Obligations, the Grantors will not and
will not permit any of their Subsidiaries to make, acquire, or permit to exist
any to Deposit Accounts or Securities Accounts unless Grantors or their
Subsidiaries, as applicable, and the applicable bank or securities intermediary
have entered into Controlled Account Agreements with Agent governing such
Deposit Accounts or Securities Accounts in order to perfect (and further
establish) Administrative Agent's Liens in such Deposit Accounts or Securities
Accounts other than (1) amounts deposited into Deposit Accounts specially and
exclusively used for payroll, payroll taxes and other employee wage and benefit
payments to or for the Grantors or their Subsidiaries' employees, (2) an
aggregate amount of not more than $250,000 (calculated at current exchange
rates) at any one time, in the case of Subsidiaries of the Grantors that are
CFCs, and (3) an aggregate amount of not more than $100,000 at any one time, in
the case of the Grantors and their Subsidiaries (other than those Subsidiaries
that are CFCs).  Except as provided in Section 6.11(c)(iv)(1) through (3), the
Grantors shall not and shall not permit their Subsidiaries to establish or
maintain any Deposit Account or Securities Account unless Agent shall have
received a Controlled Account Agreement in respect of such Deposit Account or
Securities Account.
 
(d)           Letter-of-Credit Rights.  If the Grantors (or any of them) are or
become the beneficiary of letters of credit having a face amount or value of
$100,000 or more in the aggregate, then the applicable Grantor or Grantors shall
promptly (and in any event within two (2) Business Days (or such longer period
as Agent in its Permitted Discretion may agree) after becoming a beneficiary),
notify Agent thereof and, promptly (and in any event within two (2) Business
Days) after request by Agent, enter into a tri-party agreement with Agent and
the issuer or confirming bank with respect to letter-of-credit rights assigning
such letter-of-credit rights to Agent and directing all payments thereunder to
Agent's Account, all in form and substance reasonably satisfactory to Agent;
 
(e)            Commercial Tort Claims.  If the Grantors (or any of them) have an
interest in or obtain Commercial Tort Claims having a value, or involving an
asserted claim, in the amount of $250,000 or more in the aggregate for all
Commercial Tort Claims, then the applicable Grantor or Grantors shall promptly
(and in any event within two (2) Business Days (or such longer period as Agent
in its Permitted Discretion may agree) of obtaining such Commercial Tort Claim),
notify Agent upon incurring or otherwise obtaining such Commercial Tort Claims
and, promptly (and in any event within two (2) Business Days (or such longer
period as Agent in its Permitted Discretion may agree)) after request by Agent,
amend Schedule 1 to describe such Commercial Tort Claims in a manner that
reasonably identifies such Commercial Tort Claims and which is otherwise
reasonably satisfactory to Agent, and hereby authorizes the filing of additional
financing statements or amendments to existing financing statements describing
such Commercial Tort Claims, and agrees to do such other acts or things deemed
necessary or desirable by Agent to give Agent a first priority, perfected
security interest in any such Commercial Tort Claim;
 
 
-11-

--------------------------------------------------------------------------------

 
 
(f)            Government Contracts.  Other than Accounts and Chattel Paper the
aggregate value of which does not at any one time exceed $50,000, if any Account
or Chattel Paper arises out of a contract or contracts with the United States of
America or any department, agency, or instrumentality thereof, Grantors shall
promptly (and in any event within two (2) Business Days of the creation thereof)
notify Agent thereof and, promptly (and in any event within two (2) Business
Days) after request by Agent, execute any instruments or take any steps
reasonably required by Agent in order that all moneys due or to become due under
such contract or contracts shall be assigned to Agent, for the benefit of the
Lenders, and shall provide written notice thereof under the Assignment of Claims
Act or other applicable law;
 
(g)           Intellectual Property.
 
(i)         Upon the request of Agent, in order to facilitate filings with the
United States Patent and Trademark Office and the United States Copyright
Office, each Grantor shall execute and deliver to Agent one or more Copyright
Security Agreements, Trademark Security Agreements, or Patent Security
Agreements to further evidence Administrative Agent's Lien on such Grantor's
Patents, Trademarks, or Copyrights, and the General Intangibles of such Grantor
relating thereto or represented thereby;
 
(ii)        Each Grantor shall have the duty, with respect to Intellectual
Property that is necessary in the conduct of such Grantor's business, to protect
and diligently enforce and defend at such Grantor's expense its Intellectual
Property, including (A) to diligently enforce and defend, including promptly
suing for infringement, misappropriation, or dilution and to recover any and all
damages for such infringement, misappropriation, or dilution, and filing for
opposition, interference, and cancellation against conflicting Intellectual
Property rights of any Person, (B) to prosecute diligently any trademark
application or service mark application that is part of the Trademarks pending
as of the date hereof or hereafter until the termination of this Agreement, (C)
to prosecute diligently any patent application that is part of the Patents
pending as of the date hereof or hereafter until the termination of this
Agreement, (D) to take all reasonable and necessary action to preserve and
maintain all of such Grantor's Trademarks, Patents, Copyrights, Intellectual
Property Licenses, and its rights therein, including paying all maintenance fees
and filing of applications for renewal, affidavits of use, and affidavits of
noncontestability, and (E) to require all employees, consultants, and
contractors of each Grantor who were involved in the creation or development of
such Intellectual Property to sign agreements containing assignment of
Intellectual Property rights and obligations of confidentiality.  Each Grantor
further agrees not to abandon any Intellectual Property or Intellectual Property
License that is necessary in the conduct of such Grantor's business.  Each
Grantor hereby agrees to take the steps described in this Section 6(g)(ii) with
respect to all new or acquired Intellectual Property to which it or any of its
Subsidiaries is now or later becomes entitled that is necessary in the conduct
of such Grantor's business;
 
(iii)       Grantors acknowledge and agree that the Lenders shall have no duties
with respect to any Intellectual Property or Intellectual Property Licenses of
any Grantor.  Without limiting the generality of this Section 6(g)(iii),
Grantors acknowledge and agree that no Lender shall be under any obligation to
take any steps necessary to preserve rights in the Collateral consisting of
Intellectual Property or Intellectual Property Licenses against any other
Person, but any Lender may do so at its option from and after the occurrence and
during the continuance of an Event of Default, and all expenses incurred in
connection therewith (including reasonable fees and expenses of attorneys and
other professionals) shall be for the sole account of the Borrower and shall be
chargeable to the Loan Account;
 
(iv)       [Intentionally omitted];
 
(v)        [Intentionally omitted];
 
 
-12-

--------------------------------------------------------------------------------

 
 
(vi)       On each date on which a Compliance Certificate is delivered by the
Borrower pursuant to Section 8.2 of the Credit Agreement, each Grantor shall
provide Agent with a written report of all new Patents or Trademarks that are
registered or the subject of pending applications for registrations, and of all
Intellectual Property Licenses that are material to the conduct of such
Grantor's business, in each case, which were acquired, registered, or for which
applications for registration were filed by any Grantor during the prior period
and any statement of use or amendment to allege use with respect to
intent-to-use trademark applications.  In the case of such registrations or
applications therefor, which were acquired by any Grantor, each such Grantor
shall file the necessary documents with the appropriate Governmental Authority
identifying the applicable Grantor as the owner (or as a co-owner thereof, if
such is the case) of such Intellectual Property.  In each of the foregoing
cases, the applicable Grantor shall promptly cause to be prepared, executed, and
delivered to Agent supplemental schedules to the applicable Loan Documents to
identify such Patent and Trademark registrations and applications therefor (with
the exception of Trademark applications filed on an intent-to-use basis for
which no statement of use or amendment to allege use has been filed) and
Intellectual Property Licenses as being subject to the security interests
created thereunder;
 
(vii)      On each date on which a Compliance Certificate is delivered by the
Borrower pursuant to Section 8.2 of the Credit Agreement, each Grantor shall
provide Agent with a written report of all new Copyrights that are registered or
the subject of pending applications for registration with the United States
Copyright Office which were acquired, registered, or for which applications for
registration were filed by any Grantor during the prior period.  In the case of
such registrations or applications therefor, which were acquired by any Grantor,
each such Grantor shall file the necessary documents with the appropriate
Governmental Authority identifying the applicable Grantor as the owner (or as a
co-owner thereof, if such is the case) of such Copyright.  The applicable
Grantor shall promptly cause to be prepared, executed and delivered to
Administrative Agent supplemental schedules to the Applicable Loan Documents to
identify such Copyright registrations and applications therefor as being subject
to the security interests created thereunder .
 
(viii)     Each Grantor shall take commercially reasonable steps to maintain the
confidentiality of, and otherwise protect and enforce its rights in, the
Intellectual Property that is necessary in the conduct of such Grantor's
business, including, as applicable (A) protecting the secrecy and
confidentiality of its confidential information and trade secrets by having and
enforcing a policy requiring all current employees, consultants, licensees,
vendors and contractors with access to such information to execute appropriate
confidentiality agreements; (B) taking actions reasonably necessary to ensure
that no trade secret falls into the public domain; and (C) protecting the
secrecy and confidentiality of the source code of all software programs and
applications of which it is the owner or licensee by having and enforcing a
policy requiring any licensees (or sublicensees) of such source code to enter
into license agreements with commercially reasonable use and non-disclosure
restrictions;
 
(ix)        [Intentionally omitted]; and
 
(x)         No Grantor shall enter into any material Intellectual Property
License to receive any license or rights in any Intellectual Property of any
other Person unless such Grantor has used commercially reasonable efforts to
permit the assignment of or grant of a security interest in such Intellectual
Property License (and all rights of Grantor thereunder) to the (and any
transferees of Agent).
 
(h)           Investment Related Property.
 
(i)         If any Grantor shall acquire, obtain, receive or become entitled to
receive any Pledged Interests after the Closing Date, it shall promptly (and in
any event within two (2) Business Days (or such longer period as Agent in its
Permitted Discretion may agree) of acquiring or obtaining such Collateral)
deliver to Agent a duly executed Pledged Interests Addendum identifying such
Pledged Interests;
 
(ii)        Upon the occurrence and during the continuance of an Event of
Default, following the request of Agent, all sums of money and property paid or
distributed in respect of the Investment Related Property that are received by
any Grantor shall be held by the Grantors in trust for the benefit of Agent
segregated from such Grantor's other property, and such Grantor shall deliver it
forthwith to Agent in the exact form received;
 
 
-13-

--------------------------------------------------------------------------------

 
 
(iii)       Each Grantor shall promptly deliver to Agent a copy of each material
notice or other material communication received by it in respect of any Pledged
Interests;
 
(iv)       No Grantor shall make or consent to any amendment or other
modification or waiver with respect to any Pledged Interests, Pledged Operating
Agreement, or Pledged Partnership Agreement, or enter into any agreement or
permit to exist any restriction with respect to any Pledged Interests if the
same is prohibited pursuant to the Loan Documents;
 
(v)        Each Grantor agrees that it will cooperate with Agent in obtaining
all necessary approvals and making all necessary filings under federal, state,
local, or foreign law to effect the perfection of the Security Interest on the
Investment Related Property or to effect any sale or transfer thereof;
 
(vi)       As to all limited liability company or partnership interests, issued
under any Pledged Operating Agreement or Pledged Partnership Agreement, each
Grantor hereby covenants that the Pledged Interests issued pursuant to such
agreement (A) are not and shall not be dealt in or traded on securities
exchanges or in securities markets, (B) do not and will not constitute
investment company securities, and (C) are not and will not be held by such
Grantor in a securities account.  In addition, none of the Pledged Operating
Agreements, the Pledged Partnership Agreements, or any other agreements
governing any of the Pledged Interests issued under any Pledged Operating
Agreement or Pledged Partnership Agreement, provide or shall provide that such
Pledged Interests are securities governed by Article 8 of the Uniform Commercial
Code as in effect in any relevant jurisdiction.
 
(i)             Real Property; Fixtures.  Each Grantor covenants and agrees that
upon the acquisition of any fee interest in Real Property it will promptly (and
in any event within two (2) Business Days of acquisition) notify Agent of the
acquisition of such Real Property and will grant to Agent, for the benefit of
the Lenders, a first priority Mortgage on each fee interest in Real Property
with a fair market value of at least $250,000 now or hereafter owned by such
Grantor and shall deliver such other documentation and opinions, in form and
substance satisfactory to Agent, in connection with the grant of such Mortgage
as Agent shall reasonably request in its Permitted Discretion, including title
insurance policies, financing statements, fixture filings and environmental
audits and such Grantor shall pay all recording costs, intangible taxes and
other fees and costs (including reasonable attorneys fees and expenses) incurred
in connection therewith.  Each Grantor acknowledges and agrees that, to the
extent permitted by applicable law, all of the Collateral shall remain personal
property regardless of the manner of its attachment or affixation to real
property;
 
(j)             Transfers and Other Liens.  Grantors shall not (i) sell, assign
(by operation of law or otherwise) or otherwise dispose of, or grant any option
with respect to, any of the Collateral, except as expressly permitted by the
Credit Agreement, or (ii) create or permit to exist any Lien upon or with
respect to any of the Collateral of any Grantor, except for Permitted
Liens.  The inclusion of Proceeds in the Collateral shall not be deemed to
constitute Agent's consent to any sale or other disposition of any of the
Collateral except as expressly permitted in this Agreement or the other Loan
Documents;
 
(k)            Controlled Accounts.
 
(i)         Each Grantor shall (A) establish and maintain cash management
services of a type and on terms reasonably satisfactory to Agent at one or more
of the banks set forth on Schedule 6(k) (each a "Controlled Account Bank"), and
shall take reasonable steps to ensure that all of its and its Subsidiaries'
Account Debtors forward payment of the amounts owed by them directly to such
Controlled Account Bank, and (B) deposit or cause to be deposited promptly, and
in any event no later than the first Business Day after the date of receipt
thereof, all of their collections (including those sent directly by their
Account Debtors to a Grantor) into a bank account of such Grantor (each, a
"Controlled Account") at one of the Controlled Account Banks.
 
 
-14-

--------------------------------------------------------------------------------

 
 
(ii)        Each Grantor shall establish and maintain Controlled Account
Agreements with Agent and the applicable Controlled Account Bank, in form and
substance reasonably acceptable to Agent.  Each such Controlled Account
Agreement shall provide, among other things, that (A) the Controlled Account
Bank will comply with any instructions originated by Agent directing the
disposition of the funds in such Controlled Account without further consent by
the applicable Grantor, (B) the Controlled Account Bank waives any rights of
setoff or recoupment or any other claim against the applicable Controlled
Account other than for payment of its service fees and other charges directly
related to the administration of such Controlled Account and for returned checks
or other items of payment, and (C) the Controlled Account Bank will forward, by
daily sweep, all amounts in the applicable Controlled Account to the Agent's
Account.
 
(iii)       So long as no Default or Event of Default has occurred and is
continuing, the Borrower may amend Schedule 6(k) to add or replace a Controlled
Account Bank or Controlled Account; provided, however, that (A) such prospective
Controlled Account Bank shall be reasonably satisfactory to Agent, and (B) prior
to the time of the opening of such Controlled Account, the applicable Grantor
and such prospective Controlled Account Bank shall have executed and delivered
to Agent a Controlled Account Agreement.  Each Grantor shall close any of its
Controlled Accounts (and establish replacement Controlled Account accounts in
accordance with the foregoing sentence) as promptly as practicable and in any
event within forty-five (45) days of notice from Agent that the operating
performance, funds transfer, or availability procedures or performance of the
Controlled Account Bank with respect to Controlled Account Accounts or Agent's
liability under any Controlled Account Agreement with such Controlled Account
Bank is no longer acceptable in Agent's reasonable judgment;
 
(l)             [Intentionally Omitted]
 
(m)           Pledged Notes.   Grantors (i) without the prior written consent of
Agent, will not (A) waive or release any obligation of any Person that is
obligated under any of the Pledged Notes, (B) take or omit to take any action or
knowingly suffer or permit any action to be omitted or taken, the taking or
omission of which would result in any right of offset against sums payable under
the Pledged Notes, or (C) other than Permitted Dispositions, assign or surrender
their rights and interests under any of the Pledged Notes or terminate, cancel,
modify, change, supplement or amend the Pledged Notes, and (ii) shall provide to
Agent copies of all material written notices (including notices of default)
given or received with respect to the Pledged Notes promptly after giving or
receiving such notice.
 
7.           Relation to Other Security Documents.  The provisions of this
Agreement shall be read and construed with the other Loan Documents referred to
below in the manner so indicated.
 
(a)            Credit Agreement. In the event of any conflict between any
provision in this Agreement and a provision in the Credit Agreement, such
provision of the Credit Agreement shall control.
 
(b)            Patent, Trademark, Copyright Security Agreements.  The provisions
of the Copyright Security Agreements, Trademark Security Agreements, and Patent
Security Agreements are supplemental to the provisions of this Agreement, and
nothing contained in the Copyright Security Agreements, Trademark Security
Agreements, or the Patent Security Agreements shall limit any of the rights or
remedies of Agent hereunder.  In the event of any conflict between any provision
in this Agreement and a provision in a Copyright Security Agreement, Trademark
Security Agreement or Patent Security Agreement, such provision of this
Agreement shall control.
 
 
-15-

--------------------------------------------------------------------------------

 
 
8.           Further Assurances.
 
(a)           Each Grantor agrees that from time to time, at its own expense,
such Grantor will promptly execute and deliver all further instruments and
documents, and take all further action, that Agent may reasonably request, in
order to perfect and protect the Security Interest granted hereby, to create,
perfect or protect the Security Interest purported to be granted hereby or to
enable Agent to exercise and enforce its rights and remedies hereunder with
respect to any of the Collateral.
 
(b)           Each Grantor authorizes the filing by Agent of financing or
continuation statements, or amendments thereto, and such Grantor will execute
and deliver to Agent such other instruments or notices, as Agent may reasonably
request, in order to perfect and preserve the Security Interest granted or
purported to be granted hereby.
 
(c)           Each Grantor authorizes Agent at any time and from time to time to
file, transmit, or communicate, as applicable, financing statements and
amendments (i) describing the Collateral as "all personal property of debtor" or
"all assets of debtor" or words of similar effect, (ii) describing the
Collateral as being of equal or lesser scope or with greater detail, or (iii)
that contain any information required by part 5 of Article 9 of the Code for the
sufficiency or filing office acceptance.  Each Grantor also hereby ratifies any
and all financing statements or amendments previously filed by Agent in any
jurisdiction.
 
(d)           Each Grantor acknowledges that it is not authorized to file any
financing statement or amendment or termination statement with respect to any
financing statement filed in connection with this Agreement without the prior
written consent of Agent, subject to such Grantor's rights under Section
9-509(d)(2) of the Code.
 
9.           Agent's Right to Perform Contracts, Exercise Rights, etc.  Upon the
occurrence and during the continuance of an Event of Default, Agent (or its
designee) (a) may proceed to perform any and all of the obligations of any
Grantor contained in any contract, lease, or other agreement and exercise any
and all rights of any Grantor therein contained as fully as such Grantor itself
could, (b) shall have the right to use any Grantor's rights under Intellectual
Property Licenses in connection with the enforcement of Agent's rights
hereunder, including the right to prepare for sale and sell any and all
Inventory and Equipment now or hereafter owned by any Grantor and now or
hereafter covered by such licenses, and (c) shall have the right to request that
any Stock that is pledged hereunder be registered in the name of Agent or any of
its nominees.
 
10.          Agent Appointed Attorney-in-Fact.  Each Grantor hereby irrevocably
appoints Agent its attorney-in-fact, with full authority in the place and stead
of such Grantor and in the name of such Grantor or otherwise, at such time as an
Event of Default has occurred and is continuing under the Credit Agreement, to
take any action and to execute any instrument which Agent may reasonably deem
necessary or advisable to accomplish the purposes of this Agreement, including:
 
(a)           to ask, demand, collect, sue for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
connection with the Accounts or any other Collateral of such Grantor;
 
(b)           to receive and open all mail addressed to such Grantor and to
notify postal authorities to change the address for the delivery of mail to such
Grantor to that of Agent;
 
(c)           to receive, indorse, and collect any drafts or other instruments,
documents, Negotiable Collateral or Chattel Paper;
 
(d)           to file any claims or take any action or institute any proceedings
which Agent may deem necessary or desirable for the collection of any of the
Collateral of such Grantor or otherwise to enforce the rights of Agent with
respect to any of the Collateral;
 
 
-16-

--------------------------------------------------------------------------------

 
 
(e)           to repair, alter, or supply goods, if any, necessary to fulfill in
whole or in part the purchase order of any Person obligated to such Grantor in
respect of any Account of such Grantor;
 
(f)           to use any Intellectual Property or Intellectual Property Licenses
of such Grantor, including but not limited to any labels, Patents, Trademarks,
trade names, URLs, domain names, industrial designs, Copyrights, or advertising
matter, in preparing for sale, advertising for sale, or selling Inventory or
other Collateral and to collect any amounts due under Accounts, contracts or
Negotiable Collateral of such Grantor; and
 
(g)           Agent, on behalf of the Lenders, shall have the right, but shall
not be obligated, to bring suit in its own name to enforce the Intellectual
Property and Intellectual Property Licenses and, if Agent shall commence any
such suit, the appropriate Grantor shall, at the request of Agent, do any and
all lawful acts and execute any and all proper documents reasonably required by
Agent in aid of such enforcement.
 
To the extent permitted by law, each Grantor hereby ratifies all that such
attorney-in-fact shall lawfully do or cause to be done by virtue hereof.  This
power of attorney is coupled with an interest and shall be irrevocable until
this Agreement is terminated.
 
11.          Agent May Perform.  If any Grantor fails to perform any agreement
contained herein, Agent may itself perform, or cause performance of, such
agreement, and the reasonable expenses of Agent incurred in connection therewith
shall be payable, jointly and severally, by Grantors.
 
12.          Agent's Duties.  The powers conferred on Agent hereunder are solely
to protect Agent's interest in the Collateral, for the benefit of the Lenders,
and shall not impose any duty upon Agent to exercise any such powers.  Except
for the safe custody of any Collateral in its actual possession and the
accounting for moneys actually received by it hereunder, Agent shall have no
duty as to any Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any
Collateral.  Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its actual possession if such
Collateral is accorded treatment substantially equal to that which Agent accords
its own property.
 
13.          Collection of Accounts, General Intangibles and Negotiable
Collateral.  At any time upon the occurrence and during the continuance of an
Event of Default, Agent or Agent's designee may (a) notify Account Debtors of
any Grantor that the Accounts, General Intangibles, Chattel Paper or Negotiable
Collateral of such Grantor have been assigned to Agent, for the benefit of the
Lenders, or that Agent has a security interest therein, and (b) collect the
Accounts, General Intangibles and Negotiable Collateral of any Grantor directly,
and any collection costs and expenses shall constitute part of such Grantor's
Secured Obligations under the Loan Documents.
 
14.          Disposition of Pledged Interests by Agent.  None of the Pledged
Interests existing as of the date of this Agreement are, and none of the Pledged
Interests hereafter acquired on the date of acquisition thereof will be,
registered or qualified under the various federal or state securities laws of
the United States and disposition thereof after an Event of Default may be
restricted to one or more private (instead of public) sales in view of the lack
of such registration.  Each Grantor understands that in connection with such
disposition, Agent may approach only a restricted number of potential purchasers
and further understands that a sale under such circumstances may yield a lower
price for the Pledged Interests than if the Pledged Interests were registered
and qualified pursuant to federal and state securities laws and sold on the open
market.  Each Grantor, therefore, agrees that:  (a) if Agent shall, pursuant to
the terms of this Agreement, sell or cause the Pledged Interests or any portion
thereof to be sold at a private sale, Agent shall have the right to rely upon
the advice and opinion of any nationally recognized brokerage or investment firm
(but shall not be obligated to seek such advice and the failure to do so shall
not be considered in determining the commercial reasonableness of such action)
as to the best manner in which to offer the Pledged Interest or any portion
thereof for sale and as to the best price reasonably obtainable at the private
sale thereof; and (b) such reliance shall be conclusive evidence that Agent has
handled the disposition in a commercially reasonable manner.
 
 
-17-

--------------------------------------------------------------------------------

 
 
15.          Voting and Other Rights in Respect of Pledged Interests.
 
(a)           Upon the occurrence and during the continuation of an Event of
Default, (i) Agent may, at its option, and with two (2) Business Days prior
written notice to any Grantor, and in addition to all rights and remedies
available to Agent under any other agreement, at law, in equity, or otherwise,
exercise all voting rights, or any other ownership or consensual rights
(including any dividend or distribution rights) in respect of the Pledged
Interests owned by such Grantor, but under no circumstances is Agent obligated
by the terms of this Agreement to exercise such rights, and (ii) if Agent duly
exercises its right to vote any of such Pledged Interests, each Grantor hereby
appoints Agent, such Grantor's true and lawful attorney-in-fact and IRREVOCABLE
PROXY to vote such Pledged Interests in any manner Agent deems advisable for or
against all matters submitted or which may be submitted to a vote of
shareholders, partners or members, as the case may be.  The power-of-attorney
and proxy granted hereby is coupled with an interest and shall be irrevocable.
 
(b)           For so long as any Grantor shall have the right to vote the
Pledged Interests owned by it, such Grantor covenants and agrees that it will
not, without the prior written consent of Agent, vote or take any consensual
action with respect to such Pledged Interests which would materially adversely
affect the rights of Agent, the other Lenders, or the value of the Pledged
Interests.
 
16.          Remedies.  Upon the occurrence and during the continuance of an
Event of Default:
 
(a)           Agent may, and, at the instruction of the Required Lenders, shall
exercise in respect of the Collateral, in addition to other rights and remedies
provided for herein, in the other Loan Documents, or otherwise available to it,
all the rights and remedies of a secured party on default under the Code or any
other applicable law.  Without limiting the generality of the foregoing, each
Grantor expressly agrees that, in any such event, Agent without demand of
performance or other demand, advertisement or notice of any kind (except a
notice specified below of time and place of public or private sale) to or upon
any Grantor or any other Person (all and each of which demands, advertisements
and notices are hereby expressly waived to the maximum extent permitted by the
Code or any other applicable law), may take immediate possession of all or any
portion of the Collateral and (i) require Grantors to, and each Grantor hereby
agrees that it will at its own expense and upon request of Agent forthwith,
assemble all or part of the Collateral as directed by Agent and make it
available to Agent at one or more locations where such Grantor regularly
maintains Inventory, and (ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of Agent's offices or elsewhere, for cash, on credit, and upon such other
terms as Agent may deem commercially reasonable.  Each Grantor agrees that, to
the extent notice of sale shall be required by law, at least ten (10) days
notice to the applicable Grantor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification and specifically such notice shall constitute a reasonable
"authenticated notification of disposition" within the meaning of Section 9-611
of the Code.  Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given.  Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.  Each Grantor agrees that the internet shall
constitute a "place" for purposes of Section 9-610(b) of the Code.  Each Grantor
agrees that any sale of Collateral to a licensor pursuant to the terms of a
license agreement between such licensor and a Grantor is sufficient to
constitute a commercially reasonable sale (including as to method, terms,
manner, and time) within the meaning of Section 9-610 of the Code.
 
(b)           Agent is hereby granted a license or other right to use, without
liability for royalties or any other charge, each Grantor's Intellectual
Property, including but not limited to, any labels, Patents, Trademarks, trade
names, URLs, domain names, industrial designs, Copyrights, and advertising
matter, whether owned by any Grantor or with respect to which any Grantor has
rights under license, sublicense, or other agreements (including any
Intellectual Property License), as it pertains to the Collateral, in preparing
for sale, advertising for sale and selling any Collateral, and each Grantor's
rights under all licenses and all franchise agreements shall inure to the
benefit of Agent.
 
 
-18-

--------------------------------------------------------------------------------

 
 
(c)          Agent may, in addition to other rights and remedies provided for
herein, in the other Loan Documents, or otherwise available to it under
applicable law and without the requirement of notice to or upon any Grantor or
any other Person (which notice is hereby expressly waived to the maximum extent
permitted by the Code or any other applicable law), (i) with respect to any
Grantor's Deposit Accounts in which Agent's Liens are perfected by control under
Section 9-104 of the Code, instruct the bank maintaining such Deposit Account
for the applicable Grantor to pay the balance of such Deposit Account to or for
the benefit of Agent, and (ii) with respect to any Grantor's Securities Accounts
in which Agent's Liens are perfected by control under Section 9-106 of the Code,
instruct the securities intermediary maintaining such Securities Account for the
applicable Grantor to (A) transfer any cash in such Securities Account to or for
the benefit of Agent, or (B)  liquidate any financial assets in such Securities
Account that are customarily sold on a recognized market and transfer the cash
proceeds thereof to or for the benefit of Agent.
 
(d)           Any cash held by Agent as Collateral and all cash proceeds
received by Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied against the
Secured Obligations in the order set forth in the Credit Agreement.   In the
event the proceeds of Collateral are insufficient to satisfy all of the Secured
Obligations in full, each Grantor shall remain jointly and severally liable for
any such deficiency.
 
(e)           Each Grantor hereby acknowledges that the Secured Obligations
arise out of a commercial transaction, and agrees that if an Event of Default
shall occur and be continuing Agent shall have the right to an immediate writ of
possession without notice of a hearing.  Agent shall have the right to the
appointment of a receiver for the properties and assets of each Grantor, and
each Grantor hereby consents to such rights and such appointment and hereby
waives any objection such Grantor may have thereto or the right to have a bond
or other security posted by Agent.
 
17.          Remedies Cumulative.  Each right, power, and remedy of Agent or any
other Lender as provided for in this Agreement, the other Loan Documents now or
hereafter existing at law or in equity or by statute or otherwise shall be
cumulative and concurrent and shall be in addition to every other right, power,
or remedy provided for in this Agreement, the other Loan Documents or now or
hereafter existing at law or in equity or by statute or otherwise, and the
exercise or beginning of the exercise by Agent, any other Lender, of any one or
more of such rights, powers, or remedies shall not preclude the simultaneous or
later exercise by Agent or such other Lender of any or all such other rights,
powers, or remedies.
 
18.          Marshaling. Agent shall not be required to marshal any present or
future collateral security (including but not limited to the Collateral) for, or
other assurances of payment of, the Secured Obligations or any of them or to
resort to such collateral security or other assurances of payment in any
particular order, and all of its rights and remedies hereunder and in respect of
such collateral security and other assurances of payment shall be cumulative and
in addition to all other rights and remedies, however existing or arising.  To
the extent that it lawfully may, each Grantor hereby agrees that it will not
invoke any law relating to the marshaling of collateral which might cause delay
in or impede the enforcement of Agent's rights and remedies under this Agreement
or under any other instrument creating or evidencing any of the Secured
Obligations or under which any of the Secured Obligations is outstanding or by
which any of the Secured Obligations is secured or payment thereof is otherwise
assured, and, to the extent that it lawfully may, each Grantor hereby
irrevocably waives the benefits of all such laws.
 
19.          Indemnity and Expenses.
 
(a)           Each Grantor agrees to indemnify Agent and the other Lenders from
and against all claims, lawsuits and liabilities (including reasonable attorneys
fees) growing out of or resulting from this Agreement (including enforcement of
this Agreement) or any other Loan Document to which such Grantor is a party to
the same extent contemplated by Section 10.3 of the Credit Agreement.  This
provision shall survive the termination of this Agreement and the Credit
Agreement and the repayment of the Secured Obligations.
 
 
-19-

--------------------------------------------------------------------------------

 
 
(b)           Grantors, jointly and severally, shall, upon demand, pay to Agent
(or Agent, may charge to the Loan Account) at the times contemplated by Section
12.3 of the Credit Agreement all the expenses which Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or, upon an Event of Default, the sale of,
collection from, or other realization upon, any of the Collateral in accordance
with this Agreement and the other Loan Documents, (iii) the exercise or
enforcement of any of the rights of Agent hereunder or (iv) the failure by any
Grantor to perform or observe any of the provisions hereof.
 
20.          Merger, Amendments; Etc.  THIS AGREEMENT, TOGETHER WITH THE OTHER
LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE
PARTIES.  No waiver of any provision of this Agreement, and no consent to any
departure by any Grantor herefrom, shall in any event be effective unless the
same shall be in writing and signed by Agent, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.  No amendment of any provision of this Agreement shall be
effective unless the same shall be in writing and signed by Agent and each
Grantor to which such amendment applies.
 
21.          Addresses for Notices.  All notices and other communications
provided for hereunder shall be given in the form and manner and delivered to
Agent at its address specified in the Credit Agreement, and to any of the
Grantors at their respective addresses specified in the Credit Agreement or
Subsidiary Guaranty Agreement, as applicable, or, as to any party, at such other
address as shall be designated by such party in a written notice to the other
party.
 
22.          Continuing Security Interest: Assignments under Credit
Agreement.  This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the Obligations
have been paid in full in accordance with the provisions of the Credit Agreement
and the Commitments have expired or have been terminated, (b) be binding upon
each Grantor, and their respective successors and assigns, and (c) inure to the
benefit of, and be enforceable by, Agent, and its successors, permitted
transferees and permitted assigns.  Without limiting the generality of the
foregoing clause (c), any Lender may, in accordance with the provisions of the
Credit Agreement, assign or otherwise transfer all or any portion of its rights
and obligations under the Credit Agreement to any other Person, and such other
Person shall thereupon become vested with all the benefits in respect thereof
granted to such Lender herein or otherwise.  Upon payment in full of the Secured
Obligations in accordance with the provisions of the Credit Agreement and the
expiration or termination of the Commitments, the Security Interest granted
hereby shall terminate, any Liens arising therefrom shall automatically
terminate, and all rights to the Collateral shall revert to Grantors or any
other Person entitled thereto.  At such time, Agent will authorize the filing of
appropriate termination statements to terminate such Security Interests.  No
transfer or renewal, extension, assignment, or termination of this Agreement or
of the Credit Agreement, any other Loan Document, or any other instrument or
document executed and delivered by any Grantor to Agent nor any additional
Advances or other loans made by any Lender to the Borrower, nor the taking of
further security, nor the retaking or re-delivery of the Collateral to Grantors,
or any of them, by Agent, nor any other act of the Lenders, or any of them,
shall release any Grantor from any obligation, except a release or discharge
executed in writing by Agent in accordance with the provisions of the Credit
Agreement.  Agent shall not by any act, delay, omission or otherwise, be deemed
to have waived any of its rights or remedies hereunder, unless such waiver is in
writing and signed by Agent and then only to the extent therein set forth.  A
waiver by Agent of any right or remedy on any occasion shall not be construed as
a bar to the exercise of any such right or remedy which Agent would otherwise
have had on any other occasion.
 
 
-20-

--------------------------------------------------------------------------------

 
 
23.          Governing Law.
 
(a)           THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION,
AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.
 
(b)           THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE
AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS, LOCATED IN THE
COUNTY OF COOK, STATE OF ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH
ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  AGENT AND EACH
GRANTOR WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY
HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 23(b).
 
(c)           TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT AND EACH
GRANTOR HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  AGENT AND EACH
GRANTOR REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
 
24.          New Subsidiaries.  Pursuant to Section 8.14 of the Credit
Agreement, certain Subsidiaries (whether by acquisition or creation) of any
Grantor are required to enter into this Agreement by executing and delivering in
favor of Agent a Joinder to this Agreement in substantially the form of Annex
1.  Upon the execution and delivery of Annex 1 by any such new Subsidiary, such
Subsidiary shall become a Grantor hereunder with the same force and effect as if
originally named as a Grantor herein.  The execution and delivery of any
instrument adding an additional Grantor as a party to this Agreement shall not
require the consent of any Grantor hereunder.  The rights and obligations of
each Grantor hereunder shall remain in full force and effect notwithstanding the
addition of any new Grantor hereunder.
 
25.          Agent.  Each reference herein to any right granted to, benefit
conferred upon or power exercisable by the "Agent" shall be a reference to
Agent, for the benefit of each of the Lenders.
 
26.          Miscellaneous.
 
(a)           This Agreement is a Loan Document.  This Agreement may be executed
in any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Agreement.  Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this
Agreement.  Any party delivering an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission also shall deliver an
original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement.  The foregoing shall apply to each other Loan
Document mutatis mutandis.
 
 
-21-

--------------------------------------------------------------------------------

 
 
(b)           Any provision of this Agreement which is prohibited or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof in that
jurisdiction or affecting the validity or enforceability of such provision in
any other jurisdiction.  Each provision of this Agreement shall be severable
from every other provision of this Agreement for the purpose of determining the
legal enforceability of any specific provision.
 
(c)           Headings and numbers have been set forth herein for convenience
only.  Unless the contrary is compelled by the context, everything contained in
each Section applies equally to this entire Agreement.
 
(d)           Neither this Agreement nor any uncertainty or ambiguity herein
shall be construed against any Lender or any Grantor, whether under any rule of
construction or otherwise.  This Agreement has been reviewed by all parties and
shall be construed and interpreted according to the ordinary meaning of the
words used so as to accomplish fairly the purposes and intentions of all parties
hereto.
 
(e)           The pronouns used herein shall include, when appropriate, either
gender and both singular and plural, and the grammatical construction of
sentences shall conform thereto.
 
(f)           Unless the context of this Agreement clearly requires otherwise,
references to the plural include the singular, references to the singular
include the plural, the terms "includes" and  "including" are not limiting, and
the term "or" has, except where otherwise indicated, the inclusive meaning
represented by the phrase "and/or".  The words "hereof", "herein", "hereby",
"hereunder", and similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement.  Section,
subsection, clause, schedule, and exhibit references herein are to this
Agreement unless otherwise specified.  Any reference in this Agreement to any
agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable (subject to any
restrictions on such alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein).  The words "asset" and "property" shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts, and contract
rights.  Any reference herein to the satisfaction, repayment, or payment in full
of the Secured Obligations shall mean the repayment in full in cash or
immediately available funds of all of the Secured Obligations (including the
payment of any termination amount then applicable (or which would or could
become applicable as a result of the repayment of the other Secured Obligations)
under Hedge Agreements) other than (i) unasserted contingent indemnification
Secured Obligations, and (ii) any Hedge Obligations that, at such time, are
allowed by the applicable Hedge Bank to remain outstanding without being
required to be repaid.  Any reference herein to any Person shall be construed to
include such Person's successors and assigns.  Any requirement of a writing
contained herein shall be satisfied by the transmission of a Record.
 
(g)           All of the annexes, schedules and exhibits attached to this
Agreement shall be deemed incorporated herein by reference.
 
[signature pages follow]
 
 
-22-

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the undersigned parties hereto have caused this Agreement to
be executed and delivered as of the day and year first above written.
 

GRANTORS:
PATRICK INDUSTRIES, INC., an Indiana corporation
                 
 
By:
              /s/Andy L. Nemet       Andy L. Nemeth, Executive Vice President  
    Secretary and Treasurer  

 
ADORN HOLDINGS, INC., a Delaware corporation
                 
 
By:
              /s/Andy L. Nemeth        Andy L. Nemeth, Secretary and Treasurer  

 
 
 
Signature Page To Security Agreement
 
 
 

--------------------------------------------------------------------------------

 
 

AGENT:
WELLS FARGO BANK, NATIONAL ASSOCIATION,
    a national banking association                  
 
By:
              /s/David W. O’Neal       David W. O'Neal, Senior Vice President  

 
 
Signature Page To Security Agreement
 
 
 

--------------------------------------------------------------------------------

 
 
SCHEDULES TO
 
 
SECURITY AGREEMENT
 
 
 

--------------------------------------------------------------------------------

 
 
SCHEDULE 1
 

 
COMMERCIAL TORT CLAIMS
 
None.
 
 
-2-

--------------------------------------------------------------------------------

 
 
SCHEDULE 2
 

 
COPYRIGHTS
 
None.
 
 
-3-

--------------------------------------------------------------------------------

 
 
SCHEDULE 3
 

 
INTELLECTUAL PROPERTY LICENSES
 
1.
Development and Trademark License Agreement by and between Rockford Corporation
and Patrick Industries, Inc., as amended by Amendment 1 to Development and
License Agreement and Amendment 2 to Development and License Agreement dated
April 26, 2010.

 
2.
Asset Transfer Agreement by and between Estone Digital and Patrick Industries,
Inc. dated December 7, 2009.

 
 
-4-

--------------------------------------------------------------------------------

 
 
 
 
SCHEDULE 4
 

 
PATENTS
 
None.
 
 
-5-

--------------------------------------------------------------------------------

 
 
SCHEDULE 5
 

 
TRADEMARKS
 
US Trademark Registrations
 
Registrant of Record
 
Trademark
Reg./Appl. No.
Reg. Date
Patrick Industries, Inc.
 
SUDDEN CHANGE
3868546
26 Oct. 2010
Patrick Industries, Inc.
 
ARCADIA
85245746
 
Patrick Industries
 
VERVE
85736483
 
Patrick Industries
 
iRV
85734183
 

 
Trade Names
 
Patrick Industries
Custom Vinyls
Adorn
Interior Components Plus
Gravure Ink
Gravure
Patrick Distribution
Quest Audio Video
Sun Adhesives
Midwest Laminating
American Hardwoods
Nickell Enterprises
ILC Products
Patrick Moulding
Mobilcraft
Harlan Machinery
Patrick Door
Adorn of Indiana
Bristol Laminating
Adorn Pennsylvania
AIA Countertops
AIA
Décor
Décor Manufacturing
Décor Manufacturing, LLC
 
 
-6-

--------------------------------------------------------------------------------

 
 
Creative Wood Designs
Creative Wood
Gustafson Lighting
Praxis
Praxis Group
Praxis Group, Inc.
Estone
Performance Graphics
Performance Graphics, LLC
Zombie Killer Graphics
Performance Graphics Motorsports
Decorative Dynamics
Infinity Graphics
Adorn LLC
Adorn Holdings, Inc.
 
 
-7-

--------------------------------------------------------------------------------

 
 
SCHEDULE 6
 
PLEDGED COMPANIES
 

 
Name of Grantor
Name of Pledged
Company
Number of
hares/Units
Class of
Interests
Percentage of
Class Owned
Certificate
Nos.
Patrick Industries, Inc.
 
Adorn Holdings, Inc.
29,043.956
Common A
100%
21

 
-8-

--------------------------------------------------------------------------------

 
 
SCHEDULE 6(k)
 

 
CONTROLLED ACCOUNT BANKS
 
Well Fargo Bank, National Association
 
 
-9-

--------------------------------------------------------------------------------

 
 
SCHEDULE 7
 

 
OWNED REAL PROPERTY
 
1.
1001 Beltline, Decatur, AL  35601

 
2.
107 W. Franklin St., Elkhart, IN  46516

 
3.
28163 CR 20, Elkhart, IN  46517

 
4.
201 Industrial Road, Halstead, KS  67056

 
5.
1930 West Lusher, Elkhart, IN  46517 (also known as 2044 West Lusher, Elkhart,
IN 46517)

 
6.
20 Eby Chiques Rd., Mount Joy, PA  17552

 
7.
2225 Cypress St., Valdosta, GA 31601

 
8.
1500 Old Fort Graham Rd., Lacy Lakeview, TX  76705

 
9.
44017 US Highway 52 N, New London, NC  28127

 
10.
203 S. Huntington Avenue, Syracuse, IN 46567

 
11.
57766 County Road 3, Elkhart, IN 46516

 
 
-10-

--------------------------------------------------------------------------------

 
 
SCHEDULE 8
 

 
LIST OF UNIFORM COMMERCIAL CODE FILING JURISDICTIONS
 
Grantors
Jurisdictions
   
Patrick Industries, Inc.
Indiana
   
Patrick Industries, Inc.
Elkhart County, Indiana
   
Patrick Industries, Inc.
Morgan County, Alabama
   
Patrick Industries, Inc.
Lowndes County, Georgia
   
Patrick Industries, Inc.
Harvey County, Kansas
   
Patrick Industries, Inc.
Lancaster County, Pennsylvania
   
Patrick Industries, Inc.
McLennan County, Texas
   
Patrick Industries, Inc.
Stanly County, North Carolina

 
-11-

--------------------------------------------------------------------------------

 
 
ANNEX 1 TO SECURITY AGREEMENT
FORM OF JOINDER
 
Joinder No. ____ (this "Joinder"), dated as of _______________, to the Security
Agreement, dated as of October 24, 2012 (as amended, restated, supplemented, or
otherwise modified from time to time, the "Security Agreement"), by and among
each of the parties listed on the signature pages thereto and those additional
entities that thereafter become parties thereto (collectively, jointly and
severally, "Grantors" and each, individually, a "Grantor") and WELLS FARGO BANK,
NATIONAL ASSOCIATION, a national banking association ("Wells Fargo"), in its
capacity as administrative agent for the Lenders (in such capacity, together
with its successors and assigns in such capacity, "Agent").
 
W I T N E S S E T H:
 
WHEREAS, pursuant to that certain Credit Agreement dated as of October 24, 2012
(as amended, restated, supplemented, or otherwise modified from time to time,
the "Credit Agreement"), by and among PATRICK INDUSTRIES, INC., an Indiana
corporation (the "Borrower"), the lenders party thereto as "Lenders" (such
Lenders, together with their respective successors and assigns in such capacity,
each, individually, a "Lender" and, collectively, the "Lenders"), and Agent, the
Lenders have agreed to make certain financial accommodations available to the
Borrower from time to time pursuant to the terms and conditions thereof; and
 
WHEREAS, initially capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Security Agreement
or, if not defined therein, in the Credit Agreement; and
 
WHEREAS, Grantors have entered into the Security Agreement in order to induce
the Lenders to make certain financial accommodations to the Borrower; and
 
WHEREAS, pursuant to Section 5.11 of the Credit Agreement and Section 24 of the
Security Agreement, certain Subsidiaries of the Credit Parties, must execute and
deliver certain Loan Documents, including the Security Agreement, and the
joinder to the Security Agreement by the undersigned new Grantor or Grantors
(collectively, the "New Grantors") may be accomplished by the execution of this
Joinder in favor of Agent, for the benefit of the Lenders; and
 
WHEREAS, each New Grantor (a) is [an Affiliate][a Subsidiary] of the Borrower
and, as such, will benefit by virtue of the financial accommodations extended to
the Borrower by the Lenders and (b) by becoming a Credit Party will benefit from
certain rights granted to the Credit Parties pursuant to the terms of the Loan
Documents;
 
 
Annex 1
Page 1

--------------------------------------------------------------------------------

 
 
NOW, THEREFORE, for and in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each New Grantor hereby agrees as follows:
 
1.           In accordance with Section 24 of the Security Agreement, each New
Grantor, by its signature below, becomes a "Grantor" under the Security
Agreement with the same force and effect as if originally named therein as a
"Grantor" and each New Grantor hereby (a) agrees to all of the terms and
provisions of the Security Agreement applicable to it as a "Grantor" thereunder
and (b) represents and warrants that the representations and warranties made by
it as a "Grantor" thereunder are true and correct in all material respects
(except that such materiality qualifier shall not be applicable to any
representations and warranties that are already qualified or modified by
materiality in the text thereof) on and as of the date hereof.  In furtherance
of the foregoing, each New Grantor does hereby unconditionally grant, assign,
and pledge to Agent, for the benefit of the Lenders, to secure the Secured
Obligations, a continuing security interest in and to all of such New Grantor's
right, title and interest in and to the Collateral.  Schedule 1, "Commercial
Tort Claims", Schedule 2, "Copyrights", Schedule 3, "Intellectual Property
Licenses", Schedule 4, "Patents", Schedule 5, "Trademarks", Schedule 6, "Pledged
Companies", Schedule 6(k), "Controlled Account Banks", Schedule 7, "Owned Real
Property", and Schedule 8, "List of Uniform Commercial Code Filing
Jurisdictions" attached hereto supplement Schedule 1, Schedule 2, Schedule 3,
Schedule 4, Schedule 5, Schedule 6, Schedule 6(k), Schedule 7, and Schedule 8,
respectively, to the Security Agreement and shall be deemed a part thereof for
all purposes of the Security Agreement.  Each reference to a "Grantor" in the
Security Agreement shall be deemed to include each New Grantor.  The Security
Agreement is incorporated herein by reference.  Each New Grantor authorizes
Agent at any time and from time to time to file, transmit, or communicate, as
applicable, financing statements and amendments thereto (i) describing the
Collateral as "all personal property of debtor" or "all assets of debtor" or
words of similar effect, (ii) describing the Collateral as being of equal or
lesser scope or with greater detail, or (iii) that contain any information
required by part 5 of Article 9 of the Code for the sufficiency or filing office
acceptance.  Each New Grantor also hereby ratifies any and all financing
statements or amendments previously filed by Agent in any jurisdiction in
connection with the Loan Documents.
 
2.           Each New Grantor represents and warrants to Agent and the Lenders
that this Joinder has been duly executed and delivered by such New Grantor and
constitutes its legal, valid, and binding obligation, enforceable against it in
accordance with its terms, except as enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium, or
other similar laws affecting creditors' rights generally and general principles
of equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity).
 
3.           This Joinder is a Loan Document.  This Joinder may be executed in
any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Joinder.  Delivery of an executed counterpart of this Joinder by telefacsimile
or other electronic method of transmission shall be equally as effective as
delivery of an original executed counterpart of this Joinder.  Any party
delivering an executed counterpart of this Joinder by telefacsimile or other
electronic method of transmission also shall deliver an original executed
counterpart of this Joinder but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Joinder.
 
4.           The Security Agreement, as supplemented hereby, shall remain in
full force and effect.
 
5.           THE VALIDITY OF THIS JOINDER, THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.
 
6.           THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS JOINDER SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY
OF COOK, STATE OF ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S OPTION, IN
THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE
SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  AGENT AND EACH NEW GRANTOR
WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO
ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT
ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 6.
 
 
Annex 1
Page 2

--------------------------------------------------------------------------------

 
 
7.           TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT AND EACH
NEW GRANTOR HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS JOINDER OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  AGENT AND EACH
NEW GRANTOR REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS JOINDER MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
 
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
 
 
Annex 1
Page 3

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the parties hereto have caused this Joinder to the Security
Agreement to be executed and delivered as of the day and year first above
written.
 

NEW GRANTORS: [NAME OF NEW GRANTOR]                  
 
By:
        Name:       Title   

                                                                          

 

 
[NAME OF NEW GRANTOR]
                 
 
By:
        Name:       Title:  

 

 

AGENT:
WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association
                 
 
By:
        Name:       Title:  

[SIGNATURE PAGE TO JOINDER NO. ___ TO SECURITY AGREEMENT]
 
 
Annex 1
Page 4

--------------------------------------------------------------------------------

 
 
EXHIBIT A
 
COPYRIGHT SECURITY AGREEMENT
 
This COPYRIGHT SECURITY AGREEMENT (this "Copyright Security Agreement") is made
this ___ day of ___________, 20__, by and among Grantors listed on the signature
pages hereof (collectively, jointly and severally, "Grantors" and each
individually "Grantor"), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national
banking association ("Wells Fargo"), in its capacity as administrative agent for
the Lenders (in such capacity, together with its successors and assigns in such
capacity, "Agent").
 
W I T N E S S E T H:
 
WHEREAS, pursuant to that certain Credit Agreement dated as of October ___, 2012
(as amended, restated, supplemented, or otherwise modified from time to time,
the "Credit Agreement") by and among PATRICK INDUSTRIES, INC., an Indiana
corporation (the "Borrower"), the lenders party thereto as "Lenders" (such
Lenders, together with their respective successors and assigns in such capacity,
each, individually, a "Lender" and, collectively, the "Lenders"), and Agent, the
Lenders have agreed to make certain financial accommodations available to the
Borrower from time to time pursuant to the terms and conditions thereof; and
 
WHEREAS, each of the Lenders is willing to make the financial accommodations to
the Borrower as provided for in the Credit Agreement, but only upon the
condition, among others, that Grantors shall have executed and delivered to
Agent, for the benefit of the Lenders, that certain Security Agreement, dated as
of October ___, 2012 (including all annexes, exhibits or schedules thereto, as
from time to time amended, restated, supplemented or otherwise modified, the
"Security Agreement"); and
 
WHEREAS, pursuant to the Security Agreement, Grantors are required to execute
and deliver to Agent, for the benefit of the Lenders, this Copyright Security
Agreement;
 
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantors hereby agree as follows:
 
1.           DEFINED TERMS.  All initially capitalized terms used but not
otherwise defined herein have the meanings given to them in the Security
Agreement or, if not defined therein, in the Credit Agreement.
 
2.           GRANT OF SECURITY INTEREST IN COPYRIGHT COLLATERAL.  Each Grantor
hereby unconditionally grants, collaterally assigns, and pledges to Agent, for
the benefit of each Lender, to secure the Secured Obligations, a continuing
security interest (referred to in this Copyright Security Agreement as the
"Security Interest") in all of such Grantor's right, title and interest in and
to the following, whether now owned or hereafter acquired or arising
(collectively, the "Copyright Collateral"):
 
(a)           all of such Grantor's Copyrights and Copyright Intellectual
Property Licenses to which it is a party including those referred to on Schedule
I;
 
(b)           all renewals or extensions of the foregoing; and
 
(c)           all products and proceeds of the foregoing, including any claim by
such Grantor against third parties for past, present or future infringement of
any Copyright or any Copyright exclusively licensed under any Intellectual
Property License, including the right to receive damages, or the right to
receive license fees, royalties, and other compensation under any Copyright
Intellectual Property License.
 
 
Exhibit A
Page 1

--------------------------------------------------------------------------------

 
 
3.           SECURITY FOR SECURED OBLIGATIONS.  This Copyright Security
Agreement and the Security Interest created hereby secures the payment and
performance of the Secured Obligations, whether now existing or arising
hereafter.  Without limiting the generality of the foregoing, this Copyright
Security Agreement secures the payment of all amounts which constitute part of
the Secured Obligations and would be owed by Grantors, or any of them, to Agent,
the Lenders or any of them, whether or not they are unenforceable or not
allowable due to the existence of an Insolvency Proceeding involving any
Grantor.
 
4.           SECURITY AGREEMENT.  The Security Interest granted pursuant to this
Copyright Security Agreement is granted in conjunction with the security
interests granted to Agent, for the benefit of the Lenders, pursuant to the
Security Agreement.  Each Grantor hereby acknowledges and affirms that the
rights and remedies of Agent with respect to the Security Interest in the
Copyright Collateral made and granted hereby are more fully set forth in the
Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein.  To the extent there is any
inconsistency between this Copyright Security Agreement and the Security
Agreement, the Security Agreement shall control.
 
5.           AUTHORIZATION TO SUPPLEMENT.  If any Grantor shall obtain rights to
any new copyrights, the provisions of this Copyright Security Agreement shall
automatically apply thereto. Grantors shall give prompt notice in writing to
Agent with respect to any such new copyrights.  Without limiting Grantors'
obligations under this Section, Grantors hereby authorize Agent unilaterally to
modify this Copyright Security Agreement by amending Schedule I to include any
future United States registered copyrights or applications therefor of each
Grantor.  Notwithstanding the foregoing, no failure to so modify this Copyright
Security Agreement or amend Schedule I shall in any way affect, invalidate or
detract from Agent's continuing security interest in all Collateral, whether or
not listed on Schedule I.
 
6.           COUNTERPARTS.  This Copyright Security Agreement may be executed in
any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Copyright Security Agreement.  Delivery of an executed counterpart of this
Copyright Security Agreement by telefacsimile or other electronic method of
transmission shall be equally as effective as delivery of an original executed
counterpart of this Copyright Security Agreement.  Any party delivering an
executed counterpart of this Copyright Security Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Copyright Security Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Copyright Security Agreement.
 
7.           CONSTRUCTION.  This Copyright Security Agreement is a Loan
Document.  Unless the context of this Copyright Security Agreement clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural, the terms "includes" and  "including" are not
limiting, and the term "or" has, except where otherwise indicated, the inclusive
meaning represented by the phrase "and/or".  The words "hereof", "herein",
"hereby", "hereunder", and similar terms in this Copyright Security Agreement
refer to this Copyright Security Agreement as a whole and not to any particular
provision of this Copyright Security Agreement.  Section, subsection, clause,
schedule, and exhibit references herein are to this Copyright Security Agreement
unless otherwise specified.  Any reference in this Copyright Security Agreement
to any agreement, instrument, or document shall include all alterations,
amendments, changes, extensions, modifications, renewals, replacements,
substitutions, joinders, and supplements, thereto and thereof, as applicable
(subject to any restrictions on such alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements set forth herein).  The words "asset" and "property" shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts, and contract rights.  Any reference herein to the satisfaction,
repayment, or payment in full of the Secured Obligations shall mean the
repayment in full in cash or immediately available funds of all of the Secured
Obligations (including the payment of any termination amount then applicable (or
which would or could become applicable as a result of the repayment of the other
Secured Obligations) under Hedge Agreements) other than (i) unasserted
contingent indemnification Secured Obligations, and (ii) any Hedge Obligations
that, at such time, are allowed by the applicable Hedge Bank to remain
outstanding without being required to be repaid.  Any reference herein to any
Person shall be construed to include such Person's successors and permitted
assigns.  Any requirement of a writing contained herein shall be satisfied by
the transmission of a Record.
 
 
Exhibit A
Page 2

--------------------------------------------------------------------------------

 
 
8.           THE VALIDITY OF THIS COPYRIGHT SECURITY AGREEMENT, THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE
PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO
SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF ILLINOIS.
 
9.           THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS COPYRIGHT SECURITY AGREEMENT SHALL BE TRIED AND LITIGATED
ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS
LOCATED IN THE COUNTY OF COOK, STATE OF ILLINOIS; PROVIDED, HOWEVER, THAT ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS
TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND.  AGENT AND EACH GRANTOR WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE
LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR
TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH
THIS SECTION 9.
 
10.         TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT AND EACH
GRANTOR HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  AGENT AND EACH
GRANTOR REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS COPYRIGHT SECURITY
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
 

 
[signature page follows]
 
 
Exhibit A
Page 3

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the parties hereto have caused this Copyright Security
Agreement to be executed and delivered as of the day and year first above
written.

 
 

GRANTORS:                      
By:
        Name;       Title:  

.
 

               
By:
        Name:       Title:  

 
 

AGENT:
ACCEPTED AND ACKNOWLEDGED BY:
          WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association
                 
 
By:
        Name:       Title:  

 
 
[SIGNATURE PAGE TO COPYRIGHT SECURITY AGREEMENT]
 
 
Exhibit A
Page 4

--------------------------------------------------------------------------------

 
 
SCHEDULE I
 
to
 
COPYRIGHT SECURITY AGREEMENT
 
Copyright Registrations
 
 
Grantor
 
 
Country
 
 
Copyright
 
 
Registration No.
 
 
Registration Date
 
 
 
 
       
 
 
 
       
 
 
 
       
 
 
 
       
 
 
 
       
 
 
 
       
 
 
 
       
 
 
 
       

 
Copyright Licenses
 
 
 
COPYRIGHT SECURITY AGREEMENT
 
 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT B
 
 
PATENT SECURITY AGREEMENT
 
This PATENT SECURITY AGREEMENT (this "Patent Security Agreement") is made this
___ day of ___________, 20__, by and among the Grantors listed on the signature
pages hereof (collectively, jointly and severally, "Grantors" and each
individually "Grantor"), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national
banking association ("Wells Fargo"), in its capacity as administrative agent for
the Lenders (in such capacity, together with its successors and assigns in such
capacity,  "Agent").
 
W I T N E S S E T H:
 
WHEREAS, pursuant to that certain Credit Agreement dated as of October ____,
2012 (as amended, restated, supplemented, or otherwise modified from time to
time, the "Credit Agreement"), by and among PATRICK INDUSTRIES, INC., an Indiana
corporation (the "Borrower"), the lenders party thereto as "Lenders" (such
Lenders, together with their respective successors and assigns in such capacity,
each, individually, a "Lender" and, collectively, the "Lenders"), and Agent, the
Lenders agreed to make certain financial accommodations available to the
Borrower from time to time pursuant to the terms and conditions thereof; and
 
WHEREAS, each of the Lenders is willing to make the financial accommodations to
the Borrower as provided for in the Credit Agreement, but only upon the
condition, among others, that the Grantors shall have executed and delivered to
Agent, for the benefit of the Lenders, that certain Security Agreement, dated as
of October ___, 2012 (including all annexes, exhibits or schedules thereto, as
from time to time amended, restated, supplemented or otherwise modified, the
"Security Agreement"); and
 
WHEREAS, pursuant to the Security Agreement, Grantors are required to execute
and deliver to Agent, for the benefit of the Lenders, this Patent Security
Agreement;
 
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor hereby agrees as
follows:
 
1.           DEFINED TERMS.  All initially capitalized terms used but not
otherwise defined herein have the meanings given to them in the Security
Agreement or, if not defined therein, in the Credit Agreement.
 
2.           GRANT OF SECURITY INTEREST IN PATENT COLLATERAL. Each Grantor
hereby unconditionally grants, collaterally assigns, and pledges to Agent, for
the benefit each  of the Lenders, to secure the Secured Obligations, a
continuing security interest (referred to in this Patent Security Agreement as
the "Security Interest") in all of such Grantor's right, title and interest in
and to the following, whether now owned or hereafter acquired or arising
(collectively, the "Patent Collateral"):
 
(a)           all of its Patents and Patent Intellectual Property Licenses to
which it is a party including those referred to on Schedule I;
 
(b)           all divisionals, continuations, continuations-in-part, reissues,
reexaminations, or extensions of the foregoing; and
 
(c)           all products and proceeds of the foregoing, including any claim by
such Grantor against third parties for past, present or future infringement of
any Patent or any Patent exclusively licensed under any Intellectual Property
License, including the right to receive damages, or right to receive license
fees, royalties, and other compensation under any Patent Intellectual Property
License.
 
Exhibit B
Page 1

--------------------------------------------------------------------------------

 
 
3.           SECURITY FOR SECURED OBLIGATIONS.  This Patent Security Agreement
and the Security Interest created hereby secures the payment and performance of
the Secured Obligations, whether now existing or arising hereafter.  Without
limiting the generality of the foregoing, this Patent Security Agreement secures
the payment of all amounts which constitute part of the Secured Obligations and
would be owed by Grantors, or any of them, to Agent, the Lenders or any of them,
whether or not they are unenforceable or not allowable due to the existence of
an Insolvency Proceeding involving any Grantor.
 
4.           SECURITY AGREEMENT.  The Security Interest granted pursuant to this
Patent Security Agreement is granted in conjunction with the security interests
granted to Agent, for the benefit of the Lenders, pursuant to the Security
Agreement.  Each Grantor hereby acknowledges and affirms that the rights and
remedies of Agent with respect to the Security Interest in the Patent Collateral
made and granted hereby are more fully set forth in the Security Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein.  To the extent there is any inconsistency between this Patent
Security Agreement and the Security Agreement, the Security Agreement shall
control.
 
5.           AUTHORIZATION TO SUPPLEMENT.  If any Grantor shall obtain rights to
any new patent application or issued patent or become entitled to the benefit of
any patent application or patent for any divisional, continuation,
continuation-in-part, reissue, or reexamination of any existing patent or patent
application, the provisions of this Patent Security Agreement shall
automatically apply thereto. Grantors shall give prompt notice in writing to
Agent with respect to any such new patent rights.  Without limiting Grantors'
obligations under this Section, Grantors hereby authorize Agent unilaterally to
modify this Patent Security Agreement by amending Schedule I to include any such
new patent rights of each Grantor.  Notwithstanding the foregoing, no failure to
so modify this Patent Security Agreement or amend Schedule I shall in any way
affect, invalidate or detract from Agent's continuing security interest in all
Collateral, whether or not listed on Schedule I.
 
6.           COUNTERPARTS.  This Patent Security Agreement may be executed in
any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Patent Security Agreement.  Delivery of an executed counterpart of this Patent
Security Agreement by telefacsimile or other electronic method of transmission
shall be equally as effective as delivery of an original executed counterpart of
this Patent Security Agreement.  Any party delivering an executed counterpart of
this Patent Security Agreement by telefacsimile or other electronic method of
transmission also shall deliver an original executed counterpart of this Patent
Security Agreement but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability, and binding effect of this Patent
Security Agreement.
 
7.           CONSTRUCTION.  This Patent Security Agreement is a Loan
Document.  Unless the context of this Patent Security Agreement clearly requires
otherwise, references to the plural include the singular, references to the
singular include the plural, the terms "includes" and  "including" are not
limiting, and the term "or" has, except where otherwise indicated, the inclusive
meaning represented by the phrase "and/or".  The words "hereof", "herein",
"hereby", "hereunder", and similar terms in this Patent Security Agreement refer
to this Patent Security Agreement as a whole and not to any particular provision
of this Patent Security Agreement.  Section, subsection, clause, schedule, and
exhibit references herein are to this Patent Security Agreement unless otherwise
specified.  Any reference in this Patent Security Agreement to any agreement,
instrument, or document shall include all alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements, thereto and thereof, as applicable (subject to any restrictions on
such alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein).  The
words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts, and contract rights.  Any
reference herein to the satisfaction, repayment, or payment in full of the
Secured Obligations shall mean the repayment in full in cash or immediately
available funds of all of the Secured Obligations (including the payment of any
termination amount then applicable (or which would or could become applicable as
a result of the repayment of the other Secured Obligations) under Hedge
Agreements) other than (i) unasserted contingent indemnification Secured
Obligations, and (ii) any Hedge Obligations that, at such time, are allowed by
the applicable Hedge Bank to remain outstanding without being required to be
repaid.  Any reference herein to any Person shall be construed to include such
Person's successors and permitted assigns.  Any requirement of a writing
contained herein shall be satisfied by the transmission of a Record.
 
Exhibit B
Page 2

--------------------------------------------------------------------------------

 
 
8.           THE VALIDITY OF THIS PATENT SECURITY AGREEMENT, THE CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO
WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF ILLINOIS.
 
9.           THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS PATENT SECURITY AGREEMENT SHALL BE TRIED AND LITIGATED ONLY
IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS
LOCATED IN THE COUNTY OF COOK, STATE OF ILLINOIS; PROVIDED, HOWEVER, THAT ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS
TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND.  AGENT AND EACH GRANTOR WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE
LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR
TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH
THIS SECTION 9.
 
10.         TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT AND EACH
GRANTOR HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  AGENT AND EACH
GRANTOR REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS PATENT SECURITY AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
 
[signature page follows]
 
Exhibit B
Page 3

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the parties hereto have caused this Patent Security
Agreement to be executed and delivered as of the day and year first above
written.
 
GRANTORS:
                      By:
           
     
Name:
     
Title:
                                          By:  
         
     
Name:
     
Title:
                 
AGENT:
ACCEPTED AND ACKNOWLEDGED BY:     WELLS FARGO BANK, NATIONAL ASSOCIATION, a
national banking association                     By:
           
     
Name:
     
Title:
 

 
 
 
[SIGNATURE PAGE TO PATENT SECURITY AGREEMENT]
 
Exhibit B
Page 4

--------------------------------------------------------------------------------

 
 
SCHEDULE I
to
PATENT SECURITY AGREEMENT

Patents

 
Grantor
 
 
Country
 
 
Patent
 
 
Application/ Patent No.
 
 
Filing Date
 
 
 
       
 
 
       
 
 
       
 
 
       
 
 
       
 
 
       
 
 
       
 
 
       

Patent Licenses
 
 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT C

PLEDGED INTERESTS ADDENDUM

 
This Pledged Interests Addendum, dated as of _________ __, 20___ (this "Pledged
Interests Addendum"), is delivered pursuant to Section 6 of the Security
Agreement referred to below.  The undersigned hereby agrees that this Pledged
Interests Addendum may be attached to that certain Security Agreement, dated as
of October ___, 2012, (as amended, restated, supplemented, or otherwise modified
from time to time, the "Security Agreement"), made by the undersigned, together
with the other Grantors named therein, to WELLS FARGO BANK, NATIONAL
ASSOCIATION, a national banking association, as Agent.  Initially capitalized
terms used but not defined herein shall have the meaning ascribed to such terms
in the Security Agreement or, if not defined therein, in the Credit
Agreement.  The undersigned hereby agrees that the additional interests listed
on Schedule I shall be and become part of the Pledged Interests pledged by the
undersigned to Agent in the Security Agreement and any pledged company set forth
on Schedule I shall be and become a "Pledged Company" under the Security
Agreement, each with the same force and effect as if originally named therein.
 
This Pledged Interests Addendum is a Loan Document.  Delivery of an executed
counterpart of this Pledged Interests Addendum by telefacsimile or other
electronic method of transmission shall be equally as effective as delivery of
an original executed counterpart of this Pledged Interests Addendum.  If the
undersigned delivers an executed counterpart of this Pledged Interests Addendum
by telefacsimile or other electronic method of transmission, the undersigned
shall also deliver an original executed counterpart of this Pledged Interests
Addendum but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Pledged
Interests Addendum.
 
The undersigned hereby certifies that the representations and warranties set
forth in Section 5 of the Security Agreement of the undersigned are true and
correct as to the Pledged Interests listed herein on and as of the date hereof.
 
THE VALIDITY OF THIS PLEDGED INTERESTS ADDENDUM, THE CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO
WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF ILLINOIS.
 
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS PLEDGED INTERESTS ADDENDUM SHALL BE TRIED AND LITIGATED ONLY IN THE STATE,
AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE
COUNTY OF COOK, STATE OF ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH
ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  AGENT AND EACH
GRANTOR WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY
HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS PARAGRAPH.
 
Exhibit C
Page 1

--------------------------------------------------------------------------------

 
 
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT AND EACH GRANTOR HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS PLEDGED INTERESTS ADDENDUM OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  AGENT AND EACH
GRANTOR REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS PLEDGED INTERESTS ADDENDUM
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
 

 
[signature page follows]
 
Exhibit C
Page 2

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the undersigned has caused this Pledged Interests Addendum
to be executed and delivered as of the day and year first above written.
 

 
[___________________]
                 
 
By:
        Name:       Title:  

Exhibit C
Page 3

--------------------------------------------------------------------------------

 
 
SCHEDULE I
 
to
 
PLEDGED INTERESTS ADDENDUM
 
Pledged Interests
 
 
Name of Grantor
 
 
Name of Pledged
Company
 
 
Number of
Shares/Units
 
 
Class of
Interests
 
 
Percentage of
Class Owned
 
 
Certificate
Nos.
 
 
 
         
 
 
         

 
Exhibit C
Page 4

--------------------------------------------------------------------------------

 
 
EXHIBIT D
 
TRADEMARK SECURITY AGREEMENT
 
This TRADEMARK SECURITY AGREEMENT (this "Trademark Security Agreement") is made
this ___ day of ___________, 20__, by and among Grantors listed on the signature
pages hereof (collectively, jointly and severally, "Grantors" and each
individually "Grantor"), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national
banking association ("Wells Fargo"), in its capacity as administrative agent for
the Lenders (in such capacity, together with its successors and assigns in such
capacity, "Agent").
 
W I T N E S S E T H:
 
WHEREAS, pursuant to that certain Credit Agreement dated as of October ___, 2012
(as amended, restated, supplemented, or otherwise modified from time to time,
the "Credit Agreement") by and among PATRICK INDUSTRIES, INC., an Indiana
corporation (the "Borrower"), the lenders party thereto as "Lenders" (such
Lenders, together with their respective successors and assigns in such capacity,
each, individually, a "Lender" and, collectively, the "Lenders"), and Agent, the
Lenders have agreed to make certain financial accommodations available to the
Borrower from time to time pursuant to the terms and conditions thereof; and
 
WHEREAS, each of the Lenders is willing to make the financial accommodations to
the Borrower as provided for in the Credit Agreement, but only upon the
condition, among others, that Grantors shall have executed and delivered to
Agent, for the benefit of Lenders, that certain Security Agreement, dated as of
October ___, 2012 (including all annexes, exhibits or schedules thereto, as from
time to time amended, restated, supplemented or otherwise modified, the
"Security Agreement"); and
 
WHEREAS, pursuant to the Security Agreement, Grantors are required to execute
and deliver to Agent, for the benefit of Lenders, this Trademark Security
Agreement;
 
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor hereby agrees as
follows:
 
1.           DEFINED TERMS.  All initially capitalized terms used but not
otherwise defined herein have the meanings given to them in the Security
Agreement or, if not defined therein, in the Credit Agreement.
 
2.           GRANT OF SECURITY INTEREST IN TRADEMARK COLLATERAL.  Each Grantor
hereby unconditionally grants, collaterally assigns, and pledges to Agent, for
the benefit of each Lender, to secure the Secured Obligations, a continuing
security interest (referred to in this Trademark Security Agreement as the
"Security Interest") in all of such Grantor's right, title and interest in and
to the following, whether now owned or hereafter acquired or arising
(collectively, the "Trademark Collateral"):
 
(a)           all of its Trademarks and Trademark Intellectual Property Licenses
to which it is a party including those referred to on Schedule I;
 
(b)           all goodwill of the business connected with the use of, and
symbolized by, each Trademark and each Trademark Intellectual Property License;
and
 
(c)           all products and proceeds (as that term is defined in the Code) of
the foregoing, including any claim by such Grantor against third parties for
past, present or future (i) infringement or dilution of any Trademark or any
Trademarks exclusively licensed under any Intellectual Property License,
including right to receive any damages, (ii) injury to the goodwill associated
with any Trademark, or (iii) right to receive license fees, royalties, and other
compensation under any Trademark Intellectual Property License.
 
 
Exhibit D
Page 1

--------------------------------------------------------------------------------

 
 
3.           SECURITY FOR SECURED OBLIGATIONS.  This Trademark Security
Agreement and the Security Interest created hereby secures the payment and
performance of the Secured Obligations, whether now existing or arising
hereafter.  Without limiting the generality of the foregoing, this Trademark
Security Agreement secures the payment of all amounts which constitute part of
the Secured Obligations and would be owed by Grantors, or any of them, to Agent,
the Lenders or any of them, whether or not they are unenforceable or not
allowable due to the existence of an Insolvency Proceeding involving any
Grantor.
 
4.           SECURITY AGREEMENT.  The Security Interest granted pursuant to this
Trademark Security Agreement is granted in conjunction with the security
interests granted to Agent, for the benefit of the Lenders, pursuant to the
Security Agreement.  Each Grantor hereby acknowledges and affirms that the
rights and remedies of Agent with respect to the Security Interest in the
Trademark Collateral made and granted hereby are more fully set forth in the
Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein.  To the extent there is any
inconsistency between this Trademark Security Agreement and the Security
Agreement, the Security Agreement shall control.
 
5.           AUTHORIZATION TO SUPPLEMENT.  If any Grantor shall obtain rights to
any new trademarks, the provisions of this Trademark Security Agreement shall
automatically apply thereto. Grantors shall give prompt notice in writing to
Agent with respect to any such new trademarks or renewal or extension of any
trademark registration.   Without limiting Grantors' obligations under this
Section, Grantors hereby authorize Agent unilaterally to modify this Trademark
Security Agreement by amending Schedule I to include any such new trademark
rights of each Grantor.  Notwithstanding the foregoing, no failure to so modify
this Trademark Security Agreement or amend Schedule I shall in any way affect,
invalidate or detract from Agent's continuing security interest in all
Collateral, whether or not listed on Schedule I.
 
6.           COUNTERPARTS.  This Trademark Security Agreement may be executed in
any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Trademark Security Agreement.  Delivery of an executed counterpart of this
Trademark Security Agreement by telefacsimile or other electronic method of
transmission shall be equally as effective as delivery of an original executed
counterpart of this Trademark Security Agreement.  Any party delivering an
executed counterpart of this Trademark Security Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Trademark Security Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Trademark Security Agreement.
 
7.           CONSTRUCTION.  This Trademark Security Agreement is a Loan
Document.  Unless the context of this Trademark Security Agreement clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural, the terms "includes" and  "including" are not
limiting, and the term "or" has, except where otherwise indicated, the inclusive
meaning represented by the phrase "and/or".  The words "hereof", "herein",
"hereby", "hereunder", and similar terms in this Trademark Security Agreement
refer to this Trademark Security Agreement as a whole and not to any particular
provision of this Trademark Security Agreement.  Section, subsection, clause,
schedule, and exhibit references herein are to this Agreement unless otherwise
specified.  Any reference in this Trademark Security Agreement to any agreement,
instrument, or document shall include all alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements, thereto and thereof, as applicable (subject to any restrictions on
such alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein).  The
words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts, and contract rights.  Any
reference herein to the satisfaction, repayment, or payment in full of the
Secured Obligations shall mean the repayment in full in cash or immediately
available funds of all of the Secured Obligations (including the payment of any
termination amount then applicable (or which would or could become applicable as
a result of the repayment of the other Secured Obligations) under Hedge
Agreements) other than (i) unasserted contingent indemnification Secured
Obligations, and (ii) any Hedge Obligations that, at such time, are allowed by
the applicable Hedge Bank to remain outstanding without being required to be
repaid.  Any reference herein to any Person shall be construed to include such
Person's successors and permitted assigns.  Any requirement of a writing
contained herein shall be satisfied by the transmission of a Record.
 
 
Exhibit D
Page 2

--------------------------------------------------------------------------------

 
 
8.           THE VALIDITY OF THIS TRADEMARK SECURITY AGREEMENT, THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE
PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO
SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF ILLINOIS.
 
9.           THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS TRADEMARK SECURITY AGREEMENT SHALL BE TRIED AND LITIGATED
ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS
LOCATED IN THE COUNTY OF COOK, STATE OF ILLINOIS; PROVIDED, HOWEVER, THAT ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS
TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND.  AGENT AND EACH GRANTOR WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE
LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR
TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH
THIS SECTION 9.
 
10.         TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT AND EACH
GRANTOR HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  AGENT AND EACH
GRANTOR REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS TRADEMARK SECURITY
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
 
[signature page follows]
 
 
Exhibit D
Page 3

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the parties hereto have caused this Trademark Security
Agreement to be executed and delivered as of the day and year first above
written.
 
GRANTORS:
                By:
           
   
Name:
   
Title:
                              By:  
         
   
Name:
   
Title:
           
AGENT:
ACCEPTED AND ACKNOWLEDGED BY:         WELLS FARGO BANK, NATIONAL ASSOCIATION, a
national banking association               By:
           
   
Name:
   
Title:
           

 
[SIGNATURE PAGE TO TRADEMARK SECURITY AGREEMENT]
 
 
Exhibit D
Page 4

--------------------------------------------------------------------------------

 
 
SCHEDULE I
to
TRADEMARK SECURITY AGREEMENT

 
Trademark Registrations/Applications
 
 
Grantor
 
 
Country
 
 
Mark
 
 
Application/ Registration No.
 
 
App/Reg Date
 
 
 
       
 
 
       
 
 
       
 
 
       
 
 
       
 
 
       
 
 
       
 
 
       

 
Trade Names
 

 
Common Law Trademarks
 

 
Trademarks Not Currently In Use
 

 
Trademark Licenses