Exhibit 10.7

                                                               Execution Version

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                       GUARANTEE AND COLLATERAL AGREEMENT

                                   dated as of

                                 August 1, 2007

                                      among

                                GOAMERICA, INC.,

                        the Subsidiaries of the Borrower
                         from time to time party hereto

                                       and

                          CLEARLAKE CAPITAL GROUP, LP,
                               as Collateral Agent

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<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

                                    ARTICLE I

                                   Definitions

SECTION 1.01. Credit Agreement.................................................1
SECTION 1.02. Other Defined Terms..............................................1

                                   ARTICLE II

                                    Guarantee

SECTION 2.01. Guarantee........................................................4
SECTION 2.02. Guarantee of Payment.............................................4
SECTION 2.03. No Limitations, Etc..............................................5
SECTION 2.04. Reinstatement....................................................6
SECTION 2.05. Agreement To Pay; Subrogation....................................6
SECTION 2.06. Information......................................................6

                                   ARTICLE III

                              Pledge of Securities

SECTION 3.01. Pledge...........................................................6
SECTION 3.02. Delivery of the Pledged Collateral...............................7
SECTION 3.03. Representations, Warranties and Covenants........................8
SECTION 3.04. Certification of Limited Liability Company Interests
                and Limited Partnership Interests..............................9
SECTION 3.05. Denominations....................................................9
SECTION 3.06. Voting Rights; Dividends and Interest, Etc.......................9

                                   ARTICLE IV

                     Security Interests in Personal Property

SECTION 4.01. Security Interest...............................................11
SECTION 4.02. Representations and Warranties..................................13
SECTION 4.03. Covenants 15
SECTION 4.04. Other Actions...................................................18
SECTION 4.05. Covenants Regarding Patent, Trademark and
                Copyright Collateral..........................................20

<PAGE>

                                                                              ii


                                    ARTICLE V

                                    Remedies

SECTION 5.01. Remedies Upon Default...........................................22
SECTION 5.02. Application of Proceeds.........................................24
SECTION 5.03. Grant of License to Use Intellectual Property...................24
SECTION 5.04. Securities Act, Etc.............................................25

                                   ARTICLE VI

                    Indemnity, Subrogation and Subordination

SECTION 6.01. Indemnity and Subrogation.......................................26
SECTION 6.02. Contribution and Subrogation....................................26
SECTION 6.03. Subordination...................................................26

                                   ARTICLE VII

                                  Miscellaneous

SECTION 7.01. Notices.........................................................27
SECTION 7.02. Security Interest Absolute......................................27
SECTION 7.03. Survival of Agreement...........................................27
SECTION 7.04. Limitation by Law...............................................27
SECTION 7.05. Binding Effect; Several Agreement...............................28
SECTION 7.06. Successors and Assigns..........................................28
SECTION 7.07. Collateral Agent's Fees and Expenses; Indemnification...........28
SECTION 7.08. Collateral Agent Appointed Attorney-in-Fact.....................29
SECTION 7.09. Applicable Law..................................................30
SECTION 7.10. Waivers; Amendment..............................................30
SECTION 7.11. WAIVER OF JURY TRIAL............................................30
SECTION 7.12. Severability....................................................31
SECTION 7.13. Counterparts....................................................31
SECTION 7.14. Headings........................................................31
SECTION 7.15. Jurisdiction; Consent to Service of Process.....................31
SECTION 7.16. Termination or Release..........................................32
SECTION 7.17. Additional Subsidiaries.........................................32
SECTION 7.18. Right of Setoff.................................................32

<PAGE>

                                                                             iii


Schedules
---------

Schedule I      Subsidiary Guarantors
Schedule II     Equity Interests; Pledged Debt Securities
Schedule III    Intellectual Property

Exhibits
--------

Exhibit A       Form of Supplement
Exhibit B       Form of Perfection Certificate

<PAGE>

      GUARANTEE  AND  COLLATERAL  AGREEMENT  dated as of August  1,  2007  (this
"Agreement"),  among GOAMERICA,  INC., a Delaware  corporation (the "Borrower"),
the  Subsidiaries  of the Borrower  from time to time party hereto and CLEARLAKE
CAPITAL GROUP,  LP  ("Clearlake"),  as collateral  agent (in such capacity,  the
"Collateral Agent").

                              PRELIMINARY STATEMENT

      Reference is made to the Credit  Agreement  dated as of August 1, 2007 (as
amended,  supplemented,  amended and restated or otherwise modified from time to
time, the "Credit Agreement"), among the Borrower, the lenders from time to time
party thereto (each a "Lender" and  collectively,  the "Lenders") and Clearlake,
as  administrative  agent (in such  capacity,  the  "Administrative  Agent") and
Collateral Agent.

      The  Lenders  (such  term and each  other  capitalized  term  used but not
defined in this preliminary statement having the meaning given or ascribed to it
in Article I) have agreed to extend credit to the Borrower pursuant to, and upon
the terms and conditions specified in, the Credit Agreement.  The obligations of
the Lenders to extend credit to the Borrower are conditioned  upon,  among other
things,  the execution  and delivery of this  Agreement by the Borrower and each
Subsidiary Guarantor. Each Subsidiary Guarantor is an affiliate of the Borrower,
will derive  substantial  benefits  from the extension of credit to the Borrower
pursuant to the Credit  Agreement  and is willing to execute  and  deliver  this
Agreement in order to induce the Lenders to extend such credit. Accordingly, the
parties hereto agree as follows:

                                   ARTICLE I

                                   Definitions

      SECTION  1.01.  Credit  Agreement.  (a)  Capitalized  terms  used  in this
Agreement  and not otherwise  defined  herein have the meanings set forth in the
Credit  Agreement.  All  capitalized  terms defined in the New York UCC (as such
term is defined  herein) and not  defined in this  Agreement  have the  meanings
specified therein. Except where the usage dictates otherwise,  all references to
the Uniform Commercial Code shall mean the New York UCC.

      (b) The rules of  construction  specified  in  Section  1.02 of the Credit
Agreement also apply to this Agreement.

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

      "Accounts  Receivable"  shall mean all Accounts  and all right,  title and
interest in any returned goods, together with all rights, titles, securities and
guarantees  with respect  thereto,  including any rights to stoppage in transit,
replevin, reclamation and resales, and all related security interests, liens and
pledges, whether voluntary or involuntary,  in each case whether now existing or
owned or hereafter arising or acquired.

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                                                                               2


      "Administrative Agent" shall have the meaning assigned to such term in the
preliminary statement.

      "Article 9  Collateral"  shall have the  meaning  assigned to such term in
Section 4.01.

      "Borrower" shall have the meaning assigned to such term in the preamble.

      "Collateral"   shall  mean  the  Article  9  Collateral  and  the  Pledged
Collateral.

      "Collateral  Agent"  shall have the  meaning  assigned to such term in the
preamble.

      "Copyright License" shall mean any written agreement,  now or hereafter in
effect,  granting  any right to any third  person  under  any  copyright  now or
hereafter  owned by any Grantor or that such Grantor  otherwise has the right to
license,  or  granting  any  right to any  Grantor  under any  copyright  now or
hereafter  owned by any third  person,  and all rights of such Grantor under any
such agreement.

      "Copyrights"  shall  mean all of the  following  now  owned  or  hereafter
acquired by any  Grantor:  (a) all  copyright  rights in any work subject to the
copyright  laws of the United  States or any other  country,  whether as author,
assignee,  transferee or otherwise,  and (b) all  registrations and applications
for  registration  of any such  copyright  in the  United  States  or any  other
country,  including registrations,  recordings,  supplemental  registrations and
pending  applications for registration in the United States Copyright Office (or
any  successor  office or any similar  office in any other  country),  including
those listed on Schedule III.

      "Federal  Securities Laws" shall have the meaning assigned to such term in
Section 5.04.

      "General Intangibles" shall mean all choses in action and causes of action
and all other  intangible  personal  property  of any  Grantor of every kind and
nature  (other than  Accounts)  now owned or hereafter  acquired by any Grantor,
including  all rights  and  interests  in  partnerships,  limited  partnerships,
limited  liability  companies and other  unincorporated  entities,  corporate or
other business  records,  indemnification  claims,  contract  rights  (including
rights  under  leases,  whether  entered  into  as  lessor  or  lessee,  Hedging
Agreements   and   other   agreements),    Intellectual   Property,    goodwill,
registrations,   franchises,  tax  refund  claims  and  any  letter  of  credit,
guarantee,  claim, security interest or other security held by or granted to any
Grantor to secure payment by an Account Debtor of any of the Accounts.

      "Grantors" shall mean the Borrower and the Subsidiary Guarantors.

      "Intellectual  Property" shall mean all  intellectual and similar property
of any Grantor of every kind and nature now owned or  hereafter  acquired by any
Grantor,   including  inventions,   designs,  Patents,   Copyrights,   Licenses,
Trademarks,  trade secrets,

<PAGE>
                                                                               3


confidential  or  proprietary  technical  and  business  information,  know-how,
show-how  or  other  data  or  information,   software  and  databases  and  all
embodiments or fixations  thereof and related  documentation,  registrations and
franchises,  and all  additions,  improvements  and accessions to, and books and
records describing or used in connection with, any of the foregoing.

      "License"  shall mean any Patent  License,  Trademark  License,  Copyright
License or other  license  or  sublicense  agreement  relating  to  Intellectual
Property to which any  Grantor is a party,  including  those  listed on Schedule
III.

      "New York UCC" shall mean the Uniform Commercial Code as from time to time
in effect in the State of New York.

      "Patent  License"  shall mean any written  agreement,  now or hereafter in
effect,  granting  to any  third  person  any  right  to  make,  use or sell any
invention on which a patent,  now or hereafter  owned by any Grantor or that any
Grantor otherwise has the right to license, is in existence,  or granting to any
Grantor any right to make,  use or sell any invention on which a patent,  now or
hereafter  owned by any third  person,  is in  existence,  and all rights of any
Grantor under any such agreement.

      "Patents" shall mean all of the following now owned or hereafter  acquired
by any Grantor:  (a) all letters  patent of the United States or the  equivalent
thereof in any other country,  all registrations and recordings thereof, and all
applications  for letters patent of the United States or the equivalent  thereof
in  any  other  country,   including   registrations,   recordings  and  pending
applications in the United States Patent and Trademark  Office (or any successor
or any similar offices in any other country), including those listed on Schedule
III,  and (b) all  reissues,  continuations,  divisions,  continuations-in-part,
renewals or extensions thereof, and the inventions disclosed or claimed therein,
including the right to make, use and/or sell the inventions disclosed or claimed
therein.

      "Perfection  Certificate"  shall mean a certificate  substantially  in the
form of Exhibit B hereto,  completed  and  supplemented  with the  schedules and
attachments  contemplated thereby, and duly executed by a Responsible Officer of
the Borrower.

      "Pledged  Collateral"  shall  have the  meaning  assigned  to such term in
Section 3.01.

      "Pledged Debt Securities"  shall have the meaning assigned to such term in
Section 3.01.

      "Pledged  Securities" shall mean any promissory notes,  stock certificates
or  other  securities  now or  hereafter  included  in the  Pledged  Collateral,
including all  certificates,  instruments  or other  documents  representing  or
evidencing any Pledged Collateral.

      "Pledged  Stock"  shall have the meaning  assigned to such term in Section
3.01.

<PAGE>
                                                                               4


      "Secured  Parties"  shall  mean (a) the  Lenders,  (b) the  Administrative
Agent, (c) the Collateral Agent, (d) the  beneficiaries of each  indemnification
obligation  undertaken  by any Loan Party  under any Loan  Document  and (e) the
successors and assigns of each of the foregoing.

      "Security  Interest"  shall  have the  meaning  assigned  to such  term in
Section 4.01.

      "Subsidiary  Guarantor"  shall  mean (a) the  Subsidiaries  identified  on
Schedule I hereto as Subsidiary  Guarantors and (b) each other  Subsidiary  that
becomes a party to this  Agreement as a Subsidiary  Guarantor  after the Closing
Date.

      "Trademark License" shall mean any written agreement,  now or hereafter in
effect,  granting  to any third  person  any right to use any  trademark  now or
hereafter  owned by any Grantor or that any Grantor  otherwise  has the right to
license,  or  granting  to any  Grantor  any right to use any  trademark  now or
hereafter  owned by any third  person,  and all rights of any Grantor  under any
such agreement.

      "Trademarks"  shall  mean all of the  following  now  owned  or  hereafter
acquired  by any  Grantor:  (a) all  trademarks,  service  marks,  trade  names,
corporate names, company names, business names, fictitious business names, trade
styles,  trade dress, logos, other source or business  identifiers,  designs and
general  intangibles  of like  nature,  now  existing  or  hereafter  adopted or
acquired,  all  registrations and recordings  thereof,  and all registration and
recording  applications filed in connection therewith,  including  registrations
and  registration  applications in the United States Patent and Trademark Office
(or any  successor  office)  or any  similar  offices in any State of the United
States  or any other  country  or any  political  subdivision  thereof,  and all
extensions or renewals thereof,  including those listed on Schedule III, (b) all
goodwill  associated  therewith or symbolized  thereby and (c) all other assets,
rights and interests that uniquely reflect or embody such goodwill.

                                   ARTICLE II

                                    Guarantee

      SECTION  2.01.  Guarantee.   Each  Subsidiary  Guarantor   unconditionally
guarantees,  jointly with the other  Subsidiary  Guarantors and severally,  as a
primary  obligor and not merely as a surety,  the due and  punctual  payment and
performance of the Obligations.  Each Subsidiary  Guarantor  further agrees that
the Obligations may be extended or renewed,  in whole or in part, without notice
to or further  assent from it, and that it will remain bound upon its  guarantee
notwithstanding  any  extension or renewal of any  Obligation.  Each  Subsidiary
Guarantor  waives  presentment  to,  demand of payment  from and  protest to the
Borrower or any other Loan Party of any  Obligation,  and also waives  notice of
acceptance of its guarantee and notice of protest for nonpayment.

      SECTION 2.02.  Guarantee of Payment.  Each  Subsidiary  Guarantor  further
agrees that its guarantee hereunder  constitutes a guarantee of payment when due

<PAGE>
                                                                               5


and not of collection, and waives any right to require that any resort be had by
the  Collateral  Agent or any other  Secured  Party to any security held for the
payment of the Obligations or to any balance of any Deposit Account or credit on
the books of the  Collateral  Agent or any other  Secured  Party in favor of the
Borrower or any other person.

      SECTION  2.03.  No  Limitations,  Etc.  (a)  Except for  termination  of a
Subsidiary  Guarantor's  obligations  hereunder as expressly provided in Section
7.16,  the  obligations  of each  Subsidiary  Guarantor  hereunder  shall not be
subject to any reduction, limitation,  impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject  to any  defense or  setoff,  counterclaim,  recoupment  or
termination   whatsoever   by   reason   of  the   invalidity,   illegality   or
unenforceability   of  the  Obligations  or  otherwise.   Without  limiting  the
generality  of the  foregoing,  the  obligations  of each  Subsidiary  Guarantor
hereunder  shall not be discharged or impaired or otherwise  affected by (i) the
failure of the  Collateral  Agent or any other Secured Party to assert any claim
or demand or to enforce  any right or remedy  under the  provisions  of any Loan
Document or otherwise,  (ii) any rescission,  waiver,  amendment or modification
of, or any release from any of the terms or provisions  of, any Loan Document or
any other agreement,  including with respect to any other  Subsidiary  Guarantor
under this  Agreement,  (iii) the release of, or any impairment of or failure to
perfect any Lien on or security interest in, any security held by the Collateral
Agent or any other Secured Party for the  Obligations  or any of them,  (iv) any
default,  failure or delay,  willful or  otherwise,  in the  performance  of the
Obligations  or (v) any other act or omission that may or might in any manner or
to any extent vary the risk of any Subsidiary  Guarantor or otherwise operate as
a discharge of any Subsidiary Guarantor as a matter of law or equity (other than
the  indefeasible  payment  in  full  in  cash  of all  the  Obligations).  Each
Subsidiary  Guarantor expressly authorizes the Collateral Agent to take and hold
security for the payment and performance of the Obligations,  to exchange, waive
or release any or all such security (with or without consideration),  to enforce
or apply such  security  and direct the order and manner of any sale  thereof in
its sole discretion or to release or substitute any one or more other guarantors
or obligors  upon or in respect of the  Obligations,  all without  affecting the
obligations of any Subsidiary Guarantor hereunder.

      (b) To the fullest  extent  permitted by applicable  law, each  Subsidiary
Guarantor  waives  any  defense  based on or arising  out of any  defense of the
Borrower or any other Loan Party or the  unenforceability  of the Obligations or
any part  thereof  from  any  cause,  or the  cessation  from  any  cause of the
liability of the Borrower or any other Loan Party,  other than the  indefeasible
payment in full in cash of all the  Obligations.  The  Collateral  Agent and the
other Secured Parties may, at their election,  foreclose on any security held by
one or more of them by one or more  judicial  or  nonjudicial  sales,  accept an
assignment of any such security in lieu of foreclosure, compromise or adjust any
part of the Obligations,  make any other  accommodation with the Borrower or any
other Loan Party or exercise any other right or remedy available to them against
the Borrower or any other Loan Party,  without affecting or impairing in any way
the liability of any  Subsidiary  Guarantor  hereunder  except to the extent the
Obligations  have  been  fully  and  indefeasibly  paid in full in cash.  To the
fullest extent permitted by applicable law, each Subsidiary Guarantor waives any
defense  arising out of any such election  even though

<PAGE>
                                                                               6


such election  operates,  pursuant to applicable law, to impair or to extinguish
any  right of  reimbursement  or  subrogation  or other  right or remedy of such
Subsidiary  Guarantor  against the Borrower or any other Loan Party, as the case
may be, or any security.

      SECTION 2.04.  Reinstatement.  Each Subsidiary  Guarantor  agrees that its
guarantee hereunder shall continue to be effective or be reinstated, as the case
may be,  if at any time  payment,  or any part  thereof,  of any  Obligation  is
rescinded  or must  otherwise be restored by the  Collateral  Agent or any other
Secured Party upon the bankruptcy or reorganization  of the Borrower,  any other
Loan Party or otherwise.

      SECTION  2.05.  Agreement  To  Pay;  Subrogation.  In  furtherance  of the
foregoing and not in limitation of any other right that the Collateral  Agent or
any other Secured Party has at law or in equity against any Subsidiary Guarantor
by virtue  hereof,  upon the failure of the  Borrower or any other Loan Party to
pay any Obligation  when and as the same shall become due,  whether at maturity,
by  acceleration,  after notice of  prepayment  or  otherwise,  each  Subsidiary
Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the
Collateral Agent for distribution to the applicable  Secured Parties in cash the
amount of such unpaid  Obligation.  Upon payment by any Subsidiary  Guarantor of
any  sums  to the  Collateral  Agent  as  provided  above,  all  rights  of such
Subsidiary  Guarantor  against the  Borrower or any other  Subsidiary  Guarantor
arising  as a  result  thereof  by way of right  of  subrogation,  contribution,
reimbursement,  indemnity  or  otherwise  shall in all  respects  be  subject to
Article VI.

      SECTION  2.06.   Information.   Each  Subsidiary   Guarantor  assumes  all
responsibility  for being and keeping itself informed of the Borrower's and each
other Loan Party's financial condition and assets and of all other circumstances
bearing upon the risk of nonpayment of the Obligations and the nature, scope and
extent of the risks that such Subsidiary Guarantor assumes and incurs hereunder,
and agrees that neither the  Collateral  Agent nor any other  Secured Party will
have any duty to advise such Subsidiary  Guarantor of information known to it or
any of them regarding such circumstances or risks.

                                  ARTICLE III

                              Pledge of Securities

      SECTION 3.01.  Pledge. As security for the payment or performance,  as the
case may be, in full of the Obligations, each Grantor hereby assigns and pledges
to the Collateral Agent, and its successors and assigns, for the ratable benefit
of the Secured  Parties,  and hereby  grants to the  Collateral  Agent,  and its
successors  and  assigns,  for the  ratable  benefit of the Secured  Parties,  a
security interest in, all of such Grantor's right, title and interest in, to and
under  (a)(i)  the Equity  Interests  owned by such  Grantor on the date  hereof
(including  all such Equity  Interests  listed on Schedule  II),  (ii) any other
Equity  Interests  obtained  in  the  future  by  such  Grantor  and  (iii)  the
certificates   representing   all  such  Equity  Interests  (all  the  foregoing
collectively referred to herein as the "Pledged Stock"); provided, however, that
the Pledged Stock shall not include more

<PAGE>
                                                                               7


than 66% of the issued and  outstanding  voting Equity  Interests of any Foreign
Subsidiary,  (b)(i) the debt  securities held by such Grantor on the date hereof
(including all such debt securities  listed opposite the name of such Grantor on
Schedule II), (ii) any debt  securities in the future issued to such Grantor and
(iii)  the  promissory  notes  and any other  instruments  evidencing  such debt
securities  (all the foregoing  collectively  referred to herein as the "Pledged
Debt  Securities"),  (c) all other property that may be delivered to and held by
the Collateral  Agent pursuant to the terms of this Section 3.01, (d) subject to
Section  3.06,  all  payments  of  principal  or  interest,   dividends,   cash,
instruments  and  other  property  from  time to time  received,  receivable  or
otherwise  distributed in respect of, in exchange for or upon the conversion of,
and all other  Proceeds  received in respect of, the  securities  referred to in
clauses  (a) and (b)  above,  (e)  subject  to  Section  3.06,  all  rights  and
privileges  of such Grantor with respect to the  securities  and other  property
referred to in clauses (a), (b), (c) and (d) above,  and (f) all Proceeds of any
of the foregoing  (the items  referred to in clauses (a) through (f) above being
collectively referred to as the "Pledged Collateral").

      TO HAVE AND TO HOLD  the  Pledged  Collateral,  together  with all  right,
title,  interest,  powers,  privileges and preferences  pertaining or incidental
thereto,  unto the Collateral Agent, its successors and assigns, for the ratable
benefit  of the  Secured  Parties,  forever;  subject,  however,  to the  terms,
covenants and conditions hereinafter set forth.

      SECTION 3.02. Delivery of the Pledged Collateral.  (a) Each Grantor agrees
promptly to deliver or cause to be delivered to the Collateral Agent any and all
certificates,  instruments or other documents representing or evidencing Pledged
Securities.

      (b) Each  Grantor  agrees  promptly to deliver or cause to be delivered to
the Collateral Agent any and all Pledged Debt Securities; provided that, so long
as no Event of Default shall have occurred and be continuing,  Collateral  Agent
shall, promptly upon request of such Grantor, make appropriate  arrangements for
making any  promissory  notes pledged by such Grantor  available to such Grantor
for purposes of prosecution, collection or renewal.

      (c) Upon delivery to the Collateral Agent, (i) any certificate, instrument
or  document  representing  or  evidencing  Pledged  Securities  required  to be
delivered  pursuant  to  paragraphs  (a) and (b) of this  Section  3.02 shall be
accompanied  by undated  stock  powers duly  executed in blank or other  undated
instruments of transfer  satisfactory to the Collateral  Agent and duly executed
in blank and by such other instruments and documents as the Collateral Agent may
reasonably  request and (ii) all other property  comprising  part of the Pledged
Collateral   delivered  pursuant  to  the  terms  of  this  Agreement  shall  be
accompanied by proper  instruments of assignment duly executed by the applicable
Grantor and such other  instruments  or  documents as the  Collateral  Agent may
reasonably request.  Each delivery of Pledged Securities shall be accompanied by
a  schedule  describing  the  applicable  securities,  which  schedule  shall be
attached hereto as Schedule II and made a part hereof;  provided that failure to
attach any such  schedule  hereto shall not affect the validity of the pledge of
such Pledged  Securities.  Each schedule so delivered shall supplement any prior
schedules so delivered.

<PAGE>
                                                                               8


      SECTION 3.03.  Representations,  Warranties  and  Covenants.  The Grantors
jointly and severally represent, warrant and covenant to and with the Collateral
Agent, for the benefit of the Secured Parties, that:

            (a) Schedule II (i) correctly sets forth,  in respect of each issuer
      that is a Loan Party or a Subsidiary thereof, the percentage of the issued
      and outstanding shares of each class of the Equity Interests of the issuer
      thereof  represented  by such Pledged  Stock and (ii)  includes all Equity
      Interests,  debt  securities and  promissory  notes required to be pledged
      hereunder;

            (b) the Pledged Stock and Pledged Debt  Securities  issued by a Loan
      Party or a Subsidiary  thereof have been duly and validly  authorized  and
      issued by the issuers  thereof and (i) in the case of Pledged  Stock,  are
      fully  paid  and  nonassessable  and  (ii)  in the  case of  Pledged  Debt
      Securities,  are  legal,  valid and  binding  obligations  of the  issuers
      thereof;

            (c)  except  for  the  security   interests  granted  hereunder  (or
      otherwise permitted under the Credit Agreement),  each Grantor (i) is and,
      subject to any  transfers  made in compliance  with the Credit  Agreement,
      will continue to be the direct owner,  beneficially and of record,  of the
      Pledged Securities indicated on Schedule II as owned by such Grantor, (ii)
      holds the same free and clear of all Liens, (iii) will make no assignment,
      pledge,  hypothecation  or  transfer  of, or create or permit to exist any
      security interest in or other Lien on, the Pledged Collateral,  other than
      transfers made in compliance with the Credit  Agreement,  and (iv) subject
      to Section 3.06,  will cause any and all Pledged  Collateral,  whether for
      value paid by such Grantor or otherwise,  to be forthwith  deposited  with
      the Collateral Agent and pledged or assigned hereunder;

            (d)  except for  restrictions  and  limitations  imposed by the Loan
      Documents or securities laws generally, the Pledged Collateral is and will
      continue to be freely transferable and assignable, and none of the Pledged
      Collateral  constituting  Equity Interests of a Loan Party or a Subsidiary
      thereof  is or will be  subject  to any  option,  right of first  refusal,
      shareholders  agreement,  charter  or  by-law  provisions  or  contractual
      restriction of any nature that might prohibit,  impair, delay or otherwise
      affect  the  pledge  of such  Pledged  Collateral  hereunder,  the sale or
      disposition  thereof  pursuant  hereto or the  exercise by the  Collateral
      Agent of rights and remedies hereunder;

            (e) each  Grantor  (i) has the power  and  authority  to pledge  the
      Pledged  Collateral  pledged by it hereunder in the manner  hereby done or
      contemplated and (ii) will defend its title or interest thereto or therein
      against any and all Liens (other than any Lien created or permitted by the
      Loan Documents), however arising, of all persons whomsoever;

            (f) no  consent  or  approval  of any  Governmental  Authority,  any
      securities  exchange  or  any  other  person  was or is  necessary  to the
      validity  of the

<PAGE>
                                                                               9


      pledge  effected  hereby (other than such as have been obtained and are in
      full force and effect);

            (g) by virtue of the  execution and delivery by each Grantor of this
      Agreement,  when any Pledged  Securities  are delivered to the  Collateral
      Agent in accordance with this Agreement,  the Collateral Agent will obtain
      a legal,  valid  and  perfected  first  priority  lien  upon and  security
      interest  in such  Pledged  Securities  as  security  for the  payment and
      performance of the Obligations; and

            (h)  the  pledge  effected  hereby  is  effective  to  vest  in  the
      Collateral  Agent,  for the ratable  benefit of the Secured  Parties,  the
      rights of the  Collateral  Agent in the  Pledged  Collateral  as set forth
      herein and all action by any Grantor necessary or desirable to protect and
      perfect the Lien on the Pledged Collateral has been duly taken.

      SECTION 3.04.  Certification of Limited  Liability  Company  Interests and
Limited Partnership Interests. Each interest in any limited liability company or
limited  partnership  which  is a  Subsidiary  and  pledged  hereunder  shall be
represented  by a  certificate,  shall be a  "security"  within  the  meaning of
Article 8 of the New York UCC and shall be governed by Article 8 of the New York
UCC.

      SECTION  3.05.  Denominations.  The  Collateral  Agent,  on  behalf of the
Secured Parties, shall hold the Pledged Securities in the name of the applicable
Grantor, endorsed or assigned in blank or in favor of the Collateral Agent. Each
Grantor  will  promptly  give to the  Collateral  Agent copies of any notices or
other  communications  received by it with respect to Pledged  Securities in its
capacity as the  registered  owner thereof.  The  Collateral  Agent shall at all
times  have the  right to  require  the  applicable  Grantors  to  exchange  the
certificates  representing  Pledged  Securities for  certificates  of smaller or
larger denominations for any purpose consistent with this Agreement.

      SECTION 3.06. Voting Rights;  Dividends and Interest,  Etc. (a) Unless and
until an  Event  of  Default  shall  have  occurred  and be  continuing  and the
Collateral  Agent shall have given the Grantors notice of its intent to exercise
its rights under this Agreement (which notice shall be deemed to have been given
immediately  upon the  occurrence of an Event of Default under  paragraph (g) or
(h) of Article VII of the Credit Agreement):

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

<PAGE>
                                                                              10


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

            (iii) Each  Grantor  shall be entitled to receive and retain any and
      all  dividends,  interest,  principal and other  distributions  paid on or
      distributed in respect of the Pledged Securities to the extent and only to
      the  extent   that  such   dividends,   interest,   principal   and  other
      distributions  are  permitted  by, and otherwise  paid or  distributed  in
      accordance  with,  the terms and conditions of the Credit  Agreement,  the
      other Loan  Documents and  applicable  law;  provided,  however,  that any
      noncash dividends,  interest,  principal or other distributions that would
      constitute  Pledged Stock or Pledged Debt  Securities,  whether  resulting
      from a subdivision,  combination or  reclassification  of the  outstanding
      Equity  Interests of the issuer of any Pledged  Securities  or received in
      exchange for Pledged  Securities  or any part  thereof,  or in  redemption
      thereof, or as a result of any merger, consolidation, acquisition or other
      exchange of assets to which such issuer may be a party or otherwise, shall
      be and become  part of the  Pledged  Collateral,  and,  if received by any
      Grantor,  shall not be  commingled  by such  Grantor with any of its other
      funds or property but shall be held separate and apart therefrom, shall be
      held in trust for the ratable  benefit of the Secured Parties and shall be
      forthwith  delivered  to the  Collateral  Agent  in the  same  form  as so
      received  (with any necessary  endorsement  or instrument of  assignment).
      This  paragraph  (iii) shall not apply to  dividends  between or among the
      Borrower,  the Subsidiary Guarantors and any Subsidiaries only of property
      subject to a perfected  security  interest under this Agreement;  provided
      that the Borrower  notifies the Collateral Agent in writing,  specifically
      referring to this Section 3.06 at the time of such  non-cash  dividend and
      takes any actions the Collateral Agent reasonably  specifies to ensure the
      continuance of its perfected security interest in such property under this
      Agreement.

      (b) Upon the occurrence and during the continuance of an Event of Default,
after the  Collateral  Agent  shall  have  notified  (or shall be deemed to have
notified  pursuant to Section  3.06(a)) the Grantors of the  suspension of their
rights under  paragraph  (a)(iii) of this Section  3.06,  then all rights of any
Grantor to  dividends,  interest,  principal  or other  distributions  that such
Grantor is authorized to receive pursuant to paragraph  (a)(iii) of this Section
3.06 shall  cease,  and all such rights  shall  thereupon  become  vested in the
Collateral Agent, which shall have the sole and exclusive right and authority to
receive and retain such dividends,  interest,  principal or other distributions.
All  dividends,  interest,  principal  or other  distributions  received  by any
Grantor  contrary to the  provisions of this Section 3.06 shall be held in trust
for the benefit of the Collateral Agent, shall be segregated from other property
or funds of such  Grantor and shall be  forthwith  delivered  to the  Collateral
Agent  upon  demand  in  the  same  form  as so  received  (with  any  necessary

<PAGE>
                                                                              11


endorsement or instrument of  assignment).  Any and all money and other property
paid over to or received by the  Collateral  Agent pursuant to the provisions of
this paragraph (b) shall be retained by the Collateral Agent in an account to be
established by the Collateral Agent upon receipt of such money or other property
and shall be applied in accordance  with the  provisions of Section 5.02.  After
all Events of Default have been cured or waived and each applicable  Grantor has
delivered  to  the  Administrative   Agent  certificates  to  that  effect,  the
Collateral  Agent  shall,  promptly  after all such Events of Default  have been
cured or  waived,  repay  to each  applicable  Grantor  (without  interest)  all
dividends,  interest,  principal or other  distributions that such Grantor would
otherwise be permitted to retain pursuant to the terms of paragraph  (a)(iii) of
this Section 3.06 and that have not been applied to payment of the Obligations.

      (c) Upon the occurrence and during the continuance of an Event of Default,
after the  Collateral  Agent  shall  have  notified  (or shall be deemed to have
notified  pursuant to Section  3.06(a)) the Grantors of the  suspension of their
rights  under  paragraph  (a)(i) of this  Section  3.06,  then all rights of any
Grantor to exercise the voting and  consensual  rights and powers it is entitled
to  exercise  pursuant  to  paragraph  (a)(i)  of  this  Section  3.06,  and the
obligations  of the  Collateral  Agent under  paragraph  (a)(ii) of this Section
3.06,  shall cease,  and all such rights shall  thereupon  become  vested in the
Collateral Agent, which shall have the sole and exclusive right and authority to
exercise such voting and consensual  rights and powers;  provided  that,  unless
otherwise directed by the Required Lenders,  the Collateral Agent shall have the
right from time to time  following  and during  the  continuance  of an Event of
Default to permit the Grantors to exercise such rights.

      (d) Any notice given by the  Collateral  Agent to the Grantors  exercising
its rights under  paragraph  (a) of this Section 3.06 (i) may suspend the rights
of the Grantors  under  paragraph  (a)(i) or paragraph  (a)(iii) in part without
suspending all such rights (as specified by the Collateral Agent in its sole and
absolute  discretion) and without waiving or otherwise  affecting the Collateral
Agent's rights to give  additional  notices from time to time  suspending  other
rights so long as an Event of Default has occurred and is continuing.

                                   ARTICLE IV

                     Security Interests in Personal Property

      SECTION  4.01.  Security  Interest.  (a) As  security  for the  payment or
performance, as the case may be, in full of the Obligations, each Grantor hereby
assigns and pledges to the Collateral Agent, its successors and assigns, for the
ratable  benefit of the Secured  Parties,  and hereby  grants to the  Collateral
Agent,  its  successors  and  assigns,  for the  ratable  benefit of the Secured
Parties, a security interest (the "Security  Interest"),  in all right, title or
interest in or to any and all of the following  assets and  properties now owned
or at any time  hereafter  acquired by such Grantor or in which such Grantor now
has or at any time in the  future  may  acquire  any  right,  title or  interest
(collectively, the "Article 9 Collateral"):

            (i) all Accounts;

<PAGE>
                                                                              12


            (ii) all Chattel Paper;

            (iii) all cash and Deposit Accounts;

            (iv) all Documents;

            (v) all Equipment;

            (vi) all Fixtures;

            (vii) all General Intangibles;

            (viii) all Instruments;

            (ix) all Inventory;

            (x) all Investment Property;

            (xi) all Letter-of-Credit Rights;

            (xii) all Commercial Tort Claims;

            (xiii) all books and records pertaining to the Article 9 Collateral;
      and

            (xiv)  to the  extent  not  otherwise  included,  all  Proceeds  and
      products of any and all of the foregoing and all  collateral  security and
      guarantees given by any person with respect to any of the foregoing;

provided,  however,  that the Article 9 Collateral shall not include,  and in no
event shall the security  interest granted under this Section 4.01 attach to (A)
any lease, license, contract,  property rights or agreement to which any Grantor
is a party (or to any of its  rights or  interests  thereunder)  if the grant of
such security interest would constitute or result in either (x) the abandonment,
invalidation or  unenforceability of any right, title or interest of any Grantor
therein or (y) in a breach or termination pursuant to the terms of, or a default
under, any such lease,  license,  contract,  property rights or agreement (other
than,  in each  case,  to the  extent  that any  such  term  would  be  rendered
ineffective  pursuant to Sections 9-406,  9-407,  9-408 or 9-409 of the UCC, any
provision of the Bankruptcy Code or otherwise),  (B) any Grantor's directors and
officers liability insurance  policies,  or (C) any application for registration
of a trademark  filed with the United States  Patent and Trademark  Office on an
intent-to-use  basis until such time (if any) as a statement of use or amendment
to allege use is filed, at which time such trademark shall automatically  become
part of the Collateral and subject to the security interest pledged.

      (b) Each Grantor hereby irrevocably authorizes the Collateral Agent at any
time and from  time to time to file in any  relevant  jurisdiction  any  initial
financing  statements  (including fixture filings) with respect to the Article 9
Collateral  or any part  thereof and  amendments  thereto  that (i) indicate the
Article 9 Collateral as "all assets" of

<PAGE>
                                                                              13


such  Grantor or words of  similar  effect,  and (ii)  contain  the  information
required  by  Article  9 of the  Uniform  Commercial  Code  of  each  applicable
jurisdiction for the filing of any financing  statement or amendment,  including
(A) whether such Grantor is an  organization,  the type of organization  and any
organizational  identification number issued to such Grantor and (B) in the case
of a financing statement filed as a fixture filing, a sufficient  description of
the real  property to which such  Article 9  Collateral  relates.  Each  Grantor
agrees to  provide  such  information  to the  Collateral  Agent  promptly  upon
request.

      Each Grantor also ratifies its  authorization  for the Collateral Agent to
file in any relevant jurisdiction any initial financing statements or amendments
thereto if filed prior to the date hereof.

      The Collateral Agent is further  authorized to file with the United States
Patent and Trademark  Office or United States Copyright Office (or any successor
office or any similar  office in any other  country)  such  documents  as may be
necessary or advisable for the purpose of  perfecting,  confirming,  continuing,
enforcing or protecting the Security  Interest granted by each Grantor,  without
the signature of any Grantor,  and naming any Grantor or the Grantors as debtors
and the Collateral Agent as secured party.

      (c) The  Security  Interest  is  granted  as  security  only and shall not
subject the Collateral  Agent or any other Secured Party to, or in any way alter
or modify, any obligation or liability of any Grantor with respect to or arising
out of the Article 9 Collateral.

      SECTION 4.02.  Representations  and Warranties.  The Grantors  jointly and
severally  represent and warrant to the Collateral Agent and the Secured Parties
that:

            (a) Each  Grantor  has good and  valid  rights  in and  title to the
      Article 9  Collateral  with  respect to which it has  purported to grant a
      Security  Interest  hereunder and has full power and authority to grant to
      the Collateral Agent, for the ratable benefit of the Secured Parties,  the
      Security  Interest in such  Article 9  Collateral  pursuant  hereto and to
      execute,  deliver and perform its obligations in accordance with the terms
      of this  Agreement,  without the  consent or approval of any other  person
      other than any consent or approval that has been obtained.

            (b) The Perfection Certificate has been duly prepared, completed and
      executed and the  information  set forth therein  (including (x) the exact
      legal name of each Grantor and (y) the  jurisdiction  of  organization  of
      each  Grantor) is correct and  complete  as of the Closing  Date.  Uniform
      Commercial  Code  financing  statements  (including  fixture  filings,  as
      applicable)  or other  appropriate  filings,  recordings or  registrations
      containing a description of the Article 9 Collateral have been prepared by
      the  Collateral   Agent  based  upon  the  information   provided  to  the
      Administrative Agent and the Secured Parties in the Perfection Certificate
      for filing in each  governmental,  municipal or other office  specified in
      Section 2 of the Perfection  Certificate  (or specified by notice from the
      Borrower to the Administrative Agent after the Closing Date in the case of
      filings,  recordings or registrations required by Sections 5.06 or 5.12 of
      the  Credit  Agreement),   which

<PAGE>
                                                                              14


      are all the  filings,  recordings  and  registrations  (other than filings
      required to be made in the United States  Patent and Trademark  Office and
      the  United  States  Copyright  Office in order to  perfect  the  Security
      Interest in the Article 9 Collateral  consisting of United States Patents,
      Trademarks  and  Copyrights)  that are necessary to publish  notice of and
      protect the  validity of and to  establish  a legal,  valid and  perfected
      security  interest  in  favor of the  Collateral  Agent  (for the  ratable
      benefit of the Secured  Parties) in respect of all Article 9 Collateral in
      which the  Security  Interest  may be  perfected  by filing,  recording or
      registration in the United States (or any political  subdivision thereof),
      and no further or subsequent  filing,  refiling,  recording,  rerecording,
      registration  or  reregistration  is necessary  in any such  jurisdiction,
      except as  provided  under  applicable  law with  respect to the filing of
      continuation   statements   and  as  may  be  required   with  respect  to
      after-acquired United States Patents,  Trademarks and Copyrights and as to
      unregistered Copyrights that become registered after the date hereof. Each
      Grantor  represents  and warrants that a fully  executed  agreement in the
      form  hereof  (or a fully  executed  short  form  agreement  in  form  and
      substance reasonably satisfactory to the Collateral Agent), and containing
      a  description  of all Article 9  Collateral  consisting  of  Intellectual
      Property  with  respect  to  United  States   Patents  and  United  States
      registered Trademarks (and Trademarks for which United States registration
      applications are pending) and United States registered Copyrights has been
      delivered  to the  Collateral  Agent for  recording  by the United  States
      Patent  and  Trademark  Office  and the  United  States  Copyright  Office
      pursuant to 35 U.S.C. ss. 261, 15 U.S.C. ss. 1060 or 17 U.S.C. ss. 205 and
      the  regulations  thereunder,  as  applicable,  and  otherwise  as  may be
      required  pursuant  to the laws of any other  necessary  jurisdiction,  to
      protect the  validity of and to  establish  a legal,  valid and  perfected
      security  interest  in  favor of the  Collateral  Agent  (for the  ratable
      benefit of the Secured  Parties)  in respect of all  Article 9  Collateral
      consisting  of  Patents,  Trademarks  and  Copyrights  in which a security
      interest  may be perfected by filing,  recording  or  registration  in the
      United States (or any political  subdivision  thereof),  and no further or
      subsequent  filing,  refiling,  recording,  rerecording,  registration  or
      reregistration  is necessary  (other than such actions as are necessary to
      perfect the  Security  Interest  with  respect to any Article 9 Collateral
      consisting of Patents,  Trademarks  and  Copyrights  (or  registration  or
      application for registration thereof) acquired or developed after the date
      hereof) and as to unregistered Copyrights that become registered after the
      date hereof.

            (c) The Security Interest constitutes (i) a legal and valid security
      interest in all Article 9 Collateral  securing the payment and performance
      of the  Obligations,  (ii)  subject to the  filings  described  in Section
      4.02(b),  a perfected  security  interest in all Article 9  Collateral  in
      which a  security  interest  may be  perfected  by  filing,  recording  or
      registering  a financing  statement  or  analogous  document in the United
      States (or any  political  subdivision  thereof)  pursuant  to the Uniform
      Commercial Code or other applicable law in such  jurisdictions and (iii) a
      security  interest  that shall be perfected in all Article 9 Collateral in
      which a security  interest may be perfected upon the receipt and recording
      of this Agreement  with the United States Patent and Trademark  Office and
      the United

<PAGE>
                                                                              15


      States Copyright Office, as applicable. The Security Interest is and shall
      be prior to any other Lien on any of the Article 9 Collateral,  other than
      Liens expressly permitted pursuant to Section 6.02 of the Credit Agreement
      that have priority as a matter of law.

            (d) The Article 9 Collateral is owned by the Grantors free and clear
      of any Lien, except for Liens expressly permitted pursuant to Section 6.02
      of the Credit  Agreement.  No Grantor has filed or consented to the filing
      of (i) any  financing  statement or analogous  document  under the Uniform
      Commercial  Code or any  other  applicable  laws  covering  any  Article 9
      Collateral,   (ii)  any  assignment  in  which  any  Grantor  assigns  any
      Collateral or any security  agreement or similar  instrument  covering any
      Article 9 Collateral with the United States Patent and Trademark Office or
      the United States Copyright Office,  (iii) any notice under the Assignment
      of Claims Act,  or (iv) any  assignment  in which any Grantor  assigns any
      Article 9  Collateral  or any  security  agreement  or similar  instrument
      covering any Article 9 Collateral with any foreign governmental, municipal
      or  other  office,   which  financing  statement  or  analogous  document,
      assignment,  security  agreement or similar instrument is still in effect,
      except,  in each case, for Liens expressly  permitted  pursuant to Section
      6.02 of the Credit Agreement.  No Grantor holds any Commercial Tort Claims
      except as indicated on the Perfection Certificate.

      SECTION 4.03.  Covenants.  (a) Each Grantor agrees  promptly to notify the
Collateral  Agent in writing of any change in (i) its legal name and/or address,
(ii) its  identity or type of  organization  or corporate  structure,  (iii) its
Federal Taxpayer  Identification Number or organizational  identification number
or (iv) its  jurisdiction  of  organization.  Each  Grantor  agrees  promptly to
provide the Collateral Agent with certified copies of  organizational  documents
reflecting any of the changes described in the first sentence of this paragraph.
Each  Grantor  agrees  not to effect or permit  any  change  referred  to in the
preceding  sentence unless all filings have been made (or  concurrently  will be
made) under the Uniform  Commercial Code or otherwise that are required in order
for the Collateral  Agent to continue at all times following such change to have
a valid, legal and perfected first priority security interest in all the Article
9 Collateral. Each Grantor agrees promptly to notify the Collateral Agent if any
material  portion of the Article 9  Collateral  owned or held by such Grantor is
damaged or destroyed.

      (b) [Intentionally omitted]

      (c) Each Grantor shall, at its own expense,  use  commercially  reasonable
efforts to defend title to the Article 9  Collateral  against all persons and to
defend the Security Interest of the Collateral Agent in the Article 9 Collateral
and the priority  thereof against any Lien not expressly  permitted  pursuant to
Section 6.02 of the Credit Agreement.

      (d)  Each  Grantor  agrees,  at its  own  expense,  promptly  to  execute,
acknowledge, deliver and cause to be duly filed all such further instruments and
documents  and take all such  actions as the  Collateral  Agent may from time to
time

<PAGE>
                                                                              16


reasonably request to better assure, obtain,  preserve,  protect and perfect the
Security  Interest and the rights and remedies  created  hereby,  including  the
payment of any fees and Taxes  required in  connection  with the  execution  and
delivery of this Agreement, the granting of the Security Interest and the filing
of any financing or continuation statements (including fixture filings) or other
documents in  connection  herewith or  therewith.  If any amount  payable to any
Grantor under or in connection with any of the Article 9 Collateral  shall be or
become  evidenced  by any  promissory  note or other  instrument,  such  note or
instrument shall be promptly pledged and delivered to the Collateral Agent, duly
endorsed in a manner satisfactory to the Collateral Agent.

      Without  limiting the  generality of the  foregoing,  each Grantor  hereby
authorizes the Collateral Agent, with prompt notice thereof to the Grantors made
not more than  once per  calendar  quarter,  to  supplement  this  Agreement  by
supplementing  Schedule III or adding  additional  schedules  hereto to identify
specifically any asset or item of a Grantor that may, in the Collateral  Agent's
reasonable judgment, constitute Copyrights, Licenses, Patents or Trademarks that
are the subject of  applications  or  registrations;  provided  that any Grantor
shall have the right,  exercisable  within 10 days after it has been notified by
the  Collateral  Agent of the specific  identification  of such  Collateral,  to
advise the Collateral Agent in writing of any inaccuracy of the  representations
and warranties made by such Grantor  hereunder with respect to such  Collateral.
Each Grantor agrees that it will use its commercially reasonable efforts to take
such  action  as  shall be  necessary  in order  that  all  representations  and
warranties  hereunder  shall be true and correct with respect to such Collateral
within 30 days after the date it has been  notified by the  Collateral  Agent of
the specific identification of such Collateral.

      (e) The  Collateral  Agent and such  persons as the  Collateral  Agent may
designate  shall have the  right,  upon  reasonable  notice,  at the  applicable
Grantor's own cost and expense, to inspect the Article 9 Collateral, all records
related  thereto  (and to make  extracts  and copies from such  records) and the
premises upon which any of the Article 9 Collateral  is located,  to discuss the
applicable  Grantor's  affairs  with  the  officers  of  such  Grantor  and  its
independent  accountants  and  to  verify,  under  reasonable  procedures,   the
existence,  validity, amount, quality, quantity, value, condition and status of,
or any other matter  relating to, the Article 9  Collateral,  including,  in the
case of Accounts or other  Article 9 Collateral  in the  possession of any third
person, by (but only after the occurrence and during the continuance of an Event
of Default)  contacting  Account  Debtors or the third  person  possessing  such
Article  9  Collateral  for the  purpose  of  making  such a  verification.  The
Collateral  Agent shall have the absolute right,  subject to Section 9.16 of the
Credit  Agreement,  to share any  information  it gains from such  inspection or
verification with any Secured Party. Unless an Event of Default has occurred and
is continuing, Collateral Agent shall coordinate and conduct such inspections so
as to occur  concurrently with inspections being conducted by the Administrative
Agent pursuant to Section 5.07 of the Credit Agreement.

      (f) Upon the occurrence and during the continuance of an Event of Default,
at its option,  the Collateral Agent may discharge past due Taxes,  assessments,
charges,  fees,  Liens,  security  interests or other  encumbrances  at any time
levied  or  placed  on the

<PAGE>
                                                                              17


Article 9 Collateral  and not  expressly  permitted  pursuant to Section 5.03 or
Section  6.02 of the  Credit  Agreement,  and may  pay for the  maintenance  and
preservation  of the Article 9 Collateral  to the extent any Grantor fails to do
so as expressly  required by the Credit  Agreement or this  Agreement,  and each
Grantor jointly and severally agrees to reimburse the Collateral Agent on demand
for any payment made or any expense incurred by the Collateral Agent pursuant to
the foregoing authorization;  provided,  however, that nothing in this paragraph
shall be  interpreted  as  excusing  any  Grantor  from the  performance  of, or
imposing any obligation on the Collateral  Agent or any Secured Party to cure or
perform,  any covenants or other  promises of any Grantor with respect to Taxes,
assessments,  charges, fees, Liens, security interests or other encumbrances and
maintenance as set forth herein or in the other Loan Documents.

      (g) If at any time any  Grantor  shall  take a  security  interest  in any
property  of an  Account  Debtor or any  other  person  to  secure  payment  and
performance  of an Account,  such Grantor shall  promptly  notify the Collateral
Agent  of such  security  interest  and,  upon  the  reasonable  request  of the
Collateral Agent, shall promptly assign such security interest to the Collateral
Agent for the ratable benefit of the Secured  Parties.  Such assignment need not
be filed of public record unless  necessary to continue the perfected  status of
the security  interest  against  creditors of and  transferees  from the Account
Debtor or other person granting the security interest.

      (h) Each  Grantor  shall  remain  liable to observe  and  perform  all the
conditions  and  obligations  to be  observed  and  performed  by it under  each
contract,  agreement or instrument relating to the Article 9 Collateral,  all in
accordance with the terms and conditions  thereof,  and each Grantor jointly and
severally  agrees to indemnify  and hold harmless the  Collateral  Agent and the
Secured Parties from and against any and all liability for such performance.

      (i) No Grantor  shall make or permit to be made an  assignment,  pledge or
hypothecation  of the  Article 9  Collateral  or shall  grant any other  Lien in
respect of the Article 9  Collateral  or permit any notice to be filed under the
Assignment  of Claims Act,  except,  in each case,  as  expressly  permitted  by
Section 6.02 of the Credit Agreement. No Grantor shall make or permit to be made
any  transfer of the Article 9 Collateral  and each Grantor  shall remain at all
times in possession or otherwise in control of the Article 9 Collateral owned by
it, except as permitted by the Credit Agreement.

      (j) Except as permitted by the Credit Agreement,  no Grantor will, without
the Collateral  Agent's prior written  consent,  grant any extension of the time
for payment of any Accounts  included in the Article 9  Collateral,  compromise,
compound  or settle  the same for less than the full  amount  thereof,  release,
wholly or partly,  any person liable for the payment thereof or allow any credit
or discount  whatsoever  thereon,  other than  extensions,  credits,  discounts,
compromises,  compoundings or settlements granted or made in the ordinary course
of business and  consistent  with its current  practices and in accordance  with
such prudent and standard  practice used in  industries  that are the same as or
similar to those in which such Grantor is engaged.

<PAGE>
                                                                              18


      (k)  Each  Grantor,  at its own  expense,  shall  maintain  or cause to be
maintained  insurance  covering  physical  loss or damage to the  Inventory  and
Equipment in accordance with the  requirements  set forth in Section 5.02 of the
Credit Agreement.  Each Grantor irrevocably makes,  constitutes and appoints the
Collateral  Agent  (and all  officers,  employees  or agents  designated  by the
Collateral Agent) as such Grantor's true and lawful agent (and attorney-in-fact)
for the purpose,  upon the occurrence and during the  continuance of an Event of
Default,  of  reasonably  making,  settling and  adjusting  claims in respect of
Article 9 Collateral  under  policies of  insurance,  endorsing the name of such
Grantor  on any  check,  draft,  instrument  or other  item of  payment  for the
proceeds of such  policies of insurance  and for making all  determinations  and
decisions  with  respect  thereto.  In the event that any Grantor at any time or
times shall fail to obtain or maintain any of the policies of insurance required
hereby or under the  Credit  Agreement  or to pay any  premium  in whole or part
relating  thereto,  the Collateral  Agent may,  without waiving or releasing any
obligation  or  liability  of any Grantor  hereunder  or any Default or Event of
Default, in its sole discretion,  obtain and maintain such policies of insurance
and pay such  premium and take any other  actions  with  respect  thereto as the
Collateral Agent deems advisable.  All sums disbursed by the Collateral Agent in
connection with this paragraph,  including  reasonable  attorneys'  fees,  court
costs,  expenses and other  charges  relating  thereto,  shall be payable,  upon
demand,  by the  Grantors  to the  Collateral  Agent  and  shall  be  additional
Obligations secured hereby.

      (l)  Each  Grantor  shall   maintain,   in  form  and  manner   reasonably
satisfactory  to the  Collateral  Agent,  records of its  Chattel  Paper and its
books, records and documents evidencing or pertaining thereto.

      SECTION 4.04.  Other Actions.  In order to further ensure the  attachment,
perfection and priority of, and the ability of the Collateral  Agent to enforce,
the Security Interest in the Article 9 Collateral,  each Grantor agrees, in each
case at such Grantor's own expense,  to take the following  actions with respect
to the following Article 9 Collateral:

            (a)  Instruments.  If any Grantor  shall at any time hold or acquire
      any Instruments,  such Grantor shall forthwith endorse, assign and deliver
      the same to the Collateral Agent,  accompanied by such undated instruments
      of  endorsement,  transfer  or  assignment  duly  executed in blank as the
      Collateral Agent may from time to time reasonably specify;  provided that,
      so long as no Event of Default shall have occurred and be continuing,  the
      Collateral  Agent  shall,  promptly  upon  request of such  Grantor,  make
      appropriate  arrangements  for making any promissory notes pledged by such
      Grantor available to such Grantor for purposes of prosecution,  collection
      or renewal.

            (b) Deposit  Accounts.  For each Deposit Account that any Grantor at
      any time opens or  maintains,  such  Grantor  shall,  upon the  Collateral
      Agent's request,  cause the depositary bank to agree to comply at any time
      with  instructions  from  the  Collateral  Agent to such  depositary  bank
      directing  the  disposition  of funds from time to time  credited  to such
      Deposit  Account,  without  further  consent of such  Grantor or any other
      person, pursuant to an agreement in

<PAGE>
                                                                              19


      form and substance  satisfactory to the Collateral  Agent.  The Collateral
      Agent agrees with each Grantor  that the  Collateral  Agent shall not give
      any such  instructions or withhold any withdrawal rights from any Grantor,
      unless an Event of Default has occurred and is continuing.  The provisions
      of this paragraph shall not apply to any Deposit Account (i) for which any
      Grantor,  the depositary bank and the Collateral Agent have entered into a
      cash collateral  agreement  specially  negotiated among such Grantor,  the
      depositary  bank and the  Collateral  Agent for the  specific  purpose set
      forth therein, or (ii) which is a zero balance or payroll account.

            (c) Investment Property.  Except to the extent otherwise provided in
      Article  III,  if any  Grantor  shall  at any  time  hold or  acquire  any
      certificated securities,  such Grantor shall forthwith endorse, assign and
      deliver the same to the  Collateral  Agent,  accompanied  by such  undated
      instruments  of  transfer  or  assignment  duly  executed  in blank as the
      Collateral  Agent  may  from  time  to  time  reasonably  specify.  If any
      securities now or hereafter acquired by any Grantor are uncertificated and
      are issued to such Grantor or its nominee  directly by the issuer thereof,
      such Grantor shall promptly  notify the  Collateral  Agent thereof and, at
      the  Collateral  Agent's  request,  pursuant to an  agreement  in form and
      substance  reasonably  satisfactory  to the  Collateral  Agent,  cause the
      issuer to agree to comply with  instructions  from the Collateral Agent as
      to  such  securities,  without  further  consent  of any  Grantor  or such
      nominee.  If any securities,  whether  certificated or uncertificated,  or
      other  Investment  Property now or  hereafter  acquired by any Grantor are
      held by such Grantor or its nominee  through a Securities  Intermediary or
      Commodity Intermediary,  such Grantor shall promptly notify the Collateral
      Agent  thereof  and, at the  Collateral  Agent's  request,  pursuant to an
      agreement in form and substance reasonably  satisfactory to the Collateral
      Agent cause such Securities Intermediary or Commodity Intermediary, as the
      case  may be,  to  agree  to  comply  with  Entitlement  Orders  from  the
      Collateral Agent to such Securities  Intermediary as to such securities or
      other  Investment  Property,  or (as the case may be) to apply  any  value
      distributed  on account  of any  commodity  contract  as  directed  by the
      Collateral  Agent to such  Commodity  Intermediary,  in each case  without
      further  consent of any  Grantor or such  nominee.  The  Collateral  Agent
      agrees with each Grantor that the Collateral Agent shall not give any such
      Entitlement  Orders or  instructions  or  directions  to any such  issuer,
      Securities Intermediary or Commodity Intermediary,  and shall not withhold
      its consent to the  exercise of any  withdrawal  or dealing  rights by any
      Grantor, unless an Event of Default has occurred and is continuing.

            (d)  Electronic  Chattel  Paper  and  Transferable  Records.  If any
      Grantor  at any time  holds or  acquires  an  interest  in any  Electronic
      Chattel  Paper or any  "transferable  record",  as that term is defined in
      Section 201 of the Federal  Electronic  Signatures  in Global and National
      Commerce Act, or in Section 16 of the Uniform Electronic  Transactions Act
      as in effect in any relevant  jurisdiction,  such Grantor  shall  promptly
      notify the Collateral  Agent thereof and, at the request of the Collateral
      Agent,  shall  take such  action as the  Collateral  Agent may  reasonably
      request to vest in the Collateral Agent control under New York UCC

<PAGE>
                                                                              20


      Section  9-105 of such  Electronic  Chattel Paper or control under Section
      201 of the Federal  Electronic  Signatures in Global and National Commerce
      Act  or,  as  the  case  may  be,  Section  16 of the  Uniform  Electronic
      Transactions  Act,  as  so  in  effect  in  such  jurisdiction,   of  such
      transferable  record.  The Collateral  Agent agrees with such Grantor that
      the Collateral Agent will arrange,  pursuant to procedures satisfactory to
      the Collateral Agent and so long as such procedures will not result in the
      Collateral Agent's loss of control, for the Grantor to make alterations to
      the Electronic  Chattel Paper or transferable  record  permitted under UCC
      Section  9-105  or,  as the  case  may  be,  Section  201  of the  Federal
      Electronic Signatures in Global and National Commerce Act or Section 16 of
      the Uniform  Electronic  Transactions  Act for a party in control to allow
      without  loss of control,  unless an Event of Default has  occurred and is
      continuing  or would  occur after  taking into  account any action by such
      Grantor  with respect to such  Electronic  Chattel  Paper or  transferable
      record.

            (e)  Letter-of-Credit  Rights.  If  any  Grantor  is at  any  time a
      beneficiary  under a letter of credit now or hereafter  issued in favor of
      such Grantor,  such Grantor shall  promptly  notify the  Collateral  Agent
      thereof  and,  at the  request and option of the  Collateral  Agent,  such
      Grantor shall, pursuant to an agreement in form and substance satisfactory
      to the Collateral Agent, either (i) use commercially reasonable efforts to
      arrange  for the  issuer  and any  confirmer  of such  letter of credit to
      consent to an  assignment to the  Collateral  Agent of the proceeds of any
      drawing  under the  letter of credit or (ii)  arrange  for the  Collateral
      Agent to become the transferee  beneficiary of the letter of credit,  with
      the  Collateral  Agent  agreeing,  in each case,  that the proceeds of any
      drawing  under  the  letter  of  credit  are to be paid to the  applicable
      Grantor unless an Event of Default has occurred or is continuing.

            (f) Commercial Tort Claims. If any Grantor shall at any time hold or
      acquire a  Commercial  Tort  Claim in an amount  reasonably  estimated  to
      exceed  $50,000,  the Grantor shall promptly  notify the Collateral  Agent
      thereof  in  a  writing  signed  by  such  Grantor   including  a  summary
      description  of such  claim and  grant to the  Collateral  Agent,  for the
      ratable  benefit  of the  Secured  Parties,  in such  writing  a  security
      interest therein and in the proceeds  thereof,  all upon the terms of this
      Agreement,  with such writing to be in form and substance  satisfactory to
      the Collateral Agent.

      SECTION  4.05.   Covenants  Regarding  Patent,   Trademark  and  Copyright
Collateral. (a) Each Grantor agrees that it will not, and will not permit any of
its licensees to, do any act, or omit to do any act,  whereby any Patent that is
material to the conduct of such  Grantor's  business may become  invalidated  or
dedicated to the public,  and agrees that it shall use  commercially  reasonable
efforts to mark any products covered by a Patent with the relevant patent number
as necessary and  sufficient to establish and preserve its maximum  rights under
applicable patent laws.

      (b)  Each  Grantor   (either  itself  or  through  its  licensees  or  its
sublicensees) will, for each Trademark material to the conduct of such Grantor's
business,  (i)  maintain

<PAGE>
                                                                              21


such  Trademark in full force free from any claim of  abandonment  or invalidity
for non-use,  (ii)  maintain the quality of products and services  offered under
such  Trademark,  (iii) display such Trademark with notice of Federal or foreign
registration  to the extent  necessary and  sufficient to establish and preserve
its maximum rights under  applicable law and (iv) not knowingly use or knowingly
permit the use of such Trademark in violation of any third party rights.

      (c) Each Grantor (either itself or through its licensees or  sublicensees)
will,  for each work  covered  by a material  Copyright,  continue  to  publish,
reproduce,  display,  adopt and distribute the work with  appropriate  copyright
notice as necessary and  sufficient to establish and preserve its maximum rights
under applicable copyright laws.

      (d) Each Grantor shall notify the Collateral Agent promptly if it knows or
has reason to know that any  Patent,  Trademark  or  Copyright  material  to the
conduct of its business may become  abandoned,  lost or dedicated to the public,
or of any adverse determination or development (including the institution of, or
any such  determination  or development  in, any proceeding in the United States
Patent and  Trademark  Office,  United States  Copyright  Office or any court or
similar office of any country) regarding such Grantor's ownership of any Patent,
Trademark or Copyright, its right to register the same, or its right to keep and
maintain  the  same  (other  than  non-final  office  action  in the  course  of
prosecution).

      (e) In no event  shall any  Grantor,  either  itself or through any agent,
employee, licensee or designee, file an application for any Patent, Trademark or
Copyright  (or for the  registration  of any  Trademark or  Copyright)  with the
United States Patent and Trademark Office, United States Copyright Office or any
office or agency in any  political  subdivision  of the United  States or in any
other country or any political subdivision thereof,  unless it promptly notifies
the  Collateral  Agent (which notice may be given after such filing),  and, upon
request of the Collateral  Agent,  executes and delivers any and all agreements,
instruments, documents and papers as the Collateral Agent may reasonably request
to evidence the Security  Interest in such Patent,  Trademark or Copyright,  and
each Grantor hereby  appoints the Collateral  Agent as its  attorney-in-fact  to
execute and file such  writings  for the  foregoing  purposes,  all acts of such
attorney being hereby ratified and confirmed;  such power, being coupled with an
interest,  is irrevocable until the termination or release,  pursuant to Section
7.16 hereof, of the Lien created hereunder.

      (f)  Each  Grantor  will  take all  reasonably  necessary  steps  that are
consistent  with the practice in any proceeding  before the United States Patent
and Trademark Office,  United States Copyright Office or any office or agency in
any  political  subdivision  of the United States or in any other country or any
political  subdivision thereof, to maintain and pursue each material application
relating  to the  Patents,  Trademarks  and/or  Copyrights  (and to  obtain  the
relevant  grant or  registration)  and to maintain  each issued  Patent and each
registration of the Trademarks and Copyrights that is material to the conduct of
any Grantor's  business,  including  timely filings of applications for renewal,
affidavits of use,  affidavits of  incontestability  and payment of  maintenance
fees, and, if consistent with good business  judgment,  to initiate  opposition,
interference and cancellation proceedings against third parties.

<PAGE>
                                                                              22


      (g) In the event that any Grantor  knows or has reason to believe that any
Article 9 Collateral consisting of a Patent,  Trademark or Copyright material to
the  conduct of any  Grantor's  business  has been or is about to be  infringed,
misappropriated or diluted by a third person in a material respect, such Grantor
promptly  shall  notify the  Collateral  Agent and shall,  if  desirable in such
Grantor's business judgment, promptly sue for infringement,  misappropriation or
dilution   and  to  recover  any  and  all   damages   for  such   infringement,
misappropriation  or dilution,  and take such other  actions as are  appropriate
under the circumstances to protect such Article 9 Collateral.

      (h) Upon the occurrence and during the continuance of an Event of Default,
each  Grantor  shall use its  reasonable  best  efforts to obtain all  requisite
consents or approvals by the licensor of each Copyright License,  Patent License
or Trademark License,  and each other material License, to effect the assignment
of all such  Grantor's  right,  title and interest  thereunder to the Collateral
Agent, for the ratable benefit of the Secured Parties, or its designee.

                                   ARTICLE V

                                    Remedies

      SECTION 5.01.  Remedies Upon Default.  Upon the  occurrence and during the
continuance of an Event of Default,  each Grantor agrees to deliver each item of
Collateral  to the  Collateral  Agent  on  demand,  and it is  agreed  that  the
Collateral  Agent  shall  have the  right  to take  any of or all the  following
actions  at the same or  different  times:  (a) with  respect  to any  Article 9
Collateral consisting of Intellectual Property, on demand, to cause the Security
Interest to become an assignment,  transfer and conveyance of any of or all such
Article 9 Collateral by the applicable  Grantor to the Collateral  Agent,  or to
license or sublicense,  whether general, special or otherwise, and whether on an
exclusive or nonexclusive  basis,  any such Article 9 Collateral  throughout the
world on such terms and conditions  and in such manner as the  Collateral  Agent
shall  reasonably  determine  (other  than  in  violation  of any  then-existing
licensing  arrangements to the extent that waivers cannot be obtained),  and (b)
with or without  legal  process and with or without  prior  notice or demand for
performance,  to  take  possession  of the  Article  9  Collateral  and  without
liability for trespass to enter any premises  where the Article 9 Collateral may
be located for the  purpose of taking  possession  of or removing  the Article 9
Collateral and, generally,  to exercise any and all rights afforded to a secured
party  under  the  Uniform  Commercial  Code or other  applicable  law.  Without
limiting  the  generality  of  the  foregoing,  each  Grantor  agrees  that  the
Collateral Agent shall have the right, subject to the mandatory  requirements of
applicable  law,  to  sell  or  otherwise  dispose  of all or  any  part  of the
Collateral  at a  public  or  private  sale or at any  broker's  board or on any
securities  exchange,  for cash,  upon  credit  or for  future  delivery  as the
Collateral  Agent  shall  deem  appropriate.   The  Collateral  Agent  shall  be
authorized  at any such sale (if it deems it advisable to do so) to restrict the
prospective  bidders or purchasers to persons who will  represent and agree that
they are  purchasing the Collateral for their own account for investment and not
with a view to the  distribution or sale thereof,  and upon  consummation of any
such sale the  Collateral  Agent  shall have the

<PAGE>
                                                                              23


right to assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall hold the property
sold  absolutely,  free from any claim or right on the part of any Grantor,  and
each  Grantor  hereby  waives  (to the  extent  permitted  by law) all rights of
redemption,  stay and appraisal which such Grantor now has or may at any time in
the future  have  under any rule of law or statute  now  existing  or  hereafter
enacted.

      The Collateral  Agent shall give each applicable  Grantor 10 days' written
notice  (which each Grantor  agrees is  reasonable  notice within the meaning of
Section 9-611 of the New York UCC or its equivalent in other  jurisdictions)  of
the Collateral Agent's intention to make any sale of Collateral. Such notice, in
the case of a public sale,  shall state the time and place for such sale and, in
the case of a sale at a broker's board or on a securities exchange,  shall state
the board or  exchange at which such sale is to be made and the day on which the
Collateral,  or portion thereof, will first be offered for sale at such board or
exchange.  Any  such  public  sale  shall be held at such  time or times  within
ordinary  business hours and at such place or places as the Collateral Agent may
fix and  state in the  notice  (if any) of such  sale.  At any  such  sale,  the
Collateral, or portion thereof, to be sold may be sold in one lot as an entirety
or in separate  parcels,  as the Collateral  Agent may (in its sole and absolute
discretion)  determine.  The Collateral Agent shall not be obligated to make any
sale of any  Collateral if it shall  determine  not to do so,  regardless of the
fact  that  notice  of  sale of such  Collateral  shall  have  been  given.  The
Collateral  Agent may,  without  notice or  publication,  adjourn  any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for sale, and such sale may, without further notice,
be made at the time and  place to which the same was so  adjourned.  In case any
sale of all or any  part of the  Collateral  is made  on  credit  or for  future
delivery,  the Collateral so sold may be retained by the Collateral  Agent until
the  sale  price  is  paid  by the  purchaser  or  purchasers  thereof,  but the
Collateral  Agent shall not incur any  liability  in case any such  purchaser or
purchasers shall fail to take up and pay for the Collateral so sold and, in case
of any such failure,  such Collateral may be sold again upon like notice. At any
public (or, to the extent permitted by law,  private) sale made pursuant to this
Agreement,  any  Secured  Party  may bid for or  purchase,  free (to the  extent
permitted by applicable  law) from any right of redemption,  stay,  valuation or
appraisal on the part of any Grantor  (all said rights being also hereby  waived
and released to the extent  permitted by applicable  law), the Collateral or any
part thereof  offered for sale and may make payment on account  thereof by using
any claim then due and  payable  to such  Secured  Party  from any  Grantor as a
credit against the purchase  price,  and such Secured Party may, upon compliance
with the terms of sale,  hold,  retain  and  dispose  of such  property  without
further  accountability to any Grantor therefor.  For purposes hereof, a written
agreement to purchase the Collateral or any portion  thereof shall be treated as
a sale  thereof;  the  Collateral  Agent  shall be free to carry  out such  sale
pursuant to such agreement and no Grantor shall be entitled to the return of the
Collateral or any portion thereof subject thereto, notwithstanding the fact that
after the Collateral  Agent shall have entered into such an agreement all Events
of Default  shall have been  remedied and the  Obligations  paid in full.  As an
alternative  to  exercising  the power of sale  herein  conferred  upon it,  the
Collateral Agent may proceed by a suit or suits at law or in equity to foreclose
this Agreement and to sell the Collateral or any portion  thereof  pursuant to a

<PAGE>
                                                                              24


judgment  or  decree  of a court or  courts  having  competent  jurisdiction  or
pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the
provisions  of this Section 5.01 shall be deemed to conform to the  commercially
reasonable  standards as provided in Section 9-610(b) of the New York UCC or its
equivalent in other jurisdictions.

      SECTION 5.02.  Application of Proceeds.  The Collateral  Agent shall apply
the proceeds of any collection,  sale, foreclosure or other realization upon any
Collateral, including any Collateral consisting of cash, as follows:

            FIRST,  to the  payment of all costs and  expenses  incurred  by the
      Administrative   Agent  or  the  Collateral  Agent  (in  their  respective
      capacities  as such  hereunder  or  under  any  other  Loan  Document)  in
      connection  with such  collection,  sale,  foreclosure  or  realization or
      otherwise in connection  with this  Agreement,  any other Loan Document or
      any of the  Obligations,  including  all  court  costs  and the  fees  and
      expenses of its agents and legal  counsel,  the  repayment of all advances
      made by the Administrative  Agent and/or the Collateral Agent hereunder or
      under any other Loan Document on behalf of any Grantor and any other costs
      or  expenses  incurred  in  connection  with the  exercise of any right or
      remedy hereunder or under any other Loan Document;

            SECOND, to the payment in full of all other Obligations (the amounts
      so  applied  to be  distributed  among  the  Secured  Parties  pro rata in
      accordance with the amounts of the Obligations owed to them on the date of
      any such distribution);

            THIRD, to the Grantors,  their successors or assigns,  or as a court
      of competent jurisdiction may otherwise direct.

The  Collateral  Agent  shall  have  absolute  discretion  as  to  the  time  of
application  of any such  proceeds,  moneys or balances in accordance  with this
Agreement.  Upon any  sale of  Collateral  by the  Collateral  Agent  (including
pursuant to a power of sale granted by statute or under a judicial  proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient  discharge to the purchaser or  purchasers of the  Collateral so sold
and  such  purchaser  or  purchasers  shall  not  be  obligated  to  see  to the
application of any part of the purchase money paid over to the Collateral  Agent
or such officer or be answerable in any way for the misapplication thereof.

      SECTION  5.03.  Grant of License  to Use  Intellectual  Property.  For the
purpose of enabling the Collateral  Agent to exercise  rights and remedies under
this Agreement at such time as the Collateral  Agent shall be lawfully  entitled
to  exercise  such  rights  and  remedies,  each  Grantor  hereby  grants to the
Collateral  Agent an  irrevocable,  nonexclusive  license  (exercisable  without
payment of royalty or other  compensation to the Grantors),  to use,  license or
sublicense any of the Article 9 Collateral  consisting of Intellectual  Property
now owned or hereafter  acquired by such  Grantor,  and wherever the same may be
located,  and including in such license  access to all media in which any of the
licensed  items may be  recorded  or stored  and to all  computer  software  and
programs used for the compilation or printout thereof,  subject,  in the case of
Trademarks,  to the

<PAGE>
                                                                              25


observance of standards of quality and inspection in connection  with the use of
such Trademarks as are sufficient to maintain the validity and enforceability of
such  Trademarks.  The  use of  such  license  by the  Collateral  Agent  may be
exercised,  at the option of the Collateral  Agent, only upon the occurrence and
during the  continuation  of an Event of Default;  provided,  however,  that any
license, sublicense or other transaction entered into by the Collateral Agent in
accordance  herewith  shall be binding  upon each  Grantor  notwithstanding  any
subsequent cure of an Event of Default.

      SECTION 5.04. Securities Act, Etc. In view of the position of the Grantors
in  relation to the Pledged  Collateral,  or because of other  current or future
circumstances,  a question may arise under the U.S.  Securities  Act of 1933, as
now or hereafter in effect,  or any similar statute  hereafter enacted analogous
in purpose or effect (such Act and any such similar statute as from time to time
in effect  being  called the  "Federal  Securities  Laws")  with  respect to any
disposition  of  the  Pledged  Collateral  permitted  hereunder.   Each  Grantor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the  Pledged  Collateral,  and might
also limit the extent to which or the manner in which any subsequent  transferee
of any Pledged  Collateral  could dispose of the same.  Similarly,  there may be
other legal  restrictions or limitations  affecting the Collateral  Agent in any
attempt to dispose of all or part of the  Pledged  Collateral  under  applicable
"blue sky" or other state  securities  laws or similar laws analogous in purpose
or  effect.  Each  Grantor  recognizes  that in light of such  restrictions  and
limitations  the  Collateral  Agent may, with respect to any sale of the Pledged
Collateral, limit the purchasers to those who will agree, among other things, to
acquire such Pledged Collateral for their own account,  for investment,  and not
with a view to the distribution or resale thereof. Each Grantor acknowledges and
agrees that in light of such restrictions and limitations, the Collateral Agent,
in its sole and absolute  discretion (a) may proceed to make such a sale whether
or not a  registration  statement  for the purpose of  registering  such Pledged
Collateral  or part thereof  shall have been filed under the Federal  Securities
Laws and (b) may  approach  and  negotiate  with a limited  number of  potential
purchasers  (including a single  potential  purchaser) to effect such sale. Each
Grantor  acknowledges  and agrees that any such sale might  result in prices and
other  terms less  favorable  to the seller than if such sale were a public sale
without such  restrictions.  In the event of any such sale, the Collateral Agent
shall incur no  responsibility  or liability  for selling all or any part of the
Pledged  Collateral  at a price  that  the  Collateral  Agent,  in its  sole and
absolute discretion,  may in good faith deem reasonable under the circumstances,
notwithstanding  the possibility  that a  substantially  higher price might have
been realized if the sale were deferred until after registration as aforesaid or
if more  than a  limited  number  of  purchasers  (or a single  purchaser)  were
approached.  The provisions of this Section 5.04 will apply  notwithstanding the
existence  of a public or  private  market  upon which the  quotations  or sales
prices may exceed substantially the price at which the Collateral Agent sells.

<PAGE>
                                                                              26


                                   ARTICLE VI

                    Indemnity, Subrogation and Subordination

      SECTION 6.01. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Subsidiary Guarantors may have under applicable
law (but subject to Section 6.03),  the Borrower  agrees that (a) in the event a
payment shall be made by any  Subsidiary  Guarantor  under this  Agreement,  the
Borrower shall indemnify such  Subsidiary  Guarantor for the full amount of such
payment and such  Subsidiary  Guarantor shall be subrogated to the rights of the
person to whom such  payment  shall have been made to the extent of such payment
and (b) in the  event  any  assets  of any  Subsidiary  Guarantor  shall be sold
pursuant to this Agreement or any other Security Document to satisfy in whole or
in  part a claim  of any  Secured  Party,  the  Borrower  shall  indemnify  such
Subsidiary  Guarantor in an amount equal to the greater of the book value or the
fair market value of the assets so sold.

      SECTION 6.02.  Contribution and Subrogation.  Each Subsidiary Guarantor (a
"Contributing  Subsidiary  Guarantor") agrees (subject to Section 6.03) that, in
the event a payment shall be made by any other Subsidiary Guarantor hereunder in
respect of any Obligation,  or assets of any other Subsidiary Guarantor shall be
sold  pursuant to any Security  Document to satisfy any  Obligation  owed to any
Secured Party,  and such other  Subsidiary  Guarantor (the "Claiming  Subsidiary
Guarantor") shall not have been fully indemnified by the Borrower as provided in
Section 6.01, the Contributing Subsidiary Guarantor shall indemnify the Claiming
Subsidiary  Guarantor  in an amount  equal to (i) the amount of such  payment or
(ii) the greater of the book value or the fair market value of such  assets,  as
the case may be, in each case  multiplied  by a fraction of which the  numerator
shall be the net  worth of the  Contributing  Subsidiary  Guarantor  on the date
hereof  and  the  denominator  shall  be the  aggregate  net  worth  of all  the
Subsidiary  Guarantors  on the date hereof  (or,  in the case of any  Subsidiary
Guarantor  becoming a party  hereto  pursuant to Section  7.16,  the date of the
supplement  hereto  executed and delivered by such  Subsidiary  Guarantor).  Any
Contributing  Subsidiary  Guarantor making any payment to a Claiming  Subsidiary
Guarantor  pursuant to this  Section 6.02 shall be  subrogated  to the rights of
such  Claiming  Subsidiary  Guarantor  under  Section 6.01 to the extent of such
payment.

      SECTION 6.03.  Subordination.  (a)  Notwithstanding  any provision of this
Agreement  to the  contrary,  all  rights  of the  Subsidiary  Guarantors  under
Sections  6.01 and 6.02 and all  other  rights  of  indemnity,  contribution  or
subrogation under applicable law or otherwise shall be fully subordinated to the
indefeasible  payment in full of the Obligations.  No failure on the part of the
Borrower or any Subsidiary  Guarantor to make the payments  required by Sections
6.01 and 6.02 (or any other payments required under applicable law or otherwise)
shall in any respect limit the  obligations  and  liabilities  of any Subsidiary
Guarantor  with  respect  to its  obligations  hereunder,  and  each  Subsidiary
Guarantor shall remain liable for the full amount of its obligations hereunder.

<PAGE>
                                                                              27


      (b) The  Borrower  and each  Subsidiary  Guarantor  hereby  agree that all
Indebtedness  and other monetary  obligations  owed by it to the Borrower or any
Subsidiary shall be fully  subordinated to the  indefeasible  payment in full of
the Obligations.

                                  ARTICLE VII

                                  Miscellaneous

      SECTION 7.01.  Notices.  All  communications  and notices  hereunder shall
(except as  otherwise  expressly  permitted  herein) be in writing  and given as
provided in Section 9.01 of the Credit Agreement. All communications and notices
hereunder  to any  Subsidiary  Guarantor  shall  be  given  to it in care of the
Borrower as provided in Section 9.01 of the Credit Agreement.

      SECTION 7.02.  Security  Interest  Absolute.  All rights of the Collateral
Agent hereunder,  the Security Interest, the grant of a security interest in the
Pledged  Collateral  and all  obligations  of each  Grantor  hereunder  shall be
absolute  and  unconditional  irrespective  of  (a)  any  lack  of  validity  or
enforceability of the Credit Agreement,  any other Loan Document,  any agreement
with respect to any of the  Obligations  or any other  agreement  or  instrument
relating to any of the foregoing, (b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations, or any other
amendment  or  waiver  of or  any  consent  to any  departure  from  the  Credit
Agreement, any other Loan Document or any other agreement or instrument relating
to the foregoing,  (c) any exchange,  release or  non-perfection  of any Lien on
other  collateral,  or any release or amendment or waiver of or consent under or
departure  from  any  guarantee,  securing  or  guaranteeing  all  or any of the
Obligations,  or (d) any other  circumstance  that might otherwise  constitute a
defense  available  to,  or a  discharge  of,  any  Grantor  in  respect  of the
Obligations or this Agreement.

      SECTION  7.03.   Survival  of  Agreement.   All   covenants,   agreements,
representations  and  warranties  made by the Loan Parties in the Loan Documents
and in the certificates or other instruments prepared or delivered in connection
with or  pursuant  to  this  Agreement  or any  other  Loan  Document  shall  be
considered  to have  been  relied  upon by the  Lenders  and shall  survive  the
execution  and  delivery  of the Loan  Documents  and the  making of any  Loans,
regardless  of any  investigation  made  by any  Lender  or on  its  behalf  and
notwithstanding  that the Collateral  Agent or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended under the Credit Agreement,  and shall continue in full force
and effect as long as the  principal  of or any accrued  interest on any Loan or
any fee or any other amount payable under any Loan Document is  outstanding  and
unpaid.

      SECTION 7.04. Limitation by Law. All rights,  remedies and powers provided
in this Agreement may be exercised only to the extent that the exercise  thereof
does not violate any applicable provision of law, and all the provisions of this
Agreement are intended to be subject to all mandatory provisions of law that may
be controlling and to be limited to the extent  necessary so that they shall not
render  this  Agreement  invalid,

<PAGE>
                                                                              28


unenforceable,  in whole or in part, or not entitled to be recorded,  registered
or filed under the provisions of any applicable law.

      SECTION 7.05.  Binding  Effect;  Several  Agreement.  This Agreement shall
become  effective  as to any Loan Party when a  counterpart  hereof  executed on
behalf of such Loan Party shall have been delivered to the Collateral  Agent and
a counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter  shall be binding upon such Loan Party and the  Collateral  Agent
and their respective  permitted  successors and assigns,  and shall inure to the
benefit of such Loan Party,  the Collateral  Agent and the other Secured Parties
and their  respective  successors  and assigns,  except that no Loan Party shall
have the right to assign or transfer its rights or obligations  hereunder or any
interest  herein or in the Collateral (and any such assignment or transfer shall
be void) except as expressly  contemplated or permitted by this Agreement or the
Credit Agreement. This Agreement shall be construed as a separate agreement with
respect to each Loan Party and may be amended, modified, supplemented, waived or
released  with respect to any Loan Party  without the approval of any other Loan
Party and without affecting the obligations of any other Loan Party hereunder.

      SECTION 7.06.  Successors  and Assigns.  Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants,  promises and
agreements  by or on behalf of any  Grantor  or the  Collateral  Agent  that are
contained  in this  Agreement  shall  bind  and  inure to the  benefit  of their
respective successors and assigns.

      SECTION 7.07. Collateral Agent's Fees and Expenses;  Indemnification.  (a)
The  parties  hereto  agree  that the  Collateral  Agent  shall be  entitled  to
reimbursement of its expenses incurred  hereunder as provided in Section 9.05 of
the Credit Agreement.

      (b) Without limitation of its indemnification  obligations under the other
Loan  Documents,  each Grantor  jointly and  severally  agrees to indemnify  the
Collateral  Agent and the other  Indemnitees  against,  and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities, and related out
of pocket expenses,  including the reasonable fees, charges and disbursements of
any counsel for any Indemnitee,  incurred by or asserted  against any Indemnitee
arising out of, in any way  connected  with,  or as a result of, the  execution,
delivery  or  performance  of this  Agreement  or any  agreement  or  instrument
contemplated  hereby  or any  claim,  litigation,  investigation  or  proceeding
relating to any of the foregoing or to the Collateral, regardless of whether any
Indemnitee is a party thereto or whether initiated by a third party or by a Loan
Party or any Affiliate  thereof;  provided,  however,  that such indemnity shall
not, as to any Indemnitee,  be available to the extent that such losses, claims,
damages,  liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.  To the extent permitted by
applicable  law, no Grantor  shall  assert,  and each Grantor  hereby waives any
claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential  or  punitive  damages  (as  opposed to direct or actual  damages)
arising out of,

<PAGE>
                                                                              29


in  connection  with,  or as a result of, this  Agreement  or any  agreement  or
instrument  contemplated  hereby,  the  Transactions  or any  Loan or the use of
proceeds thereof.

      (c) Any such amounts  payable as provided  hereunder  shall be  additional
Obligations secured hereby and by the other Security  Documents.  The provisions
of this  Section  7.06  shall  remain  operative  and in full  force and  effect
regardless of the termination of this Agreement or any other Loan Document,  the
consummation of the transactions  contemplated  hereby,  the repayment of any of
the Obligations,  the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document,  or any  investigation  made by or on
behalf of the Collateral Agent or any other Secured Party. All amounts due under
this  Section  7.07 shall be payable on written  demand  therefor and shall bear
interest,  on and from the date of  demand,  at the rate  specified  in  Section
2.04(a) of the Credit Agreement.

      SECTION 7.08.  Collateral Agent Appointed  Attorney-in-Fact.  Each Grantor
hereby appoints the Collateral Agent as the attorney-in-fact of such Grantor for
the purpose of carrying  out the  provisions  of this  Agreement  and taking any
action and executing any instrument that the Collateral Agent may deem necessary
or advisable to accomplish  the purposes  hereof  following the  occurrence  and
during the continuance of an Event of Default,  which appointment is irrevocable
and coupled with an interest.  Without limiting the generality of the foregoing,
the  Collateral  Agent shall have the right,  upon the occurrence and during the
continuance of an Event of Default,  with full power of  substitution  either in
the  Collateral  Agent's  name or in the name of such  Grantor  (a) to  receive,
endorse, assign and/or deliver any and all notes,  acceptances,  checks, drafts,
money orders or other  evidences of payment  relating to the  Collateral  or any
part thereof, (b) to demand,  collect,  receive payment of, give receipt for and
give  discharges and releases of all or any of the  Collateral,  (c) to sign the
name of any  Grantor  on any  invoice or bill of lading  relating  to any of the
Collateral,  (d) to send  verifications  of Accounts  Receivable  to any Account
Debtor, (e) to commence and prosecute any and all suits,  actions or proceedings
at law or in  equity  in any  court of  competent  jurisdiction  to  collect  or
otherwise  realize on all or any of the  Collateral  or to enforce any rights in
respect of any Collateral, (f) to settle, compromise, compound, adjust or defend
any actions, suits or proceedings relating to all or any of the Collateral,  (g)
to notify, or to require any Grantor to notify,  Account Debtors to make payment
directly  to the  Collateral  Agent,  and (h) to use,  sell,  assign,  transfer,
pledge,  make any agreement with respect to or otherwise deal with all or any of
the Collateral,  and to do all other acts and things  necessary to carry out the
purposes of this Agreement in accordance with its terms, as fully and completely
as though the Collateral Agent were the absolute owner of the Collateral for all
purposes; provided, however, that nothing herein contained shall be construed as
requiring or obligating the  Collateral  Agent to make any commitment or to make
any  inquiry as to the nature or  sufficiency  of any  payment  received  by the
Collateral  Agent,  or to present  or file any claim or  notice,  or to take any
action with respect to the  Collateral  or any part thereof or the moneys due or
to become due in respect thereof or any property covered thereby. The Collateral
Agent  and the other  Secured  Parties  shall be  accountable  only for  amounts
actually  received  as a result of the  exercise  of the powers  granted to them
herein,  and neither  they nor their  officers,  directors,  employees or agents
shall be  responsible  to

<PAGE>
                                                                              30


any Grantor for any act or failure to act hereunder,  except for their own gross
negligence, willful misconduct or bad faith.

      SECTION  7.09.  Applicable  Law.  THIS  AGREEMENT  SHALL BE  CONSTRUED  IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

      SECTION  7.10.  Waivers;  Amendment.  (a)  No  failure  or  delay  by  the
Collateral Agent, the Administrative Agent or any Lender in exercising any right
or power  hereunder or under any other Loan  Document  shall operate as a waiver
hereof or thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or  discontinuance of steps to enforce such a right or
power,  preclude  any other or further  exercise  thereof or the exercise of any
other right or power.  The rights and  remedies  of the  Collateral  Agent,  the
Administrative  Agent  and the  Lenders  hereunder  and  under  the  other  Loan
Documents  are  cumulative  and are not exclusive of any rights or remedies that
they would  otherwise  have.  No waiver of any provision of any Loan Document or
consent  to any  departure  by any Loan  Party  therefrom  shall in any event be
effective  unless the same shall be permitted  by paragraph  (b) of this Section
7.10,  and then such waiver or consent  shall be effective  only in the specific
instance and for the purpose for which given. Without limiting the generality of
the  foregoing,  the making of a Loan shall not be  construed as a waiver of any
Default,  regardless of whether the Collateral  Agent or any Lender may have had
notice or knowledge of such Default at the time. No notice or demand on any Loan
Party in any case shall entitle any Loan Party to any other or further notice or
demand in similar or other circumstances.

      (b) Neither this Agreement nor any provision hereof may be waived, amended
or modified  except  pursuant to an agreement or agreements  in writing  entered
into by the Collateral  Agent and the Loan Party or Loan Parties with respect to
which such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 9.08 of the Credit Agreement.

      SECTION 7.11. WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY  IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION  DIRECTLY OR INDIRECTLY  ARISING
OUT OF,  UNDER OR IN  CONNECTION  WITH THIS  AGREEMENT  OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE,  AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS  REPRESENTED,  EXPRESSLY OR  OTHERWISE,  THAT
SUCH OTHER  PARTY  WOULD NOT,  IN THE EVENT OF  LITIGATION,  SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES  THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN  INDUCED TO ENTER INTO THIS  AGREEMENT  AND THE OTHER  LOAN  DOCUMENTS,  AS
APPLICABLE,  BY, AMONG OTHER THINGS,  THE MUTUAL WAIVERS AND  CERTIFICATIONS  IN
THIS SECTION 7.11.

<PAGE>
                                                                              31


      SECTION 7.12. Severability. In the event any one or more of the provisions
contained  in this  Agreement  or in any  other  Loan  Document  should  be held
invalid,  illegal or  unenforceable in any respect,  the validity,  legality and
enforceability  of the remaining  provisions  contained herein and therein shall
not in any way be  affected or impaired  thereby (it being  understood  that the
invalidity of a particular  provision in a particular  jurisdiction shall not in
and of itself affect the validity of such provision in any other  jurisdiction).
The parties shall  endeavor in good-faith  negotiations  to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which  comes  as  close  as  possible  to  that  of  the  invalid,   illegal  or
unenforceable provisions.

      SECTION 7.13. Counterparts. This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together  shall  constitute a
single  contract,  and shall  become  effective  as  provided  in Section  7.05.
Delivery  of  an  executed   signature  page  to  this  Agreement  by  facsimile
transmission  shall be as effective as delivery of a manually signed counterpart
of this Agreement.

      SECTION  7.14.  Headings.  Article and Section  headings  and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement  and are not to  affect  the  construction  of,  or to be  taken  into
consideration in interpreting, this Agreement.

      SECTION 7.15. Jurisdiction; Consent to Service of Process. (a) Each of the
Grantors hereby  irrevocably  and  unconditionally  submits,  for itself and its
property,  to the exclusive  jurisdiction of any New York State court or Federal
court of the  United  States  of  America,  sitting  in New York  City,  and any
appellate court from any thereof,  in any action or proceeding arising out of or
relating to this  Agreement or any other Loan  Document,  or for  recognition or
enforcement of any judgment, and each of the Loan Parties hereby irrevocably and
unconditionally  agrees  that  all  claims  in  respect  of any such  action  or
proceeding  may be heard and  determined in such New York State court or, to the
extent permitted by law, in such Federal court.  Each of the Loan Parties agrees
that a final  judgment in any such action or proceeding  shall be conclusive and
may be enforced in other  jurisdictions  by suit on the judgment or in any other
manner  provided by law.  Nothing in this  Agreement or any other Loan  Document
shall affect any right that the Collateral  Agent, the  Administrative  Agent or
any Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan  Document  against any Grantor or its  properties in
the courts of any jurisdiction.

      (b)  Each of the  Loan  Parties  hereby  irrevocably  and  unconditionally
waives,  to the  fullest  extent  it may  legally  and  effectively  do so,  any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding  arising out of or relating to this  Agreement or any other
Loan  Document in any court  referred to in paragraph  (a) of this Section 7.15.
Each of the Loan  Parties  hereby  irrevocably  waives,  to the  fullest  extent
permitted by law, the defense of an  inconvenient  forum to the  maintenance  of
such action or proceeding in any such court.

<PAGE>
                                                                              32


      (c) Each of the Loan  Parties  hereby  irrevocably  consents to service of
process in the manner  provided  for  notices in Section  7.01.  Nothing in this
Agreement  or any other Loan  Document  will affect the right of the  Collateral
Agent to serve process in any other manner permitted by law.

      SECTION 7.16.  Termination or Release. (a) This Agreement,  the guarantees
made herein, the Security Interest, the pledge of the Pledged Collateral and all
other security interests granted hereby shall terminate when all the Obligations
have been indefeasibly  paid in full and the Lenders have no further  commitment
to lend under the Credit Agreement.

      (b) A  Subsidiary  Guarantor  shall  automatically  be  released  from its
obligations  hereunder  and the  Security  Interests  created  hereunder  in the
Collateral of such Subsidiary Guarantor shall be automatically released upon the
consummation of any transaction permitted by the Credit Agreement as a result of
which such Subsidiary Guarantor ceases to be a Subsidiary.

      (c) Upon any sale or other transfer by any Grantor of any Collateral  that
is permitted  under the Credit  Agreement to any person that is not the Borrower
or a Subsidiary Guarantor,  or, upon the effectiveness of any written consent to
the release of the Security  Interest granted hereby in any Collateral  pursuant
to  Section  9.08  of the  Credit  Agreement,  the  Security  Interest  in  such
Collateral shall be automatically released.

      (d) In connection  with any  termination or release  pursuant to paragraph
(a), (b) or (c) above,  the Collateral  Agent shall promptly execute and deliver
to  any  Grantor,  at  such  Grantor's  expense,  all  Uniform  Commercial  Code
termination  statements and similar documents that such Grantor shall reasonably
request to evidence such  termination or release.  Any execution and delivery of
documents  pursuant  to this  Section  7.16  shall  be  without  recourse  to or
representation or warranty by the Collateral Agent or any Secured Party. Without
limiting the  provisions  of Section  7.07,  the Borrower  shall  reimburse  the
Collateral Agent upon demand for all costs and out-of-pocket expenses, including
the  reasonable  fees,  charges  and  expenses  of  counsel,  incurred  by it in
connection with any action contemplated by this Section 7.16.

      SECTION 7.17. Additional Subsidiaries.  Any Subsidiary that is required to
become a party  hereto  pursuant to Section 5.12 of the Credit  Agreement  shall
enter into this Agreement as a Subsidiary  Guarantor and a Grantor upon becoming
such a Subsidiary.  Upon execution and delivery by the Collateral Agent and such
Subsidiary  of a  supplement  in the form of Exhibit A hereto,  such  Subsidiary
shall become a Subsidiary  Guarantor and a Grantor hereunder with the same force
and  effect  as if  originally  named as a  Subsidiary  Guarantor  and a Grantor
herein.  The execution and delivery of any such instrument shall not require the
consent of any other Loan Party  hereunder.  The rights and  obligations of each
Loan Party hereunder shall remain in full force and effect  notwithstanding  the
addition of any new Loan Party as a party to this Agreement.

      SECTION 7.18. Right of Setoff.  If an Event of Default shall have occurred
and is continuing,  each Secured Party is hereby authorized at any time and from

<PAGE>
                                                                              33


time to time, to the fullest  extent  permitted by law, to set off and apply any
and all Collateral  (including any deposits (general or special, time or demand,
provisional or final)) at any time held and other  obligations at any time owing
by such Secured Party to or for the credit or the account of any Grantor against
any and all of the  obligations of such Grantor now or hereafter  existing under
this  Agreement  and the  other  Loan  Documents  held by  such  Secured  Party,
irrespective  of whether or not such  Secured  Party  shall have made any demand
under this  Agreement or any other Loan Document and although  such  obligations
may be  unmatured.  The rights of each Secured Party under this Section 7.18 are
in addition to other  rights and  remedies  (including  other  rights of setoff)
which such Secured Party may have.

                  [Remainder of page intentionally left blank]

<PAGE>

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

                                        GOAMERICA, INC.

                                              by: /s/ Daniel R. Luis
                                                  ------------------------------
                                                  Name: Daniel R. Luis
                                                  Title: Chief Executive Officer

                                        GOAMERICA COMMUNICATIONS CORP.

                                              by: /s/ Daniel R. Luis
                                                  ------------------------------
                                                  Name: Daniel R. Luis
                                                  Title: President

                                        WYND COMMUNICATIONS CORPORATION

                                              by: /s/ Daniel R. Luis
                                                  ------------------------------
                                                  Name: Daniel R. Luis
                                                  Title: President

                                        ACQUISITION 1 CORP.

                                              by: /s/ Daniel R. Luis
                                                  ------------------------------
                                                  Name: Daniel R. Luis
                                                  Title: President

<PAGE>

                                        CLEARLAKE CAPITAL GROUP, LP, as
                                        Collateral Agent

                                        By: CCG Operations, LLC
                                        Its: General Partner

                                              by: /s/ Behdad Eghbali
                                                  ------------------------------
                                                  Name: Behdad Eghbali
                                                  Title: Manager