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                                                                     EXHIBIT 4.4

                               SECURITY AGREEMENT

      THIS SECURITY AGREEMENT (this "Agreement"), dated as of December 10, 2004
by EMS TECHNOLOGIES, INC., a Georgia corporation (the "Borrower"), the
Subsidiaries of the Borrower signatory hereto and each other Subsidiary of the
Borrower hereafter a party hereto (the Borrower, each Subsidiary and each other
Subsidiary hereafter becoming a party hereto shall be collectively known as the
"Grantors"), in favor of SUNTRUST BANK, a Georgia banking corporation, as
Collateral Agent (the "Collateral Agent"), for the benefit of the Secured
Creditors (as defined below).

                                   WITNESSETH:

      WHEREAS, the Borrower, the Lenders from time to time party thereto (the
"US Lenders") and SunTrust Bank, as Administrative Agent (the "US Agent") are
all party to the U.S. Revolving Credit Agreement (as amended, restated,
modified, extended, renewed, replaced, supplemented and/or refinanced from time
to time, the "US Credit Agreement"), dated as of the date hereof pursuant to
which, the US Lenders have agreed to establish a revolving credit facility on
behalf of the Borrower and to provide for the issuance of, and participation in,
letters of credit for the account of the Borrower;

      WHEREAS, pursuant to that certain Subsidiary Guaranty Agreement dated as
of the date hereof (the "Subsidiary Guaranty Agreement"), the Subsidiaries of
the Borrower signatory thereto have jointly and severally guaranteed the payment
and performance when due of all indebtedness and other obligations of the
Borrower under the US Credit Agreement;

      WHEREAS, EMS Technologies Canada, Ltd. (the "Canadian Borrower"), the
Lenders from time to time party thereto (the "Canadian Lenders") and Bank of
America, National Association (Canada Branch), as Canadian Administrative Agent,
Funding Agent and Canadian Collateral Agent (the "Canadian Agent") are all party
to the Canadian Revolving Credit Agreement (as amended, restated, modified,
extended, renewed, replaced, supplemented and/or refinanced from time to time,
the "Canadian Credit Agreement") dated as of the date hereof pursuant to which,
the Canadian Lenders have agreed to establish a revolving credit facility on
behalf of the Canadian Borrower and to provide for the issuance of, and
participation in, letters of credit for the account of the Canadian Borrower;

      WHEREAS, pursuant to the Guaranty Agreement dated as of the date hereof by
the Borrower and the Subsidiaries of the Borrower a signatory thereto (the
"Canadian Guaranty Agreement"), the Borrower and the Subsidiaries of the
Borrower signatory hereto have jointly and severally guaranteed the payment and
performance when due of all indebtedness and other obligations of the Canadian
Borrower under the Canadian Credit Agreement;

      WHEREAS, the Borrower and its Subsidiaries may at any time and from time
to time enter into one or more Hedging Transactions (as defined herein) with one
or more US Lenders or any Affiliate thereof (each such US Lender or Affiliate,
even if the respective US Lender subsequently ceases to be a US Lender under the
US Credit Agreement for any reason, in such

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capacity, together with its respective successors and assigns, a "US Swap
Provider");

      WHEREAS, the Canadian Borrower and its Subsidiaries may at any time and
from time to time enter into one or more Hedging Transactions with one or more
Canadian Lenders or any Affiliate thereof (each such Canadian Lender or
Affiliate, even if the respective Canadian Lender subsequently ceases to be a
Canadian Lender under the Canadian Credit Agreement for any reason, in such
capacity, together with its respective successors and assigns, a "Canadian Swap
Provider" and together with the US Swap Provider, the "Swap Providers");

      WHEREAS, it is a condition precedent to the obligations of the US Agent,
the Issuing Bank (as defined in the US Credit Agreement), the Swingline Lender
(as defined in the US Credit Agreement) and the US Lenders (collectively the "US
Creditors") under the US Credit Agreement that the Grantors enter into this
Agreement to secure all obligations of the Borrower under the US Credit
Agreement, and to secure the obligations of each domestic Subsidiary of the
Borrower signatory hereto under the Subsidiary Guaranty Agreement;

      WHEREAS, it is a condition precedent to the obligations of the Canadian
Agent, the Issuing Bank (as defined in the Canadian Credit Agreement), the
Swingline Lender (as defined in the Canadian Credit Agreement), and the Canadian
Lenders (collectively, the "Canadian Creditors") under the Canadian Credit
Agreement that the Grantors enter into this Agreement to secure all obligations
of the Borrower and each Subsidiary of the Borrower signatory hereto under the
Canadian Guaranty Agreement;

      WHEREAS, it is a condition precedent to the Swap Providers entering into
the Hedging Transactions that the Grantors enter into this Agreement to secure
the Hedging Obligations (as defined herein); and

      WHEREAS, each Grantor desires to execute this Agreement to satisfy the
conditions precedent described in three preceding recitals.

      NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

      SECTION 1. DEFINITIONS. Capitalized terms defined in the US Credit
Agreement and not otherwise defined herein, when used in this Agreement shall
have the respective meanings provided for in the US Credit Agreement. The
following additional terms, when used in this Agreement, shall have the
following meanings:

            "Account Debtor" shall mean any Person who is obligated under an
Account.

            "Accounts" shall mean, for any Person, all "accounts" (as defined in
the UCC), now or hereafter owned or acquired by such Person or in which such
Person now or hereafter has or acquires any rights and, in any event, shall mean
and include, without limitation, (a) all accounts receivable, contract rights,
book debts, notes, drafts and other obligations or indebtedness owing to such
Person arising from the sale or lease of goods or other property by

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such Person or the performance of services by such Person (including, without
limitation, any such obligation which might be characterized as an account or
general intangible under the Uniform Commercial Code in effect in any
jurisdiction), (b) all of such Person's rights in, to and under all purchase and
sales orders for goods, services or other property, and all of such Person's
rights to any goods, services or other property represented by any of the
foregoing (including returned or repossessed goods and unpaid sellers' rights of
rescission, replevin, reclamation and rights to stoppage in transit), (c) all
monies due to or to become due to such Person under all contracts for the sale,
lease or exchange of goods or other property or the performance of services by
such Person (whether or not yet earned by performance on the part of such
Person), and (d) all collateral security and guarantees of any kind given to
such Person with respect to any of the foregoing.

            "Borrower" shall have the meaning given to that term in the
introductory paragraph hereof.

            "Canadian Agent" shall have the meaning given to that term in the
recitals hereto.

            "Canadian Borrower" shall have the meaning given to that term in the
recitals hereto.

            "Canadian Credit Agreement" shall have the meaning given to that
term in the recitals hereto.

            "Canadian Creditors" shall have the meaning given to that term in
the recitals hereto and shall include their respective successors and assigns.

            "Canadian Guaranty Agreement" shall have the meaning given to that
term in the recitals hereto.

            "Canadian Lenders" shall have the meaning given to that term in the
recitals hereto and shall include their respective successors and assigns.

            "Canadian Loan Documents" shall mean the Canadian Credit Agreement,
the Canadian Guaranty Agreement and all other documents which are defined as
"Loan Documents" under the Canadian Credit Agreement.

            "Canadian Obligations" shall have the meaning given to that term in
clause (ii) of the definition of Secured Obligations.

            "Canadian Swap Providers" shall have the meaning given to that term
in the recitals hereto.

            "Chattel Paper" shall mean all "chattel paper" (as defined in the
UCC) now owned or hereafter acquired by any Grantor or in which any Grantor has
or acquires any rights, or other receipts of any Grantor, evidencing or
representing rights or interest in such chattel paper.

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            "Collateral" shall mean, collectively, all of the following:

                  (i)   all Accounts;

                  (ii)  all Chattel Paper;

                  (iii) all 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 Software;

                  (xii) all money, cash or cash equivalents;

                 (xiii) all other goods and personal property, whether tangible
                        or intangible;

                  (xiv) all Supporting Obligations and Letter-of-Credit Rights
                        of any Grantor;

                  (xv)  all books and records pertaining to any of the
                        Collateral (including, without limitation, credit files,
                        Software, computer programs, printouts and other
                        computer materials and records but excluding customer
                        lists);

                  (xvi) the commercial tort claims set forth on Schedule VI
                        attached hereto; and

                 (xvii) All products and Proceeds of all or any of the
                        Collateral described in clauses (i) through (xvi)
                        hereof.

            "Collateral Agent" shall have the meaning given to that term in the
introductory paragraph hereof, and shall include all successors and assigns
thereof.

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            "Copyright License" shall mean any and all rights of any Grantor
under any written agreement granting any right to use any Copyright or Copyright
registration.

            "Copyrights" shall mean all of the following now owned or hereafter
acquired by any Grantor or in which any Grantor now has or hereafter acquires
any rights: (a) all copyrights and general intangibles of like nature (whether
registered or unregistered), all registrations and recordings thereof, and all
applications in connection therewith, including all registrations, recordings
and applications in the United States Copyright Office or in any similar office
or agency of the United States, any state or territory thereof, or any other
country or any political subdivision thereof, and (b) all reissues, extensions
or renewals thereof.

            "Deposit Accounts" shall mean all "deposit accounts" (as defined in
the UCC) now owned or hereafter acquired by any Grantor or in which any Grantor
has or acquires any rights, or other receipts, of any Grantor covering,
evidencing or representing rights or interest in such deposit accounts.

            "Documents" shall mean all "documents" (as defined in the UCC) now
owned or hereafter acquired by any Grantor or in which any Grantor has or
acquires any rights, or other receipts, of any Grantor covering, evidencing or
representing goods.

            "Equipment" shall mean all "equipment" (as defined in the UCC) now
owned or hereafter acquired by any Grantor and wherever located, and, in any
event, shall include all machinery, equipment, furniture, furnishings,
processing equipment, conveyors, machine tools, engineering processing
equipment, manufacturing equipment, materials handling equipment, trade
fixtures, trucks, trailers, forklifts, vehicles, computers and other electronic
data processing and other office equipment of any Grantor, and any and all
additions, substitutions and replacements of any of the foregoing, together with
all attachments, components, parts, equipment and accessories installed thereon
or affixed thereto, all fuel therefor and all manuals, drawings, instructions,
warranties and rights with respect thereto.

            "Event of Default" shall have the meaning set forth for such term in
Section 7 hereof.

            "Exempt Inventory" shall mean, at any time of determination,
Inventory (i) which, individually and in the aggregate, has a fair market value
that does not exceed $6,000,000 and (ii) the loss or destruction of which, would
not be reasonably expected to have a Material Adverse Effect.

            "Fixtures" shall mean all "fixtures" (as defined in the UCC) now
owned or hereafter acquired by any Grantor or in which any Grantor has or
acquires any rights, or other receipts, of any Grantor covering, evidencing or
representing rights or interest in such fixtures.

            "General Intangibles" shall mean all "general intangibles" (as
defined in the UCC) now owned or hereafter acquired by any Grantor or in which
any Grantor has or acquires any rights and, in any event, shall include all
right, title and interest in or under all contracts, all

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customer lists, Licenses, Copyrights, Trademarks, Patents, and all applications
therefor and reissues, extensions or renewals thereof, rights in Intellectual
Property, interests in partnerships, joint ventures and other business
associations, licenses, permits, copyrights, trade secrets, proprietary or
confidential information, inventions (whether or not patented or patentable),
technical information, procedures, designs, knowledge, know-how, software, data
bases, data, skill, expertise, experience, processes, models, drawings,
materials and records, goodwill (including the goodwill associated with any
Trademark or Trademark License), all rights and claims in or under insurance
policies (including insurance for fire, damage, loss and casualty, whether
covering personal property, real property, tangible rights or intangible rights,
all liability, life, key man and business interruption insurance, and all
unearned premiums), uncertificated securities, choses in action, deposit,
checking and other bank accounts, rights to receive tax refunds and other
payments, rights of indemnification, all books and records, correspondence,
credit files, invoices, tapes, cards, computer runs, domain names, prospect
lists, customer lists and other papers and documents.

            "Grantor" shall have the meaning given to that term in the
introductory paragraph hereof.

            "Hedging Obligation" shall have the meaning given to that term in
clause (iii) of the definition of Secured Obligations.

            "Hedging Transaction" of any Person shall mean any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into by such Person that is a rate swap, basis swap, forward rate transaction,
commodity swap, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collateral transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
these transactions) or any combination thereof, whether linked to one or more
interest rates, foreign currencies, commodity prices, equity prices or other
financial measures.

            "Instruments" shall mean all "instruments" (as defined in the UCC)
now owned or hereafter acquired by any Grantor or in which any Grantor has or
acquires any rights and, in any event, shall include all promissory notes, all
certificates of deposit and all letters of credit evidencing, representing,
arising from or existing in respect of, relating to, securing or otherwise
supporting the payment of, any of the Accounts or other obligations owed to any
Grantor.

            "Intellectual Property" shall mean all of the following now owned or
hereafter acquired by any Grantor or in which any Grantor has or acquires any
rights: (a) all Patents, patent rights and patent applications, Copyrights and
copyright applications, Trademarks, trademark rights, trade names, trade name
rights, service marks, service mark rights, applications for registration of
trademarks, trade names and service marks, fictitious names registrations and
trademark, trade name and service mark registrations, and all derivations
thereof; and (b) Patent Licenses, Trademark Licenses, Copyright Licenses and
other licenses to use any of the items described in the preceding clause (a),
and any other items necessary to conduct or operate the business of each
Grantor.

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            "Intercreditor Agreement" shall mean that certain Intercreditor
Agreement dated as of the date hereof by and among the Collateral Agent and the
Secured Creditors.

            "Inventory" shall mean all "inventory" (as defined in the UCC) now
owned or hereafter acquired by any Grantor or in which any Grantor has or
acquires any rights and, in any event, shall include all goods owned or held for
sale or lease to any other Persons.

            "Investment Property" shall mean all "investment property" (as
defined in the UCC) now owned or hereafter acquired by any Grantor or in which
any Grantor has or acquires any rights and, in any event, shall include all
"certificated securities", "uncertificated securities", "security entitlements",
"securities accounts", "commodity contracts" and "commodity accounts" (as all
such terms are defined in the UCC) of each Grantor.

            "Letter-of-Credit Rights" shall mean "letter-of-credit rights" (as
defined in the UCC), now owned or hereafter acquired by any Grantor, including
rights to payment or performance under a letter of credit, whether or not any
Grantor, as beneficiary, has demanded or is entitled to demand payment or
performance.

            "License" shall mean any Copyright License, Patent License,
Trademark License or other license of rights or interests of each Grantor in
Intellectual Property.

            "Patent License" shall mean any written agreement now owned or
hereafter acquired by any Grantor or in which any Grantor has or acquires any
rights granting any right with respect to any property, process or other
invention on which a Patent is in existence.

            "Patents" shall mean all of the following now owned or hereafter
acquired by any Grantor or in which any Grantor has or acquires any rights: (a)
all letters patent of the United States or any other country, all registrations
and recordings thereof, and all applications for letters patent of the United
States or any other country, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State or Territory thereof, or any
other country; and (b) all reissues, continuations, continuations-in-part and
extensions thereof.

            "Perfection Certificate" shall mean the certificate or certificates
which are attached hereto as Schedule III.

            "Proceeds" shall mean all "proceeds" (as defined in the UCC) of, and
all other profits, rentals or receipts, in whatever form, arising from the
collection, sale, lease, exchange, assignment, licensing or other disposition
of, or realization upon, the Collateral, and, in any event, shall mean and
include all claims against third parties for loss of, damage to or destruction
of, or for proceeds payable under, or unearned premiums with respect to,
policies of insurance in respect of any Collateral, and any condemnation or
requisition payments with respect to any Collateral and the following types of
property acquired with cash proceeds: Accounts, Inventory, General Intangibles,
Documents, Instruments and Equipment.

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            "Secured Creditors" shall mean, collectively, the US Creditors, the
Canadian Creditors and the Swap Providers.

            "Secured Debt Documents" shall mean the US Loan Documents and the
Canadian Loan Documents.

            "Secured Obligations" shall mean (i) the full and prompt payment
when due (whether at the stated maturity, by acceleration or otherwise) of all
Obligations (including Obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due), indebtedness and
liabilities (including, without limitation, indemnities, fees and interest
thereon and all interest that accrues after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of any Grantor at the rate provided for in
the respective documentation, whether or not a claim for post-petition interest
is allowed in any such case, proceeding or other action) of such Grantor owing
to the US Creditors, now existing or hereafter incurred under, arising out of or
in connection with the US Credit Agreement and each US Loan Document to which
such Grantor is a party (including, in the case of each Grantor that is a
Subsidiary Loan Party, all such obligations, indebtedness and liabilities under
the Subsidiary Guaranty Agreement) and the due performance and compliance by
such Grantor with the terms, conditions and agreements of the US Credit
Agreement and each such Loan Document (all such obligations, indebtedness and
liabilities under this clause (i), being herein collectively called the "US
Obligations"); (ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due), indebtedness and liabilities (including,
without limitation, indemnities, fees and interest thereon and all interest that
accrues after the commencement of any case, proceeding or other action relating
to the bankruptcy, insolvency, reorganization or similar proceeding of any
Grantor at the rate provided for in the respective documentation, whether or not
a claim for post-petition interest is allowed in any such case, proceeding or
other action) of such Grantor owing to the Canadian Creditors, now existing or
hereafter incurred under, arising out of or in connection with the Canadian
Guaranty Agreement and the due performance and compliance by such Grantor with
the terms, conditions and agreements of the Canadian Guaranty Agreement (all
such obligations, indebtedness and liabilities under this clause (ii) being
herein collectively called the "Canadian Obligations"); (iii) the full and
prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due),
indebtedness and liabilities (including, without limitation, indemnities, fees
and interest thereon and all interest that accrues after the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of any Grantor at the rate provided for in
the respective documentation, whether or not a claim for post-petition interest
is allowed in any such case, proceeding or other action) of such Grantor owing
to the Swap Providers, now existing or hereafter incurred under, arising out of
or in connection with each Hedging Transaction (including any buy back,
reversal, termination or assignment of any Hedging Transaction, any renewal,
extension, modification of any Hedging Transaction and any substitution for any
Hedging Transaction), whether such Hedging Transaction is now in existence or
hereafter arising, and the due performance and compliance by such Grantor with
all of the terms,

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conditions and agreements contained in each such Hedging Transaction (all such
obligations, indebtedness and liabilities under this clause (iii) being herein
collectively called the "Hedging Obligations"); (iv) any and all sums advanced
by the Collateral Agent in order to preserve the Collateral or preserve its
security interest in the Collateral, and (v) in the event of any proceeding for
the collection or enforcement of any indebtedness, obligations or liabilities of
each Grantor referred to in preceding clauses (i), (ii) or (iii) after an Event
of Default shall have occurred and be continuing, the expenses of re-taking,
holding, preparing for sale or lease, selling or otherwise disposing of or
realizing on the Collateral, or of any exercise by the Collateral Agent of its
rights hereunder, together with attorneys' fees actually incurred and court
costs.

It is acknowledged and agreed that the "Secured Obligations" shall include
extensions of credit of the types described above, whether outstanding on the
date of this Agreement or extended from time to time after the date of this
Agreement. Notwithstanding anything to the contrary contained above in this
definition, obligations, indebtedness and liabilities which would otherwise
constitute Canadian Obligations pursuant to clause (ii) of the first sentence of
this definition shall not constitute Canadian Obligations, as the case may be,
for purposes of (or be secured pursuant to) this Agreement to the extent
incurred (or guaranteed) in violation of the provisions of the US Credit
Agreement (but only with respect to that portion of indebtedness outstanding (or
guaranteed) in violation thereof), and obligations, indebtedness and liabilities
which would otherwise constitute Hedging Obligations pursuant to clause (iii) of
the first sentence of this definition shall not constitute Hedging Obligations,
as the case may be, for purposes of (or be secured pursuant to) this Agreement
to the extent incurred (or guaranteed) in violation of the provisions of the US
Credit Agreement (but only with respect to that portion of indebtedness
outstanding (or guaranteed) in violation thereof).

            "Security Interests" shall mean the security interests granted to
Collateral Agent on its behalf and on behalf of the Secured Creditors pursuant
to Section 3, as well as all other security interests created or assigned as
additional security for the Secured Obligations pursuant to the provisions of
this Agreement.

            "Software" shall mean all "software" (as defined in the UCC), now
owned or hereafter acquired by any Grantor, including all computer programs and
all supporting information provided in connection with a transaction related to
any program.

            "Specified Accounts" shall mean, at any time of determination,
Accounts (i) for which the Borrower has established adequate reserves on its
books and records in accordance with GAAP; (ii) which, individually and in the
aggregate, do not exceed $5,000,000; and (iii) which, if uncollectible, would
not be reasonably expected to have a Material Adverse Effect.

            "Supporting Obligations" means all "supporting obligations" (as
defined in the UCC), including letters of credit and guaranties issued in
support of Accounts, Chattel Paper, Documents, General Intangibles, Instruments,
or Investment Property.

            "Swap Providers" shall have the meaning given to such term in the
recitals hereto.

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            "Trademark License" shall mean any written agreement now owned or
hereafter acquired by any Grantor or in which any Grantor has or acquires any
such rights granting to any Grantor any right to use any Trademark.

            "Trademarks" shall mean all of the following now owned or hereafter
acquired by any Grantor or in which any Grantor has or acquires any such rights:
(i) all trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos, other source or
business identifiers, prints and labels on which any of the foregoing have
appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), now owned or existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, registrations, recordings
and applications in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, (ii) all reissues, extensions or
renewals thereof and (iii) all goodwill associated with or symbolized by any of
the foregoing.

            "UCC" shall mean the Uniform Commercial Code as in effect, from time
to time, in the State of Georgia; provided that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or non-perfection
of the Security Interests in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than Georgia, "UCC" shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or effect of
perfection or non-perfection.

            "United States" shall mean the United States of America, any of the
fifty states thereof, and the District of Columbia.

            "US Agent" shall have the meaning given to that term in the recitals
hereto.

            "US Credit Agreement" shall have the meaning given to that term in
the recitals hereto.

            "US Creditors" shall have the meaning given to that term in the
recitals hereto and shall include their respective successors and assigns.

            "US Lenders" shall have the meaning given to that term in the
recitals hereto and shall include their respective successors and assigns.

            "US Loan Documents" shall mean the US Credit Agreement, the
Subsidiary Guaranty Agreement and all other documents which are defined as "Loan
Documents" under the US Credit Agreement.

            "US Obligations" shall have the meaning given to that term in clause
(i) of the definition of Secured Obligations.

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            "US Swap Providers" shall have the meaning given to such term in the
recitals hereto.

      SECTION 2. REPRESENTATIONS AND WARRANTIES. Each Grantor represents and
warrants to Collateral Agent, for the benefit of Secured Creditors, as follows:

            (a) Such Grantor has rights in and the power to transfer each item
of the Collateral upon which it purports to grant a Lien hereunder and has good
and marketable title to all of its Collateral, free and clear of any Liens other
than Liens expressly permitted under Section 7.2 of the US Credit Agreement.

            (b) Other than financing statements, security agreements, or other
similar or equivalent documents or instruments with respect to Liens expressly
permitted under Section 7.2 of the US Credit Agreement, no financing statement,
mortgage, security agreement or similar or equivalent document or instrument
evidencing a Lien on all or any part of the Collateral is on file or of record
in any jurisdiction. None of the Collateral is in the possession of a Person
(other than any Grantor) asserting any claim thereto or security interest
therein, except that Collateral Agent or its designee may have possession of
Collateral as contemplated hereby.

            (c) When the UCC financing statements in appropriate form are filed
in the offices specified on Schedule I attached hereto, the Security Interests
shall constitute valid and perfected security interests in the Collateral in
favor of the Collateral Agent for the benefit of the Secured Creditors, prior to
all other Liens and rights of others therein except for the Liens expressly
permitted under Section 7.2 of the US Credit Agreement, to the extent that a
security interest therein may be perfected by filing pursuant to the UCC,
assuming the proper filing and indexing thereof.

            (d) All Inventory and Equipment is insured in accordance with the
requirements of the US Credit Agreement.

            (e) None of the Collateral constitutes, or is the Proceeds of, "farm
products" (as defined in the UCC).

            (f) Schedule II correctly sets forth each Grantor's state of
incorporation, organizational identification and correct legal name indicated on
the public record of such Grantor's jurisdiction of organization which shows
such Grantor to be organized.

            (g) The Perfection Certificate, which is attached hereto as Schedule
III, correctly sets forth (i) all names and tradenames that each Grantor has
used within the last five years and the names of all Persons that have merged
into or been acquired by each Grantor, (ii) the chief executive offices of each
Grantor, (iii) the locations where each Grantor maintains books or records
relating to the Collateral; (iv) all other locations in which tangible assets of
each Grantor are located, (v) all third parties with possession of any Inventory
or Equipment of each Grantor and (vi) each Grantor's mailing address.

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            (h) Schedule IV correctly sets forth the name of each bank at which
each Grantor maintains Deposit Accounts, and the account numbers for each
Deposit Account.

            (i) Schedule V correctly sets forth all letters of credit under
which each Grantor is a beneficiary.

            (j) Schedule VI correctly sets forth all "commercial tort claims"
(as such term is defined in the UCC) owned by each Grantor.

            (k) With respect to the Accounts, except as specifically disclosed
to the Collateral Agent, (i) they represent bona fide sales of Inventory or
rendering of services to Account Debtors in the ordinary course of such
Grantor's business and are not evidenced by a judgment, Instrument or Chattel
Paper; (ii) except with respect to Specified Accounts, there are no setoffs,
claims or disputes existing or asserted with respect thereto and such Grantor
has not made any agreement with any Account Debtor for any extension of time for
the payment thereof, any compromise or settlement for less than the full amount
thereof, any release of any Account Debtor from liability therefor, or any
deduction therefrom; (iii) to such Grantor's knowledge, there are no facts,
events or occurrences which in any way impair the validity or enforceability
thereof or could reasonably be expected to reduce the amount payable thereunder
as shown on such Grantor's books and records and any invoices, statements and
other reports delivered to the Collateral Agent with respect thereto; (iv)
except with respect to Specified Accounts, such Grantor has not received any
notice of proceedings or actions which are threatened or pending against any
Account Debtor which might result in any adverse change in such Account Debtor's
financial condition; and (v) such Grantor has no knowledge that any Account
Debtor is unable generally to pay its debts as they become due. Further with
respect to the Accounts (x) the amounts shown on such records and all invoices,
statements and collateral reports which may be delivered to the Collateral Agent
with respect thereto are actually and absolutely owing to such Grantor as
indicated thereon and are not in any way contingent; and (y) to such Grantor's
knowledge, all Account Debtors have the capacity to contract.

            (l) With respect to any Inventory, (i) no Inventory other than the
Exempt Inventory is now, or shall at any time or times hereafter be stored or
located at any location other than one of the Grantor's locations set forth on
the Perfection Certificate without the Collateral Agent's prior written consent,
and if the Collateral Agent gives such consent, such Grantor will concurrently
therewith obtain, to the extent required by the US Credit Agreement, bailee,
landlord and mortgagee agreements, (ii) such Grantor has good, indefeasible and
merchantable title to such Inventory and such Inventory is not subject to any
Lien or security interest or document whatsoever except for the Lien granted to
the Collateral Agent and except for Permitted Encumbrances, (iii) except the
Exempt Inventory, such Inventory is of good and merchantable quality, free from
any defects, (iv) such Inventory is not subject to any licensing, patent,
royalty, trademark, trade name or copyright agreements with any third parties
which would require any consent of any third party upon sale or disposition of
that Inventory or the payment of any monies to any third party upon such sale or
other disposition, and (v) the completion of manufacture, sale or other
disposition of such Inventory by the Collateral Agent following an Event of
Default shall not require the consent of any Person and shall not constitute

                                       12
<PAGE>

a breach or default under any contract or agreement to which such Grantor is a
party or to which such property is subject.

            (m) Such Grantor does not have any interest in, or title to, any
registration or pending application for any Patent, Trademark or Copyright
except as set forth in the Perfection Certificate. This Security Agreement is
effective to create a valid and continuing Lien on and, upon filing of the
Copyright Security Agreements with the United States Copyright Office and filing
of the Patent Security Agreements and the Trademark Security Agreements with the
United State Patent and Trademark Office, perfected security interests in favor
of the Collateral Agent in such Grantor's Patents, Trademarks and Copyrights and
such perfected security interests are enforceable as such as against any and all
creditors of and purchasers from such Grantor. Upon filing of the Copyright
Security Agreements with the United States Copyright Office and filing of the
Patent Security Agreements and the Trademark Security Agreements with the United
State Patent and Trademark Office and the filing of appropriate financing
statements listed on Schedule I hereto, all action necessary or desirable to
protect and perfect the Collateral Agent's Lien on such Grantor's Patents,
Trademarks or Copyrights shall have been duly taken.

      SECTION 3. THE SECURITY INTERESTS. (a) As security for the prompt and
complete payment and performance when due of all of its Secured Obligations,
each Grantor does hereby (i) pledge, assign, hypothecate, set over and convey
unto the Collateral Agent for the benefit of the US Creditors, and does hereby
grant to the Collateral Agent for the benefit of the US Creditors, a continuing
security interest in all of the right, title and interest of such Grantor in, to
and under all of the Collateral (and all rights therein) of such Grantor, or in
which or to which such Grantor has any rights, in each case, whether now
existing or hereafter from time to time acquired, (ii) separately pledge,
assign, hypothecate, set over and convey unto the Collateral Agent for the
benefit of the Canadian Creditors, and does hereby separately grant to the
Collateral Agent for the benefit of the Canadian Creditors, a separate
continuing security interest in all of the right, title and interest of such
Grantor in, to and under all of the Collateral (and all rights therein) of such
Grantor, or in which or to which such Grantor has any rights, in each case,
whether now existing or hereafter from time to time acquired and (iii)
separately pledge, assign, hypothecate, set over and convey unto the Collateral
Agent for the benefit of the Swap Providers, and does hereby separately grant to
the Collateral Agent for the benefit of the Swap Providers, a separate
continuing security interest in all of the right, title and interest of such
Grantor in, to and under all of the Collateral (and all rights therein) of such
Grantor, or in which or to which such Grantor has any rights, in each case,
whether now existing or hereafter from time to time acquired.

            (b) Notwithstanding anything to the contrary contained in this
Section or elsewhere in this Agreement, each Grantor and the Collateral Agent
(on behalf of the Secured Creditors) acknowledges and agrees that (i) the US
Creditors' security interest in the Collateral, the Canadian Creditors' security
interests in the Collateral and the Swap Providers' security interests in the
Collateral constitute security interests separate and apart from each other,
(ii) the grants of security interest hereunder constitute three separate and
distinct grants of security, one in favor of the Collateral

                                       13
<PAGE>

Agent for the benefit of the US Creditors, the second in favor of the Collateral
Agent for the benefit of the Canadian Creditors and the third in favor of the
Collateral Agent for the benefit of the Swap Providers and (iii) in the event of
any conflict between the provisions of this Agreement and the provisions of the
Canadian Loan Documents or the Hedging Transactions, the terms of this Agreement
shall prevail.

      SECTION 4. FURTHER ASSURANCES; COVENANTS.

            (a) General.

                  (i) No Grantor shall change the location of its chief
            executive office or principal place of business unless it shall have
            given Collateral Agent thirty days prior notice thereof, as well as
            executed and delivered to Collateral Agent all financing statements
            and financing statement amendments which Collateral Agent may
            request in connection therewith. If any Grantor shall change the
            locations, or establish new locations, where it keeps or holds any
            of the Collateral or any records relating thereto from the
            applicable locations described in the Perfection Certificate
            attached hereto as Schedule III, then, if the Collateral Agent so
            requests, the Grantors shall, within fifteen days after the request
            therefor, give the Collateral Agent an updated list of all such
            locations. The foregoing covenant shall not apply to any Collateral
            (including trucks) perfected by recordation of the Collateral
            Agent's Lien on the appropriate certificate of title.

                  (ii) No Grantor shall change its name, organizational
            identification number, identity, jurisdiction of organization, or
            corporate structure in any manner unless it shall have given
            Collateral Agent thirty days prior written notice thereof, and
            executed and delivered to Collateral Agent all financing statements
            and financing statement amendments which Collateral Agent may
            request in connection therewith. No Grantor shall merge or
            consolidate into, or transfer any of the Collateral to, any other
            Person other than another Grantor, without the prior written consent
            of the Collateral Agent.

                  (iii) Each Grantor hereby authorizes Collateral Agent, its
            counsel or its representative, at any time and from time to time, to
            file financing statements and amendments that describe the
            collateral covered by such financing statements as "all assets of
            Grantor", "all personal property of Grantor" or words of similar
            effect, in such jurisdictions as Collateral Agent may deem necessary
            or desirable in order to perfect the security interests granted by
            such Grantor under this Agreement. Each Grantor will, from time to
            time, at its expense, execute, deliver, file and record any
            statement, assignment, instrument, document, agreement or other
            paper and take any other action (including, without limitation, any
            filings with the United States Patent and Trademark Office,
            Copyright or Patent filings and any filings of financing or
            continuation statements under the UCC) that from time to time may be
            necessary, or that Collateral Agent may request, in order to create,
            preserve, upgrade in rank (to the extent required hereby), perfect,
            confirm or validate the Security Interests or to enable Collateral
            Agent to obtain the full benefits of this Agreement, or to enable
            Collateral Agent to exercise and enforce any of its rights, powers
            and remedies hereunder with respect to any of its

                                       14
<PAGE>

            Collateral. Each Grantor hereby authorizes Collateral Agent to
            execute and file financing statements, financing statement
            amendments or continuation statements on behalf of such Grantor.
            Each Grantor agrees that a carbon, photographic, photostatic or
            other reproduction of this Agreement or of a financing statement is
            sufficient as a financing statement. Grantors shall pay the costs
            of, or incidental to, any recording or filing of any financing
            statements, financing statement amendments or continuation
            statements concerning the Collateral

                  (iv) Except as set forth in the Perfection Certificate
            attached hereto as Schedule III, no Grantor shall permit any of its
            tangible assets, including without limitation, its Inventory and
            Equipment, to be in the possession of any other Person unless either
            (A) pursuant to an agreement in form and substance satisfactory to
            the Collateral Agent (1) such Person has acknowledged that (x) it
            holds possession of such Inventory, Equipment and other tangible
            assets, as the case may be, for Collateral Agent's benefit, subject
            to the Collateral Agent's instructions, and (y) such Person does not
            have a Lien in such Inventory, Equipment or other tangible assets,
            (2) such Person agrees not to hold such Inventory, Equipment or
            other tangible assets on behalf of any other Person and (3) upon
            request by the Collateral Agent, such Person agrees to issue and
            deliver to the Collateral Agent warehouse receipts, bills of lading
            or any similar documents relating to such Collateral in Collateral
            Agent's name and in form and substance acceptable to Collateral
            Agent or (B) such Inventory is consigned to another Person and, if
            the aggregate fair market value of any such consigned Inventory
            exceeds $100,000, the Grantors have perfected their purchase money
            security interest in such consigned Inventory.

                  (v) No Grantor shall (A) sell, transfer, lease, exchange,
            assign or otherwise dispose of, or grant any option, warrant or
            other right with respect to, any of its Collateral other than sales
            of assets permitted under Section 7.6 of the US Credit Agreement; or
            (B) create, incur or suffer to exist any Lien with respect to any
            Collateral, except for the Liens expressly permitted under Section
            7.2 of the US Credit Agreement.

                  (vi) Each Grantor will, promptly upon request, provide to
            Collateral Agent all information and evidence it may reasonably
            request concerning the Collateral, to enable Collateral Agent to
            enforce the provisions of this Agreement.

                  (vii) Each Grantor shall take all actions necessary or
            reasonably requested by Collateral Agent in order to maintain the
            perfected status of the Security Interests.

                  (viii) No Grantor shall file any amendment to or termination
            of a financing statement naming any Grantor as debtor and Collateral
            Agent as secured party, or any correction statement with respect
            thereto, in any jurisdiction.

                  (ix) Each Grantor shall take all steps necessary to grant the
            Collateral

                                       15
<PAGE>

            Agent control of all electronic chattel paper in accordance with the
            UCC and all "transferable records" as defined in each of the Uniform
            Electronic Transactions Act and the Electronic Signatures in Global
            and National Commerce Act.

            (b) Accounts, Etc.

                  (i) Each Grantor shall use all reasonable efforts consistent
            with prudent business practice to cause to be collected from its
            Account Debtors, as and when due, any and all amounts owing under or
            on account of each Account (including, without limitation, Accounts
            which are delinquent, such Accounts to be collected in accordance
            with lawful collection procedures) and apply forthwith upon receipt
            thereof all such amounts as are so collected to the outstanding
            balance of such Account. The costs and expenses (including, without
            limitation, attorneys' fees) of collection of Accounts incurred by
            such Grantor or Collateral Agent shall be borne by Grantors.

                  (ii) Upon the occurrence and during the continuance of any
            Event of Default, upon request of Collateral Agent, each Grantor
            will promptly notify (and each Grantor hereby authorizes Collateral
            Agent so to notify) each Account Debtor in respect of any Account or
            Instrument that such Collateral has been assigned to Collateral
            Agent hereunder, and that any payments due or to become due in
            respect of such Collateral are to be made directly to Collateral
            Agent or its designee.

                  (iii) Each Grantor will perform and comply with all of its
            obligations in respect of Accounts, Instruments and General
            Intangibles except where the failure to perform or comply could not
            reasonably be expected to have a Material Adverse Effect.

            (c) Equipment, Etc. Each Grantor shall, (i) within ten days after a
written request by Collateral Agent, in the case of Equipment now owned, and
(ii) following a request by Collateral Agent pursuant to subclause (i) above,
within ten days after acquiring any other Equipment, deliver to Collateral
Agent, any and all certificates of title, and applications therefor, if any, of
such Equipment and shall cause Collateral Agent to be named as lienholder on any
such certificate of title and applications. No Grantor shall permit any such
items to become a fixture to real estate or an accession to other personal
property unless such real estate or personal property is the subject of a
fixture filing (as defined in the UCC) creating a first priority perfected Lien
in favor of Collateral Agent; provided that, from and after the date hereof, the
Grantors may attach Equipment having an aggregate fair market value of not more
than $1,000,000 to real estate.

            (d) Patents, Trademarks, Etc. Each Grantor shall notify Collateral
Agent immediately upon the occurrence of each of the following (i) such
Grantor's acquisition after the date of this Agreement of any material
Intellectual Property and (ii) such Grantor's obtaining knowledge, or reason to
know, that any application or registration relating to any material Intellectual
Property owned by or licensed to such Grantor is reasonably likely to become

                                       16
<PAGE>

abandoned or dedicated, or of any material adverse determination or development
(including, without limitation, the institution of, or any such determination or
development in, any proceeding in the United States Copyright Office, the United
States Patent and Trademark Office or any court) regarding such Grantor's
ownership of any material Intellectual Property, its right to register the same,
or to keep and maintain the same.

            (e) Deposit Accounts, Chattel Paper, Investment Property and Letters
of Credit.

                  (i) Upon 5 days after written request by the Collateral Agent,
            the Grantors shall update the list of Deposit Accounts set forth on
            Schedule IV hereto;

                  (ii) Each Grantor shall, (A) within five days after written
            request by Collateral Agent, in the case of Deposit Accounts now
            maintained, and (B) following a request by Collateral Agent pursuant
            to subclause (A) above, within five days after opening any other
            Deposit Account, deliver to Collateral Agent control agreements, in
            form and substance satisfactory to Collateral Agent in its sole
            discretion, executed by such Grantor, the bank at which the deposit
            account is located and Collateral Agent;

                  (iii) No Grantor shall become the beneficiary of any Letters
            of Credit which, together with all other Letters of Credit held by
            any Grantor and not assigned pursuant to this subsection (iii),
            exceed $1,000,000, unless the issuer of the Letter of Credit has
            consented to the assignment of the proceeds of such Letter of Credit
            to Collateral Agent such assignment to be in form and substance
            acceptable to Collateral Agent.

                  (iv) Each Grantor, at any time and from time to time, will (A)
            take such steps as Collateral Agent may reasonably request from time
            to time for Collateral Agent to obtain "control" of any Investment
            Property or electronic Chattel Paper, with any agreements
            establishing control to be in form and substance reasonably
            satisfactory to Collateral Agent, and (B) otherwise to insure the
            continued perfection and priority of Collateral Agent's security
            interest in any of the Collateral and of the preservation of its
            rights therein.

            (f) Commercial Tort Claims. If any Grantor shall at any time acquire
a "commercial tort claim" (as such term is defined in the UCC) other than those
listed on Schedule VI attached herto with a claim for damages that could
reasonably be expected to be in excess of $100,000, such Grantor shall, promptly
upon becoming aware of any such commercial tort claim, notify Collateral Agent
thereof in a writing, providing a reasonable description and summary thereof,
and shall execute a supplement to this Agreement granting a security interest in
such commercial tort claim to Collateral Agent.

                                       17
<PAGE>

      SECTION 5. REPORTING AND RECORDKEEPING. Each Grantor covenants and agrees
with Collateral Agent that from and after the date of this Agreement and until
the Secured Obligations have been paid in full:

            (a) Maintenance of Records Generally. Each Grantor will keep and
maintain at its own cost and expense records of its Collateral, complete in all
material respects, including, without limitation, a record of all payments
received and all credits granted with respect to the Collateral and all other
dealings with its Collateral. Each Grantor will mark its books and records
pertaining to its Collateral to evidence this Agreement and the Security
Interests. For Collateral Agent's further security, each Grantor agrees that
Collateral Agent shall have a security interest in all of such Grantor's books
and records pertaining to its Collateral and, upon the occurrence and during the
continuation of any Event of Default, Grantor shall deliver and turn over full
and complete copies of any such books and records to Collateral Agent or to its
representatives at any time on demand of Collateral Agent. Upon reasonable
notice from Collateral Agent, each Grantor shall permit any representative of
Collateral Agent to inspect such books and records and will provide photocopies
thereof to Collateral Agent.

            (b) Special Provisions Regarding Maintenance of Records and
Reporting Re: Accounts, Inventory and Equipment;

                  (i) Each Grantor shall keep complete and accurate records of
            its Accounts. Upon the request of Collateral Agent, such Grantor
            shall deliver to Collateral Agent all documents, including, without
            limitation, repayment histories and present status reports, relating
            to its Accounts so scheduled and such other matters and information
            relating to the status of its then existing Accounts as Collateral
            Agent shall reasonably request.

                  (ii) Except with respect to Specified Accounts, in the event
            any amounts due and owing are in dispute between any Account Debtor
            and any Grantor, such Grantor shall provide Collateral Agent with
            written notice thereof promptly after such Grantor's learning
            thereof explaining in detail the reason for the dispute, all claims
            related thereto and the amount in controversy.

                  (iii) Each Grantor shall maintain itemized records, accurate
            in all material respects, itemizing and describing the kind, type,
            quality, quantity, location and book value of its Inventory and
            Equipment and shall, upon request by Collateral Agent, furnish
            Collateral Agent with a current schedule containing the foregoing
            information.

                  (iv) Each Grantor will promptly upon, but in no event later
            than five Business Days after:

                        (A) Except with respect to Specified Accounts, such
            Grantor's learning thereof, inform Collateral Agent, in writing, of
            any delay in such Grantor's performance of any of its obligations to
            any Account Debtor and of any assertion of any claims, offsets or
            counterclaims by any Account Debtor and of any

                                       18
<PAGE>

            allowances, credits and/or other monies granted by such Grantor to
            any Account Debtor; and

                        (B) Such Grantor's receipt or learning thereof, furnish
            to and inform Collateral Agent of all material adverse information
            relating to the financial condition of any Account Debtor with
            respect to Accounts exceeding $10,000 in the aggregate; and

                  (v) Such Grantor will promptly notify Collateral Agent in
            writing if any Account, the face value of which exceeds $10,000,
            arises out of a contract with the United States of America, or any
            department, agency, subdivision or instrumentality thereof, or of
            any state (or department, agency, subdivision or instrumentality
            thereof) where such state has a state assignment of claims act or
            other law comparable to the Federal Assignment of Claims Act, and
            will take any action required or requested by Collateral Agent to
            give notice of Collateral Agent's security interest in such Accounts
            under the provisions of the Federal Assignment of Claims Act or any
            comparable law or act enacted by any state or local governmental
            authority; and

                  (vi) Such Grantor at its expense will cause independent public
            accountants reasonably satisfactory to Collateral Agent to prepare
            and deliver to Collateral Agent at any time and from time to time
            promptly upon Collateral Agent's request made when any Event of
            Default exists, the following reports: (A) a reconciliation of all
            of its Accounts, (B) an aging of all of its Accounts, (C) trial
            balances, and (D) a test verification of such Accounts.

            (c) Further Identification of Collateral. Each Grantor will if so
requested by Collateral Agent furnish to Collateral Agent, as often as
Collateral Agent reasonably requests but in no event more frequently than once
per calendar quarter, statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as Collateral Agent may reasonably request, all in reasonable detail.

            (d) Notices. In addition to the notices required by Section 5(b)
hereof, each Grantor will advise Collateral Agent promptly, but in no event
later than thirty days after the occurrence thereof, in reasonable detail, (i)
of any Lien or claim made or asserted against any of the Collateral that is not
expressly permitted by the terms of the US Credit Agreement, and (ii) of the
occurrence of any other event which would have a material adverse effect on the
aggregate value of the Collateral or on the validity, perfection or priority of
the Security Interests.

      SECTION 6. GENERAL AUTHORITY. Each Grantor hereby irrevocably appoints
Collateral Agent its true and lawful attorney, with full power of substitution,
in the name of such Grantor, Collateral Agent or otherwise, for the sole use and
benefit of Collateral Agent on its behalf and on behalf of the Secured
Creditors, but at such Grantor's expense, to exercise, at any time all or any of
the following powers:

                                       19
<PAGE>

            (i) to file the financing statements, financing statement amendments
            and continuation statements referred to in Section 4(a)(iii),

            (ii) to demand, sue for, collect, receive and give acquittance for
            any and all monies due or to become due with respect to any
            Collateral or by virtue thereof,

            (iii) to settle, compromise, compound, prosecute or defend any
            action or proceeding with respect to any Collateral,

            (iv) to sell, transfer, assign or otherwise deal in or with the
            Collateral or the proceeds or avails thereof, as fully and
            effectually as if Collateral Agent were the absolute owner thereof,
            and

            (v) to extend the time of payment of any or all thereof and to make
            any allowance and other adjustments with reference to the
            Collateral.

provided, however, that the powers described in clauses (ii), (iii), (iv) and
(v) above may be exercised by Collateral Agent only if an Event of Default then
exists.

      SECTION 7. EVENTS OF DEFAULT. Each of the following specified events shall
constitute an Event of Default under this Agreement:

            (a) The existence or occurrence of any "Event of Default" as
provided under the terms of the US Credit Agreement;

            (b) The existence or occurrence of any "Event of Default" as
provided under the terms of the Canadian Credit Agreement;

            (c) Any representation or warranty made by or on behalf of any
Grantor under or pursuant to this Agreement shall have been false or misleading
in any material respect when made;

            (d) Any Grantor shall fail to observe or perform any covenant or
agreement set forth in Sections 4 or 5; or

            (e) Any Grantor shall fail to observe or perform any other covenant
or agreement set forth in this Agreement other than those referenced in
paragraphs (a), (b), (c) and (d) above, and if such failure is capable of being
remedied, such failure shall remain unremedied for thirty days.

      SECTION 8. REMEDIES UPON EVENT OF DEFAULT.

            (a) If any Event of Default has occurred and is continuing,
Collateral Agent may, without further notice, exercise all rights and remedies
under this Agreement or any other Loan Document or that are available to a
secured creditor under the UCC or that are otherwise available at law or in
equity, at any time, in any order and in any combination, including to

                                       20
<PAGE>

collect any and all Secured Obligations from the Grantors, and, in addition,
Collateral Agent may sell the Collateral or any part thereof at public or
private sale, for cash, upon credit or for future delivery, and at such price or
prices as Collateral Agent may deem satisfactory. Collateral Agent shall give
Borrower not less than ten days' prior written notice of the time and place of
any sale or other intended disposition of Collateral, except any Collateral
which is perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market. Each Grantor agrees that any such
notice constitutes "reasonable notification" within the meaning of Section 9-611
of the UCC (to the extent such Section or any successor provision under the UCC
is applicable).

            (b) Collateral Agent or any Secured Creditor may be the purchaser of
any or all of the Collateral so sold at any public sale (or, if such Collateral
is of a type customarily sold in a recognized market or is of a type which is
the subject of widely distributed standard price quotations or if otherwise
permitted under applicable law, at any private sale) and thereafter hold the
same, absolutely, free from any right or claim of whatsoever kind. Each Grantor
agrees to execute and deliver such documents and take such other action as
Collateral Agent deems necessary or advisable in order that any such sale may be
made in compliance with law. Upon any such sale Collateral Agent shall have the
right to deliver, assign and transfer to the purchaser thereof the Collateral so
sold. Each purchaser at any such sale shall hold the Collateral so sold to it
absolutely, free from any claim or right of any kind, including any equity or
right of redemption of the Grantors. To the extent permitted by law, each
Grantor hereby specifically waives all rights of redemption, stay or appraisal
which it has or may have under any law now existing or hereafter adopted. The
notice (if any) of such sale shall (1) in case of a public sale, state the time
and place fixed for such sale, and (2) in the case of a private sale, state the
day after which such sale may be consummated. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as Collateral Agent may fix in the notice of such sale. At any such sale
Collateral may be sold in one lot as an entirety or in separate parcels, as
Collateral Agent may determine. Collateral Agent shall not be obligated to make
any such sale pursuant to any such notice. 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 the
sale, and such sale may be made at any time or place to which the same may be so
adjourned. In case of any sale of all or any part of the Collateral on credit or
for future delivery, such Collateral so sold may be retained by Collateral Agent
until the selling price is paid by the purchaser thereof, but Collateral Agent
shall not incur any liability in case of the failure of such purchaser to take
up and pay for such Collateral so sold and, in case of any such failure, such
Collateral may again be sold upon like notice. Collateral Agent, instead of
exercising the power of sale herein conferred upon it, may proceed by a suit or
suits at law or in equity to foreclose the Security Interests and sell
Collateral, or any portion thereof, under a judgment or decree of a court or
courts of competent jurisdiction. The Grantors shall remain liable for any
deficiency.

            (c) For the purpose of enforcing any and all rights and remedies
under this Agreement, Collateral Agent may (i) require any Grantor to, and each
Grantor agrees that it will, at the joint and several expense of the Grantors,
and upon the request of Collateral Agent, forthwith assemble all or any part of
its Collateral as directed by Collateral Agent and make it available at a place
designated by Collateral Agent which is, in Collateral Agent's opinion,

                                       21
<PAGE>

reasonably convenient to Collateral Agent and such Grantor, whether at the
premises of such Grantor or otherwise, (ii) to the extent permitted by
applicable law, enter, with or without process of law and without breach of the
peace, any premise where any such Collateral is or may be located and, without
charge or liability to Collateral Agent, seize and remove such Collateral from
such premises, (iii) have access to and use such Grantor's books and records,
computers and software relating to the Collateral, and (iv) prior to the
disposition of any of the Collateral, store or transfer such Collateral without
charge in or by means of any storage or transportation facility owned or leased
by such Grantor, process, repair or recondition such Collateral or otherwise
prepare it for disposition in any manner and to the extent Collateral Agent
deems appropriate and, in connection with such preparation and disposition, use
without charge any trademark, trade name, copyright, patent or technical process
used such Grantor.

            (d) Without limiting the generality of the foregoing, if any Event
of Default has occurred and is continuing:

                  (i) Collateral Agent may (without assuming any obligations or
            liability thereunder), at any time and from time to time, enforce
            (and shall have the exclusive right to enforce) against any licensee
            or sublicensee all rights and remedies of any Grantor in, to and
            under any Licenses and take or refrain from taking any action under
            any thereof, and each Grantor hereby releases Collateral Agent from,
            and agrees to hold Collateral Agent free and harmless from and
            against any claims arising out of, any lawful action so taken or
            omitted to be taken with respect thereto except ------ for
            Collateral Agent's gross negligence or willful misconduct as
            determined by a final and --- nonappealable decision of a court of
            competent jurisdiction; and

                  (ii) upon request by Collateral Agent, each Grantor agrees to
            execute and deliver to Collateral Agent powers of attorney, in form
            and substance satisfactory to Collateral Agent, for the
            implementation of any lease, assignment, license, sublicense, grant
            of option, sale or other disposition of any Intellectual Property.
            In the event of any such disposition pursuant to this Section, each
            Grantor shall supply its know-how and expertise relating to the
            manufacture and sale of the products bearing Trademarks or the
            products or services made or rendered in connection with Patents or
            Copyrights, and its customer lists and other records relating to
            such Intellectual Property and to the distribution of said products,
            to Collateral Agent.

            (e) By accepting the benefits of this Agreement the Secured
Creditors expressly acknowledge and agree that, other than as may be set forth
in the Intercreditor Agreement, this Agreement may be enforced only by the
action of the Collateral Agent and that no other Secured Creditor shall have any
right individually to seek to enforce or to enforce this Agreement or to realize
upon the security to be granted hereby, it being understood and agreed that such
rights and remedies shall be exercised exclusively by the Collateral Agent for
the benefit of the Secured Creditors upon the terms of this Agreement and the
Intercreditor Agreement.

                                       22
<PAGE>

      SECTION 9. LIMITATION ON DUTY OF COLLATERAL AGENT IN RESPECT OF
COLLATERAL. Beyond reasonable care in the custody thereof, the Collateral Agent
shall have no duty as to any Collateral of any Grantor in its possession or
control or in the possession or control of any agent or bailee or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody of the Collateral of the Grantors in
its possession if such Collateral is accorded treatment substantially equal to
that which it accords its own property, and the Collateral Agent shall not be
liable or responsible for any loss or damage to any of the Grantors' Collateral,
or for any diminution in the value thereof, by reason of the act or omission of
any warehouseman, carrier, forwarding agency, consignee or other agent or bailee
selected by the Collateral Agent in good faith.

      SECTION 10. APPLICATION OF PROCEEDS. The proceeds of any sale of, or other
realization upon, all or any part of the Collateral of the Grantors shall be
applied by the Collateral Agent in the manner set forth in the Intercreditor
Agreement. It is understood and agreed that each of the Grantors shall remain
jointly and severally liable to the relevant Secured Creditors to the extent of
any deficiency between (i) the amount of the proceeds of the Collateral received
by the Collateral Agent hereunder and (ii) the aggregate amount of the Secured
Obligations as the same may be subject to reduction in accordance with Section
15 of the Subsidiary Guaranty Agreement.

      SECTION 11. CONCERNING THE COLLATERAL AGENT. The provisions of the
Intercreditor Agreement shall inure to the benefit of the Collateral Agent in
respect of this Agreement and shall be binding upon the parties to the
Intercreditor Agreement in such respect. In furtherance and not in derogation of
the rights, privileges and immunities of the Collateral Agent therein set forth:

            (a) The Collateral Agent is authorized to take all such action as is
provided to be taken by it as Collateral Agent hereunder or otherwise permitted
under the Intercreditor Agreement and all other action reasonably incidental
thereto. As to any matters not expressly provided for herein or therein, the
Collateral Agent may request instructions from the Secured Creditors and shall
act or refrain from acting in accordance with written instructions from the
Secured Creditors or, in the absence of such instructions, in accordance with
its discretion.

            (b) By accepting the benefits of this Agreement, the Secured
Creditors expressly acknowledge that the Collateral Agent shall not be
responsible for the existence, genuineness or value of any of the Grantors'
Collateral or for the validity, perfection, priority or enforceability of the
Security Interests, whether impaired by operation of law or by reason of any
action or omission to act on its part. The Secured Creditors further acknowledge
that the Collateral Agent shall have no duty to ascertain or inquire as to the
performance or observance of any of the terms of this Agreement by the Grantors.

            (c) The Collateral Agent will hold in accordance with this Agreement
all items of the Collateral at any time received under this Agreement. It is
expressly understood and agreed that the obligations of the Collateral Agent as
holder of the Collateral and interests therein and with respect to the
disposition thereof, and otherwise under this Agreement, are only those

                                       23
<PAGE>

expressly set forth in this Agreement and the Intercreditor Agreement. The
Collateral Agent shall act hereunder on the terms and conditions set forth in
the Intercreditor Agreement, the terms of which shall be deemed incorporated
herein by reference as fully as if the same were set forth herein in their
entirety.

      SECTION 12. APPOINTMENT OF CO-AGENTS. At any time or times, in order to
comply with any legal requirement in any jurisdiction, the Collateral Agent may
appoint another bank or trust company or one or more other Persons reasonably
acceptable to the Secured Creditors and, so long as no Event of Default has
occurred or is continuing, the Borrower, either to act as co-agent or co-agents,
jointly with the Collateral Agent, or to act as separate agent or agents on
behalf of the Collateral Agent and the Secured Creditors with such power and
authority as may be necessary for the effectual operation of the provisions
hereof and specified in the instrument of appointment (which may, in the
discretion of the Collateral Agent, include provisions for the protection of
such co-agent or separate agent similar to the provisions of Section 9 and 11).

      SECTION 13. INDEMNITY; EXPENSES.

            (a) Each Grantor jointly and severally agrees to indemnify,
reimburse and hold the Collateral Agent, each other Secured Creditor, and their
respective successors, assigns, employees, officers, directors, affiliates,
agents and servants (hereinafter in this Section referred to individually as an
"Indemnitee," and, collectively, as "Indemnitees") harmless from any and all
liabilities, obligations, losses, damages, injuries, penalties, claims, demands,
actions, suits, judgments and any and all costs, expenses or disbursements
(including reasonable attorneys' fees and expenses) (for the purposes of this
Section the foregoing are collectively called "expenses") of whatsoever kind and
nature imposed on, asserted against or incurred by any of the Indemnitees in any
way relating to or arising out of this Agreement, any other Secured Debt
Documents or any other document executed in connection herewith or therewith or
in any other way connected with the administration of the transactions
contemplated hereby or thereby or the enforcement of any of the terms of, or the
preservation of any rights under any thereof, or in any way relating to or
arising out of the manufacture, ownership, ordering, purchase, delivery,
control, acceptance, lease, financing, possession, operation, condition, sale,
return or other disposition, or use of the Collateral (including, without
limitation, latent or other defects, whether or not discoverable), including the
violation by a Grantor of the laws of any country, state or other governmental
body or unit, any tort (including, without limitation, claims arising or imposed
under the doctrine of strict liability, or for or on account of injury to or the
death of any Person (including any Indemnitee), or property damage), or contract
claim; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses (x) 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 or (y) result from a claim brought by a
Grantor against an Indemnitee for a material breach of such Indemnitee's
obligations hereunder, if such Grantor has obtained a final and nonappealable
judgment in its favor on such claim as determined by a court of competent
jurisdiction. Each Grantor agrees that upon written notice by any Indemnitee of
the assertion of such a liability, obligation, loss, damage, injury, penalty,
claim, demand, action, suit or judgment, the relevant Grantor shall assume full
responsibility for the defense thereof. Each Indemnitee agrees to use its
commercially reasonable efforts to promptly notify the relevant Grantor of any
such assertion of which such Indemnitee has knowledge.

                                       24
<PAGE>

            (b) Without limiting the application of subsection (a) above, each
Grantor agrees, jointly and severally, to pay, or reimburse the Collateral Agent
for any and all reasonable fees, costs and expenses of whatever kind or nature
incurred in connection with the creation, preservation or protection of the
Collateral Agent's Liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment or
discharge of any taxes or Liens upon or in respect of the Collateral, premiums
for insurance with respect to the Collateral and all other reasonable fees,
costs and expenses in connection with protecting, maintaining or preserving the
Collateral and the Collateral Agent's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Collateral.

            (c) Without limiting the application of subsections (a) or (b)
above, each Grantor agrees, jointly and severally, to pay, indemnify and hold
each Indemnitee harmless from and against any loss, costs, damages and expenses
which such Indemnitee may suffer, expend or incur in consequence of or growing
out of any material misrepresentation by any Grantor in this Agreement, any
other Secured Debt Document or in any writing contemplated by or made or
delivered pursuant to or in connection with this Agreement or any other Secured
Debt Document.

            (d) If and to the extent that the obligations of any Grantor under
this Section are unenforceable for any reason, such Grantor hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law. This Section 13 shall
survive the termination of this Agreement.

      SECTION 14. SECURITY INTEREST ABSOLUTE.

            All rights of the Collateral Agent and Security Interests, and all
obligations of each Grantor hereunder, shall be absolute and unconditional
irrespective of:

            (a) any lack of validity or enforceability of any Secured Debt
Document;

            (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 Secured Debt Documents including,
without limitation, any increase in the Secured Obligations resulting from the
extension of additional credit to any Grantor or any of its Subsidiaries or
otherwise;

            (c) any taking, exchange, release or non-perfection of any other
collateral, or any taking, release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured Obligations;

            (d) any manner of application of collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any part of the Secured Obligations or
any other assets of any Grantor or any of its Subsidiaries;

                                       25
<PAGE>

            (e) any change, restructuring or termination of the corporate
structure or existence of any Grantor or any of its Subsidiaries; or

            (f) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, any Grantor or a third party grantor.

      SECTION 15. TERMINATION OF SECURITY INTERESTS; RELEASE OF COLLATERAL.

            (a) Upon the repayment in full of all Secured Obligations in cash,
termination of all commitments of the Secured Creditors under the Secured Debt
Documents and the cash collateralization of any outstanding letters of credit in
accordance with the terms of the US Credit Agreement and the Canadian Credit
Agreement, the Security Interests shall terminate and all rights to the
Collateral shall revert to Grantors.

            (b) In the event that any part of the Collateral is sold or
otherwise disposed of (to a Person other than another Grantor) in accordance
with the terms of the US Credit Agreement and the Canadian Credit Agreement and
the proceeds of any such sale or disposition or other release are applied in
accordance with the terms of the US Credit Agreement, the Canadian Credit
Agreement or such other Secured Debt Document, as the case may be, to the extent
required to be so applied, such Collateral will be sold, disposed of or released
free and clear of the Liens created by this Agreement and the Collateral Agent,
at the request and expense of such Grantor, will take such actions as set forth
in subsection (d) below.

            (c) At any time that the respective Grantor desires that Collateral
be released as provided in the foregoing subsection (b), such Grantor shall
deliver to the Collateral Agent a certificate signed by a Responsible Officer of
such Grantor stating that the release of the respective Collateral is permitted
pursuant to subsection (b) above.

            (d) Upon any such termination of the Security Interests or release
of such Collateral, and upon the Grantors' satisfaction of the condition set
forth in subsection (c) above, the Collateral Agent will, at the expense of
Borrower, execute and deliver to Borrower such documents as Grantors shall
reasonably request, but without recourse or warranty to Collateral Agent,
including but not limited to written authorization to file termination
statements to evidence the termination of the Security Interests in such
Collateral.

            (e) The Collateral Agent shall have no liability whatsoever to any
other Secured Creditor as the result of any release of Collateral by it in
accordance with (or which the Collateral Agent in the absence of gross
negligence or willful misconduct believes to be in accordance with) this
Section.

      SECTION 16. REINSTATEMENT. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Grantor for liquidation or reorganization, should any Grantor become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of any
Grantor's assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Secured Obligations,
or any part thereof, is,

                                       26
<PAGE>
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Secured Obligations, whether as a
"voidable preference," "fraudulent conveyance," "fraudulent transfer" or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Secured Obligations shall be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.

      SECTION 17. NOTICES. All notices, requests and other communications to the
Grantors or the Collateral Agent hereunder shall be delivered in the manner
required by the US Credit Agreement and shall be sufficiently given to the
Collateral Agent or any Grantor if addressed or delivered to them at, in the
case of the Collateral Agent, the address of the US Agent set forth in the US
Credit Agreement, in the case of the Borrower, its address and telecopier number
specified in the US Credit Agreement, and in the case of any other Grantors,
their respective addresses and telecopier numbers provided in the Subsidiary
Guaranty Agreement. All such notices and communications shall be deemed to have
been duly given at the times set forth in the US Credit Agreement. All notices,
requests and other communications to the Secured Creditors hereunder shall be
delivered in the manner required by the Intercreditor Agreement and shall be
sufficiently given to the Secured Creditors if addressed or delivered to them at
their respective addresses and telecopier numbers provided in the Intercreditor
Agreement. All such notices and communications shall be deemed to have been duly
given at the times set forth in the Intercreditor Agreement.

      SECTION 18. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the
part of the Collateral Agent in exercising any right or remedy hereunder, and no
course of dealing between any Grantor on the one hand and the Collateral Agent
or any Secured Creditor on the other hand shall operate as a waiver thereof, nor
shall any single or partial exercise of any right or remedy hereunder or any
other Secured Debt Document preclude any other or further exercise thereof or
the exercise of any other right or remedy hereunder or thereunder. The rights
and remedies herein and in the other Secured Debt Documents are cumulative and
not exclusive of any rights or remedies which the Collateral Agent would
otherwise have. No notice to or demand on Grantors not required hereunder in any
case shall entitle any Grantor to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Collateral Agent to any other or further action in any circumstances without
notice or demand.

      SECTION 19. ADDITIONAL GRANTORS. It is understood and agreed that any
Subsidiary of the Borrower that is required to become a party to this Agreement
after the date hereof pursuant to the requirements of the US Credit Agreement or
the Canadian Credit Agreement shall become a Grantor hereunder by (a) executing
a counterpart hereof and/or an assumption agreement, in each case in form and
substance satisfactory to the Collateral Agent, (b) delivering supplements to
Schedules I through VI hereto, as are necessary to cause such Schedules to be
complete and accurate with respect to such additional Grantor on such date and
(c) taking all actions as specified in this Agreement, the US Credit Agreement
and the Canadian Credit Agreement, in each case with all documents required
above to be delivered to the Collateral Agent and with all documents and action
required above to be taken to the reasonable satisfaction of the Collateral
Agent.

                                       27
<PAGE>

      SECTION 20. SUCCESSORS AND ASSIGNS. This Agreement and all obligations of
each Grantor hereunder shall be binding upon the successors and assigns of such
Grantor (including any debtor-in-possession on behalf of such Grantor) and
shall, together with the rights and remedies of the Collateral Agent, for the
benefit of the Secured Creditors, hereunder, inure to the benefit of the
Collateral Agent, Secured Creditors, all future holders of any instrument
evidencing any of the Secured Obligations and their respective successors and
assigns. No sales of participations, other sales, assignments, transfers or
other dispositions of any agreement governing or instrument evidencing the
Secured Obligations or any portion thereof or interest therein shall in any
manner affect the Lien granted to the Collateral Agent, for the benefit of the
Secured Creditors, hereunder. No Grantor may assign, sell, hypothecate or
otherwise transfer any interest in or obligation under this Agreement.

      SECTION 21. AMENDMENTS. No amendment or waiver of any provision of this
Agreement, nor consent to any departure by Grantors herefrom, shall in any event
be effective unless the same shall be in writing and signed by Collateral Agent,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.

      SECTION 22. GOVERNING LAW; WAIVER OF JURY TRIAL.

            (a) THIS AGREEMENT AND THE RIGHTS AND SECURED OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW
(WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF) OF THE STATE
OF GEORGIA, EXCEPT TO THE EXTENT THAT PERFECTION (AND THE EFFECT OF PERFECTION
AND NONPERFECTION) AND CERTAIN REMEDIES MAY BE GOVERNED BY THE LAWS OF ANY
JURISDICTION OTHER THAN GEORGIA.

            (b) GRANTORS IRREVOCABLY AND UNCONDITIONALLY SUBMIT, FOR THEMSELF
AND THEIR PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT OF THE NORTHERN DISTRICT OF GEORGIA, AND OF ANY STATE COURT
SITTING IN FULTON COUNTY AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN SUCH GEORGIA STATE COURT OR, TO THE EXTENT PERMITTED BY APPLICABLE LAW, SUCH
FEDERAL COURT. EACH GRANTOR 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 SHALL AFFECT ANY RIGHT THAT THE COLLATERAL AGENT OR ANY SECURED
CREDITOR MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS

                                       28
<PAGE>
AGREEMENT OR ANY OTHER SECURED DEBT DOCUMENT AGAINST SUCH GRANTOR OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION IN WHICH THE PROPERTY THAT IS THE
SUBJECT OF SUCH ACTION OR PROCEEDING IS LOCATED.

            (c) EACH GRANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING DESCRIBED IN PARAGRAPH (B) OF THIS SECTION AND
BROUGHT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH GRANTOR
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.

            (d) EACH GRANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN
THE MANNER PROVIDED FOR NOTICES IN THE US CREDIT AGREEMENT. NOTHING IN THIS
AGREEMENT OR IN ANY OTHER SECURED DEBT DOCUMENT WILL AFFECT THE RIGHT OF ANY
PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

            (e) EACH GRANTOR HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH GRANTOR (i) 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
(ii) ACKNOWLEDGES THAT IT HAS NOT BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS SECTION.

      SECTION 23. SEVERABILITY. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable, in whole or in part,
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

      SECTION 24. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts
(including by telecopy), but all of which shall together constitute one and the
same instruments.

      SECTION 25. HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.

                                       29
<PAGE>

                         [Signatures on following page]

                                       30
<PAGE>

      IN WITNESS WHEREOF, Grantors have caused this Agreement to be duly
executed and delivered by their duly authorized officers as of the day and year
first above written.

                                  EMS TECHNOLOGIES, INC., a Georgia corporation

                                  By:__________________________________________
                                  Name:________________________________________
                                  Title:_______________________________________

                                  EMS INVESTMENT HOLDINGS, INC.,
                                    a Delaware corporation

                                  By:__________________________________________
                                  Name:________________________________________
                                  Title:_______________________________________

                                  LXE INC., a Georgia corporation

                                  By:__________________________________________
                                  Name:________________________________________
                                  Title:_______________________________________

                                       31
<PAGE>

                                   SCHEDULE I

                           LIST OF UCC FILING OFFICES

<TABLE>
<CAPTION>
       NAME OF COMPANY             STATE               OFFICE(S)
-----------------------------    ---------    ----------------------------------
<S>                              <C>          <C>
EMS Technologies, Inc.           Georgia      Office of the Clerk of the Superior
                                              Court of Fulton County, Georgia

EMS Investment Holdings, Inc.    Delaware     Delaware Secretary of State

LXE Inc.                         Georgia      Office of the Clerk of the Superior
                                              Court of Fulton County, Georgia
</TABLE>

                                       32
<PAGE>

                                   SCHEDULE II

<TABLE>
<CAPTION>
      GRANTOR'S EXACT              STATE OF       ORGANIZATIONAL
        LEGAL NAME               INCORPORATION      ID NUMBER
-----------------------------    -------------    --------------
<S>                              <C>              <C>
EMS Technologies, Inc.              Georgia          J906681

EMS Investment Holdings, Inc.      Delaware          2825937

LXE Inc.                            Georgia          K638969
</TABLE>

<PAGE>

                                  SCHEDULE III

                         [Attach Perfection Certificate]

                                       34
<PAGE>

                                   SCHEDULE IV

<TABLE>
<CAPTION>
   Name and               State of           Deposit Account
Address of Bank     Organization of Bank          Number
---------------     --------------------     ---------------
<S>                 <C>                      <C>
</TABLE>

                                       35
<PAGE>

                                   SCHEDULE V

<TABLE>
<CAPTION>
Name of Grantor/       Issuer of         Face Amount of      Letter of Credit
Beneficiary         Letter of Credit    Letter of Credit         Number
----------------    ----------------    ----------------     ----------------
<S>                 <C>                 <C>                  <C>
</TABLE>

                                       36
<PAGE>

                                   SCHEDULE VI

Commercial Tort Claims:

[Case captions or description of case]

[This should include tort claims against suppliers for RadarSat 2]

                                       37