TRADEMARK SECURITY AGREEMENT



      THIS TRADEMARK SECURITY AGREEMENT between AGROTEC WILLIAMS, INC., a
Delaware corporation ("Borrower"), and WELLS FARGO BANK, NATIONAL
ASSOCIATION  ("Bank"), is as follows:



1.    Preliminary Statements

      (A) Borrower has executed and delivered this Agreement to Bank in order to
induce Bank (i) to enter into the Credit  Agreement  executed  and  delivered by
Borrower (together with other borrowers) contemporaneously herewith (said Credit
Agreement,  as it may hereafter be amended or otherwise  modified is hereinafter
referred to as the "Credit  Agreement"),  and (ii) to make advances  pursuant to
the Credit Agreement.

      (B) All  capitalized  terms used herein and not otherwise  defined  herein
shall have the meaning attributed to them in the Credit Agreement.

2.    Grant of Security

      As security for the full and prompt performance of all of the Obligations,
Borrower  hereby  assigns,  pledges  and  grants to Bank a lien on and  security
interest in Borrower's entire right,  title and interest in and to the Trademark
Collateral.  As  used  herein,  "Trademark  Collateral"  means:  (i)  all of the
Borrower's right,  title and interest in and to all of its now owned or existing
and filed and hereafter  acquired or arising and filed Trademark  License Rights
(as  defined  below),  trademarks,  service  marks,  trademark  or service  mark
registrations,   trade  names,  and  trademark  or  service  mark  applications,
including,  without limitation, each mark, registration,  and application listed
on  Schedule  I,  attached  hereto  and made a part  hereof,  (ii) all  renewals
thereof, (iii) all income, royalties, damages and payments now and hereafter due
and/or payable with respect thereto, including, without limitation,  damages and
payment  for past or future  infringements  thereof,  (iv) all rights to sue for
past, present and future  infringements  thereof,  (v) all rights  corresponding
thereto  throughout the world,  and (vi) together in each case with the goodwill
of Borrower's  business connected with the use of, and symbolized by, such marks
and rights.  "Trademark License Rights" means Borrower's entire right, title and
interest  in, to and under  all  license  agreements  with any  Person,  whether
Borrower is licensor or licensee, with respect to any trademarks, service marks,
or tradenames, including, without limitation, the licenses listed on Schedule I.

3.    Representations and Warranties

      Subject to any  exceptions  listed on Schedule I, Borrower  represents and
warrants as follows:

      (A) Borrower is the sole and exclusive  owner of the entire and encumbered
right,  title and interest in and to each of the Trademark  Collateral  free and
clear of any liens, charges and encumbrances.

      (B) Schedule I sets forth a complete and  accurate  list of all  Trademark
License Rights,  trademarks,  trade names, service marks,  trademark and service
mark registrations, and applications for trademark or service mark registrations
owned by Borrower.

      (C) Each trademark,  service mark, trade name,  trademark and service mark
registration,  and  application  for  trademark  or  service  mark  registration
identified  in  Schedule  I is  subsisting  and has not been  adjudged  invalid,
unregistrable  or  unenforceable,  in  whole or in  part,  and  each  registered
trademark and service mark and each  application  for trademark and service mark
registration is valid,  registered or registrable and  enforceable.  Borrower is
not aware of any prior use of any item of Trademark  Collateral which could lead
to such item becoming  invalid or  unenforceable,  including prior  unauthorized
uses by third  parties and uses which were not  supported by the goodwill of the
business connected with such item.

      (D) Borrower has not granted any license, release, covenant not to sue, or
non-assertion  assurance  to any third  person  with  respect to any part of the
Trademark Collateral.

      (E) Borrower has used reasonable and proper statutory notice in connection
with its use of each registered trademark and service mark.

      (F) The current  conduct of Borrower's  business does not conflict with or
infringe any  proprietary  right of any third party in any way which  materially
adversely affects the business, financial condition or business prospects of the
Borrower or its  affiliates,  and no one has  asserted to Borrower or any of its
affiliates that such conduct  conflicts with or infringes any valid  proprietary
right of any  third  party in any way which  materially  adversely  affects  the
business, financial condition or business prospects of the Borrower.

      (G) The Trademark License Rights are in full force and effect; Borrower is
not in  default  under any of the  Trademark  License  Rights;  and no event has
occurred which with notice or the passage of time, or both,  might  constitute a
default by Borrower under any of the Trademark License Rights.

      (H) No authorization, consent, approval, or other action by, and no notice
to or filing or recording  with, any  governmental,  administrative  or judicial
authority  or  regulatory  body is  currently  or is  reasonably  expected to be
required for the grant by Borrower of the liens and security  interests  granted
hereby or for the  execution,  delivery  or  performance  of this  Agreement  by
Borrower,  other than routine action which may be required after the date hereof
to maintain rights in the  trademarks,  or for the perfection of or the exercise
by Bank of its rights and remedies hereunder.

4.    Further Assurances

      (A)  Borrower  agrees  that from  time to time,  at its  expense,  it will
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or desirable,  or that Bank may reasonably
request,  in order (i) to continue,  perfect and protect the  assignment and the
security  interest  granted or purported to be granted  hereby or (ii) to enable
Bank to exercise and enforce its rights and remedies  hereunder  with respect to
any part of the Trademark  Collateral.  Without  limiting the  generality of the
foregoing,  the Borrower  will execute and file such  financing or  continuation
statements,  amendments  hereto, and such other instruments or notices as may be
necessary or desirable,  or as Bank may reasonably  request, in order to perfect
and preserve the security interest granted or purported to be granted hereby.

      (B)  Borrower  hereby  authorizes  Bank to file one or more  financing  or
continuation statements,  and amendments thereto, relative to all or any part of
the Trademark  Collateral  without the signature of Borrower where  permitted by
law. A carbon,  photographic  or other  reproduction  of this  Agreement  or any
financing statement covering the Trademark  Collateral or any part thereof shall
be sufficient as a financing statement where permitted by law.

      (C)  Borrower  will  furnish  to Bank  from  time to time  statements  and
schedules further  identifying and describing the Trademark  Collateral and such
other reports in connection with the Trademark Collateral as Bank may reasonably
request, all in reasonable detail.

      (D) Borrower  agrees that,  should it obtain an ownership  interest in any
Trademark  License Rights,  trademark,  service mark,  trade name,  trademark or
service  mark  registration,  or  application  for  trademark  or  service  mark
registration  which is not now identified in Schedule I, (i) Borrower shall give
prompt written notice thereof to Bank,  (ii) the provisions of Paragraph 2 shall
automatically  apply to any such Trademark  License Rights,  trademark,  service
mark,  trademark or service mark  registration,  or application for trademark or
service mark  registration,  and (iii) any such Trademark License Rights,  mark,
registration,  or  application,  together  with  the  goodwill  of the  business
connected  with the use of the mark and  symbolized  by it, shall  automatically
become part of the Trademark Collateral. Borrower authorizes Bank to modify this
Agreement  by  amending  Schedule I to include  any  Trademark  License  Rights,
trademark, service mark, trademark or service mark registration,  or application
for trademark or service mark  registration  which becomes part of the Trademark
Collateral  under this  Paragraph and the goodwill of the business to which each
such mark pertains.

      (E) With respect to any  trademark  necessary to the conduct of Borrower's
business,  Borrower agrees to take all necessary steps in any proceeding  before
the United States Patent and Trademark Office or any similar office or agency in
any  other  country  or any  political  subdivision  thereof  or in any court to
maintain each registered trademark,  service mark, and trademark or service mark
registration,  and to pursue each  application  for  trademark  or service  mark
registration now or hereafter  included in the Trademark  Collateral,  including
the filing of  applications  for renewal,  the payment of maintenance  fees, and
participation in opposition,  interference and infringement proceedings.  To the
extent necessary or desirable to the conduct of its business, Borrower agrees to
take corresponding steps with respect to each new or other registered trademark,
service  mark  trademark  or service  mark  registration,  and  application  for
trademark  or service  mark  registration  to which the Borrower is now or later
becomes entitled. Any expenses incurred in connection with such activities shall
be borne by Borrower.  Without the prior written consent of Bank, Borrower shall
not abandon  any right to file an  application  for  trademark  or service  mark
registration,  or abandon any pending  application,  registration,  trademark or
service mark.

      (F) Borrower agrees to notify Bank immediately if Borrower learns (i) that
any item of the Trademark  Collateral may become abandoned;  (ii) of any adverse
determination or any development (including, without limitation, the institution
of any proceeding in the United States Patent and Trademark Office or any court)
regarding  any  item  of  the  Trademark  Collateral;  or  (iii)  that  it is or
potentially could be in default of any of the Trademark License Rights.

      (G) If Borrower becomes aware that any item of the Trademark Collateral is
infringed or  misappropriated  by a third party,  Borrower shall promptly notify
Bank and shall take such actions as are  necessary  under the  circumstances  to
protect such Trademark  Collateral.  If Borrower  elects to file an infringement
suit,  Bank,  upon notice from Borrower of Borrower's  intent to file such suit,
shall  either  join in such suit or reassign to  Borrower  Bank's  rights  under
Section 2(iii). Any expense incurred in connection with such activities shall be
borne by Borrower.

      (H) Borrower shall continue to use reasonable and proper  statutory notice
in connection with its use of each registered trademark or service mark.

5.    Transfers and Other Liens

      Borrower shall not:

      (A) sell,  assign (by operation of law or otherwise) or otherwise  dispose
of any of the Trademark Collateral, except as permitted by the Credit Agreement;

      (B) create or suffer to exist any lien,  security interest or other charge
or encumbrance upon or with respect to any of the Trademark Collateral except as
otherwise  disclosed  in Schedule  I, or as  otherwise  permitted  by the Credit
Agreement; or

      (C)  take  any  other  action  in  connection  with  any of the  Trademark
Collateral that would impair the value of the interests or rights  thereunder of
Borrower.

6.    Bank Appointed Attorney-in-Fact

      Borrower hereby irrevocably appoints Bank as Borrower's  attorney-in-fact,
with full authority in Borrower's place,  stead and on behalf of Borrower and in
Borrower's  name or  otherwise,  from time to time in Bank's  sole and  absolute
discretion,  to take any action and to execute any instrument that Bank may deem
necessary or advisable to accomplish the purposes of this Agreement,  including,
without limitation:  (i) to ask, demand, collect, sue for, recover,  compromise,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Trademark Collateral;  (ii) to receive, endorse, and
collect  any  drafts or other  instruments,  documents  and  chattel  paper,  in
connection  with  clause  (i)  above;  and (iii) to file any  claims or take any
action or institute any  proceedings  that Bank may deem  necessary or desirable
for the  collection of any of the  Trademark  Collateral or otherwise to enforce
the rights of Bank with respect to any of the Trademark Collateral.

7.    Bank May Perform

      (A) If Borrower fails to perform any of its obligations  contained herein,
Bank may itself  perform,  or cause  performance of, such  obligations,  and the
expenses of Bank incurred in connection  therewith  shall be payable by Borrower
under Paragraph 10(B).

      (B) Bank, or its designated representatives,  shall have the right, at all
times, to inspect Borrower's  premises and to examine Borrower's books,  records
and operations relating to the Trademark Collateral.

8.    Bank's Duties

      The powers  conferred on Bank hereunder are solely to protect its interest
in the Trademark  Collateral and shall not impose any duty upon Bank to exercise
any such powers.  Except for the safe custody of any Trademark Collateral in its
possession and the accounting for moneys actually received by it hereunder, Bank
shall have no duty as to any  Trademark  Collateral,  or as to the taking of any
necessary  steps to preserve  rights  against  other parties or any other rights
pertaining to any Trademark  Collateral.  Bank shall be deemed to have exercised
reasonable care in the custody and  preservation of the Trademark  Collateral in
its possession if the Trademark  Collateral is accorded treatment  substantially
equal to that which Bank accords its own property.

9.    Remedies

      If any Event of Default shall have occurred and be continuing:

      (A) Bank may exercise in respect of the Trademark Collateral,  in addition
to other rights and remedies provided for herein or otherwise available to Bank,
all the  rights  and  remedies  of a  secured  party on  default  under the Code
(whether or not the Code applies to the affected Trademark  Collateral) and also
may (i) exercise any and all rights and remedies of Borrower  under or otherwise
in respect of the Trademark  Collateral;  (ii) require Borrower to, and Borrower
hereby  agrees that it will at its expense and upon  request of Bank  forthwith,
assemble all or any part of the documents embodying the Trademark  Collateral as
directed by Bank and make them  available to Bank at a place to be designated by
Bank which is reasonably convenient to both Bank and Borrower,  (iii) occupy any
premises  owned or leased by Borrower  where  documents  embodying the Trademark
Collateral or any part thereof are assembled for a reasonable period in order to
effectuate  Bank's  rights and  remedies  hereunder  or under law,  without  any
obligation to Borrower in respect of such occupation, (iv) license the Trademark
Collateral  or any part thereof,  or assign its rights to the Trademark  License
Rights to any Person, and (v) without notice except as specified below, sell the
Trademark  Collateral  or any part  thereof in one or more  parcels at public or
private sale, at any of Bank's offices or elsewhere,  for cash, on credit or for
future  delivery,  and upon  such  other  terms  as Bank  may deem  commercially
reasonable. In the event of any sale, assignment, or other disposition of any of
the  Trademark  Collateral,  the  goodwill of the  business  connected  with and
symbolized  by any Trademark  Collateral  subject to such  disposition  shall be
included,  and Borrower shall supply to Bank or its designee Borrower's know-how
and expertise  relating to the manufacture and sale of products or the provision
of services  relating to any Trademark  Collateral  subject to such disposition,
and  Borrower's  customer  lists and other  records  relating to such  Trademark
Collateral  and to the  distribution  of such  products and  services.  Borrower
agrees  that,  to the extent  notice of sale shall be  required by law, at least
five days  notice to  Borrower  of the time and place of any public  sale or the
time after  which any  private  sale is to be made shall  constitute  reasonable
notification.  Bank  shall not be  obligated  to make any sale of any  Trademark
Collateral  regardless of notice of sale having been given. Bank may adjourn any
public or private sale from time to time by  announcement  at the time and place
fixed therefor,  and such sale may, without further notice,  be made at the time
and place to which it was so adjourned.

      (B) All payments  received by Borrower under or in connection  with any of
the  Trademark  Collateral  shall be  received in trust for the benefit of Bank,
shall be  segregated  from other funds of Borrower and shall be  forthwith  paid
over to Bank in the same form as so received (with any necessary endorsement).

      (C) All  payments  made  hereunder or in  connection  with or otherwise in
respect of the Trademark  Collateral  and all cash proceeds  received by Bank in
respect of any sale of,  collection  from, or other  realization upon all or any
part of the Trademark Collateral may, in the discretion of Bank, be held by Bank
as collateral for, and/or then or at any time thereafter  applied (after payment
of any amounts  payable to Bank pursuant to Paragraph 10) in whole or in part by
Bank against,  all or any part of the  Obligations,  in such order as Bank shall
elect.  Any  surplus of such cash or cash  proceeds  held by Bank and  remaining
after  payment in full, in cash,  of all the  Obligations  shall be paid over to
Borrower or to whomsoever may be lawfully entitled to receive such surplus.

10.   Indemnity and Expenses

      (A) Borrower  agrees to indemnify  and hold Bank harmless from and against
any and all claims, losses and liabilities arising out of or resulting from this
Agreement or the transactions  contemplated  hereby,  or the enforcement of this
Agreement,   including,  without  limitation,   claims,  losses  or  liabilities
resulting from Bank's  negligence,  but excluding claims,  losses or liabilities
resulting  from Bank's bad faith or willful  misconduct as determined by a final
judgment of a court of competent jurisdiction.

      (B)  Borrower,  upon  demand,  will pay to Bank the  amount of any and all
reasonable  expenses,  including,  without  limitation,  the reasonable fees and
disbursements of its counsel (whether  incurred at the trial or appellate level,
in an arbitration proceeding, in a bankruptcy, including, without limitation any
adversary  proceeding,  contested  matter  or motion  or  otherwise)  and of any
experts and agents,  which Bank may incur in connection  with any and all of the
following  (i)  the   administration  of  this  Agreement,   (ii)  the  custody,
preservation,  use or operation  of, or the sale of,  collection  from, or other
realization  upon,  any of the  Trademark  Collateral,  (iii)  the  exercise  or
enforcement of any of Bank's rights  hereunder,  or (iv) the failure by Borrower
to perform or observe any of the provisions hereof.

11.   Amendments, Waivers, Consents

      No amendment or waiver of any  provision of this  Agreement nor consent to
any departure by Borrower  herefrom shall in any event be effective  unless such
amendment  or waiver  shall be in  writing  and  signed  by Bank,  and then such
amendment or waiver shall be effective only in the specific instance and for the
specific purpose for which it was given.

12.   Notices

      All  notices,  requests  and  demands  which any party is  required or may
desire to give to any other party under any provision of this  Agreement must be
in writing delivered to each party at the following address:

      BORROWER:         Agrotec Williams, Inc.
                        c/o Williams Controls, Inc.
                        14100 SW 72nd Avenue
                        Portland, OR  97224
                        Attn:  Thomas W. Itin, Chairman
                        Telecopy No.:  (248) 851-9080

      BANK:             Wells Fargo Bank, National Association
                           Commercial Finance Division
                        245 S. Los Robles Ave., Ste. 600
                               Pasadena, CA 91101
                             Attn: Angelo Samperisi
                          Telecopy No.: (818) 884-9063

or to such other  address as any party may  designate  by written  notice to all
other  parties.  Each such  notice,  request and demand shall be deemed given or
made as follows:  (a) if sent by hand delivery,  upon  delivery;  (b) if sent by
mail, upon the earlier of the date of receipt or three days after deposit in the
U.S. mail,  first class and postage prepaid;  and (c) if sent by telecopy,  upon
receipt  and the sender  will  endeavor  to send a hard copy of such  telecopied
notice to the recipient by mail.

13.   Miscellaneous

      (A) This  Agreement  shall  create a continuing  security  interest in the
Trademark Collateral and shall (i) remain in full force and effect until payment
in full,  in cash,  of the  Obligations,  (ii) be  binding  upon  Borrower,  its
successors and assigns,  and (iii) inure,  together with the rights and remedies
of Bank hereunder, to the benefit of Bank, its successors and assigns.

      (B) Upon the full  payment  of all  Obligations,  the liens  and  security
interests  granted  hereby  shall  terminate  and all  rights  to the  Trademark
Collateral shall revert to Borrower.  Upon any such  termination,  Bank will, at
Borrower's  expense,  execute and deliver to Borrower such documents as Borrower
shall reasonably request to evidence such termination and reversion.

      (C) If any term or provision of this Agreement is or shall become illegal,
invalid or unenforceable in any jurisdiction,  all other terms and provisions of
this Agreement shall remain legal,  valid and  enforceable in such  jurisdiction
and such illegal,  invalid or unenforceable  provision shall be legal, valid and
enforceable in any other jurisdiction.

      (D) THIS AGREEMENT  SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF
THE PARTIES HERETO  DETERMINED IN ACCORDANCE  WITH THE LOCAL LAW OF THE STATE OF
OREGON,  EXCLUDING ANY CONFLICTS OF LAW RULE OR PRINCIPLE  THAT MIGHT  OTHERWISE
REFER CONSTRUCTION OR INTERPRETATION OF THIS AGREEMENT TO THE SUBSTANTIVE LAW OF
ANOTHER JURISDICTION, AND ALL OTHER LAWS OF MANDATORY APPLICATION.

      (E) AS A  SPECIFICALLY  BARGAINED  INDUCEMENT  FOR BANK TO ENTER INTO THIS
AGREEMENT AND EXTEND CREDIT TO BORROWER,  BORROWER AND BANK EACH WAIVES TRIAL BY
JURY WITH  RESPECT TO ANY ACTION,  CLAIM,  SUIT OR  PROCEEDING  IN RESPECT OF OR
ARISING OUT OF THIS AGREEMENT.

      (F) The captions in this  Agreement  are for  reference  purposes only and
shall not  relate to or affect  in any way the  construction  or  interpretation
hereof.

      (G) The  representations,  warranties,  covenants and agreements contained
herein or in any Schedule attached hereto shall survive the execution hereof.



<PAGE>



      IN WITNESS WHEREOF, Borrower has caused this Agreement to be duly executed
and delivered by its officer thereunto duly authorized as of July 11, 1997.

                             AGROTEC WILLIAMS, INC.



                              By:____________________________

                              Title:___________________________



STATE OF OREGON         )
                              ) SS:
COUNTY OF MULTNOMAH     )

      The foregoing  Trademark  Security Agreement was executed and acknowledged
before me on July 11, 1997, by ______________________, personally known to me to
be the  _____________  of Agrotec  Williams,  Inc., a Delaware  corporation,  on
behalf of such corporation.


                                  Notary Public
                             My Commission Expires:



Accepted as of July 11, 1997.

WELLS FARGO BANK, NATIONAL ASSOCIATION



By:
    Vice President



<PAGE>



                                SCHEDULE I
                                    TO
                       TRADEMARK SECURITY AGREEMENT



1.    Trademark Registrations

      Reg. No. 1,89,761


<PAGE>

                       TRADEMARK SECURITY AGREEMENT



      THIS TRADEMARK SECURITY AGREEMENT between HARDEE WILLIAMS, INC., a
Delaware corporation ("Borrower"), and WELLS FARGO BANK, NATIONAL
ASSOCIATION  ("Bank"), is as follows:



1.    Preliminary Statements

      (A) Borrower has executed and delivered this Agreement to Bank in order to
induce Bank (i) to enter into the Credit  Agreement  executed  and  delivered by
Borrower (together with other borrowers) contemporaneously herewith (said Credit
Agreement,  as it may hereafter be amended or otherwise  modified is hereinafter
referred to as the "Credit  Agreement"),  and (ii) to make advances  pursuant to
the Credit Agreement.

      (B) All  capitalized  terms used herein and not otherwise  defined  herein
shall have the meaning attributed to them in the Credit Agreement.

2.    Grant of Security

      As security for the full and prompt performance of all of the Obligations,
Borrower  hereby  assigns,  pledges  and  grants to Bank a lien on and  security
interest in Borrower's entire right,  title and interest in and to the Trademark
Collateral.  As  used  herein,  "Trademark  Collateral"  means:  (i)  all of the
Borrower's right,  title and interest in and to all of its now owned or existing
and filed and hereafter  acquired or arising and filed Trademark  License Rights
(as  defined  below),  trademarks,  service  marks,  trademark  or service  mark
registrations,   trade  names,  and  trademark  or  service  mark  applications,
including,  without limitation, each mark, registration,  and application listed
on  Schedule  I,  attached  hereto  and made a part  hereof,  (ii) all  renewals
thereof, (iii) all income, royalties, damages and payments now and hereafter due
and/or payable with respect thereto, including, without limitation,  damages and
payment  for past or future  infringements  thereof,  (iv) all rights to sue for
past, present and future  infringements  thereof,  (v) all rights  corresponding
thereto  throughout the world,  and (vi) together in each case with the goodwill
of Borrower's  business connected with the use of, and symbolized by, such marks
and rights.  "Trademark License Rights" means Borrower's entire right, title and
interest  in, to and under  all  license  agreements  with any  Person,  whether
Borrower is licensor or licensee, with respect to any trademarks, service marks,
or tradenames, including, without limitation, the licenses listed on Schedule I.

3.    Representations and Warranties

      Subject to any  exceptions  listed on Schedule I, Borrower  represents and
warrants as follows:

      (A) Borrower is the sole and exclusive  owner of the entire and encumbered
right,  title and interest in and to each of the Trademark  Collateral  free and
clear of any liens, charges and encumbrances.

      (B) Schedule I sets forth a complete and  accurate  list of all  Trademark
License Rights,  trademarks,  trade names, service marks,  trademark and service
mark registrations, and applications for trademark or service mark registrations
owned by Borrower.

      (C) Each trademark,  service mark, trade name,  trademark and service mark
registration,  and  application  for  trademark  or  service  mark  registration
identified  in  Schedule  I is  subsisting  and has not been  adjudged  invalid,
unregistrable  or  unenforceable,  in  whole or in  part,  and  each  registered
trademark and service mark and each  application  for trademark and service mark
registration is valid,  registered or registrable and  enforceable.  Borrower is
not aware of any prior use of any item of Trademark  Collateral which could lead
to such item becoming  invalid or  unenforceable,  including prior  unauthorized
uses by third  parties and uses which were not  supported by the goodwill of the
business connected with such item.

      (D) Borrower has not granted any license, release, covenant not to sue, or
non-assertion  assurance  to any third  person  with  respect to any part of the
Trademark Collateral.

      (E) Borrower has used reasonable and proper statutory notice in connection
with its use of each registered trademark and service mark.

      (F) The current  conduct of Borrower's  business does not conflict with or
infringe any  proprietary  right of any third party in any way which  materially
adversely affects the business, financial condition or business prospects of the
Borrower or its  affiliates,  and no one has  asserted to Borrower or any of its
affiliates that such conduct  conflicts with or infringes any valid  proprietary
right of any  third  party in any way which  materially  adversely  affects  the
business, financial condition or business prospects of the Borrower.

      (G) The Trademark License Rights are in full force and effect; Borrower is
not in  default  under any of the  Trademark  License  Rights;  and no event has
occurred which with notice or the passage of time, or both,  might  constitute a
default by Borrower under any of the Trademark License Rights.

      (H) No authorization, consent, approval, or other action by, and no notice
to or filing or recording  with, any  governmental,  administrative  or judicial
authority  or  regulatory  body is  currently  or is  reasonably  expected to be
required for the grant by Borrower of the liens and security  interests  granted
hereby or for the  execution,  delivery  or  performance  of this  Agreement  by
Borrower,  other than routine action which may be required after the date hereof
to maintain rights in the  trademarks,  or for the perfection of or the exercise
by Bank of its rights and remedies hereunder.

4.    Further Assurances

      (A)  Borrower  agrees  that from  time to time,  at its  expense,  it will
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or desirable,  or that Bank may reasonably
request,  in order (i) to continue,  perfect and protect the  assignment and the
security  interest  granted or purported to be granted  hereby or (ii) to enable
Bank to exercise and enforce its rights and remedies  hereunder  with respect to
any part of the Trademark  Collateral.  Without  limiting the  generality of the
foregoing,  the Borrower  will execute and file such  financing or  continuation
statements,  amendments  hereto, and such other instruments or notices as may be
necessary or desirable,  or as Bank may reasonably  request, in order to perfect
and preserve the security interest granted or purported to be granted hereby.

      (B)  Borrower  hereby  authorizes  Bank to file one or more  financing  or
continuation statements,  and amendments thereto, relative to all or any part of
the Trademark  Collateral  without the signature of Borrower where  permitted by
law. A carbon,  photographic  or other  reproduction  of this  Agreement  or any
financing statement covering the Trademark  Collateral or any part thereof shall
be sufficient as a financing statement where permitted by law.

      (C)  Borrower  will  furnish  to Bank  from  time to time  statements  and
schedules further  identifying and describing the Trademark  Collateral and such
other reports in connection with the Trademark Collateral as Bank may reasonably
request, all in reasonable detail.

      (D) Borrower  agrees that,  should it obtain an ownership  interest in any
Trademark  License Rights,  trademark,  service mark,  trade name,  trademark or
service  mark  registration,  or  application  for  trademark  or  service  mark
registration  which is not now identified in Schedule I, (i) Borrower shall give
prompt written notice thereof to Bank,  (ii) the provisions of Paragraph 2 shall
automatically  apply to any such Trademark  License Rights,  trademark,  service
mark,  trademark or service mark  registration,  or application for trademark or
service mark  registration,  and (iii) any such Trademark License Rights,  mark,
registration,  or  application,  together  with  the  goodwill  of the  business
connected  with the use of the mark and  symbolized  by it, shall  automatically
become part of the Trademark Collateral. Borrower authorizes Bank to modify this
Agreement  by  amending  Schedule I to include  any  Trademark  License  Rights,
trademark, service mark, trademark or service mark registration,  or application
for trademark or service mark  registration  which becomes part of the Trademark
Collateral  under this  Paragraph and the goodwill of the business to which each
such mark pertains.

      (E) With respect to any  trademark  necessary to the conduct of Borrower's
business,  Borrower agrees to take all necessary steps in any proceeding  before
the United States Patent and Trademark Office or any similar office or agency in
any  other  country  or any  political  subdivision  thereof  or in any court to
maintain each registered trademark,  service mark, and trademark or service mark
registration,  and to pursue each  application  for  trademark  or service  mark
registration now or hereafter  included in the Trademark  Collateral,  including
the filing of  applications  for renewal,  the payment of maintenance  fees, and
participation in opposition,  interference and infringement proceedings.  To the
extent necessary or desirable to the conduct of its business, Borrower agrees to
take corresponding steps with respect to each new or other registered trademark,
service  mark  trademark  or service  mark  registration,  and  application  for
trademark  or service  mark  registration  to which the Borrower is now or later
becomes entitled. Any expenses incurred in connection with such activities shall
be borne by Borrower.  Without the prior written consent of Bank, Borrower shall
not abandon  any right to file an  application  for  trademark  or service  mark
registration,  or abandon any pending  application,  registration,  trademark or
service mark.

      (F) Borrower agrees to notify Bank immediately if Borrower learns (i) that
any item of the Trademark  Collateral may become abandoned;  (ii) of any adverse
determination or any development (including, without limitation, the institution
of any proceeding in the United States Patent and Trademark Office or any court)
regarding  any  item  of  the  Trademark  Collateral;  or  (iii)  that  it is or
potentially could be in default of any of the Trademark License Rights.

      (G) If Borrower becomes aware that any item of the Trademark Collateral is
infringed or  misappropriated  by a third party,  Borrower shall promptly notify
Bank and shall take such actions as are  necessary  under the  circumstances  to
protect such Trademark  Collateral.  If Borrower  elects to file an infringement
suit,  Bank,  upon notice from Borrower of Borrower's  intent to file such suit,
shall  either  join in such suit or reassign to  Borrower  Bank's  rights  under
Section 2(iii). Any expense incurred in connection with such activities shall be
borne by Borrower.

      (H) Borrower shall continue to use reasonable and proper  statutory notice
in connection with its use of each registered trademark or service mark.

5.    Transfers and Other Liens

      Borrower shall not:

      (A) sell,  assign (by operation of law or otherwise) or otherwise  dispose
of any of the Trademark Collateral, except as permitted by the Credit Agreement;

      (B) create or suffer to exist any lien,  security interest or other charge
or encumbrance upon or with respect to any of the Trademark Collateral except as
otherwise  disclosed  in Schedule  I, or as  otherwise  permitted  by the Credit
Agreement; or

      (C)  take  any  other  action  in  connection  with  any of the  Trademark
Collateral that would impair the value of the interests or rights  thereunder of
Borrower.

6.    Bank Appointed Attorney-in-Fact

      Borrower hereby irrevocably appoints Bank as Borrower's  attorney-in-fact,
with full authority in Borrower's place,  stead and on behalf of Borrower and in
Borrower's  name or  otherwise,  from time to time in Bank's  sole and  absolute
discretion,  to take any action and to execute any instrument that Bank may deem
necessary or advisable to accomplish the purposes of this Agreement,  including,
without limitation:  (i) to ask, demand, collect, sue for, recover,  compromise,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Trademark Collateral;  (ii) to receive, endorse, and
collect  any  drafts or other  instruments,  documents  and  chattel  paper,  in
connection  with  clause  (i)  above;  and (iii) to file any  claims or take any
action or institute any  proceedings  that Bank may deem  necessary or desirable
for the  collection of any of the  Trademark  Collateral or otherwise to enforce
the rights of Bank with respect to any of the Trademark Collateral.

7.    Bank May Perform

      (A) If Borrower fails to perform any of its obligations  contained herein,
Bank may itself  perform,  or cause  performance of, such  obligations,  and the
expenses of Bank incurred in connection  therewith  shall be payable by Borrower
under Paragraph 10(B).

      (B) Bank, or its designated representatives,  shall have the right, at all
times, to inspect Borrower's  premises and to examine Borrower's books,  records
and operations relating to the Trademark Collateral.

8.    Bank's Duties

      The powers  conferred on Bank hereunder are solely to protect its interest
in the Trademark  Collateral and shall not impose any duty upon Bank to exercise
any such powers.  Except for the safe custody of any Trademark Collateral in its
possession and the accounting for moneys actually received by it hereunder, Bank
shall have no duty as to any  Trademark  Collateral,  or as to the taking of any
necessary  steps to preserve  rights  against  other parties or any other rights
pertaining to any Trademark  Collateral.  Bank shall be deemed to have exercised
reasonable care in the custody and  preservation of the Trademark  Collateral in
its possession if the Trademark  Collateral is accorded treatment  substantially
equal to that which Bank accords its own property.

9.    Remedies

      If any Event of Default shall have occurred and be continuing:

      (A) Bank may exercise in respect of the Trademark Collateral,  in addition
to other rights and remedies provided for herein or otherwise available to Bank,
all the  rights  and  remedies  of a  secured  party on  default  under the Code
(whether or not the Code applies to the affected Trademark  Collateral) and also
may (i) exercise any and all rights and remedies of Borrower  under or otherwise
in respect of the Trademark  Collateral;  (ii) require Borrower to, and Borrower
hereby  agrees that it will at its expense and upon  request of Bank  forthwith,
assemble all or any part of the documents embodying the Trademark  Collateral as
directed by Bank and make them  available to Bank at a place to be designated by
Bank which is reasonably convenient to both Bank and Borrower,  (iii) occupy any
premises  owned or leased by Borrower  where  documents  embodying the Trademark
Collateral or any part thereof are assembled for a reasonable period in order to
effectuate  Bank's  rights and  remedies  hereunder  or under law,  without  any
obligation to Borrower in respect of such occupation, (iv) license the Trademark
Collateral  or any part thereof,  or assign its rights to the Trademark  License
Rights to any Person, and (v) without notice except as specified below, sell the
Trademark  Collateral  or any part  thereof in one or more  parcels at public or
private sale, at any of Bank's offices or elsewhere,  for cash, on credit or for
future  delivery,  and upon  such  other  terms  as Bank  may deem  commercially
reasonable. In the event of any sale, assignment, or other disposition of any of
the  Trademark  Collateral,  the  goodwill of the  business  connected  with and
symbolized  by any Trademark  Collateral  subject to such  disposition  shall be
included,  and Borrower shall supply to Bank or its designee Borrower's know-how
and expertise  relating to the manufacture and sale of products or the provision
of services  relating to any Trademark  Collateral  subject to such disposition,
and  Borrower's  customer  lists and other  records  relating to such  Trademark
Collateral  and to the  distribution  of such  products and  services.  Borrower
agrees  that,  to the extent  notice of sale shall be  required by law, at least
five days  notice to  Borrower  of the time and place of any public  sale or the
time after  which any  private  sale is to be made shall  constitute  reasonable
notification.  Bank  shall not be  obligated  to make any sale of any  Trademark
Collateral  regardless of notice of sale having been given. Bank may adjourn any
public or private sale from time to time by  announcement  at the time and place
fixed therefor,  and such sale may, without further notice,  be made at the time
and place to which it was so adjourned.

      (B) All payments  received by Borrower under or in connection  with any of
the  Trademark  Collateral  shall be  received in trust for the benefit of Bank,
shall be  segregated  from other funds of Borrower and shall be  forthwith  paid
over to Bank in the same form as so received (with any necessary endorsement).

      (C) All  payments  made  hereunder or in  connection  with or otherwise in
respect of the Trademark  Collateral  and all cash proceeds  received by Bank in
respect of any sale of,  collection  from, or other  realization upon all or any
part of the Trademark Collateral may, in the discretion of Bank, be held by Bank
as collateral for, and/or then or at any time thereafter  applied (after payment
of any amounts  payable to Bank pursuant to Paragraph 10) in whole or in part by
Bank against,  all or any part of the  Obligations,  in such order as Bank shall
elect.  Any  surplus of such cash or cash  proceeds  held by Bank and  remaining
after  payment in full, in cash,  of all the  Obligations  shall be paid over to
Borrower or to whomsoever may be lawfully entitled to receive such surplus.

10.   Indemnity and Expenses

      (A) Borrower  agrees to indemnify  and hold Bank harmless from and against
any and all claims, losses and liabilities arising out of or resulting from this
Agreement or the transactions  contemplated  hereby,  or the enforcement of this
Agreement,   including,  without  limitation,   claims,  losses  or  liabilities
resulting from Bank's  negligence,  but excluding claims,  losses or liabilities
resulting  from Bank's bad faith or willful  misconduct as determined by a final
judgment of a court of competent jurisdiction.

      (B)  Borrower,  upon  demand,  will pay to Bank the  amount of any and all
reasonable  expenses,  including,  without  limitation,  the reasonable fees and
disbursements of its counsel (whether  incurred at the trial or appellate level,
in an arbitration proceeding, in a bankruptcy, including, without limitation any
adversary  proceeding,  contested  matter  or motion  or  otherwise)  and of any
experts and agents,  which Bank may incur in connection  with any and all of the
following  (i)  the   administration  of  this  Agreement,   (ii)  the  custody,
preservation,  use or operation  of, or the sale of,  collection  from, or other
realization  upon,  any of the  Trademark  Collateral,  (iii)  the  exercise  or
enforcement of any of Bank's rights  hereunder,  or (iv) the failure by Borrower
to perform or observe any of the provisions hereof.

11.   Amendments, Waivers, Consents

      No amendment or waiver of any  provision of this  Agreement nor consent to
any departure by Borrower  herefrom shall in any event be effective  unless such
amendment  or waiver  shall be in  writing  and  signed  by Bank,  and then such
amendment or waiver shall be effective only in the specific instance and for the
specific purpose for which it was given.

12.   Notices

      All  notices,  requests  and  demands  which any party is  required or may
desire to give to any other party under any provision of this  Agreement must be
in writing delivered to each party at the following address:

      BORROWER:         Hardee Williams, Inc.
                        c/o Williams Controls, Inc.
                        14100 SW 72nd Avenue
                        Portland, OR  97224
                        Attn:  Thomas W. Itin, Chairman
                        Telecopy No.:  (248) 851-9080

      BANK:             Wells Fargo Bank, National Association
                           Commercial Finance Division
                        245 S. Los Robles Ave., Ste. 600
                               Pasadena, CA 91101
                             Attn: Angelo Samperisi
                          Telecopy No.: (818) 884-9063

or to such other  address as any party may  designate  by written  notice to all
other  parties.  Each such  notice,  request and demand shall be deemed given or
made as follows:  (a) if sent by hand delivery,  upon  delivery;  (b) if sent by
mail, upon the earlier of the date of receipt or three days after deposit in the
U.S. mail,  first class and postage prepaid;  and (c) if sent by telecopy,  upon
receipt  and the sender  will  endeavor  to send a hard copy of such  telecopied
notice to the recipient by mail.

13.   Miscellaneous

      (A) This  Agreement  shall  create a continuing  security  interest in the
Trademark Collateral and shall (i) remain in full force and effect until payment
in full,  in cash,  of the  Obligations,  (ii) be  binding  upon  Borrower,  its
successors and assigns,  and (iii) inure,  together with the rights and remedies
of Bank hereunder, to the benefit of Bank, its successors and assigns.

      (B) Upon the full  payment  of all  Obligations,  the liens  and  security
interests  granted  hereby  shall  terminate  and all  rights  to the  Trademark
Collateral shall revert to Borrower.  Upon any such  termination,  Bank will, at
Borrower's  expense,  execute and deliver to Borrower such documents as Borrower
shall reasonably request to evidence such termination and reversion.

      (C) If any term or provision of this Agreement is or shall become illegal,
invalid or unenforceable in any jurisdiction,  all other terms and provisions of
this Agreement shall remain legal,  valid and  enforceable in such  jurisdiction
and such illegal,  invalid or unenforceable  provision shall be legal, valid and
enforceable in any other jurisdiction.

      (D) THIS AGREEMENT  SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF
THE PARTIES HERETO  DETERMINED IN ACCORDANCE  WITH THE LOCAL LAW OF THE STATE OF
OREGON,  EXCLUDING ANY CONFLICTS OF LAW RULE OR PRINCIPLE  THAT MIGHT  OTHERWISE
REFER CONSTRUCTION OR INTERPRETATION OF THIS AGREEMENT TO THE SUBSTANTIVE LAW OF
ANOTHER JURISDICTION, AND ALL OTHER LAWS OF MANDATORY APPLICATION.

      (E) AS A  SPECIFICALLY  BARGAINED  INDUCEMENT  FOR BANK TO ENTER INTO THIS
AGREEMENT AND EXTEND CREDIT TO BORROWER,  BORROWER AND BANK EACH WAIVES TRIAL BY
JURY WITH  RESPECT TO ANY ACTION,  CLAIM,  SUIT OR  PROCEEDING  IN RESPECT OF OR
ARISING OUT OF THIS AGREEMENT.

      (F) The captions in this  Agreement  are for  reference  purposes only and
shall not  relate to or affect  in any way the  construction  or  interpretation
hereof.

      (G) The  representations,  warranties,  covenants and agreements contained
herein or in any Schedule attached hereto shall survive the execution hereof.



<PAGE>



      IN WITNESS WHEREOF, Borrower has caused this Agreement to be duly executed
and delivered by its officer thereunto duly authorized as ofJuly 11, 1997.

                              HARDEE WILLIAMS, INC.



                              By:____________________________

                              Title:___________________________



STATE OF OREGON         )
                              ) SS:
COUNTY OF MULTNOMAH     )

      The foregoing  Trademark  Security Agreement was executed and acknowledged
before me on July 11, 1997, by ______________________, personally known to me to
be the _____________ of Hardee Williams, Inc., a Delaware corporation, on behalf
of such corporation.


                                  Notary Public
                             My Commission Expires:



Accepted as of July 11, 1997.

WELLS FARGO BANK, NATIONAL ASSOCIATION



By:
    Vice President



<PAGE>



                                SCHEDULE I
                                    TO
                       TRADEMARK SECURITY AGREEMENT



1.    Trademark Registrations

      Reg. No. 1,511,526
      Reg. No. 1,511,527


<PAGE>
                       TRADEMARK SECURITY AGREEMENT



      THIS TRADEMARK SECURITY AGREEMENT between KENCO/WILLIAMS, INC., a
Delaware corporation ("Borrower"), and WELLS FARGO BANK, NATIONAL
ASSOCIATION  ("Bank"), is as follows:



1.    Preliminary Statements

      (A) Borrower has executed and delivered this Agreement to Bank in order to
induce Bank (i) to enter into the Credit  Agreement  executed  and  delivered by
Borrower (together with other borrowers) contemporaneously herewith (said Credit
Agreement,  as it may hereafter be amended or otherwise  modified is hereinafter
referred to as the "Credit  Agreement"),  and (ii) to make advances  pursuant to
the Credit Agreement.

      (B) All  capitalized  terms used herein and not otherwise  defined  herein
shall have the meaning attributed to them in the Credit Agreement.

2.    Grant of Security

      As security for the full and prompt performance of all of the Obligations,
Borrower  hereby  assigns,  pledges  and  grants to Bank a lien on and  security
interest in Borrower's entire right,  title and interest in and to the Trademark
Collateral.  As  used  herein,  "Trademark  Collateral"  means:  (i)  all of the
Borrower's right,  title and interest in and to all of its now owned or existing
and filed and hereafter  acquired or arising and filed Trademark  License Rights
(as  defined  below),  trademarks,  service  marks,  trademark  or service  mark
registrations,   trade  names,  and  trademark  or  service  mark  applications,
including,  without limitation, each mark, registration,  and application listed
on  Schedule  I,  attached  hereto  and made a part  hereof,  (ii) all  renewals
thereof, (iii) all income, royalties, damages and payments now and hereafter due
and/or payable with respect thereto, including, without limitation,  damages and
payment  for past or future  infringements  thereof,  (iv) all rights to sue for
past, present and future  infringements  thereof,  (v) all rights  corresponding
thereto  throughout the world,  and (vi) together in each case with the goodwill
of Borrower's  business connected with the use of, and symbolized by, such marks
and rights.  "Trademark License Rights" means Borrower's entire right, title and
interest  in, to and under  all  license  agreements  with any  Person,  whether
Borrower is licensor or licensee, with respect to any trademarks, service marks,
or tradenames, including, without limitation, the licenses listed on Schedule I.

3.    Representations and Warranties

      Subject to any  exceptions  listed on Schedule I, Borrower  represents and
warrants as follows:

      (A) Borrower is the sole and exclusive  owner of the entire and encumbered
right,  title and interest in and to each of the Trademark  Collateral  free and
clear of any liens, charges and encumbrances.

      (B) Schedule I sets forth a complete and  accurate  list of all  Trademark
License Rights,  trademarks,  trade names, service marks,  trademark and service
mark registrations, and applications for trademark or service mark registrations
owned by Borrower.

      (C) Each trademark,  service mark, trade name,  trademark and service mark
registration,  and  application  for  trademark  or  service  mark  registration
identified  in  Schedule  I is  subsisting  and has not been  adjudged  invalid,
unregistrable  or  unenforceable,  in  whole or in  part,  and  each  registered
trademark and service mark and each  application  for trademark and service mark
registration is valid,  registered or registrable and  enforceable.  Borrower is
not aware of any prior use of any item of Trademark  Collateral which could lead
to such item becoming  invalid or  unenforceable,  including prior  unauthorized
uses by third  parties and uses which were not  supported by the goodwill of the
business connected with such item.

      (D) Borrower has not granted any license, release, covenant not to sue, or
non-assertion  assurance  to any third  person  with  respect to any part of the
Trademark Collateral.

      (E) Borrower has used reasonable and proper statutory notice in connection
with its use of each registered trademark and service mark.

      (F) The current  conduct of Borrower's  business does not conflict with or
infringe any  proprietary  right of any third party in any way which  materially
adversely affects the business, financial condition or business prospects of the
Borrower or its  affiliates,  and no one has  asserted to Borrower or any of its
affiliates that such conduct  conflicts with or infringes any valid  proprietary
right of any  third  party in any way which  materially  adversely  affects  the
business, financial condition or business prospects of the Borrower.

      (G) The Trademark License Rights are in full force and effect; Borrower is
not in  default  under any of the  Trademark  License  Rights;  and no event has
occurred which with notice or the passage of time, or both,  might  constitute a
default by Borrower under any of the Trademark License Rights.

      (H) No authorization, consent, approval, or other action by, and no notice
to or filing or recording  with, any  governmental,  administrative  or judicial
authority  or  regulatory  body is  currently  or is  reasonably  expected to be
required for the grant by Borrower of the liens and security  interests  granted
hereby or for the  execution,  delivery  or  performance  of this  Agreement  by
Borrower,  other than routine action which may be required after the date hereof
to maintain rights in the  trademarks,  or for the perfection of or the exercise
by Bank of its rights and remedies hereunder.

4.    Further Assurances

      (A)  Borrower  agrees  that from  time to time,  at its  expense,  it will
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or desirable,  or that Bank may reasonably
request,  in order (i) to continue,  perfect and protect the  assignment and the
security  interest  granted or purported to be granted  hereby or (ii) to enable
Bank to exercise and enforce its rights and remedies  hereunder  with respect to
any part of the Trademark  Collateral.  Without  limiting the  generality of the
foregoing,  the Borrower  will execute and file such  financing or  continuation
statements,  amendments  hereto, and such other instruments or notices as may be
necessary or desirable,  or as Bank may reasonably  request, in order to perfect
and preserve the security interest granted or purported to be granted hereby.

      (B)  Borrower  hereby  authorizes  Bank to file one or more  financing  or
continuation statements,  and amendments thereto, relative to all or any part of
the Trademark  Collateral  without the signature of Borrower where  permitted by
law. A carbon,  photographic  or other  reproduction  of this  Agreement  or any
financing statement covering the Trademark  Collateral or any part thereof shall
be sufficient as a financing statement where permitted by law.

      (C)  Borrower  will  furnish  to Bank  from  time to time  statements  and
schedules further  identifying and describing the Trademark  Collateral and such
other reports in connection with the Trademark Collateral as Bank may reasonably
request, all in reasonable detail.

      (D) Borrower  agrees that,  should it obtain an ownership  interest in any
Trademark  License Rights,  trademark,  service mark,  trade name,  trademark or
service  mark  registration,  or  application  for  trademark  or  service  mark
registration  which is not now identified in Schedule I, (i) Borrower shall give
prompt written notice thereof to Bank,  (ii) the provisions of Paragraph 2 shall
automatically  apply to any such Trademark  License Rights,  trademark,  service
mark,  trademark or service mark  registration,  or application for trademark or
service mark  registration,  and (iii) any such Trademark License Rights,  mark,
registration,  or  application,  together  with  the  goodwill  of the  business
connected  with the use of the mark and  symbolized  by it, shall  automatically
become part of the Trademark Collateral. Borrower authorizes Bank to modify this
Agreement  by  amending  Schedule I to include  any  Trademark  License  Rights,
trademark, service mark, trademark or service mark registration,  or application
for trademark or service mark  registration  which becomes part of the Trademark
Collateral  under this  Paragraph and the goodwill of the business to which each
such mark pertains.

      (E) With respect to any  trademark  necessary to the conduct of Borrower's
business,  Borrower agrees to take all necessary steps in any proceeding  before
the United States Patent and Trademark Office or any similar office or agency in
any  other  country  or any  political  subdivision  thereof  or in any court to
maintain each registered trademark,  service mark, and trademark or service mark
registration,  and to pursue each  application  for  trademark  or service  mark
registration now or hereafter  included in the Trademark  Collateral,  including
the filing of  applications  for renewal,  the payment of maintenance  fees, and
participation in opposition,  interference and infringement proceedings.  To the
extent necessary or desirable to the conduct of its business, Borrower agrees to
take corresponding steps with respect to each new or other registered trademark,
service  mark  trademark  or service  mark  registration,  and  application  for
trademark  or service  mark  registration  to which the Borrower is now or later
becomes entitled. Any expenses incurred in connection with such activities shall
be borne by Borrower.  Without the prior written consent of Bank, Borrower shall
not abandon  any right to file an  application  for  trademark  or service  mark
registration,  or abandon any pending  application,  registration,  trademark or
service mark.

      (F) Borrower agrees to notify Bank immediately if Borrower learns (i) that
any item of the Trademark  Collateral may become abandoned;  (ii) of any adverse
determination or any development (including, without limitation, the institution
of any proceeding in the United States Patent and Trademark Office or any court)
regarding  any  item  of  the  Trademark  Collateral;  or  (iii)  that  it is or
potentially could be in default of any of the Trademark License Rights.

      (G) If Borrower becomes aware that any item of the Trademark Collateral is
infringed or  misappropriated  by a third party,  Borrower shall promptly notify
Bank and shall take such actions as are  necessary  under the  circumstances  to
protect such Trademark  Collateral.  If Borrower  elects to file an infringement
suit,  Bank,  upon notice from Borrower of Borrower's  intent to file such suit,
shall  either  join in such suit or reassign to  Borrower  Bank's  rights  under
Section 2(iii). Any expense incurred in connection with such activities shall be
borne by Borrower.

      (H) Borrower shall continue to use reasonable and proper  statutory notice
in connection with its use of each registered trademark or service mark.

5.    Transfers and Other Liens

      Borrower shall not:

      (A) sell,  assign (by operation of law or otherwise) or otherwise  dispose
of any of the Trademark Collateral, except as permitted by the Credit Agreement;

      (B) create or suffer to exist any lien,  security interest or other charge
or encumbrance upon or with respect to any of the Trademark Collateral except as
otherwise  disclosed  in Schedule  I, or as  otherwise  permitted  by the Credit
Agreement; or

      (C)  take  any  other  action  in  connection  with  any of the  Trademark
Collateral that would impair the value of the interests or rights  thereunder of
Borrower.

6.    Bank Appointed Attorney-in-Fact

      Borrower hereby irrevocably appoints Bank as Borrower's  attorney-in-fact,
with full authority in Borrower's place,  stead and on behalf of Borrower and in
Borrower's  name or  otherwise,  from time to time in Bank's  sole and  absolute
discretion,  to take any action and to execute any instrument that Bank may deem
necessary or advisable to accomplish the purposes of this Agreement,  including,
without limitation:  (i) to ask, demand, collect, sue for, recover,  compromise,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Trademark Collateral;  (ii) to receive, endorse, and
collect  any  drafts or other  instruments,  documents  and  chattel  paper,  in
connection  with  clause  (i)  above;  and (iii) to file any  claims or take any
action or institute any  proceedings  that Bank may deem  necessary or desirable
for the  collection of any of the  Trademark  Collateral or otherwise to enforce
the rights of Bank with respect to any of the Trademark Collateral.

7.    Bank May Perform

      (A) If Borrower fails to perform any of its obligations  contained herein,
Bank may itself  perform,  or cause  performance of, such  obligations,  and the
expenses of Bank incurred in connection  therewith  shall be payable by Borrower
under Paragraph 10(B).

      (B) Bank, or its designated representatives,  shall have the right, at all
times, to inspect Borrower's  premises and to examine Borrower's books,  records
and operations relating to the Trademark Collateral.

8.    Bank's Duties

      The powers  conferred on Bank hereunder are solely to protect its interest
in the Trademark  Collateral and shall not impose any duty upon Bank to exercise
any such powers.  Except for the safe custody of any Trademark Collateral in its
possession and the accounting for moneys actually received by it hereunder, Bank
shall have no duty as to any  Trademark  Collateral,  or as to the taking of any
necessary  steps to preserve  rights  against  other parties or any other rights
pertaining to any Trademark  Collateral.  Bank shall be deemed to have exercised
reasonable care in the custody and  preservation of the Trademark  Collateral in
its possession if the Trademark  Collateral is accorded treatment  substantially
equal to that which Bank accords its own property.

9.    Remedies

      If any Event of Default shall have occurred and be continuing:

      (A) Bank may exercise in respect of the Trademark Collateral,  in addition
to other rights and remedies provided for herein or otherwise available to Bank,
all the  rights  and  remedies  of a  secured  party on  default  under the Code
(whether or not the Code applies to the affected Trademark  Collateral) and also
may (i) exercise any and all rights and remedies of Borrower  under or otherwise
in respect of the Trademark  Collateral;  (ii) require Borrower to, and Borrower
hereby  agrees that it will at its expense and upon  request of Bank  forthwith,
assemble all or any part of the documents embodying the Trademark  Collateral as
directed by Bank and make them  available to Bank at a place to be designated by
Bank which is reasonably convenient to both Bank and Borrower,  (iii) occupy any
premises  owned or leased by Borrower  where  documents  embodying the Trademark
Collateral or any part thereof are assembled for a reasonable period in order to
effectuate  Bank's  rights and  remedies  hereunder  or under law,  without  any
obligation to Borrower in respect of such occupation, (iv) license the Trademark
Collateral  or any part thereof,  or assign its rights to the Trademark  License
Rights to any Person, and (v) without notice except as specified below, sell the
Trademark  Collateral  or any part  thereof in one or more  parcels at public or
private sale, at any of Bank's offices or elsewhere,  for cash, on credit or for
future  delivery,  and upon  such  other  terms  as Bank  may deem  commercially
reasonable. In the event of any sale, assignment, or other disposition of any of
the  Trademark  Collateral,  the  goodwill of the  business  connected  with and
symbolized  by any Trademark  Collateral  subject to such  disposition  shall be
included,  and Borrower shall supply to Bank or its designee Borrower's know-how
and expertise  relating to the manufacture and sale of products or the provision
of services  relating to any Trademark  Collateral  subject to such disposition,
and  Borrower's  customer  lists and other  records  relating to such  Trademark
Collateral  and to the  distribution  of such  products and  services.  Borrower
agrees  that,  to the extent  notice of sale shall be  required by law, at least
five days  notice to  Borrower  of the time and place of any public  sale or the
time after  which any  private  sale is to be made shall  constitute  reasonable
notification.  Bank  shall not be  obligated  to make any sale of any  Trademark
Collateral  regardless of notice of sale having been given. Bank may adjourn any
public or private sale from time to time by  announcement  at the time and place
fixed therefor,  and such sale may, without further notice,  be made at the time
and place to which it was so adjourned.

      (B) All payments  received by Borrower under or in connection  with any of
the  Trademark  Collateral  shall be  received in trust for the benefit of Bank,
shall be  segregated  from other funds of Borrower and shall be  forthwith  paid
over to Bank in the same form as so received (with any necessary endorsement).

      (C) All  payments  made  hereunder or in  connection  with or otherwise in
respect of the Trademark  Collateral  and all cash proceeds  received by Bank in
respect of any sale of,  collection  from, or other  realization upon all or any
part of the Trademark Collateral may, in the discretion of Bank, be held by Bank
as collateral for, and/or then or at any time thereafter  applied (after payment
of any amounts  payable to Bank pursuant to Paragraph 10) in whole or in part by
Bank against,  all or any part of the  Obligations,  in such order as Bank shall
elect.  Any  surplus of such cash or cash  proceeds  held by Bank and  remaining
after  payment in full, in cash,  of all the  Obligations  shall be paid over to
Borrower or to whomsoever may be lawfully entitled to receive such surplus.

10.   Indemnity and Expenses

      (A) Borrower  agrees to indemnify  and hold Bank harmless from and against
any and all claims, losses and liabilities arising out of or resulting from this
Agreement or the transactions  contemplated  hereby,  or the enforcement of this
Agreement,   including,  without  limitation,   claims,  losses  or  liabilities
resulting from Bank's  negligence,  but excluding claims,  losses or liabilities
resulting  from Bank's bad faith or willful  misconduct as determined by a final
judgment of a court of competent jurisdiction.

      (B)  Borrower,  upon  demand,  will pay to Bank the  amount of any and all
reasonable  expenses,  including,  without  limitation,  the reasonable fees and
disbursements of its counsel (whether  incurred at the trial or appellate level,
in an arbitration proceeding, in a bankruptcy, including, without limitation any
adversary  proceeding,  contested  matter  or motion  or  otherwise)  and of any
experts and agents,  which Bank may incur in connection  with any and all of the
following  (i)  the   administration  of  this  Agreement,   (ii)  the  custody,
preservation,  use or operation  of, or the sale of,  collection  from, or other
realization  upon,  any of the  Trademark  Collateral,  (iii)  the  exercise  or
enforcement of any of Bank's rights  hereunder,  or (iv) the failure by Borrower
to perform or observe any of the provisions hereof.

11.   Amendments, Waivers, Consents

      No amendment or waiver of any  provision of this  Agreement nor consent to
any departure by Borrower  herefrom shall in any event be effective  unless such
amendment  or waiver  shall be in  writing  and  signed  by Bank,  and then such
amendment or waiver shall be effective only in the specific instance and for the
specific purpose for which it was given.

12.   Notices

      All  notices,  requests  and  demands  which any party is  required or may
desire to give to any other party under any provision of this  Agreement must be
in writing delivered to each party at the following address:

      BORROWER:         Kenco/Williams, Inc.
                        c/o Williams Controls, Inc.
                        14100 SW 72nd Avenue
                        Portland, OR  97224
                        Attn:  Thomas W. Itin, Chairman
                        Telecopy No.:  (248) 851-9080

      BANK:             Wells Fargo Bank, National Association
                           Commercial Finance Division
                        245 S. Los Robles Ave., Ste. 600
                               Pasadena, CA 91101
                             Attn: Angelo Samperisi
                          Telecopy No.: (818) 884-9063

or to such other  address as any party may  designate  by written  notice to all
other  parties.  Each such  notice,  request and demand shall be deemed given or
made as follows:  (a) if sent by hand delivery,  upon  delivery;  (b) if sent by
mail, upon the earlier of the date of receipt or three days after deposit in the
U.S. mail,  first class and postage prepaid;  and (c) if sent by telecopy,  upon
receipt  and the sender  will  endeavor  to send a hard copy of such  telecopied
notice to the recipient by mail.

13.   Miscellaneous

      (A) This  Agreement  shall  create a continuing  security  interest in the
Trademark Collateral and shall (i) remain in full force and effect until payment
in full,  in cash,  of the  Obligations,  (ii) be  binding  upon  Borrower,  its
successors and assigns,  and (iii) inure,  together with the rights and remedies
of Bank hereunder, to the benefit of Bank, its successors and assigns.

      (B) Upon the full  payment  of all  Obligations,  the liens  and  security
interests  granted  hereby  shall  terminate  and all  rights  to the  Trademark
Collateral shall revert to Borrower.  Upon any such  termination,  Bank will, at
Borrower's  expense,  execute and deliver to Borrower such documents as Borrower
shall reasonably request to evidence such termination and reversion.

      (C) If any term or provision of this Agreement is or shall become illegal,
invalid or unenforceable in any jurisdiction,  all other terms and provisions of
this Agreement shall remain legal,  valid and  enforceable in such  jurisdiction
and such illegal,  invalid or unenforceable  provision shall be legal, valid and
enforceable in any other jurisdiction.

      (D) THIS AGREEMENT  SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF
THE PARTIES HERETO  DETERMINED IN ACCORDANCE  WITH THE LOCAL LAW OF THE STATE OF
OREGON,  EXCLUDING ANY CONFLICTS OF LAW RULE OR PRINCIPLE  THAT MIGHT  OTHERWISE
REFER CONSTRUCTION OR INTERPRETATION OF THIS AGREEMENT TO THE SUBSTANTIVE LAW OF
ANOTHER JURISDICTION, AND ALL OTHER LAWS OF MANDATORY APPLICATION.

      (E) AS A  SPECIFICALLY  BARGAINED  INDUCEMENT  FOR BANK TO ENTER INTO THIS
AGREEMENT AND EXTEND CREDIT TO BORROWER,  BORROWER AND BANK EACH WAIVES TRIAL BY
JURY WITH  RESPECT TO ANY ACTION,  CLAIM,  SUIT OR  PROCEEDING  IN RESPECT OF OR
ARISING OUT OF THIS AGREEMENT.

      (F) The captions in this  Agreement  are for  reference  purposes only and
shall not  relate to or affect  in any way the  construction  or  interpretation
hereof.

      (G) The  representations,  warranties,  covenants and agreements contained
herein or in any Schedule attached hereto shall survive the execution hereof.



<PAGE>



      IN WITNESS WHEREOF, Borrower has caused this Agreement to be duly executed
and delivered by its officer thereunto duly authorized as of July 11, 1997.

                              KENCO/WILLIAMS, INC.



                              By:____________________________

                              Title:___________________________



STATE OF OREGON         )
                              ) SS:
COUNTY OF MULTNOMAH     )

      The foregoing  Trademark  Security Agreement was executed and acknowledged
before me on July 11, 1997, by ______________________, personally known to me to
be the _____________ of Kenco/Williams,  Inc., a Delaware corporation, on behalf
of such corporation.


                                  Notary Public
                             My Commission Expires:



Accepted as of July 11, 1997.

WELLS FARGO BANK, NATIONAL ASSOCIATION



By:
    Vice President



<PAGE>



                                SCHEDULE I
                                    TO
                       TRADEMARK SECURITY AGREEMENT



1.    Trademark Registrations

      Reg. No. 1,879,664
      Reg. No. 1,755,176
      Reg. No. 1,484,182