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                        SUBSIDIARY BORROWER SECURITY AGREEMENT


       AGREEMENT (this "AGREEMENT"), dated as of February 12, 1999, between 
THE COLEMAN COMPANY, INC. (with its successors, the "SUBSIDIARY BORROWER") 
and FIRST UNION NATIONAL BANK, as Administrative Agent (with its successors 
in such capacity, the "ADMINISTRATIVE AGENT").

                                 W I T N E S S E T H:

              WHEREAS, Sunbeam Corporation (with its successors, the 
"PARENT"), the Subsidiary Borrowers referred to therein, the Lenders party 
thereto, Morgan Stanley Senior Funding, Inc., as Syndication Agent, Bank of 
America National Trust and Savings Association, as Documentation Agent, and 
First Union National Bank, as Administrative Agent, are parties to a Credit 
Agreement dated as of March 30, 1998 (as amended, supplemented or otherwise 
modified from time to time, the "CREDIT AGREEMENT"); and

              WHEREAS, as of the date hereof, the Subsidiary Borrower, the 
Parent and the Administrative Agent have entered into a Subsidiary Borrowing 
Agreement (as amended, supplemented or otherwise modified from time to time, 
the "SUBSIDIARY BORROWING AGREEMENT"); and

              WHEREAS, in order to induce the Lenders and the Administrative 
Agent to permit the Subsidiary Borrower to become a party to the Credit 
Agreement by executing the Subsidiary Borrowing Agreement, the Subsidiary 
Borrower has agreed to grant a continuing security interest in and to the 
Collateral (as hereafter defined) to secure the Secured Obligations (as 
hereafter defined);

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

              SECTION 1.  DEFINITIONS.  Terms defined in the Credit Agreement 
and not otherwise defined herein have, as used herein, the respective 
meanings provided for therein.  The following additional terms, as used 
herein, have the following respective meanings:

              "COLLATERAL" has the meaning set forth in Section 3.

              "DOCUMENTS" means all "documents" (as defined in the UCC) or 
other receipts covering, evidencing or representing Inventory, now owned or 
hereafter acquired by the Subsidiary Borrower.

              "INVENTORY" means all "INVENTORY" (as defined in the UCC), now 
owned or hereafter acquired by the Subsidiary Borrower, wherever located, and 
shall also mean and include, without 

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limitation, all raw materials and other materials and supplies, 
work-in-process and finished goods and any products made or processed 
therefrom and all substances, if any, commingled therewith or added thereto.

              "LETTER OF CREDIT OBLIGATION" means at any time any 
reimbursement obligation of the Subsidiary Borrower with respect to any LC 
Disbursement or other obligation of the Subsidiary Borrower to make a payment 
in connection with a Letter of Credit issued for the account of the 
Subsidiary Borrower, including contingent obligations with respect to amounts 
which are then, or may thereafter become, available for drawing under Letters 
of Credit issued for the account of the Subsidiary Borrower and then 
outstanding.

              "LIQUID INVESTMENTS" means Permitted Investments; PROVIDED that 
(i) each Liquid Investment shall mature within 30 days after it is acquired 
by the Administrative Agent and (ii) in order to provide the Administrative 
Agent, for the benefit of the Secured Parties, with a perfected security 
interest therein, each Liquid Investment shall be either:

              (A)  evidenced by negotiable certificates or instruments, or, if
          non-negotiable, then issued in the name of the Administrative
          Agent, which (together with any appropriate instruments of
          transfer) are delivered to, and held by, the Administrative Agent
          or an agent thereof (which shall not be the Parent or any of its
          Affiliates) in the State of New York or North Carolina; or

              (B)  in book-entry form and issued by the United States and
          subject to pledge under applicable state law and Treasury
          regulations and as to which (in the opinion of counsel to the
          Administrative Agent) appropriate measures shall have been taken
          for perfection of the Security Interests.

              "PERFECTION CERTIFICATE" means a certificate substantially in 
the form of Exhibit A, completed and supplemented with the schedules and 
attachments contemplated thereby to the satisfaction of the Administrative 
Agent, and duly executed by the chief legal officer of the Subsidiary 
Borrower.

              "PERMITTED LIENS" means the Security Interests and the Liens on 
the Collateral permitted to be created, to be assumed or to exist pursuant to 
Section 6.02 of the Credit Agreement.

              "PROCEEDS" means all proceeds of, and all other profits, 
products, rents or receipts, in whatever form, arising from the collection, 
sale, lease, exchange, assignment, licensing or other disposition of, or 
other realization upon, Collateral, including without limitation all claims 
of the Subsidiary Borrower 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, in each 
case whether now existing or hereafter arising.

              "SECURED OBLIGATIONS" means the obligations secured under this 
Agreement, including all obligations of the Subsidiary Borrower under or in 
respect of the Subsidiary Borrowing Agreement and the Credit Agreement, 
including without limitation, its obligations in 

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respect of (i) all principal of and interest (including, without limitation, 
any interest which accrues after or would accrue but for the commencement of 
any case, proceeding or other action relating to the bankruptcy, insolvency 
or reorganization of the Subsidiary Borrower, whether or not allowed or 
allowable as a claim in any such proceeding) on any loan made to the 
Subsidiary Borrower under, or any note issued by the Subsidiary Borrower 
pursuant to, the Credit Agreement, (ii) all Letter of Credit Obligations and 
all interest thereon (including without limitation, any interest which 
accrues after or would accrue but for the commencement of any case, 
proceeding or other action relating to the bankruptcy, insolvency or 
reorganization of the Subsidiary Borrower, whether or not allowed or 
allowable as a claim in any such proceeding), (iii) all other amounts payable 
by the Subsidiary Borrower under the Subsidiary Borrowing Agreement, the 
Credit Agreement and any other Loan Document to which the Subsidiary Borrower 
is a party, and (iv) any renewals or extensions of any of the foregoing; it 
being understood that, unless and until the Subsidiary Borrower becomes a 
Subsidiary Guarantor, the Secured Obligations shall not include the 
obligations of the Parent or any other Obligor (other than the Subsidiary 
Borrower) under the Credit Agreement or any other Loan Document.

              "SECURED PARTIES" means the Agents and the Lenders, and 
"SECURED PARTY" means any of them.

              "SECURITY INTERESTS" means the security interests in the 
Collateral granted hereunder securing the Secured Obligations.

              "UCC" means the Uniform Commercial Code as in effect on the 
date hereof in the State of New York; PROVIDED that if by reason of mandatory 
provisions of law, the perfection or the effect of perfection or 
non-perfection of the Security Interest in any Collateral is governed by the 
Uniform Commercial Code as in effect in a jurisdiction other than New York, 
"UCC" means 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.

              SECTION 2.  REPRESENTATIONS AND WARRANTIES.  The Subsidiary 
Borrower represents and warrants as follows:

              (a)    The Subsidiary Borrower has good and marketable title to
          all of the Collateral, free and clear of any Liens other than the
          Permitted Liens.

              (b)    The Subsidiary Borrower has not performed any acts which
          might prevent the Administrative Agent from enforcing any of the
          terms of this Agreement or which would limit the Administrative
          Agent in any such enforcement.  Other than financing statements or
          other similar or equivalent documents or instruments with respect
          to the Security Interests and Permitted Liens, no financing
          statement, mortgage, security agreement or similar or equivalent
          document or instrument covering all or any part of the Collateral
          is on file or of record in any jurisdiction in which such filing
          or recording would be effective to perfect a Lien on such
          Collateral.  No Collateral is in the possession of any Person
          (other than the Subsidiary Borrower) asserting any claim thereto
          or security interest therein, except that the Administrative Agent
          or its designee may have possession of Collateral as contemplated
          hereby.

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              (c)    The information set forth in the Perfection Certificate
          delivered to the Administrative Agent prior to the execution of
          this Agreement is correct and complete.  Not later than 60 days
          following the date of such delivery, the Subsidiary Borrower shall
          furnish to the Administrative Agent file search reports from each
          UCC filing office set forth in Schedule 7 to its Perfection
          Certificate confirming the filing information set forth in such
          Schedule.

              (d)    The Security Interests constitute valid security interests
          under applicable law securing the Secured Obligations.  When UCC-1
          financing statements, including the collateral description in the
          form of Schedule 6(A) to the Perfection Certificate, shall have
          been filed in the offices specified in the Perfection Certificate,
          the Security Interests shall constitute perfected security
          interests in the Collateral (except Inventory in transit) to the
          extent that a security interest therein may be perfected by filing
          pursuant to the UCC, prior to all other Liens and rights of others
          therein except for the Permitted Liens. 

              (e)    The Inventory is insured in accordance with the
          requirements of the Credit Agreement.

              (f)    All Inventory manufactured by the Subsidiary Borrower has
          or will have been produced in compliance with the applicable
          requirements of the Fair Labor Standards Act, as amended.

              SECTION 3.  THE SECURITY INTERESTS.  (a)  In order to secure 
the full and punctual payment of the Secured Obligations in accordance with 
the terms thereof, and to secure the performance of all of the obligations of 
the Subsidiary Borrower hereunder and under the Subsidiary Borrowing 
Agreement, the Credit Agreement and the other Loan Documents to which it is a 
party, the Subsidiary Borrower hereby grants to the Administrative Agent for 
the ratable benefit of the Secured Parties a continuing security interest in 
and to all of the following property of the Subsidiary Borrower, whether now 
owned or existing or hereafter acquired or arising and regardless of where 
located (all being collectively referred to as the "COLLATERAL"):

              (i)    Documents;

              (ii)   Inventory;

              (iii)  All books and records (including, without limitation,
          customer lists, credit files, computer programs, printouts and
          other computer materials and records) of the Subsidiary Borrower
          pertaining to any of the Collateral; and

              (iv)   All Proceeds of all or any of the Collateral described in
          clauses 3(a)(i) through 3(a)(iii) hereof.

              (b)    The Security Interests are granted as security only and 
shall not subject any Secured Party to, or transfer or in any way affect or 
modify, any obligation or liability of the Subsidiary Borrower with respect 
to any of the Collateral or any transaction in connection therewith.

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              (c)    Notwithstanding the foregoing, the Collateral shall not 
include (i) any contracts or agreements to the extent the inclusion thereof 
would violate a prohibition on assignment that is effective under relevant 
law or (ii) any accounts receivable or other accounts (as defined in the UCC).

              SECTION 4.  FURTHER ASSURANCES; COVENANTS.  (a)  The Subsidiary 
Borrower will not change (i) its name, identity or corporate structure in any 
manner unless it shall have given the Administrative Agent not less than 10 
days' prior written notice thereof and delivered an opinion of counsel with 
respect thereto in accordance with Section 4(h);  (ii) the location of its 
chief executive office or chief place of business from a location described 
in its Perfection Certificate to a location not described in its Perfection 
Certificate unless it shall have given the Administrative Agent not less than 
30 days' prior written notice thereof and delivered an opinion of counsel 
with respect thereto in accordance with Section 4(h); or (iii) the locations 
where it keeps or holds any Collateral (other than Inventory in transit) or 
any records relating thereto from a location described in its Perfection 
Certificate to a location not described in its Perfection Certificate unless 
it gives the Administrative Agent written notice within 10 days thereof and 
delivers an opinion of counsel with respect thereto in accordance with 
Section 4(h).  The Subsidiary Borrower shall not in any event change the 
location of any Collateral if such change would cause the Security Interests 
in such Collateral to lapse or cease to be perfected.

              (b)    The Subsidiary Borrower will, from time to time, at its 
expense and in such manner and form as the Administrative Agent may require, 
execute, deliver, file and record any statement, assignment, instrument, 
document, agreement or other paper and take any other action (including, 
without limitation, any filings of financing or continuation statements under 
the UCC) that from time to time may be necessary or desirable, or that the 
Administrative Agent may request, in order to create, preserve, perfect, 
confirm or validate the Security Interests or to enable the Administrative 
Agent and the other Secured Parties to obtain the full benefits of this 
Agreement, or to enable the Administrative Agent to exercise and enforce any 
of its rights, powers and remedies hereunder with respect to any of the 
Collateral.  To the extent permitted by applicable law, the Subsidiary 
Borrower hereby authorizes the Administrative Agent to execute and file 
financing statements or continuation statements without the Subsidiary 
Borrower's signature appearing thereon. The Subsidiary Borrower agrees that a 
carbon, photographic, photostatic or other reproduction of this Agreement or 
of a financing statement is sufficient as a financing statement. The 
Subsidiary Borrower shall pay the costs of, or incidental to, any recording 
or filing of any financing or continuation statements concerning the 
Collateral.

              (c)    If any Collateral is at any time in the possession or 
control of any warehouseman, bailee or any of the Subsidiary Borrower's 
agents or processors upon the occurrence and during the continuance of an 
Event of Default and upon the written request of the Administrative Agent, 
the Subsidiary Borrower shall notify such warehouseman, bailee, agent or 
processor of the Security Interests created hereby and to hold all such 
Collateral for the Administrative Agent's account subject to the 
Administrative Agent's instructions.

              (d)    The Subsidiary Borrower shall keep full and accurate 
books and records relating to the Collateral, and stamp or otherwise mark 
such books and records in such manner as the Required Lenders may reasonably 
require in order to reflect the Security Interests.

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              (e)    Without the prior written consent of the Required 
Lenders, the Subsidiary Borrower will not sell, lease, exchange, assign or 
otherwise dispose of, or grant any option with respect to, any Collateral 
except that, subject to the rights of the Administrative Agent and the other 
Secured Parties hereunder if an Event of Default shall have occurred and be 
continuing, the Subsidiary Borrower may (x) sell, lease or exchange Inventory 
in the ordinary course of business and (y) consummate any Asset Sale or other 
disposition of assets permitted by the terms of the Credit Agreement.

              (f)    Within 10 days following the execution of this 
Agreement, the Subsidiary Borrower will cause the Administrative Agent to be 
named as an insured party and loss payee on each insurance policy covering 
risks relating to any of its Inventory.  The Subsidiary Borrower will deliver 
to the Administrative Agent, upon request of the Administrative Agent, the 
insurance policies for such insurance or certificates of insurance evidencing 
such coverage.  Each such insurance policy shall include effective waivers by 
the insurer of all claims for insurance premiums against the Administrative 
Agent or any other Secured Party, provide for coverage to the Administrative 
Agent regardless of the breach by the Subsidiary Borrower of any warranty or 
representation made therein, not be subject to co-insurance, provide that 
upon the occurrence and during the continuance of an Event of Default, all 
insurance proceeds in excess of $200,000 per claim shall be adjusted with and 
payable to the Administrative Agent and provide that no cancellation, 
termination or material modification thereof shall be effective until at 
least 30 days after receipt by the Administrative Agent of notice thereof.  
The Subsidiary Borrower hereby appoints the Administrative Agent as its 
attorney-in-fact to make proof of loss, claim for insurance and adjustments 
with insurers, and to execute or endorse all documents, checks or drafts in 
connection with payments made as a result of any insurance policies.

              (g)    The Subsidiary Borrower will, promptly upon request, 
provide to the Administrative Agent all information and evidence it may 
reasonably request concerning the Collateral to enable the Administrative 
Agent to enforce the provisions of this Agreement.

              (h)    (i) Not more than six months prior to or 10 days after 
each date on which the Subsidiary Borrower proposes to take any action 
contemplated by Section 4(a)(i) or Section 4(a)(iii) and (ii) not more than 
six months nor less than 30 days prior to each date on which the Subsidiary 
Borrower proposes to take any action contemplated by Section 4(a)(ii), the 
Subsidiary Borrower shall, at the Subsidiary Borrower's cost and expense, 
cause to be delivered to the Secured Parties an opinion of counsel, 
satisfactory to the Administrative Agent, substantially in the form of 
Exhibit B to the effect that all financing statements and amendments or 
supplements thereto, continuation statements and other documents required to 
be recorded or filed in order to perfect and protect the Security Interests 
for a period, specified in such opinion, continuing until a date not earlier 
than eighteen months from the date of such opinion, against all creditors of 
and purchasers from the Subsidiary Borrower have been filed in each filing 
office necessary for such purpose and that all filing fees and taxes, if any, 
payable in connection with such filings have been paid in full; PROVIDED that 
if such opinion states that the only recordings or filings required in order 
to perfect and protect the Security Interests are continuation statements, 
such opinion need only address such perfection and protection of the Security 
Interests for a period, specified in such opinion, continuing until a date 
not earlier than six months from the date of such opinion.

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              SECTION 5.  GENERAL AUTHORITY.  The Subsidiary Borrower hereby 
irrevocably appoints the Administrative Agent its true and lawful attorney, 
with full power of substitution, in the name of the Subsidiary Borrower, the 
Agents, the Lenders or otherwise, for the sole use and benefit of the Secured 
Parties, but at the Subsidiary Borrower's expense, to the extent permitted by 
law to exercise, at any time and from time to time while an Event of Default 
has occurred and is continuing and the Administrative Agent, pursuant to a 
request of the Required Lenders, has notified the Subsidiary Borrower of its 
decision to so exercise, all or any of the following powers with respect to 
all or any of the Collateral:

              (a)    to demand, sue for, collect, receive and give acquittance
          for any and all monies due or to become due thereon or by virtue
          thereof,

              (b)    to settle, compromise, compound, prosecute or defend any
          action or proceeding with respect thereto,

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

              (d)    to extend the time of payment of any or all thereof and to
          make any allowance and other adjustments with reference thereto;

PROVIDED that the Administrative Agent shall give the Subsidiary Borrower not 
less than ten days' prior notice of the time and place of any sale or other 
intended disposition of any of the 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.  The Administrative Agent and the 
Subsidiary Borrower agree that such notice constitutes "reasonable 
notification" within the meaning of Section 9-504(3) of the UCC.

              SECTION 6.  REMEDIES UPON EVENT OF DEFAULT.  (a) If any Event 
of Default has occurred and is continuing, the Administrative Agent may 
exercise on behalf of the Secured Parties all rights of a secured party under 
the UCC (whether or not in effect in the jurisdiction where such rights are 
exercised) and, in addition, the Administrative Agent may, without being 
required to give any notice, except as herein provided or as may be required 
by mandatory provisions of law, (i) apply cash, if any, then held by it as 
Collateral as specified in Section 8 and (ii) if there shall be no such cash 
or if such cash shall be insufficient to pay all the Secured Obligations in 
full, 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 the 
Administrative Agent may deem satisfactory.  The Administrative Agent or any 
Lender may be the purchaser of any or all of the Collateral so sold at any 
public sale (or, if the 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, at any private sale).  The Subsidiary Borrower 
will execute and deliver such documents and take such other action as the 
Administrative Agent deems necessary or advisable in order that any such sale 
may be made in compliance with law.  Upon any such sale the Administrative 
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 and free from any claim or right of 
whatsoever kind, including any equity or right of redemption of the 
Subsidiary Borrower which 

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may be waived, and the Subsidiary Borrower, to the extent permitted by law, 
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 required by Section 5 shall (A) in the case of a 
public sale, state the time and place fixed for such sale, and (B) 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 the Administrative 
Agent may fix in the notice of such sale.  At any such sale the Collateral 
may be sold in one lot as an entirety or in separate parcels, as the 
Administrative Agent may determine.  The Administrative Agent shall not be 
obligated to make any such sale pursuant to any such notice.  The 
Administrative 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 the case 
of any sale of all or any part of the Collateral on credit or for future 
delivery, the Collateral so sold may be retained by the Administrative Agent 
until the selling price is paid by the purchaser thereof, but the 
Administrative Agent shall not incur any liability in the case of the failure 
of such purchaser to take up and pay for the Collateral so sold and, in the 
case of any such failure, such Collateral may again be sold upon like notice. 
The Administrative 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 the Collateral, or any portion 
thereof, under a judgment or decree of a court or courts of competent 
jurisdiction.  For the purposes of obtaining executory process, the 
Subsidiary Borrower does hereby confess judgment in favor of the 
Administrative Agent for the full amount of the Secured Obligations.

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              (b)    For the purpose of enforcing any and all rights and 
remedies under this Agreement the Administrative Agent may, at any time when 
an Event of Default has occurred and is continuing, (i) require the 
Subsidiary Borrower to, and the Subsidiary Borrower agrees that it will, at 
the Subsidiary Borrower's expense and upon the request of the Administrative 
Agent, forthwith assemble all or any part of the Collateral as directed by 
the Administrative Agent and make it available at a place designated by the 
Administrative Agent which is, in its opinion, reasonably convenient to the 
Administrative Agent and the Subsidiary Borrower, whether at the premises of 
the Subsidiary Borrower or otherwise, (ii) to the extent permitted by 
applicable law, enter, with or without process of law and without breach of 
the peace, any premises where any of the Collateral is or may be located, and 
without charge or liability to it seize and remove such Collateral from such 
premises, (iii) have access to and use the Subsidiary Borrower's books and 
records relating to the Collateral and (iv) prior to the disposition of the 
Collateral, store or transfer it without charge in or by means of any storage 
or transportation facility owned or leased by the Subsidiary Borrower, 
process, repair or recondition it or otherwise prepare it for disposition in 
any manner and to the extent the Administrative Agent deems appropriate and, 
in connection with such preparation and disposition, use without charge any 
trademark, trade name, copyright, patent or technical process used by the 
Subsidiary Borrower.  The Administrative Agent may also render any or all of 
the Collateral unusable at the Subsidiary Borrower's premises and may dispose 
of such Collateral on such premises without liability for rent or costs.

              SECTION 7.  LIMITATION ON DUTY OF ADMINISTRATIVE AGENT IN 
RESPECT OF COLLATERAL.  Beyond the exercise of reasonable care in the custody 
thereof, the Administrative Agent shall have no duty as to any Collateral 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 Administrative 
Agent shall be deemed to have exercised reasonable care in the custody and 
preservation of the Collateral in its possession if the Collateral is 
accorded treatment substantially equal to that which it accords its own 
property, and shall not be liable or responsible for any loss or damage to 
any of the 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 Administrative Agent in 
good faith.

              SECTION 8.  APPLICATION OF PROCEEDS.  (a)  Upon the occurrence 
and during the continuance of an Event of Default, the proceeds of any sale 
of, or other realization upon, all or any part of the Collateral and any cash 
held shall be applied by the Administrative Agent in the following order of 
priorities:

              FIRST, to payment of the expenses of such sale or other
          realization, including reasonable compensation to agents and
          counsel for the Administrative Agent, and all expenses,
          liabilities and advances incurred or made by the Administrative
          Agent in connection therewith, and any other unreimbursed expenses
          for which any Secured Party is to be reimbursed pursuant to
          Section 10.03  of the Credit Agreement or Section 11 hereof and
          unpaid fees owing to the Agents under the Credit Agreement;

              SECOND, to the ratable payment of the Secured Obligations which
          constitute the unpaid principal of the Loans and, subject to the
          second sentence of subsection (b), Letter of 

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          Credit Obligations and the unpaid reimbursement obligations which 
          constitute Secured Obligations;

              THIRD, to the ratable payment of the Secured Obligations arising
          in respect of accrued but unpaid interest on the Secured
          Obligations in accordance with the provisions of the Credit
          Agreement;

              FOURTH, to the ratable payment of all other Secured Obligations,
          until all Secured Obligations shall have been paid in full; and

              FINALLY, to payment to the Subsidiary Borrower or its successors
          or assigns, or as a court of competent jurisdiction may direct, of
          any surplus then remaining from such proceeds.

              (b)  The Administrative Agent may make distributions hereunder 
in cash or in kind or, on a ratable basis, in any combination thereof.  If at 
any time any monies collected or received by the Administrative Agent are 
distributable pursuant to this Section in respect of a Letter of Credit 
Obligation which is a contingent obligation at such time, then the 
Administrative Agent shall invest such amounts in Liquid Investments selected 
by it and shall hold all such amounts so distributable and all such Liquid 
Investments and the net proceeds thereof in trust for application to the 
payment of such Letter of Credit Obligation at such time as such Letter of 
Credit Obligation is no longer a contingent obligation.  If the 
Administrative Agent holds any amounts which were distributable in respect of 
any Letter of Credit Obligation after all Letters of Credit issued for the 
account of the Subsidiary Borrower have expired and all amounts payable with 
respect thereto have been paid, such amounts shall be applied in the order 
set forth in subsection (a) above.

              (c)  In making the determinations and allocations required by 
this Section, the Administrative Agent shall have no liability to any Secured 
Party for actions taken in reliance on information supplied by the Secured 
Parties as to the amounts of the Secured Obligations held by them.  All 
distributions made by the Administrative Agent pursuant to this Section shall 
be final, and the Administrative Agent shall have no duty to inquire as to 
the application by the Secured Parties of any amount distributed to them.  
However, if at any time the Administrative Agent determines that an 
allocation or distribution previously made pursuant to this Section was based 
on a mistake of fact (including, without limiting the generality of the 
foregoing, mistakes based on any assumption that principal or interest has 
been paid by payments which are subsequently recovered from the recipient 
thereof through the operation of any bankruptcy, reorganization, insolvency 
or other laws or otherwise), the Administrative Agent may in its discretion, 
but shall not be obligated to, adjust subsequent allocations and 
distributions hereunder so that, on a cumulative basis, the Administrative 
Agent and the other Secured Parties receive the distributions to which they 
would have been entitled if such mistake of fact had not been made.

              SECTION 9.  CONCERNING THE ADMINISTRATIVE AGENT.  The 
provisions of Article 8 of the Credit Agreement shall inure to the benefit of 
the Administrative Agent in respect of this Agreement and shall be binding 
upon the parties to the Credit Agreement in such respect.  In furtherance and 
not in derogation of the rights, privileges and immunities of the 
Administrative Agent therein set forth:

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              (a)    The Administrative Agent is authorized to take all such
          action as is provided to be taken by it as Administrative Agent
          hereunder and all other action reasonably incidental thereto.  As
          to any matters not expressly provided for herein (including,
          without limitation, the timing and methods of realization upon the
          Collateral) the Administrative Agent shall act or refrain from
          acting in accordance with written instructions from the Required
          Lenders or, in the absence of such instructions, in accordance
          with its discretion.

              (b)    The Administrative Agent shall not be responsible for the
          existence, genuineness or value of any of the Collateral or for
          the validity, perfection, priority or enforceability of the
          Security Interests in any of the Collateral, whether impaired by
          operation of law or by reason of any action or omission to act on
          its part hereunder.  The Administrative 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 Subsidiary Borrower.

              SECTION 10.  APPOINTMENT OF CO-AGENTS.  At any time or times, 
in order to comply with any legal requirement in any jurisdiction, the 
Administrative Agent may appoint another bank or trust company or one or more 
other Persons, either to act as co-agent or co-agents, jointly with the 
Administrative Agent, or to act as separate agent or agents on behalf of the 
Secured Parties with such power and authority as may be necessary for the 
effectual operation of the provisions hereof and may be specified in the 
instrument of appointment (which may, in the discretion of the Administrative 
Agent, include provisions for the protection of such co-agent or separate 
agent similar to the provisions of Section 9).

              SECTION 11.  EXPENSES.  In the event that the Subsidiary 
Borrower fails to comply with the provisions of the Subsidiary Borrowing 
Agreement, the Credit Agreement or this Agreement, such that the value of any 
Collateral or the validity, perfection, rank or value of any Security 
Interest is thereby diminished or potentially diminished or put at risk, the 
Administrative Agent if requested by the Required Lenders may, but shall not 
be required to, effect such compliance on behalf of the Subsidiary Borrower, 
and the Subsidiary Borrower shall reimburse the Administrative Agent for the 
costs thereof on demand.  All insurance expenses and all expenses of 
protecting, storing, warehousing, appraising, insuring, handling, 
maintaining, and shipping the Collateral, any and all excise, property, 
sales, and use taxes imposed by any state, federal, or local authority on any 
of the Collateral, or in respect of periodic appraisals and inspections of 
the Collateral to the extent the same may be requested by the Required 
Lenders from time to time, or in respect of the sale or other disposition 
thereof, shall be borne and paid by the Subsidiary Borrower; and if the 
Subsidiary Borrower fails to promptly pay any portion thereof when due, the 
Administrative Agent or, if an Event of Default shall have occurred and be 
continuing, any other Secured Party may, at its option, but shall not be 
required to, pay the same and charge the Subsidiary Borrower's account 
therefor, and the Subsidiary Borrower agrees to reimburse the Administrative 
Agent or such other Secured Party therefor on demand.  All sums so paid or 
incurred by the Administrative Agent or any other Secured Party for any of 
the foregoing and any and all other sums for which the Subsidiary Borrower 
may become liable hereunder and all costs and expenses (including attorneys' 
fees, legal expenses and court costs) reasonably incurred by the 
Administrative Agent or any other Secured Party in enforcing or protecting 
the Security Interests or any of their rights or remedies under this 
Agreement, shall, 

                                       11

<PAGE>

together with interest thereon until paid at the rate applicable to ABR 
Borrowings plus 2%, be additional Secured Obligations hereunder.

              SECTION 12.  TERMINATION OF SECURITY INTERESTS; RELEASE OF 
COLLATERAL.  (a)   Upon the repayment in full of all Secured Obligations, the 
termination of the commitments of the Lenders under the Credit Agreement to 
make Loans to the Subsidiary Borrower and to issue Letters of Credit for its 
account and the expiration or cancellation of all Letters of Credit issued 
for the account of the Subsidiary Borrower, the Security Interests shall 
terminate and all rights to the Collateral shall revert to the Subsidiary 
Borrower.

              (b)    Upon the consummation of any sale or exchange of 
Collateral permitted by clause (x) of Section 4(e), the Security Interests 
created hereby in the Collateral subject to such sale or exchange (but not in 
any Proceeds that constitute Collateral arising from such sale or exchange) 
shall cease immediately without any further action on the part of any Lender 
or the Administrative Agent. 

              (c)    Except as provided otherwise in the Credit Agreement, 
upon the consummation of any Asset Sale permitted by the terms of the Credit 
Agreement, the Administrative Agent shall release the Collateral (but not any 
Proceeds thereof) sold pursuant to such Asset Sale.  Any such release shall 
not require the consent of any Lender, and the Administrative Agent shall be 
fully protected in relying on a certificate of the Parent or the Subsidiary 
Borrower as to whether any particular Asset Sale is permitted by the terms of 
the Credit Agreement.

              (d)    In addition to releases of Collateral effected by 
subsection (b) or permitted pursuant to subsection (c), at any time and from 
time to time prior to such termination of the Security Interests, the 
Administrative Agent may release any of the Collateral with the prior written 
consent of the Required Lenders; PROVIDED that any release of all or 
substantially all of the Collateral (for purposes of this proviso, as defined 
in the Credit Agreement) shall require the consent of all of the Lenders. 

              (e)    Upon the termination of the Security Interests or any 
release of Collateral permitted by this Section, the Administrative Agent 
will, at the expense of the Subsidiary Borrower, execute and deliver to the 
Subsidiary Borrower such documents as the Subsidiary Borrower shall 
reasonably request to evidence the termination of the Security Interests or 
the release of such Collateral, as the case may be. 

              SECTION 13.  NOTICES.  All notices and other communications 
provided for herein shall be given in accordance with Section 10.01 of the 
Credit Agreement.

                                       12

<PAGE>

              SECTION 14.  WAIVERS, NON-EXCLUSIVE REMEDIES.  No failure on 
the part of the Administrative Agent to exercise, and no delay in exercising 
and no course of dealing with respect to, any right under this Agreement 
shall operate as a waiver thereof; nor shall any single or partial exercise 
by the Administrative Agent of any right under this Agreement, the Subsidiary 
Borrowing Agreement, the Credit Agreement or any other Loan Document preclude 
any other or further exercise thereof or the exercise of any other right.  
The rights in this Agreement, the Subsidiary Borrowing Agreement, the Credit 
Agreement and the other Loan Documents are cumulative and are not exclusive 
of any other remedies provided by law.

              SECTION 15.  SUCCESSORS AND ASSIGNS.  This Agreement is for the 
benefit of the Secured Parties and their successors and assigns, and in the 
event of an assignment of all or any of the Secured Obligations in accordance 
with the provisions of the Credit Agreement to the extent applicable to the 
indebtedness or obligation so assigned, may be transferred with such 
indebtedness or obligation.  This Agreement shall be binding on the 
Subsidiary Borrower and its successors and assigns.

              SECTION 16.  CHANGES IN WRITING.  Neither this Agreement nor 
any provision hereof may be changed, waived, discharged or terminated orally, 
but only in writing signed by the Subsidiary Borrower and the Administrative 
Agent with the consent of the Required Lenders (or, solely in the case of 
this Section or any provision of Section 12 specifying the circumstances 
under which the consent of all Lenders is required to release Collateral, all 
the Lenders).

              SECTION 17.  NEW YORK LAW.  This Agreement shall be construed 
in accordance with and governed by the laws of the State of New York, except 
as otherwise required by mandatory provisions of law and except to the extent 
that remedies provided by the laws of any jurisdiction other than New York 
are governed by the laws of such jurisdiction.

              SECTION 18.  SEVERABILITY.  If any provision hereof is invalid 
or unenforceable in any jurisdiction, then, to the fullest extent permitted 
by law, (i) the other provisions hereof shall remain in full force and effect 
in such jurisdiction and shall be liberally construed in favor of the 
Administrative Agent and the other Secured Parties in order to carry out the 
intentions of the parties hereto as nearly as may be possible; and (ii) the 
invalidity or unenforceability of any provision hereof in any jurisdiction 
shall not affect the validity or enforceability of such provision in any 
other jurisdiction.

              SECTION 19. COLLATERAL DOCUMENT. This Agreement shall constitute a
Collateral Document for all purposes under the Credit Agreement and the other
Loan Documents.

                                       13

<PAGE>

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


                                       THE COLEMAN COMPANY, INC.

                                       By: /s/ Robert P. Totte
                                          ---------------------------
                                          Name: Robert P. Totte
                                          Title: Vice President



                                       FIRST UNION NATIONAL BANK, 
                                         as Administrative Agent

                                       By: /s/ T. M. Molitor
                                          ---------------------------
                                          Name: T. M. Molitor
                                          Title: Senior Vice President

                                       14

<PAGE>

                                                                EXHIBIT A


                                PERFECTION CERTIFICATE

       The undersigned, the chief legal officer of THE COLEMAN COMPANY, INC., 
a Delaware corporation (the "SUBSIDIARY BORROWER"), hereby certifies with 
reference to the Subsidiary Borrower Security Agreement, dated as of 
February __, 1999, between the Subsidiary Borrower and FIRST UNION NATIONAL 
BANK, as Administrative Agent (terms defined therein being used herein as 
therein defined), to each Secured Party as follows:

              1.   NAMES.  (a) The exact company name of the Subsidiary 
Borrower as it appears in its certificate of incorporation or certificate of 
formation is as follows:

       (b)  Set forth below is each other company name the Subsidiary 
Borrower has had within the past five years, together with the date of the 
relevant change:

       (c)  Except as set forth in Schedule 1, the Subsidiary Borrower has 
not changed its identity or company structure in any way within the past five 
years.

[Changes in identity or company structure would include mergers, consolidations
and acquisitions, as well as any change in the form, nature or jurisdiction of
organization.  If any such change has occurred, include in Schedule 1 the
information required by paragraphs 1, 2 and 3 of this certificate as to each
acquiree or constituent party to a merger or consolidation.]

              (d)  The following is a list of all other names (including 
trade names or similar appellations) used by the Subsidiary Borrower or any 
of its divisions or other business units at any time during the past five 
years:

              2.  CURRENT LOCATIONS.  (a) The chief executive office of the 
Subsidiary Borrower is located at the following address:

<PAGE>

MAILING ADDRESS                        COUNTY                   STATE
----------------------------------     ---------------          ----------


              (b)  The following are all the places of business of the 
Subsidiary Borrower not identified above:

MAILING ADDRESS                        COUNTY                   STATE
----------------------------------     ---------------          ----------


              (c)  The following are all the locations where the Subsidiary 
Borrower maintains any Inventory not identified above:

MAILING ADDRESS                        COUNTY                   STATE
----------------------------------     ---------------          ----------


              (d)  The following are the names and addresses of all Persons 
other than the Subsidiary Borrower which have possession of any of the 
Subsidiary Borrower's Inventory:

MAILING ADDRESS                        COUNTY                   STATE
----------------------------------     ---------------          ----------


              3.  PRIOR LOCATIONS.  (a) Set forth below is the information 
required by subparagraphs 2(a) and 2(b) above with respect to each location 
or place of business maintained by the Subsidiary Borrower at any time during 
the past five years:

       (b)  Set forth below is the information required by subparagraphs 2(c) 
and 2(d) above with respect to each location or bailee where or with whom 
Inventory has been lodged at any time during the past four months:

              4.   UNUSUAL TRANSACTIONS.  Except as set forth in Schedule 4, 
all Inventory has been acquired by the Subsidiary Borrower in the ordinary 
course of its business.

              5.   FILE SEARCH REPORTS.  Attached hereto as Schedule 5(A) is 
a true copy of a file search report conducted by [Lexis] in each jurisdiction 
identified in paragraph 2 or 3 above with respect to each name set forth in 
paragraph 1 above.  Attached hereto as Schedule 5(B) is a true copy of each 
financing statement or other filing identified in such file search reports as 
supplied to us by [Lexis].

                                       2

<PAGE>

              6.  UCC FILINGS.  A duly signed financing statement on Form 
UCC-1, including a collateral description in the form of Schedule 6(A) 
hereto, will be duly filed in the Uniform Commercial Code filing office in 
each jurisdiction identified in paragraph 2 hereof.

              7.  SCHEDULE OF FILINGS.  Within 30 days of the date hereof a 
schedule in the form of Schedule 7 hereto setting forth filing information 
with respect to the filings described in paragraph 6 above will be delivered 
to the Administrative Agent.

              8.  FILING FEES.  All filing fees and taxes payable in 
connection with the filings described in paragraph 6 above have been or will 
be paid.

              IN WITNESS WHEREOF, we have hereunto set our hands this ___ day 
of February, 1999.


                                       THE COLEMAN COMPANY, INC.
                                       
                                       By:
                                          ---------------------------
                                          Name:  
                                          Title: 
                                          

                                       3
<PAGE>

                                                                EXHIBIT B


                      OPINION OF COUNSEL FOR SUBSIDIARY BORROWER

                                       * * * *

       1.  The Subsidiary Borrower Security Agreement creates a valid 
security interest, for the benefit of the Secured Parties, in all Collateral 
(as defined in the Subsidiary Borrower Security Agreement) to the extent the 
UCC is applicable thereto (the "SECURITY INTEREST").

       2.  UCC financing statements and amendments thereto (collectively, the 
"FINANCING STATEMENTS") have been filed in the filing offices listed in 
Schedule 7 to the Perfection Certificate (the "FILING JURISDICTIONS"), which 
are all of the offices in which filings are required to perfect the Security 
Interest, to the extent the Security Interest may be perfected by filing 
under the UCC, and no further filing or recording of any document or 
instrument or other action will be required so to perfect the Security 
Interest, except that (i) continuation statements with respect to each 
Financing Statement must be filed within [six months prior to the last 
day of each consecutive five-year period beginning on the filing date]; 
(ii) additional filings may be necessary if the Subsidiary Borrower changes 
its name, identity or company structure or the jurisdiction in which its 
places of business, its chief executive office or the Collateral are located; 
and (iii) we express no opinion on the perfection of, or need for further 
filing or recording to perfect, the Security Interest in goods now or 
hereafter located in any jurisdiction other than the Filing Jurisdictions.

       3.  Based solely upon our review of the search report dated ______ of 
[search firm], a copy of which is attached hereto, there are:      

              (a)  no UCC financing statements which name the Subsidiary
       Borrower as debtor or seller and cover any of the Collateral, other than
       the Financing Statements, and the financing statements with respect to
       Permitted Liens annexed as Schedule 5(A) to the Perfection Certificate,
       listed in the available records in the UCC filing offices set forth in
       paragraphs 2 and 3 of the Perfection Certificate, which include all of
       the offices prescribed under the UCC as the offices in which filings
       should have been made to perfect security interests in the Collateral;
       and

              (b)  no notices of the filing of any federal tax lien (filed
       pursuant to Section 6323 of the Internal Revenue Code) or any lien of the
       Pension Benefit Guaranty Corporation (filed pursuant to Section 4068 of
       ERISA) covering any of the Collateral listed in the available records in
       the [UCC filing office in state of the Subsidiary Borrower's chief
       executive office], which is the only office having files which must be
       searched in order to fully determine the existence of notices of the
       filing of federal tax liens (filed pursuant to Section 6323 of the
       Internal Revenue Code) and liens of the Pension Benefit Guaranty
       Corporation (filed pursuant to Section 4068 of ERISA) on the Collateral.

       4.  The Security Interest validly secures the payment of all future 
Loans made by the Lenders to the Subsidiary Borrower pursuant to the Credit 
Agreement and all reimbursement obligations after the date hereof with 
respect to Letters of Credit issued for the account of the Subsidiary 
Borrower, whether or not at the time such Loans are made or Letters of Credit 
are 

<PAGE>

issued an Event of Default or other event not within the control of the 
Lenders has relieved or may relieve the Lenders from their obligations to 
make such Loans or issue such Letters of Credit, and is perfected to the 
extent set forth in paragraph 2 above with respect to such future Loans and 
reimbursement obligations.  Insofar as the priority thereof is governed by 
the UCC, the Security Interest has the same priority with respect to such 
future Loans and reimbursement obligations as it does with respect to Loans 
made or reimbursement obligations incurred on the date hereof.


                                       2