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                                                                    EXHIBIT 10.3

                     PATENT AND TRADEMARK SECURITY AGREEMENT

                  SECOND AMENDED AND RESTATED PATENT AND TRADEMARK SECURITY
AGREEMENT, dated as of September 16, 2003, made by Day International Group,
Inc., a Delaware corporation, Day International, Inc., a Delaware corporation,
Varn International, Inc., a Delaware corporation, and Day International Finance,
Inc., a Delaware corporation, (together with any other entity that may become a
party hereto as provided herein, the "Grantors"), in favor of Lehman Commercial
Paper Inc., as administrative agent (in such capacity, the "Administrative
Agent") for the banks and other financial institutions (the "Lenders") from time
to time parties to the Second Amended and Restated Senior Secured Credit
Agreement, dated as of September 16, 2003 (as amended, waived, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among Day
International Group, Inc., a Delaware corporation, the Lenders, Lehman Brothers
Inc., as sole advisor, sole bookrunner and joint lead arranger, and Banc One
Capital Markets, Inc., as joint lead arranger (together in such capacities, the
"Arrangers"), Bank One, NA, as syndication agent, National City Bank, as
documentation agent, and the Administrative Agent.

                              W I T N E S S E T H :

                  WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrower (as defined
therein) upon the terms and subject to the conditions set forth therein; and

                  WHEREAS, it is a condition to the obligation of the Lenders to
make their respective extensions of credit to the Borrower under the Credit
Agreement that each of the Grantors execute and deliver this Agreement to the
Administrative Agent for the ratable benefit of the Secured Parties (as defined
below); and

                  WHEREAS, in connection with the Existing Credit Agreement,
certain of the parties hereto entered into the Amended and Restated Patent and
Trademark Security Agreement, dated as of October 19, 1999 (the "Existing Patent
and Trademark Agreement"), and, in connection with the Credit Agreement, the
parties hereto wish to enter into this Agreement to amend and restate the
Existing Patent and Trademark Security Agreement;

                  NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent, the Arrangers and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each of the Grantors hereby agrees with the
Administrative Agent, for the ratable benefit of the Secured Parties, that the
Existing Patent and Trademark Security Agreement shall be amended and restated
to read in its entirety as follows:

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                  1.       Defined Terms. (a) Unless otherwise defined herein,
capitalized terms which are defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement.

                  (b)      The following terms shall have the following
 meanings:

                  "Agreement": this Second Amended and Restated Patent and
Trademark Security Agreement, as the same may be amended, supplemented, waived
or otherwise modified from time to time.

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

                  "Collateral": as defined in Section 2 of this Agreement.

                  "Default": a "Default" as defined in the Credit Agreement.

                  "Event of Default": an "Event of Default" as defined in the
Credit Agreement.

                  "General Intangibles": as defined in Section 9-102(a)(42) of
the Code, including, without limitation, all Patents and Trademarks now or
hereafter owned by each of the Grantors to the extent such Patents and
Trademarks would be included in General Intangibles under the Code.

                  "Loan Documents": the collective reference to the "Loan
Documents" as defined in the Credit Agreement.

                  "Loans": the collective reference to the "Loans" as defined in
the Credit Agreement.

                  "Obligations": the Obligations (as defined in the Guarantee
and Collateral Agreement) of each of the Grantors.

                  "Patent Licenses": all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to manufacture, use or
sell any invention covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to in Schedule II.

                  "Patents": (i) all letters patent of the United States, any
other country or any political subdivision thereof, all reissues and extensions
thereof and all goodwill associated therewith, including, without limitation,
any of the foregoing referred to in Schedule II, (ii) all applications for
letters patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof, including, without limitation,
any of the foregoing referred to in Schedule II, and (iii) all rights to obtain
any reissues or extensions of the foregoing (Patents and Patent Licenses being,
collectively, the "Patent Collateral").

                  "Proceeds": as defined in Section 9-102(a)(64) of the Code.

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                  "Qualified Counterparty": as defined in the Guarantee and
Collateral Agreement.

                  "Revolving Credit Commitments": the collective reference to
the "Revolving Credit Commitments" as defined in the Credit Agreement.

                  "Secured Parties": the collective reference to the
Administrative Agent, the Lenders (including, without limitation, the Issuing
Lender and the Swing Line Lender), any Qualified Counterparty, and their
respective successors and assigns.

                  "Trademark Licenses": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any Trademark,
including, without limitation, any of the foregoing referred to in Schedule I.

                  "Trademarks": (i) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and all goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, and all common-law
rights related thereto, including, without limitation, any of the foregoing
referred to in Schedule I, and (ii) the right to obtain all renewals thereof
(Trademarks and Trademark Licenses being, collectively, the "Trademark
Collateral").

                  (c)      The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
section and paragraph references are to this Agreement unless otherwise
specified.

                  (d)      The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.

                  (e)      Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to such Grantor's Collateral or the relevant part thereof.

                  2.       Grant of Security Interest. Each of the Grantors
hereby grants, subject to existing ownership rights of joint owners and existing
licenses granted by the Grantors in the ordinary course of business with respect
to the Collateral (as hereinafter defined), to the Administrative Agent for the
ratable benefit of the Secured Parties a security interest in all of the
following property now owned or at any time hereafter acquired by each of the
Grantors or in which the Grantors now have or at any time in the future may
acquire any right, title or interest (collectively, the "Collateral"), as
collateral security for the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration or otherwise) of the
Obligations of the Grantors:

                           (i)      all Patents;

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                           (ii)     all Patent Licenses;

                           (iii)    all Trademarks;

                           (iv)     all Trademark Licenses;

                           (v)      all General Intangibles connected with the
         use of or symbolized by the Trademarks and Patents; and

                           (vi)     to the extent not otherwise included, all
         Proceeds and products of any and all of the foregoing including,
         without limitation, any claim by such Grantor against third parties for
         past, present or future (a) infringement of any Patent or Patent
         licensed under any Patent License, (b) infringement or dilution of any
         Trademark or Trademark licensed under any Trademark License or (c)
         injury to the goodwill associated with any Trademark or Trademark
         licensed under any Trademark License, and all collateral security and
         guarantees given by any Person with respect to any of the foregoing;

provided, that the foregoing grant of a security interest with respect to
General Intangibles, Patent Licenses and Trademark Licenses shall not include a
security interest in, and the Collateral shall not include, any Patent License
or Trademark License with or issued by Persons other than a Subsidiary of the
Grantor that would otherwise be included in the Collateral to the extent that
the grant by such Grantor of such security interest is prohibited by the terms
and provisions of the written agreement or document or instrument creating or
evidencing such license or permit or Patent License or Trademark License, or
gives the other party thereto the right to terminate such Patent License or
Trademark License in the event of the grant of a security interest with respect
thereto and, provided further, that the foregoing grant of a security interest
with respect to Patents and Trademarks shall not include a security interest in,
and the Collateral shall not include, any Patent or Trademark owned jointly with
or issued to Persons other than a Subsidiary of the Grantor that would otherwise
be included in the Collateral to the extent that the grant by such Grantor of
such security interest is prohibited by the terms and provisions of the written
agreement or document or instrument creating or evidencing such joint ownership
or gives the other party the right to terminate the rights of the Grantor with
respect to such Patent or Trademark in the event of the grant of a security
interest with respect thereto. All references in this Agreement to any of the
property described in clauses (i) through (vi) of the preceding sentence, or to
any Proceeds thereof, shall be deemed to be references to such property or
Proceeds to the extent such property or Proceeds constitutes Collateral.

                  3.       Representations and Warranties. Each of the Grantors
hereby represents and warrants to the Administrative Agent on behalf of the
Secured Parties that:

                  (a)      Power and Authority. As of the date hereof, the
         Grantor has the corporate power and authority, and the legal right, to
         make, deliver and perform its obligations under, and to grant the
         security interest in the Trademark Collateral and the Patent Collateral
         to the extent provided in, and pursuant to, this Agreement and has
         taken all necessary corporate action to authorize the execution,
         delivery and performance of, and

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         grant of the security interest in the Trademark Collateral and the
         Patent Collateral to the extent provided in, and pursuant to, this
         Agreement.

                  (b)      Title; No Other Liens. As of the date hereof, except
         for the Liens granted to the Administrative Agent, for the benefit of
         the Secured Parties, pursuant to this Agreement and the other Liens
         permitted to exist on the Collateral pursuant to the Loan Documents
         (including, without limitation, any Liens permitted to exist on the
         Collateral pursuant to Section 7.3 of the Credit Agreement), and except
         as set forth on Schedule I or II hereto, the Grantor is (or, in the
         case of after-acquired Collateral, will be) the sole, legal and
         beneficial owner of the entire right, title and interest in and to the
         material Trademarks set forth on Schedule I hereto and the material
         Patents set forth in Schedule II hereto free and clear of any and all
         Liens. As of the date hereof, no security agreement, financing
         statement or other public notice similar in effect with respect to all
         or any part of the Collateral is on file or of record in any public
         office (including, without limitation, the United States Patent and
         Trademark Office), except such as may have been filed in favor of the
         Administrative Agent, for the benefit of the Secured Parties, pursuant
         to this Agreement or in respect of such Liens as may be permitted
         pursuant to the Loan Documents (including, without limitation, any
         Liens permitted to exist on the Collateral pursuant to Section 7.3 of
         the Credit Agreement).

                  (c)      Perfected Liens. (i) As of the date hereof, this
         Agreement is effective to create, as collateral security for the
         Obligations, valid and enforceable Liens on the Collateral in favor of
         the Administrative Agent, for the benefit of the Secured Parties,
         except as enforceability may be affected by bankruptcy, insolvency,
         fraudulent conveyance, reorganization, moratorium and other similar
         laws relating to or affecting creditors' rights generally, general
         equitable principles (whether considered in a proceeding in equity or
         at law) and an implied covenant of good faith and fair dealing.

                           (ii)     As of the date hereof, except with respect
                  to Liens upon Patents and Trademarks and Patent Licenses and
                  Trademark Licenses, which Liens, to the extent not otherwise
                  perfected by the filing of financing statements under the Code
                  in accordance herewith, would in the case of Patents and
                  Trademarks listed in Schedules I and II hereto, or in the case
                  of Patent Licenses and Trademark Licenses listed in Schedules
                  I and II hereto, may be perfected upon the filing, acceptance
                  and recordation thereof in the United States Patent and
                  Trademark Office, upon filing of the financing statements
                  delivered to the Administrative Agent by the Grantor on the
                  Closing Date in the jurisdictions listed on Schedule 3 to the
                  Guarantee and Collateral Agreement (which financing statements
                  are in proper form for filing in such jurisdictions) (and the
                  recording of this Agreement in the United States Patent and
                  Trademark Office, and the making of filings after the Closing
                  Date in any other jurisdiction in the United States as may be
                  necessary under any Requirement of Law), the Liens created
                  pursuant to this Agreement will constitute valid and perfected
                  Liens on the Collateral in the United States in favor of the
                  Administrative Agent for the benefit of the Secured Parties,
                  which Liens will be prior to all other Liens of all other
                  Persons with respect to the Collateral, except for Liens
                  permitted pursuant to the Loan

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                  Documents (including, without limitation, those permitted to
                  exist pursuant to Section 7.3 of the Credit Agreement) and
                  except as set forth on Schedule I or II hereto, and which
                  Liens are enforceable as such against all creditors of and
                  purchasers (except to the extent that the recording of an
                  assignment or other transfer of title to the Administrative
                  Agent in the United States Patent and Trademark Office may be
                  necessary for such enforceability) from the Grantor, except as
                  such enforcement may be limited by bankruptcy, insolvency,
                  reorganization, moratorium or similar laws affecting the
                  enforcement of creditors' rights generally and by general
                  equitable principles (whether enforcement is sought by
                  proceedings in equity or at law) or by an implied covenant of
                  good faith and fair dealing.

                  (d)      Consents. No consent of any party (other than the
         Grantor) to any material Patent License or material Trademark License
         constituting Collateral is required, or purports to be required, to be
         obtained by or on behalf of the Grantor in connection with the
         execution, delivery and performance of this Agreement that has not been
         obtained. Each Patent License and Trademark License constituting
         Collateral is in full force and effect and constitutes a valid and
         legally enforceable obligation of the Grantor and (to the knowledge of
         the Grantor) each other party thereto except as enforceability may be
         limited by bankruptcy, insolvency, reorganization, moratorium or
         similar laws affecting the enforcement of creditor's rights generally
         and by general equitable principles (whether enforcement is sought by
         proceedings in equity or at law) or by an implied covenant of good
         faith and fair dealing and except to the extent the failure of any such
         Patent License or Trademark License constituting Collateral to be in
         full force and effect or valid or legally enforceable would not be
         reasonably expected, in the aggregate, to have a material adverse
         effect on the value of the Collateral (as such term is defined in the
         Credit Agreement). No consent or authorization of, filing with or other
         act by or in respect of any Governmental Authority is required in
         connection with the execution, delivery, performance, validity or
         enforceability of any of the Patent Licenses or Trademark Licenses
         constituting Collateral by any party thereto other than those which
         have been duly obtained, made or performed and are in full force and
         effect and those the failure of which to make or obtain would not be
         reasonably expected, in the aggregate, to have a material adverse
         effect on the value of the Collateral (as such term is defined in the
         Credit Agreement). Neither such Grantor nor (to the knowledge of such
         Grantor) any other party to any Patent License or Trademark License
         constituting Collateral is in default in the performance or observance
         of any of the terms thereof, except for such defaults as would not
         reasonably be expected, in the aggregate, to have a material adverse
         effect on the value of the Collateral (as such term is defined in the
         Credit Agreement). Except for rights reserved in favor of the United
         States government, as required under law, the right, title and interest
         of the Grantor in, to and under each Patent License and Trademark
         License constituting Collateral are not subject to any defense, offset,
         counterclaim or claim which would be reasonably expected, either
         individually or in the aggregate, to have a material adverse effect on
         the value of the Collateral (as such term is defined in the Credit
         Agreement).

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                  (e)      Schedules I and II are Complete; All Filings Have
         Been Made. Set forth in Schedules I and II is a complete and accurate
         list of all material Trademarks and material Patents owned by the
         Grantor as of the date hereof. As of the date hereof, the Grantor will
         have made all necessary filings to protect and maintain its interest in
         the Trademarks and Patents set forth in Schedules I and II, including,
         without limitation, all necessary filings and payments of all
         maintenance fees, in the United States Patent and Trademark Office to
         the extent such Trademarks and Patents are material to the Grantor's
         business. Set forth in Schedules I and II is a complete and accurate
         list of all of the material Trademark Licenses and material Patent
         Licenses owned by the Grantor as of the date hereof.

                  (f)      The Trademarks and Trademark Licenses are Subsisting
         and Not Adjudged Invalid. As of the date hereof, each trademark
         registration and trademark application of the Grantor set forth in
         Schedule I is subsisting as of the date hereof, and has not been
         adjudged invalid, unregisterable or unenforceable, in whole or in part,
         and, to the best of such Grantor's knowledge, is valid, registrable and
         enforceable. As of the date hereof, each of the Trademark Licenses set
         forth in Schedule I is validly subsisting and has not been adjudged
         invalid or unenforceable, in whole or in part, and, to the best of such
         Grantor's knowledge, is valid and enforceable. As of the date hereof,
         each Grantor has notified the Administrative Agent in writing of all
         uses of any item of Trademark Collateral material to such Grantor's
         business of which such Grantor is aware which could reasonably be
         expected to lead to such item becoming invalid or unenforceable,
         including unauthorized uses by third parties and uses which were not
         supported by the goodwill of the business connected with such
         Collateral.

                  (g)      The Patents and Patent Licenses are Subsisting and
         Not Adjudged Invalid. As of the date hereof, each Patent and patent
         application of the Grantor set forth in Schedule II is subsisting and
         has not been adjudged invalid, unpatentable or unenforceable, in whole
         or in part, and, to the best of such Grantor's knowledge, is valid,
         patentable and enforceable. As of the date hereof, each of the Patent
         Licenses set forth in Schedule II is validly subsisting and has not
         been adjudged invalid or unenforceable, in whole or in part, and, to
         the best of such Grantor's knowledge, is valid and enforceable. As of
         the date hereof, the Grantor has notified the Administrative Agent in
         writing of all uses of any item of Patent Collateral material to such
         Grantor's business of which such Grantor is aware which could
         reasonably be expected to lead to such item becoming invalid or
         unenforceable.

                  (h)      No Previous Assignments or Releases. Except as set
         forth on Schedule I or II hereto, as of the date hereof, the Grantor
         has not made an agreement constituting a present or future assignment,
         sale, transfer or encumbrance of any of the Collateral (except for any
         such assignment, sale, transfer or encumbrance permitted under the Loan
         Documents). Except as permitted by the Loan Documents or as required by
         law, the Grantor has not granted any license, shop right, release,
         covenant not to sue, or non-assertion assurance to any Person with
         respect to any material part of the Collateral which would have a
         Material Adverse Effect.

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                  (i)      Proper Statutory Notice. The Grantor has marked its
         products with the trademark registration symbol (R), the numbers of all
         appropriate patents, the common law trademark symbol (TM), or the
         designation "patent pending," as the case may be, to the extent that it
         is reasonably and commercially practicable.

                  (j)      No Knowledge of Claims Likely to Arise. Except for
         the Trademark Licenses and Patent Licenses listed in Schedules I and II
         hereto, the Grantor has no knowledge of the existence of any right or
         any claim (other than as permitted by this Agreement or the Loan
         Documents) that is likely to be made under or against any item of
         Collateral contained on Schedules I and II which would have a Material
         Adverse Effect.

                  (k)      No Knowledge of Existing or Threatened Claims. No
         claim has been made and is continuing or, to the Grantor's knowledge,
         threatened that the use by such Grantor of any item of Collateral is
         invalid or unenforceable or that the use by such Grantor of any
         Collateral does or may violate the rights of any Person, which would
         have a Material Adverse Effect. To the Grantor's knowledge, there is
         currently no infringement or unauthorized use of any item of Collateral
         contained on Schedules I and II hereto which would have a Material
         Adverse Effect.

                  Each Grantor agrees that the foregoing representations and
warranties shall be deemed to have been made by the Grantor on and as of each
date on which an extension of credit is made by the Lenders to the Borrower
under the Credit Agreement, in each case as though made on and as of each such
date (or, if any such representation or warranty is expressly stated to have
been made as of a specific date, as of such specific date).

                  4.       Covenants. Each of the Grantors covenants and agrees
with the Administrative Agent and the other Secured Parties that, from and after
the date of this Agreement until the payment in full of the Loans, the
Reimbursement Obligations and to the extent then due and owing, all other
Obligations, the termination of the Revolving Credit Commitments and the
expiration, termination or return to the Issuing Lender of any Letters of
Credit:

                  (a)      Further Documentation; Pledge of Instruments and
         Chattel Paper. At any time and from time to time, upon the written
         request of the Administrative Agent or the Grantor, as the case may be,
         and at the sole expense of such Grantor, such Grantor or the
         Administrative Agent, as the case may be, will promptly and duly
         execute and deliver such further instruments and documents and take
         such further action as the Administrative Agent or the Grantor, as the
         case may be, may reasonably request for the purpose of obtaining or
         preserving the full benefits of this Agreement and of the rights and
         powers herein granted, including, without limitation, the filing of any
         financing or continuation statements under the Uniform Commercial Code
         in effect in any jurisdiction with respect to the Liens created hereby.
         The Grantor also hereby authorizes the Administrative Agent to file any
         such financing or continuation statement without the signature of the
         Grantor to the extent permitted by applicable law. A carbon,
         photographic or other reproduction of this Agreement shall be
         sufficient as a financing statement for filing in any jurisdiction. The
         Administrative Agent agrees to notify the

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         Grantor and the Grantor agrees to notify the Administrative Agent of
         any financing or continuation statement filed by it pursuant to this
         Section 4(a), provided that any failure to give any notice shall not
         affect the validity or effectiveness of any such filing.

                  (b)      Indemnification and Expenses. The Grantor agrees to
         pay, and to save the Administrative Agent, the other Secured Parties
         and their respective agents, officers, directors and successors
         harmless from, any and all liabilities and reasonable costs and
         expenses (including, without limitation, reasonable legal fees and
         expenses) (i) with respect to, or resulting from, any delay by the
         Grantor in complying with any material Requirement of Law applicable to
         any of the Collateral, or (ii) in connection with any of the
         transactions contemplated by this Agreement, provided that such
         indemnity shall not, as to the Administrative Agent, any of the other
         Secured Parties or any of their respective agents, officers, directors
         and successors, be available to the extent that such liabilities, costs
         and expenses resulted from the gross negligence or willful misconduct
         of any of the same. In any suit, proceeding or action brought by the
         Administrative Agent or any other Secured Party under any of the
         Collateral for any sum owing thereunder, or to enforce any of the
         Collateral, the Grantor will save, indemnify and keep the
         Administrative Agent, such Secured Party and their respective agents,
         officers, directors and successors harmless from and against all
         expense, loss or damage suffered by reason of any defense or
         counterclaim raised in any such suit, proceeding or action, except to
         the extent such expense, loss or damage resulted from the gross
         negligence or willful misconduct of any of the same.

                  (c)      Maintenance of Records. The Grantor will keep and
         maintain at its own cost and expense reasonably satisfactory and
         complete records of the Collateral, and shall mark such records to
         evidence this Agreement and the Liens and the security interests
         created hereby. For the Administrative Agent's and the other Secured
         Parties' further security, the Administrative Agent, for the benefit of
         the Secured Parties, shall have a security interest in all of the
         Grantor's books and records pertaining to the Collateral.

                  (d)      Right of Inspection. Upon reasonable written advance
         notice to the Grantor and at reasonable intervals, or at any time and
         from time to time after the occurrence and during the continuation of
         an Event of Default, the Administrative Agent shall have reasonable
         access during normal business hours to all the books, correspondence
         and records of the Grantor, and the Administrative Agent and its
         representatives may examine the same, and to the extent reasonable take
         extracts therefrom and make photocopies thereof, and the Grantor agrees
         to render to the Administrative Agent, at the Grantor's reasonable cost
         and expense, such clerical and other assistance as may be reasonably
         requested with regard thereto.

                  (e)      Compliance with Laws, etc. The Grantor will comply in
         all material respects with all material Requirements of Law applicable
         to the Collateral or any part thereof, except to the extent that the
         failure to so comply would not be reasonably expected to materially
         adversely affect in the aggregate the Administrative Agent's or the
         other Secured Parties' rights hereunder, the priority of their Liens on
         the Collateral or the value of the Collateral.

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<PAGE>

                  (f)      Further Identification of Collateral. The Grantor
         will furnish to the Administrative Agent from time to time such
         statements and schedules further identifying and describing the
         Collateral, and such other reports in connection with the Collateral,
         as the Administrative Agent may reasonably request, all in reasonable
         detail.

                  (g)      Security Interest in Any Newly Acquired Collateral.
         The Grantor agrees that, should it obtain an ownership interest in any
         material Trademark, Patent, Trademark License or Patent License, which
         is not now a part of the Collateral, (i) the provisions of Section 2
         shall automatically apply thereto, (ii) any such Trademark, Patent,
         Trademark License and Patent License shall automatically become part of
         the Collateral, and (iii) with respect to any ownership interest in any
         such Trademark, Patent, Trademark License or Patent License that such
         Grantor should obtain, it shall give notice thereof to the
         Administrative Agent in writing, in reasonable detail, at its address
         set forth in the Credit Agreement within 45 days after the end of the
         calendar quarter in which it obtains such ownership interest. The
         Grantor authorizes the Administrative Agent to modify this Agreement by
         amending Schedules I and II (and will cooperate reasonably with the
         Administrative Agent in effecting any such amendment) to include on
         Schedule I any Trademark and Trademark License and on Schedule II any
         Patent or Patent License of which it receives notice under this
         Section, or to prepare and file with the United States Patent and
         Trademark Office a supplement to this Agreement to include any Patent
         or Trademark of which it receives notice to under this Section.

                  (h)      Maintenance of the Trademark Collateral. Except as
         permitted in the Loan Documents and to the extent permitted by law, the
         Grantor agrees to take all reasonably necessary steps, including,
         without limitation, in the United States Patent and Trademark Office or
         in any court, to (i) maintain each trademark registration and each
         Trademark License identified on Schedule I hereto, and (ii) pursue each
         trademark application now or hereafter identified in Schedule I hereto,
         including, without limitation, the filing of responses to office
         actions issued by the United States Patent and Trademark Office, the
         filing of applications for renewal, the filing of affidavits under
         Sections 8 and 15 of the United States Trademark Act, and the
         participation in opposition, cancellation, infringement and
         misappropriation proceedings, except, in each case in which such
         Grantor has reasonably determined that any of the foregoing is not of
         material economic value to it. The Grantor agrees to take corresponding
         steps with respect to each new or acquired trademark or service mark
         registration, or application for trademark or service mark
         registration, or any rights obtained under any Trademark License, in
         each case, which it is now or later becomes entitled, except in each
         case in which the Grantor has reasonably determined that any of the
         foregoing is not of material economic value to it. Any expenses
         incurred in connection with such activities shall be borne by such
         Grantor.

                  (i)      Maintenance of the Patent Collateral. Except as
         permitted in the Loan Documents and to the extent permitted by law, the
         Grantor agrees to take all reasonably necessary steps, including,
         without limitation, in the United States Patent and Trademark Office or
         in any court, to (i) maintain each Patent and each Patent License
         identified on Schedule II hereto, and (ii) pursue each patent
         application, now or hereafter identified in Schedule II hereto,
         including, without limitation, the filing of divisional, continuation,

                                       10
<PAGE>

         continuation-in-part and substitute applications, the filing of
         applications for reissue, renewal or extensions, the payment of
         maintenance fees, and the participation in interference, reexamination,
         opposition, infringement and misappropriation proceedings, except, in
         each case in which the Grantor has reasonably determined that any of
         the foregoing is not of material economic value to it. The Grantor
         agrees to take corresponding steps with respect to each new or acquired
         Patent, patent application, or any rights obtained under any Patent
         License, in each case, which it is now or later becomes entitled,
         except in each case in which the Grantor has reasonably determined that
         any of the foregoing is not of material economic value to it. Any
         expenses incurred in connection with such activities shall be borne by
         the Grantor.

                  (j)      Preservation and Protection of the Trademark
         Collateral and Patent Collateral. Except as provided in Section 4(k)
         hereof, the Grantor shall take all steps permitted by law which it or
         the Administrative Agent deems reasonably appropriate under the
         circumstances to preserve and protect its material Trademark Collateral
         and Patent Collateral.

                  (k)      Grantor Shall Not Abandon any Collateral. The Grantor
         shall not abandon any trademark registration, Patent or any pending
         trademark or patent application, in each case listed on Schedule I or
         Schedule II, without the written consent of the Administrative Agent,
         unless such Grantor shall have previously determined that such use or
         the pursuit or maintenance of such trademark registration, Patent or
         pending trademark or patent application is not of material economic
         value to it, in which case, such Grantor will, at least annually, give
         notice of any such abandonment to the Administrative Agent in writing,
         in reasonable detail, at its address set forth in the Credit Agreement.

                  (l)      Infringement of Any Collateral. In the event that any
         Grantor becomes aware that any item of the Collateral which such
         Grantor has reasonably determined to be material to its business is
         infringed or misappropriated by a third party, which infringement or
         misappropriation would reasonably be expected to have a Material
         Adverse Effect, the Grantor shall notify the Administrative Agent
         promptly and in writing, in reasonable detail, at its address set forth
         in the Credit Agreement, and shall take such actions permitted by law
         as the Grantor or the Administrative Agent deems reasonably appropriate
         under the circumstances to protect such Collateral, including, without
         limitation, suing for infringement or misappropriation and for an
         injunction against such infringement or misappropriation. Any expense
         incurred in connection with such activities shall be borne by such
         Grantor. The Grantor will advise the Administrative Agent promptly and
         in writing, in reasonable detail, at its address set forth in the
         Credit Agreement, of any adverse determination or the institution of
         any proceeding (including, without limitation, the institution of any
         proceeding in the United States Patent and Trademark Office or any
         court) regarding any item of the Collateral which has a Material
         Adverse Effect.

                  (m)      Use of Statutory Notice. The Grantor shall mark its
         products with the trademark registration symbol (R), the numbers of all
         appropriate patents, the common law

                                       11
<PAGE>

         trademark symbol (TM), or the designation "patent pending," as the case
         may be, to the extent that it is reasonably and commercially
         practicable.

                  (n)      Limitation on Liens on Collateral. The Grantor will
         not create, incur or permit to exist, will defend the Collateral
         against, and will take such other action as is reasonably necessary to
         remove, any material Lien or material adverse claim on or to any of the
         Collateral, other than Liens created hereby and other than as permitted
         pursuant to the Loan Documents (including, without limitation, any
         Liens permitted to exist on the Collateral pursuant to Section 7.3 of
         the Credit Agreement), and will defend the right, title and interest of
         the Administrative Agent and the other Secured Parties in and to any of
         the Collateral against the claims and demands of all Persons
         whomsoever, except where failure to defend would not have a Material
         Adverse Effect and except where such claim or demand arises from a Lien
         permitted pursuant to the Loan Documents including, without limitation,
         any Liens permitted to exist on the Collateral pursuant to Section 7.3
         of the Credit Agreement).

                  (o)      Limitations on Dispositions of Collateral. Without
         the prior written consent of the Administrative Agent, the Grantor will
         not sell, assign, transfer, exchange or otherwise dispose of, or grant
         any option with respect to, the Collateral, or attempt, offer or
         contract to do so, except with respect to licenses in the ordinary
         course of business or as permitted by this Agreement or the Loan
         Documents.

                  (p)      Notices. The Grantor will advise the Administrative
         Agent promptly and in writing, in reasonable detail, at its address set
         forth in the Credit Agreement, (i) of any Lien (other than Liens
         created hereby or permitted under the Loan Documents, including,
         without limitation, any Liens permitted to exist on the Collateral
         pursuant to Section 7.3 of the Credit Agreement) on any Patents or
         Trademarks and (ii) of the occurrence of any other event which would
         reasonably be expected in the aggregate to have a material adverse
         effect on the aggregate value of the Collateral taken as a whole or the
         Liens created hereunder.

                  5.       Administrative Agent's Appointment as
Attorney-in-Fact.

                  (a)      Powers. Each Grantor hereby irrevocably constitutes
and appoints the Administrative Agent and any officer or agent of the
Administrative Agent, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of the Grantor and in the name of the Grantor or in its own name, for the
purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be reasonably necessary or desirable to accomplish the purposes of this
Agreement to the extent permitted by law, and, without limiting the generality
of the foregoing, to the extent permitted by law, the Grantor hereby gives the
Administrative Agent the power and right, on behalf of the Grantor, without
notice to or assent by the Grantor, to do, at any time when an Event of Default
has occurred and is continuing, the following:

                                       12

<PAGE>

                           (i)      to execute and deliver any and all
                  agreements, instruments, documents, and papers as the
                  Administrative Agent may reasonably request to evidence the
                  Administrative Agent's and the other Secured Parties' security
                  interest in any of the Collateral and the goodwill of the
                  Grantor relating thereto or represented thereby;

                           (ii)     in the name of the Grantor or its own name,
                  or otherwise, to take possession of and indorse and collect
                  any checks, drafts, notes, acceptances or other instruments
                  for the payment of moneys due under any General Intangible (to
                  the extent that the foregoing constitute Collateral) or with
                  respect to any other Collateral and to file any claim or to
                  take any other action or institute any proceeding in any court
                  of law or equity or otherwise deemed appropriate by the
                  Administrative Agent for the purpose of collecting any and all
                  such moneys due under such General Intangible or with respect
                  to any other Collateral whenever payable;

                           (iii)    to pay or discharge Liens placed on the
                  Collateral, other than Liens permitted under this Agreement or
                  the other Loan Documents, including, without limitation, any
                  Liens permitted to exist on the Collateral pursuant to Section
                  7.3 of the Credit Agreement; and

                           (iv)     (A) to direct any party liable for any
                  payment under any of the Collateral to make payment of any and
                  all moneys due or to become due thereunder directly to the
                  Administrative Agent or as the Administrative Agent shall
                  direct; (B) to ask for, or demand, collect, receive payment of
                  and receipt for, any and all moneys, claims and other amounts
                  due or to become due at any time in respect of or arising out
                  of any Collateral; (C) to sign and indorse any invoices,
                  freight or express bills, bills of lading, storage or
                  warehouse receipts, drafts against debtors, assignments,
                  verifications, notices and other documents in connection with
                  any of the Collateral; (D) to commence and prosecute any
                  suits, actions or proceedings at law or in equity in any court
                  of competent jurisdiction to collect the Collateral or any
                  thereof and to enforce any other right in respect of any
                  Collateral; (E) to defend any suit, action or proceeding
                  brought against the Grantor with respect to any of the
                  Collateral; (F) subject to any preexisting rights of joint
                  owners, to settle, compromise or adjust any suit, action or
                  proceeding described in clause (E) above and, in connection
                  therewith, to give such discharges or releases as the
                  Administrative Agent may deem appropriate; (G) subject to any
                  pre-existing reserved rights or licenses, to assign any Patent
                  or Trademark constituting Collateral (along with the goodwill
                  of the business to which any such Patent or Trademark
                  pertains), for such term or terms, on such conditions, and in
                  such manner, as the Administrative Agent shall in its sole
                  discretion determine; and (H) generally, to sell, transfer,
                  pledge and make any agreement with respect to or otherwise
                  deal with any of the Collateral as fully and completely as
                  though the Administrative Agent were the absolute owner of all
                  such Grantor's rights therein for all purposes, and to do, at
                  the Administrative Agent's option and the Grantor's expense,
                  at any time, or from time to time, all

                                       13
<PAGE>

                  acts and things which the Administrative Agent deems
                  reasonably necessary to protect, preserve or realize upon the
                  Collateral and the Administrative Agent's and the other
                  Secured Parties' Liens thereon and to effect the intent of
                  this Agreement, all as fully and effectively as the Grantor
                  might do.

Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable until the payment in full of the Loans, the
Reimbursement Obligations and the other Obligations then due and owing, the
termination of the Revolving Credit Commitments and the expiration, termination
or return to the Issuing Lender of any Letters of Credit.

                  (b)      Other Powers. Each Grantor also authorizes the
Administrative Agent, from time to time if an Event of Default shall have
occurred and be continuing, to execute, in connection with any sale provided for
in Section 8 hereof, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.

                  (c)      No Duty on the Part of Administrative Agent or
Secured Parties. The powers conferred on the Administrative Agent and the other
Secured Parties hereunder are solely to protect the Administrative Agent's and
the other Secured Parties' interests in the Collateral and shall not impose any
duty upon the Administrative Agent or any other Secured Party to exercise any
such powers. The Administrative Agent and the other Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees, affiliates, agents or successors shall be responsible to the Grantors
for any act or failure to act hereunder, except for gross negligence or willful
misconduct of any of the same.

                  6.       Performance by Administrative Agent of Grantor's
Obligations. If any Grantor fails to perform or comply with any of its
agreements contained herein and the Administrative Agent, as provided for by the
terms of this Agreement, shall perform or comply, or otherwise cause performance
or compliance, with such agreements, the reasonable expenses of the
Administrative Agent incurred in connection with such performance or compliance,
together with interest thereon at a rate per annum equal to 2.0% above the rate
applicable to Base Rate Loans that are Revolving Credit Loans, shall be payable
by such Grantor to the Administrative Agent on demand, and such Grantor's
obligations to make such payments shall constitute Obligations secured hereby.

                  7.       Proceeds. It is agreed that if an Event of Default
shall occur and be continuing, (a) all Proceeds of any Collateral received by
each Grantor consisting of cash, checks and other near-cash items shall be held
by such Grantor in trust for the Administrative Agent and the other Secured
Parties, segregated from other funds of the Grantor, and shall, forthwith upon
receipt by the Grantor, be turned over to the Administrative Agent in the exact
form received by the Grantor (duly indorsed by the Grantor to the Administrative
Agent, if required), and (b) any and all such Proceeds received by the
Administrative Agent (whether from the Grantor or otherwise) shall be held by
the Administrative Agent for the benefit of the Secured Parties as collateral
security for the Obligations (whether matured or unmatured), and/or then or at
any time thereafter may, in the sole discretion of the Administrative Agent, be
applied by the

                                       14

<PAGE>

Administrative Agent against the Obligations then due and owing in the following
order of priority:

                  FIRST, to pay incurred and unpaid fees and expenses of the
         Administrative Agent under the Loan Documents;

                  SECOND, to the Administrative Agent, for application by it
         towards payment of amounts then due and owing and remaining unpaid in
         respect of the Obligations, pro rata among the Secured Parties
         according to the amounts of the Obligations then due and owing and
         remaining unpaid to the Secured Parties;

                  THIRD, to the Administrative Agent, for application by it
         towards prepayment of the Obligations, pro rata among the Secured
         Parties according to the amounts of the Obligations then held by the
         Secured Parties; and

                  FOURTH, any balance of such Proceeds remaining after the
         Obligations shall have been paid in full, no Letters of Credit shall be
         outstanding and the Commitments shall have terminated shall be paid
         over to the Borrower or to whomsoever may be lawfully entitled to
         receive the same.

                  8.       Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Secured Parties, may
exercise all rights and remedies of a secured party under the Code, and, to the
extent permitted by law, all other rights and remedies granted to the
Administrative Agent or any Secured Party in this Agreement and the other Loan
Documents and in any other instrument or agreement securing, evidencing or
relating to the Obligations. Without limiting the generality of the foregoing,
the Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon the Grantors or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances, to the extent permitted by law, forthwith
collect, receive, appropriate and realize upon the Collateral, or any part
thereof, and/or may forthwith sell, lease, assign, give option or options to
purchase, or otherwise dispose of and deliver the Collateral or any part thereof
(or contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, at any exchange, broker's board or office of the
Administrative Agent or any other Secured Party or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The Administrative Agent or any other Secured Party shall have the right, to the
extent permitted by law, upon any such sale or sales, to purchase the whole or
any part of the Collateral so sold, free of any right or equity of redemption in
the Grantor, which right or equity is hereby waived and released. Each of the
Grantors further agrees, at the Administrative Agent's request, to assemble the
Collateral and make it available to the Administrative Agent at places which the
Administrative Agent shall reasonably select, whether at such Grantor's premises
or elsewhere. In the event of any sale, assignment, or other disposition of any
of the Collateral, the goodwill of the business connected with and symbolized by
any Trademark Collateral subject to such disposition shall be included, and the
Grantor shall supply to the Administrative Agent or its designee such Grantor's
know-how and expertise

                                       15

<PAGE>

relating to the Collateral subject to such disposition, and the Grantor's
notebooks, studies, reports, records, documents and things embodying the same or
relating to the inventions, processes or ideas covered by, and to the
manufacture of any products under or in connection with, the Collateral subject
to such disposition, and the Grantor's customer's lists, studies and surveys and
other records and documents relating to the distribution, marketing, advertising
and sale of products relating to the Collateral subject to such disposition. The
Administrative Agent shall apply the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred therein or incidental to
the care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Administrative Agent and the other Secured
Parties hereunder, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment and performance in whole or in part of the
Obligations then due and owing, in the order of priority specified in Section 7
hereof, and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-615(a)(3) of the Code, need the
Administrative Agent account for the surplus, if any, to the Grantor. To the
extent permitted by applicable law, (a) each Grantor waives all claims, damages
and demands it may acquire against the Administrative Agent or any other Secured
Party arising out of the repossession, retention or sale of the Collateral,
other than any such claims, damages and demands that may arise from the gross
negligence or willful misconduct of any of them, and (b) any notice of a
proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least 10 days before
such sale or other disposition. Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay in full the Loans, the Reimbursement Obligations, and,
to the extent then due and owing, all other Obligations, including, without
limitation, the reasonable fees and disbursements of any attorneys employed by
the Administrative Agent or any other Secured Party to collect such deficiency,
as provided in the Credit Agreement.

                  9.       Limitation on Duties Regarding Preservation of
Collateral. The Administrative Agent's sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession, under
Section 9-207 of the Code or otherwise, shall be to deal with it in the same
manner as the Administrative Agent deals with similar property for its own
account. Neither the Administrative Agent, any other Secured Party, nor any of
their respective directors, officers, employees, affiliates or agents shall be
liable for failure to demand, collect or realize upon all or any part of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any
other Person.

                  10.      Powers Coupled with an Interest. All authorizations
and agencies herein contained with respect to the Collateral are powers coupled
with an interest and are irrevocable until the payment in full of the Loans, the
Reimbursement Obligations and, to the extent then due and owing, all other
Obligations, the termination of the Revolving Credit Commitments and the
expiration, termination or return to the Issuing Lender of any Letters of
Credit.

                  11.      Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such

                                       16
<PAGE>

prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.

                  12.      Section Headings. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.

                  13.      No Waiver; Cumulative Remedies. Neither the
Administrative Agent nor any other Secured Party nor any Grantor shall by any
act (except by a written instrument pursuant to Section 14 hereof), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default or in any
breach of any of the terms and conditions hereof. No failure to exercise, nor
any delay in exercising, on the part of the Administrative Agent, any other
Secured Party or the Grantor, any right, power or privilege hereunder shall
operate as a waiver thereof. No single or partial exercise of any right, power
or privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the
Administrative Agent, any other Secured Party or any Grantor of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent, such other Secured Party or such
Grantor would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any rights or remedies provided by law.

                  14.      Waivers and Amendments; Successors and Assigns. None
of the terms or provisions of this Agreement may be amended, supplemented,
waived or otherwise modified except in accordance with Section 10.1 of the
Credit Agreement. No consent of any Qualified Counterparty shall be required for
any waiver, amendment, supplement or other modification to this Agreement. This
Agreement shall be binding upon and shall inure to the benefit of each of the
Grantors and their respective successors and assigns, and the Administrative
Agent and the other Secured Parties and their respective successors, indorsees,
transferees and assigns, except that (other than in accordance with Section 7.5
of the Credit Agreement) none of the Grantors shall assign, transfer or delegate
any of its rights or obligations under this Agreement without the prior written
consent of the Administrative Agent.

                  15.      Notices. All notices, requests and demands to or upon
the respective parties hereto shall be made in accordance with Section 10.2 of
the Credit Agreement. The Administrative Agent, the Secured Parties and the
Grantors may change their respective addresses and transmission numbers for
notices by notice in the manner provided in this Section 15.

                  16.      Authority of Administrative Agent. Each Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the other Secured Parties, be governed by the Credit Agreement and by
such other agreements with

                                       17

<PAGE>

respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and the Grantors shall not
be under any obligation to make any inquiry respecting such authority.

                  17.      GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.

                  18.      Release of Collateral and Termination. (a) At such
time as the Loans, the Reimbursement Obligations and the other Obligations
(other than Borrower Hedge Agreement Obligations (as defined in the Guarantee
and Collateral Agreement) and Guarantor Hedge Agreement Obligations (as defined
in the Guarantee and Collateral Agreement)) shall have been paid in full, the
Commitments have been terminated and no Letters of Credit shall be outstanding,
the Collateral shall be released from the Liens created hereby, and this
Agreement and all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and each Grantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantors;
provided, that if any payment, or any part thereof, of any of the Obligations is
rescinded or must otherwise be restored or returned by the Administrative Agent
or any other Secured Party upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Grantor or any other Loan Party, or upon or
as a result of the appointment of a receiver, intervenor or conservator of, or a
trustee or similar officer for, the Grantor or any other Loan Party or any
substantial part of its property, or otherwise, this Agreement, all rights
hereunder and the Liens created hereby shall continue to be effective, or be
reinstated, as though such payments had not been made. At the request and sole
expense of any Grantor following any such termination, the Administrative Agent
shall reassign to such Grantor any Collateral held by the Administrative Agent
hereunder, and execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination and reassignment.

                  (b)      If any of the Collateral shall be sold, transferred
or otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then the Administrative Agent, at the request and sole expense of
such Grantor, shall execute and deliver to such Grantor all releases or other
documents reasonably necessary or desirable for the release of the Liens created
hereby on such Collateral.

                  (c)      No consent of any Qualified Counterparty shall be
required for any release of Collateral or Grantors pursuant to this Section.

                  19.      Incorporation of Provisions of Guarantee and
Collateral Agreement. Each Grantor hereby acknowledges and affirms that the
rights and remedies of the Administrative Agent with respect to the security
interest in the Collateral made and granted hereby are more fully set forth in
the Guarantee and Collateral Agreement, the terms, conditions and other
provisions of which, insofar as they relate to the Collateral, such security
interest and such rights and remedies, are incorporated by reference herein as
if fully set forth herein. Nothing in this

                                       18

<PAGE>

Agreement shall defer or impair the attachment or perfection of any security
interest in any collateral described in the Guarantee and Collateral Agreement
which would attach or be perfected pursuant to the terms of the Guarantee and
Collateral Agreement without action by the Grantor or any other Person.

                  20.      Interpretation. In the event of a conflict between
any term of this Agreement and the terms of the Credit Agreement, the terms of
the Credit Agreement shall control.

                  21.      Integration. This Agreement and the other Loan
Documents represent the entire agreement of the Grantors and the Administrative
Agent with respect to the subject matter hereof and there are no promises or
representations by the Grantors, the Administrative Agent or any other Secured
Party relative to the subject matter hereof not reflected or referred to herein
or therein.

                  22.      Submission To Jurisdiction; Waivers. Each Grantor
hereby irrevocably and unconditionally:

                  (a)      submits for itself and its property in any legal
         action or proceeding relating to this Agreement and the other Loan
         Documents to which it is a party, or for recognition and enforcement of
         any judgement in respect thereof, to the non-exclusive general
         jurisdiction of the courts of the State of New York, the courts of the
         United States of America for the Southern District of New York, and
         appellate courts from any thereof;

                  (b)      consents that any such action or proceeding may be
         brought in such courts and waives any objection that it may now or
         hereafter have to the venue of any such action or proceeding in any
         such court or that such action or proceeding was brought in an
         inconvenient forum and agrees not to plead or claim the same;

                  (c)      agrees that service of process in any such action or
         proceeding may be effected by mailing a copy thereof by registered or
         certified mail (or any substantially similar form of mail), postage
         prepaid, to the Grantor at the address referred to in Section 15 or at
         such other address of which the Administrative Agent shall have been
         notified pursuant thereto;

                  (d)      agrees that nothing herein shall affect the right to
         effect service of process in any other manner permitted by law or shall
         limit the right to sue in any other jurisdiction; and

                  (e)      waives, to the maximum extent not prohibited by law,
         any right it may have to claim or recover in any legal action or
         proceeding referred to in this Section 22 any punitive damages.

                  23.      WAIVER OF JURY TRIAL. EACH OF THE GRANTORS AND THE
ADMINISTRATIVE AGENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY
IN ANY LEGAL ACTION OR

                                       19
<PAGE>

PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

                  24.      Counterparts. This Agreement may be executed and
acknowledged by one or more of the parties to this Agreement on any number of
separate counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

                  25.      Additional Grantors. Each Subsidiary of the Borrower
that is required to become a party to this Agreement pursuant to Section 6.9 of
the Credit Agreement shall become a Grantor for all purposes of this Agreement
upon execution and delivery by such Subsidiary of an Assumption Agreement in the
form of Annex I hereto.

                                       20

<PAGE>

                  IN WITNESS WHEREOF, the undersigned has caused this Agreement
to be duly executed and delivered as of the date first above written.

                                       DAY INTERNATIONAL GROUP, INC.

                                       By:    /s/ Thomas J. Koenig
                                          ------------------------------
                                          Name:
                                          Title:

                                       DAY INTERNATIONAL, INC.

                                       By:  /s/ Thomas J. Koenig
                                          ------------------------------
                                          Name:
                                          Title:

                                       VARN INTERNATIONAL, INC.

                                       By:  /s/ Thomas J. Koenig
                                          ------------------------------
                                          Name:
                                          Title:

                                       DAY INTERNATIONAL FINANCE, INC.

                                       By:  /s/ Thomas J. Koenig
                                          ------------------------------
                                          Name:
                                          Title:

<PAGE>

ACKNOWLEDGED AND AGREED AS OF
THE DATE HEREOF BY:

LEHMAN COMMERCIAL PAPER INC., as Administrative Agent

By:    /s/ G. Andrew Keith
   ---------------------------------------------------
   Name: G. Andrew Keith
   Title: Authorized Signatory