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                                                                    Exhibit 10.4

                              AMENDED AND RESTATED
                         PLEDGE AND SECURITY AGREEMENT

     This AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT dated as of August
15, 2001 (this "Agreement") is entered into by and among U.S. INDUSTRIES, INC.
(formerly known as USI, Inc.), a Delaware corporation ("USI"), USI GLOBAL
CORP., a Delaware corporation ("USI Global"), USI AMERICAN HOLDINGS, INC., a
Delaware corporation ("USI American"; USI, USI Global and USI American each
being referred to herein, individually, as a "Borrower" and, collectively, as
the "Borrowers"), each Subsidiary of USI listed on the signature pages hereof
(together with the Borrowers, each, individually, an "Initial Pledgor" and,
collectively, the "Initial Pledgors"), and each other Subsidiary of USI which
hereafter becomes a party to this Agreement pursuant to Section 22(b) hereof
(together with the Initial Pledgors, each, individually, a "Pledgor" and,
collectively, the "Pledgors"), WILMINGTON TRUST COMPANY, a Delaware banking
corporation (together with any successor corporate trustee appointed pursuant
to Article VII of the Collateral Trust Agreement referred to below, the
"Corporate Trustee"), and DAVID A. VANASKEY, an individual residing in the
State of Delaware (together with any successor individual trustee appointed
pursuant to Article VII of the Collateral Trust Agreement, the "Individual
Trustee" and, together with the Corporate Trustee, the "Collateral Trustees"),
the foregoing Collateral Trustees being trustees for the Secured Holders.

     This Agreement amends and restates that certain Pledge and Security
Agreement dated as of April 30, 2001 by and among the Initial Pledgors (other
then the Rexair Obligors) and the Collateral Trustees. Capitalized terms used,
but not otherwise defined, herein have the meanings specified in the Collateral
Trust Agreement (defined below) and, unless otherwise defined in this Agreement
or in the Collateral Trust Agreement, terms defined in Article 8 or 9 of the
UCC and/or in the Federal Book Entry Regulations (as defined below) are used in
this Agreement as such terms are defined in such Article 8 or 9 and/or the
Federal Book Entry Regulations. "UCC" means the Uniform Commercial Code as in
effect, from time to time, in the State of New York; provided that, if
perfection or the effect of perfection or non-perfection or the priority of any
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 from time to time in such other jurisdiction for
purposes of the provisions hereof relating to such perfection, effect of
perfection or non-perfection or priority. "Federal Book Entry Regulations"
means (a) the federal regulations contained in Subpart B ("Treasury/Reserve
Automated Debt Entry System (TRADES)") governing book-entry securities
consisting of U.S. Treasury bonds, notes and bills and Subpart D ("Additional
Provisions") of 31 C.F.R. Part 357, 31 C.F.R. ss. 357.2, ss. 357.10 through ss.
357.14 and ss. 357.41 through ss. 357.44 and (b) to the extent substantially
identical to the federal regulations referred to in clause (a) above (as in
effect from time to time), the federal regulations governing other book-entry
securities.

     Certain of the terms and provisions of this Agreement as herein amended
and restated have been updated to take into account the revisions to Article 9
of the UCC recently enacted in all 50 states and which became effective in New
York and most other states on July 1,
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2001 (the "Modernizing Changes"). Although the collateral descriptions in
previously filed financing statements corresponded to the terms used in the UCC
before the Modernizing Changes, the parties hereto intend that such financing
statements and collateral descriptions will continue to be effective and will
relate to and cover the items and types of Collateral described herein (other
than as set forth in Section 9-108(e)(1) of the UCC).

                            PRELIMINARY STATEMENTS:

          (1) Simultaneously herewith, the Borrowers, through JUSI Holdings,
Inc. ("JUSI"), a wholly owned Subsidiary, have acquired (the "Rexair
Acquisition") all of the outstanding capital stock of Rexair Holdings, Inc.
("Rexair Holdings") not owned by them immediately prior to such acquisition
and, in connection therewith, the Borrowers have agreed to cause, and have
herewith caused, (i) JUSI to deliver to the Collateral Trustees, as additional
collateral subject to this Agreement, 100% of the capital stock of Rexair
Holdings (as well as the 16% membership units of Strategic Industries, LLC)
owned by JUSI, (ii) Rexair Holdings to deliver to the Collateral Trustees, as
additional collateral subject to this Agreement, 100% of the capital stock of
Rexair, Inc. ("Rexair", and together with Rexair Holdings, collectively, the
"Rexair Obligors") and (ii) the Rexair Obligors to become parties to this
Agreement, the Collateral Trust Agreement and certain other Collateral
Documents as Pledgors, the Rexair Obligors having executed and delivered
herewith a Security Agreement Supplement pursuant to Section 22(b) hereof and
Section 9.15 of the Collateral Trust Agreement, 100% of the capital stock of
Rexair, a mortgage and certain other Collateral Documents;

          (2) In connection with the Rexair Acquisition, the Credit Parties,
the Agents, the Debt Coordinator, the Collateral Trustees and the Pledgors have
entered into an Amendment, Restatement, General Provisions and Intercreditor
Agreement dated as of even date herewith (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Master Agreement"),
to provide for and coordinate the interests of the various Credit Parties and
to amend and restate the following agreements and related facilities, in
pertinent part, as follows:

          (A) the Commitments of Bank of America, N.A., in its individual
     capacity (in such capacity, "BofA") under the Credit Agreement dated as of
     October 27, 2000, as previously amended (the "364-Day Credit Agreement "),
     among the Borrowers and BofA, as administrative agent thereunder (in such
     capacity, the "364-Day Agent") and as the sole lender thereunder, are
     terminated and are replaced by an increase in BofA's Commitments under the
     USI Credit Agreement (as hereinafter defined);

          (B) the Credit Agreement dated as of December 12, 1996, as previously
     amended (formerly referred to as the "5-Year Credit Agreement" and, as
     amended and restated by the Master Agreement, and as further amended,
     amended and restated, supplemented and otherwise modified from time to
     time, hereinafter referred to as the "USI Credit Agreement "), among the
     Borrowers, BofA, as administrative agent thereunder (in such capacity,
     formerly referred to as the "5-Year Agent" and hereafter referred to as
     the "USI Agent"), and the other USI Credit Parties (as defined in the
     Collateral Trust Agreement) is amended and restated by the Master
     Agreement to, inter alia, (i) increase the commitments of BofA thereunder
     by the amount of its terminated commitments under the 364-Day Credit
     Agreement and by an additional $30,000,000 to


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     replace its also terminated commitments under a separate receivables
     purchase agreement with the Borrowers, (ii) include among the
     "Obligations" (as defined in the USI Credit Agreement) the obligations of
     the Borrowers from time to time owing to individual USI Creditor Parties
     or their Affiliates in respect of (A) deposit accounts that are from time
     to time subject to the liens and security interests of this Agreement and
     control agreements ("Controlled Deposit Accounts") in favor of the
     Collateral Trustees maintained by the Borrowers or any of them with any
     such Person, including, without limitation, those listed in the schedules
     to the Pledge and Security Agreement, (B) automated clearing house and
     other cash management services ("Cash Management Services") provided to
     the Borrowers or any of them by any such Person and/or (C) any Secured
     Hedge Agreements, (iii) modify and coordinate certain credit and other
     provisions thereof and (iv) extend the maturity date thereunder to
     November 30, 2002 (as the same may be further modified by agreement among
     the Credit Parties, the "Maturity Date");

          (C) the Credit Agreement dated as of March 24, 2000 (as previously
     amended, and as amended and restated by the Master Agreement, and as
     further amended, amended and restated, supplemented and otherwise modified
     from time to time, hereinafter referred to as the "Rexair Credit
     Agreement" and, together with the USI Credit Agreement, the "Credit
     Agreements") among the Rexair Obligors, BofA, as administrative agent (in
     such capacity, the "Rexair Agent"), and the Rexair Credit Parties (as
     defined in the Collateral Trust Agreement) is amended and restated by the
     Master Agreement to, inter alia, (i) include among the "Obligations" (as
     defined in the Rexair Credit Agreement) the obligations of the Rexair
     Obligors from time to time owing to individual Rexair Credit Parties or
     their Affiliates in respect of (A) Controlled Deposit Accounts maintained
     by the Rexair Obligors or any of them with any such Person in favor of the
     Collateral Trustees (as defined in the Rexair Credit Agreement) or the
     Collateral Trustees, including, without limitation, those listed on
     schedules to the Rexair Collateral Documents and/or (B) Cash Management
     Services provided to the Rexair Obligors or any of them by any such
     Person, (ii) modify certain credit and other provisions thereof and (iii)
     align the maturity date thereunder with the Maturity Date;

          (D) the Guaranty dated as of March 24, 2000 (as previously amended,
     as amended and restated by the Master Agreement and as hereafter further
     amended, amended and restated, supplemented or otherwise modified, the
     "Rexair Guaranty") by us, and USI Global, jointly and severally, in favor
     of the Rexair Credit Parties and other persons is amended and restated to,
     inter alia, (i) reaffirm and restate the guaranty thereunder of the
     obligations of the Rexair Obligors to the Rexair Credit Parties and such
     other Persons as amended and restated by the Master Agreement and (ii)
     further commit the Borrowers to directly assume such obligations as direct
     obligations to the extent not otherwise paid in full upon any future
     disposition of the Rexair Obligors or of all or substantially all of their
     assets; and

          (E) the reimbursement and other obligations of the Borrowers to
     certain USI Credit Parties (the "L/C Credit Parties") under the letters of
     credit and bankers' acceptances referred to as Independent L/Cs described
     in the Master Agreement (together with any roll-overs, extensions and
     replacements thereof and any other permitted letters of credit and
     bankers' acceptances from time to time issued by any of the L/C Credit
     Parties, but not issued under the USI Credit Agreement, the "Independent
     L/Cs") are,


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     inter alia, made subject to committed letter of credit facilities of the
     L/C Credit Parties under the Master Agreement (the "Independent L/C
     Commitments") that are governed by certain credit and other provisions of
     the Master Agreement and terminate on the Maturity Date.

          (3) The Borrowers are also joint and several co-obligors with respect
to (i) those certain 7-1/4% Senior Notes due December 1, 2006 (as amended,
supplemented or otherwise modified and in effect on the date hereof and as the
same may hereafter be further amended, modified, extended, renewed, replaced,
restated or supplemented from time to time pursuant to the terms thereof, the
"7-1/4% Notes"), issued pursuant to that certain Indenture, dated as of
December 12, 1996 (as amended, supplemented or otherwise modified and in effect
on the date hereof and as the same may hereafter be further amended, modified,
extended, renewed, replaced, restated or supplemented from time to time
pursuant to the terms thereof, the "7-1/4% Note Indenture"), and (ii) those
certain 7-?% Senior Notes due October 15, 2003 (as amended, supplemented or
otherwise modified and in effect on the date hereof and as the same may
hereafter be further amended, modified, extended, renewed, replaced, restated
or supplemented from time to time pursuant to the terms thereof, the "7-?%
Notes" and, together with the 7-1/4% Notes, the "Notes"), issued pursuant to
that certain Indenture, dated as of October 27, 1998 (as amended, supplemented
or otherwise modified and in effect on the date hereof and as the same may
hereafter be further amended, modified, extended, renewed, replaced, restated,
or supplemented from time to time pursuant to the terms thereof, the "7-?% Note
Indenture" and, together with the 7-1/4% Note Indentures, the "Note
Indentures"). Pursuant to the "Limitation on Liens" provisions of each of the
Note Indentures, each Borrower has agreed not to incur, and not to permit its
Restricted Subsidiaries (as therein defined) to incur, certain Liens (as
therein defined) upon any of its property or assets to secure certain Debt (as
therein defined) without making effective provision whereby the obligations
under the Notes shall be secured equally and ratably with the Debt secured by
such Liens for so long as such Debt shall be so secured (the "Indenture Lien
Limitation").

          (4) Pursuant to the Credit Agreements and the Master Agreement, each
Borrower and Rexair Obligor has agreed, subject to the Indenture Lien
Limitations, (i) to grant and to cause certain of its respective Subsidiaries
to grant, to the Collateral Trustees for the Equal and Ratable Benefit of the
Credit Parties and the other Secured Holders pursuant to this Agreement and the
other Collateral Documents liens on and security interests in all or
substantially all of its and each such Subsidiary's assets and property from
time to time owned by it or such Subsidiary.

          (5) In connection with and pursuant to the Master Agreement, the
Pledgors, the Debt Coordinator, the Agents, the other Credit Parties and the
Collateral Trustees have entered into an Amended and Restated Collateral Trust
Agreement dated as of even date, amending and restating that certain Collateral
Trust Agreement dated as of April 30, 2001, as previously amended (as so
amended and restated, and as hereafter amended, amended and restated,
supplemented or otherwise modified, the "Collateral Trust Agreement") to
provide for and give further effect to the purposes of the Master Agreement
this Agreement, and the Pledgors have opened a collateral deposit account and
securities account, Account No. 55060 (the "Collateral Account"), with the
Corporate Trustee at its office at Rodney Square North, 1100 North Market
Street, Wilmington, DE 19890-0001, in the name of the Collateral Trustees


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and under the sole control and dominion of the Collateral Trustees and subject
to the terms of this Agreement, in addition to their other Controlled Deposit
Accounts.

          (6) This Agreement is intended to grant to the Collateral Trustees,
in trust for the Equal and Ratable Benefit of the Secured Holders and their
respective Representatives, liens on and security interests in substantially
all of the personal property and assets of the Pledgors, and this Agreement and
the liens and security interests granted hereunder are conditions to the
agreement of each of the Credit Parties to enter into the Master Agreement and
the other agreements delivered in connection therewith and to continue pursuant
to the Master Agreement to make Loans, issue Letters of Credit and make other
extensions of credit and/or provide services from time to time to or for the
account of the Borrowers and the Rexair Obligors.

          NOW, THEREFORE, in consideration of the premises and in order to
induce the Credit Parties to continue to make Loans and issue Letters of Credit
for the account of the Borrowers and the Rexair Obligors under the Credit
Agreements and Independent L/C Commitments, to induce certain of the Credit
Parties or their Affiliates to enter into or maintain from time to time with or
for the account of any of the Pledgors, Secured Hedge Agreements, Deposit
Account Control Agreements and Cash Management Service Agreements, and in order
to comply with the Indenture Lien Limitation of each of the Note Indentures,
each Pledgor hereby agrees with the Collateral Trustees for the Equal and
Ratable Benefit of the Representatives and the Secured Holders as follows:

          Section 1. Grant of Security. Each Pledgor hereby assigns and pledges
to the Collateral Trustees and hereby grants to the Collateral Trustees, in
each case, in trust pursuant to the Collateral Trust Agreement for the Equal
and Ratable Benefit of the Secured Holders and their Representatives to the
extent set forth in Section 2 of this Agreement, a lien on and a security
interest in all of such Pledgor's right, title and interest in and to the
following, in each case, as to each type of property described below, whether
now owned or hereafter acquired by such Pledgor, wherever located, and whether
now or hereafter existing or arising (collectively, the "Collateral"):

          (a) all equipment in all of its forms (including, without limitation,
     all manufacturing equipment, all office equipment and all motor vehicles
     and other distribution equipment), all fixtures and all parts thereof and
     all accessions thereto and all software related thereto, including
     software that is imbedded in and is part of the equipment (any and all
     such equipment, fixtures, parts, accessions and software being the
     "Equipment");

          (b) all inventory in all of its forms (including, without limitation,
     (i) all raw materials and work in process therefor, finished goods thereof
     and materials used or consumed in the manufacture, production, preparation
     or shipping thereof, (ii) goods in which such Pledgor has an interest in
     mass or a joint or other interest or right of any kind (including, without
     limitation, goods in which such Pledgor has an interest or right as
     consignee) and (iii) goods that are returned to or repossessed or stopped
     in transit by such Pledgor), and all accessions thereto and products
     thereof and documents therefor, and all software related thereto,
     including  software that is imbedded in and is part of the


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     inventory (any and all such inventory, accessions, products and documents
     being the "Inventory");

          (c) all accounts, chattel paper (including tangible chattel paper and
     electronic chattel paper), instruments (including promissory notes),
     deposit accounts, letter-of-credit rights, software, general intangibles
     (including payment intangibles) and other obligations of any kind, whether
     or not arising out of or in connection with the sale or lease of goods or
     the rendering of services and whether or not earned by performance, and
     all rights now or hereafter existing in and to all supporting obligations
     and in and to all security agreements, mortgages, liens, leases and other
     contracts securing or otherwise relating to the foregoing property (any
     and all of such accounts, chattel paper, instruments, deposit accounts,
     letter-of-credit rights, software, general intangibles and other
     obligations, to the extent not referred to in clause (d), (e) or (f)
     below, being the "Receivables", and any and all such supporting
     obligations, security agreements, mortgages, liens, leases and other
     contracts being the "Related Contracts");

          (d) the following (the "Security Collateral"):

               (i) the Initial Pledged Shares and the certificates, if any,
          representing the Initial Pledged Shares, and all dividends, cash,
          instruments and other property from time to time received, receivable
          or otherwise distributed in respect of or in exchange for any or all
          of the Initial Pledged Shares;

               (ii) the Initial Pledged Debt and the instruments, if any,
          evidencing the Initial Pledged Debt, and all interest, cash,
          instruments and other property from time to time received, receivable
          or otherwise distributed in respect of or in exchange for any or all
          of the Initial Pledged Debt;

               (iii) all additional shares of stock or other equity interests
          in any Person from time to time acquired by such Pledgor in any
          manner (such shares and other interests, together with the Initial
          Pledged Shares, being the "Pledged Shares"), and the certificates, if
          any, representing such additional shares or other interests, and all
          dividends, cash, instruments and other property from time to time
          received, receivable or otherwise distributed in respect of or in
          exchange for any or all of such shares or other interests; provided
          that such Pledgor shall not be required to pledge, and the terms
          "Pledged Shares" and "Security Collateral" used in this Agreement
          shall not include, any shares of stock in any Foreign Corporation (as
          hereinafter defined) owned or otherwise held thereby which, when
          aggregated with all of the other shares of stock in such Foreign
          Corporation pledged by such Pledgor, would result in 66% or more of
          the shares of stock in such Foreign Corporation entitled to vote
          (within the meaning of Treasury Regulation Section 1.956-2(c)(2)
          promulgated under the Internal Revenue Code) (the "Voting Foreign
          Stock") (on a fully diluted basis) being pledged to the Secured
          Holders under this Agreement (although all of the shares of stock in
          such Foreign Corporation not entitled to vote (within the meaning of
          Treasury Regulation Section 1.956-2(c)(2) promulgated under the
          Internal Revenue Code) (the "Non-Voting Foreign Stock") shall be
          pledged by the Pledgor); provided


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          further that if, as a result of any change in the tax laws of the
          United States of America after the date of this Agreement, the pledge
          by the Pledgors of any additional shares of stock in any such Foreign
          Corporation to the Secured Holders under this Agreement would not
          result in an increase in the net tax liabilities of such Pledgors,
          then, promptly after the change in such laws, all such additional
          shares of stock shall be so pledged under this Agreement (for
          purposes of this Section 1(d)(iii), "Foreign Corporation" means, at
          any time, any direct or indirect Subsidiary of each Pledgor organized
          outside of the laws of the United States or any state or other
          political subdivision thereof at such time that constitutes a
          "controlled foreign corporation" under Section 957 of the Internal
          Revenue Code);

               (iv) all additional indebtedness from time to time owed to such
          Pledgor (such indebtedness, together with the Initial Pledged Debt,
          being the "Pledged Debt") and the instruments, if any, evidencing
          such indebtedness, and all interest, cash, instruments and other
          property from time to time received, receivable or otherwise
          distributed in respect of or in exchange for any or all of such
          indebtedness;

               (v) all Securities Accounts of such Pledgor, all Pledged
          Security Entitlements with respect to all Pledged Financial Assets
          from time to time credited to such Securities Accounts, and all
          Pledged Financial Assets, and all dividends, interest, cash,
          instruments and other property from time to time received, receivable
          or otherwise distributed in respect of or in exchange for any or all
          of such Pledged Security Entitlements or such Pledged Financial
          Assets; and

               (vi) all other investment property (including, without
          limitation, all (A) securities, whether certificated or
          uncertificated, (B) security entitlements, (C) securities accounts,
          (D) commodity contracts and (E) commodity accounts) in which such
          Pledgor has now, or acquires from time to time hereafter, any right,
          title or interest in any manner, and the certificates or instruments,
          if any, representing or evidencing such investment property, and all
          dividends, interest, distributions, value, cash, instruments and
          other property from time to time received, receivable or otherwise
          distributed in respect of or in exchange for any or all of such
          investment property;

          (e) the following (collectively, the "Account Collateral"):

               (i) the Collateral Account, all financial assets from time to
          time credited to the Collateral Account (including, without
          limitation, all Cash Equivalents from time to time credited to the
          Collateral Account), all dividends, interest, cash, instruments and
          other property from time to time received, receivable or otherwise
          distributed in respect of or in exchange for any or all of such
          financial assets, and all funds held therein and all certificates and
          instruments, if any, from time to time representing or evidencing the
          Collateral Account;


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               (ii) all other deposit accounts, including, without limitation,
          each account listed in Schedule V, whether designated on such
          Schedule V as a Concentration Account, Operating Account, Controlled
          Deposit Account, Other Account or otherwise (each, a "Deposit
          Account"), including each Cash Collateral Account (subject, in the
          case of any Cash Collateral Account, to the priority claims of the
          Secured Holders for whose primary benefit such Cash Collateral
          Account is maintained pursuant to the terms of the Master Agreement),
          all financial assets from time to time credited to each such Deposit
          Account (including, without limitation, all Cash Equivalents from
          time to time credited to such Deposit Account), all dividends,
          interest, cash, instruments and other property from time to time
          received, receivable or otherwise distributed in respect of or in
          exchange for any or all of such financial assets, and all funds held
          therein and all certificates and instruments, if any, from time to
          time representing or evidencing each Deposit Account;

               (iii) all notes, certificates of deposit, deposit accounts,
          checks and other instruments from time to time delivered to or
          otherwise possessed by the Collateral Trustees for or on behalf of
          such Pledgor, including, without limitation, those delivered or
          possessed in substitution for or in addition to any or all of the
          then existing Account Collateral; and

               (iv) all interest, dividends, cash, instruments and other
          property from time to time received, receivable or otherwise
          distributed in respect of or in exchange for any or all of the then
          existing Account Collateral;

          (f) the following (collectively, the "Intellectual Property
     Collateral"):

               (i) all United States, international and foreign patents, patent
          applications and statutory invention registrations, including,
          without limitation, the patents set forth in Part A of Schedule IV
          hereto (as such Schedule IV may be supplemented from time to time by
          supplements to this Agreement, each such supplement being in
          substantially the form of Exhibit E hereto (an "IP Security Agreement
          Supplement"), executed and delivered by such Pledgor to the
          Collateral Trustees from time to time), together with all reissues,
          divisions, continuations, continuations-in-part, extensions and
          reexaminations thereof, all inventions therein, all rights therein
          provided by international treaties or conventions and all
          improvements thereto, and all other rights of any kind whatsoever of
          such Pledgor accruing thereunder or pertaining thereto (the
          "Patents");

               (ii) all trademarks (including, without limitation, service
          marks), certification marks, collective marks, trade dress, logos,
          domain names, product configurations, trade names, business names,
          corporate names and other source identifiers, whether or not
          registered, whether currently in use or not, including, without
          limitation, all common law rights and registrations and applications
          for registration thereof, including, without limitation, the
          trademark registrations and trademark applications set forth in Part
          B of Schedule IV hereto (as such Schedule


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          IV may be supplemented from time to time by IP Security Agreement
          Supplements executed and delivered by such Pledgor to the Collateral
          Trustees from time to time), and all other marks registered in the
          U.S. Patent and Trademark Office or in any office or agency of any
          State or Territory of the United States or any foreign country (but
          excluding any United States intent-to-use trademark application prior
          to the filing and acceptance of a Statement of Use or an Amendment to
          allege use in connection therewith to the extent that a valid
          security interest may not be taken in such an intent-to-use trademark
          application under applicable law), and all rights therein provided by
          international treaties or conventions, all reissues, extensions and
          renewals of any of the foregoing, together in each case with the
          goodwill of the business connected therewith and symbolized thereby,
          and all rights corresponding thereto throughout the world and all
          other rights of any kind whatsoever of such Pledgor accruing
          thereunder or pertaining thereto (the "Trademarks");

               (iii) all copyrights, copyright applications, copyright
          registrations and like protections in each work of authorship,
          whether statutory or common law, whether published or unpublished,
          any renewals or extensions thereof, all copyrights of works based on,
          incorporated in, derived from, or relating to works covered by such
          copyrights, including, without limitation, the copyright
          registrations and copyright applications set forth in Part C of
          Schedule IV hereto (as such Schedule IV may be supplemented from time
          to time by IP Security Agreement Supplements executed and delivered
          by such Pledgor to the Collateral Trustees from time to time),
          together with all rights corresponding thereto throughout the world
          and all other rights of any kind whatsoever of such Pledgor accruing
          thereunder or pertaining thereto (the "Copyrights");

               (iv) all confidential and proprietary information, including,
          without limitation, know-how, trade secrets, manufacturing and
          production processes and techniques, inventions, research and
          development information, technical data, financial, marketing and
          business data, pricing and cost information, business and marketing
          plans and customer and supplier lists and information (the "Trade
          Secrets");

               (v) all software, including computer software programs and
          databases (including, without limitation, source code, object code
          and all related applications and data files), firmware, and
          documentation and materials relating thereto, and all rights with
          respect to the foregoing, together with any and all options,
          warranties, service contracts, program services, test rights,
          maintenance rights, improvement rights, renewal rights and
          indemnifications and any substitutions, replacements, additions or
          model conversions of any of the foregoing (the "Computer Software");

               (vi) all license agreements, permits, authorizations and
          franchises, whether with respect to the Patents, Trademarks,
          Copyrights, Trade Secrets or Computer Software, or with respect to
          the patents, trademarks, copyrights, trade secrets, computer software
          or other proprietary right of any other Person,


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          including, without limitation, the license agreements set forth in
          Part D of Schedule IV hereto (as such Schedule IV may be supplemented
          from time to time by IP Security Agreement Supplements executed and
          delivered by such Pledgor to the Collateral Trustees from time to
          time), and all income, royalties and other payments now or hereafter
          due and/or payable with respect thereto, subject, in each case, to
          the terms of such license agreements, permits, authorizations and
          franchises (the "Licenses"); and

               (vii) any and all claims for damages for past, present and
          future infringement, misappropriation or breach with respect to the
          Patents, Trademarks, Copyrights, Trade Secrets, Computer Software or
          Licenses, with the right, but not the obligation, to sue for and
          collect, or otherwise recover, such damages;

          (g) all commercial tort claims described in Schedule VII (the
     "Commercial Tort Claims Collateral");

          (h) all books and records (including, without limitation, customer
     lists, credit files, computer programs, software, printouts and other
     computer materials and records) of such Pledgor pertaining to any of the
     Collateral; and

          (i) all proceeds of, collateral for, and supporting obligations
     relating to, any and all of the Collateral (including, without limitation,
     proceeds, collateral and supporting obligations that constitute property
     of the types described in clauses (a) through (h) of this Section 1 and
     this clause (i)) and, to the extent not otherwise included, all (A)
     payments under insurance (whether or not the Collateral Trustees are the
     loss payees thereof), or any indemnity, warranty or guaranty, payable by
     reason of loss or damage to or otherwise with respect to any of the
     foregoing Collateral, (B) commercial tort claims and (C) cash.

          Notwithstanding anything to the contrary contained in this Section 1,
the following property shall be excluded from the lien and security interest
granted hereunder:

          (i) any contract, agreement or other document (and any contract
     rights arising thereunder) to which any of the Pledgors is a party on the
     date hereof and any similar contract or agreement entered into by any
     Pledgor after the date hereof with the prior written consent of the
     Required Representatives, in each case, shall be excluded from the lien
     and security interest granted by such Pledgor under this Section 1 to the
     extent that the assignment thereof, or the creation of a lien and security
     interest therein, would constitute a breach of the terms of such contract,
     agreement or other document, or would permit any party to such contract,
     agreement or other document to terminate such contract rights or agreement
     (all such contracts, agreements and other documents being the "Excluded
     Agreements"); provided, however, that (1) the exclusion from the lien and
     security interest granted by such Pledgor hereunder of any contract rights
     of any of the Pledgors under one or more of the Excluded Agreements shall
     not limit, restrict or impair the grant by such Pledgor of the lien and
     security interest in any accounts or receivables arising under any such
     Excluded Agreement or any payments due or to become due thereunder, and
     (2) any of the Excluded Agreements shall automatically cease to be


                                      10
<PAGE>


     excluded from this Section 1 at such time as, (A) the prohibition of
     assignment or of the creation of a lien and security interest in such
     agreement is no longer in effect or is rendered ineffective as a matter of
     law or (B) the applicable Pledgor has obtained the consent of the other
     parties to such agreement to the assignment of, or creation of a lien and
     security interest in, the contract rights of such Pledgor thereunder;

          (ii) any license, permit or authorization from any Governmental
     Authority in favor of any Pledgor shall be excluded from the lien and
     security interest granted by such Pledgor under this Section 1 to the
     extent that the assignment thereof or the creation of a lien and security
     interest therein would constitute a breach of the terms of such license,
     permit or authorization or would require any separate license, permit or
     authorization or would otherwise terminate such license, permit or
     authorization (all of the licenses, permits and authorizations referred to
     herein being the "Excluded Authorizations"); provided, however, that any
     of the Excluded Authorizations shall cease to be excluded from this
     Section 1 at such time as (1) the prohibition of assignment or of the
     creation of a lien and security interest in such license, permit or
     authorization is no longer in effect or is rendered ineffective as a
     matter of law or (2) the applicable Pledgor has obtained the consent of
     the applicable Governmental Authority to the assignment of, or creation of
     a lien and security interest in, such license, permit or authorization of
     such Pledgor; and

          (iii) any property of a Pledgor which is subject to any Lien which
     such Pledgor is permitted to enter into pursuant to the terms of Section
     6.02(a)(iv) or (if not permitted by the lease terms) 6.02(a)(v) of the
     Master Agreement, to the extent that such Pledgor has agreed not to
     further encumber such property (all such property being "Other Excluded
     Property"), shall be excluded from the lien and security interest granted
     by such Pledgor under this Section 1; provided, however, that any such
     Other Excluded Property shall cease to be excluded from this Section 1 if,
     at any time, the prohibition of assignment or the creation of a lien and
     security interest in such property is no longer in effect by reason of an
     amendment, waiver or other modification of the applicable Security
     Instrument or the release or satisfaction of such Security Instrument.

          In addition, nothing in this Agreement shall be deemed to require any
Pledgor to seek the consent of any Person or Governmental Authority to the
assignment of, or the creation of a lien on or a security interest in, any
Excluded Agreement, Excluded Authorization or Other Excluded Property.

          Section 2. Security for Secured Obligations.

          (a) This Agreement secures (i) in the case of any Collateral granted
     by a Pledgor that is a Borrower or a Restricted Subsidiary, the payment
     and performance of all the Secured Obligations (as defined in the
     Collateral Trust Agreement) of the Pledgors now or hereafter existing
     under the Secured Agreements, for the Equal and Ratable Benefit of all of
     the Secured Holders thereof and their Representatives and (ii) in the case
     of any Collateral granted by a Pledgor that is an Unrestricted Subsidiary
     Pledgor, the payment and performance of all the Secured Obligations of the
     Pledgors now or hereafter existing under the Secured Agreements, other
     than any Secured Obligations arising under


                                      11
<PAGE>


     or in respect of the 7-1/4% Notes and the 7-1/8% Notes, for the Equal and
     Ratable Benefit of the Secured Holders thereof and their respective
     Representatives under such Secured Agreements, but not for the benefit of
     any Note Holders or their Representatives.

          (b) With respect to any Rexair Collateral, the Lien created by this
     Agreement and the other Collateral Documents (not including any Rexair
     Collateral Documents) shall be, until all Rexair Debt is repaid in full
     and all commitments thereunder terminated, a second priority Lien,
     subordinate to the prior Lien of the Rexair Collateral Documents.

          Section 3. Pledgors Remain Liable. Anything herein to the contrary
notwithstanding,

          (a) each Pledgor shall remain liable under the contracts and
     agreements included in such Pledgor's Collateral to the extent set forth
     therein to perform all of its duties and obligations thereunder to the
     same extent as if this Agreement had not been executed,

          (b) the exercise by the Collateral Trustees of any of the rights
     hereunder shall not release any Pledgor from any of its duties or
     obligations under the contracts and agreements included in the Collateral
     and

          (c) neither the Collateral Trustees nor any Secured Holder shall have
     any obligation or liability under the contracts and agreements included in
     the Collateral by reason of this Agreement or any Secured Agreement, nor
     shall the Collateral Trustees or any Secured Holder be obligated to
     perform any of the obligations or duties of any Pledgor thereunder or to
     take any action to collect or enforce any claim for payment assigned
     hereunder.

          Section 4. Delivery and Control of Security Collateral. So long as
any Bank Exposure (as defined in the Master Agreement) shall remain unpaid or
outstanding, or any Secured Hedge Agreement shall be in effect, or any Bank
shall have any Commitment (as defined in the Master Agreement) under the Credit
Agreements:

          (a) All certificates or instruments representing or evidencing
     Security Collateral shall be delivered to and held by or on behalf of the
     Collateral Trustees pursuant hereto and shall be in suitable form for
     transfer by delivery, or shall be accompanied by duly executed instruments
     of transfer or assignment in blank, all in form and substance satisfactory
     to the Collateral Trustees. Upon the occurrence and during the continuance
     of an Actionable Default, the Collateral Trustees shall have the right, at
     any time in their discretion and without notice to any Pledgor, to
     transfer to or to register in the name of the Collateral Trustees or any
     of their nominees any or all of the Security Collateral, subject only to
     the revocable rights specified in Section 12(a). In addition, the
     Collateral Trustees shall have the right at any time to exchange
     certificates or instruments representing or evidencing Security Collateral
     for certificates or instruments of smaller or larger denominations. Also,
     the Collateral Trustees shall have the right at any time to convert
     Security Collateral consisting of financial assets credited to any
     Securities


                                      12
<PAGE>


     Account of any Pledgor to Security Collateral consisting of financial
     assets held directly by the Collateral Trustees, and to convert Security
     Collateral consisting of financial assets held directly by the Collateral
     Trustees to Security Collateral consisting of financial assets credited to
     such Securities Account.

          (b) With respect to any Security Collateral in which any Pledgor has
     any right, title or interest and that constitutes an uncertificated
     security, such Pledgor will cause the issuer thereof either (i) to
     register the Collateral Trustees as the registered owner of such security
     or (ii) to agree in an authenticated record with such Pledgor and the
     Collateral Trustees that such issuer will comply with instructions with
     respect to such security originated by the Collateral Trustees without
     further consent of such Pledgor, such authenticated record to be in form
     and substance satisfactory to the Collateral Trustees. Each Pledgor which
     has issued any Security Collateral to any other Pledgor hereby agrees with
     such other Pledgor and the Collateral Trustees that it will comply with
     instructions with respect to such Security Collateral originated by the
     Collateral Trustees without further consent of such other Pledgor.

          (c) With respect to any Security Collateral in which any Pledgor has
     any right, title or interest and that constitutes a security entitlement,
     such Pledgor will cause the securities intermediary with respect to such
     security entitlement either (i) to identify in its records the Collateral
     Trustees as the entitlement holder of such security entitlement against
     such securities intermediary or (ii) to agree in an authenticated record
     with such Pledgor and the Collateral Trustees that such securities
     intermediary will comply with entitlement orders (that is, notifications
     communicated to such securities intermediary directing transfer or
     redemption of the financial asset to which such Pledgor has a security
     entitlement) originated by the Collateral Trustees without further consent
     of such Pledgor, such authenticated record to be in substantially the form
     of Exhibit C hereto or otherwise in form and substance satisfactory to the
     Collateral Trustees (such agreement being a "Securities Account Control
     Agreement"). Each Pledgor agrees that it will not establish or open any
     additional securities account in addition to those listed in Part C of
     Schedule I hereto, unless the Collateral Trustee shall have received at
     least 10 days' prior notice of such addition in an authenticated record
     and shall have received a Securities Account Control Agreement (or a
     supplement to an existing Securities Account Control Agreement) covering
     such new securities account, and upon the receipt by the Collateral
     Trustees of such Securities Account Control Agreement (or supplement),
     Part C of Schedule I hereto shall be automatically amended to include such
     securities account. Each Pledgor agrees that it will not terminate any
     Securities Account unless the Collateral Trustees and the Required
     Representatives shall have received at least 10 days' prior notice of such
     termination in an authenticated record (and, upon such termination, Part C
     of Schedule I hereto shall be automatically amended to delete such
     Securities Account).

          (d) No Pledgor will change or add any securities intermediary that
     maintains any securities account in which any of the Collateral is
     credited or carried, or change or add any such securities account, in each
     case without first complying with the above provisions of this Section 4
     in order to perfect the security interest granted hereunder in such
     Collateral.


                                      13
<PAGE>


          Section 5. Maintaining the Pledged Accounts. So long as any Bank
Exposure shall remain unpaid or outstanding, or any Secured Hedge Agreement
shall be in effect, or any Bank shall have any Commitment under the Credit
Agreements:

          (a) Each Pledgor will maintain all Account Collateral only with banks
     (the "Controlled Account Banks") that have agreed, in a record
     authenticated by the Pledgor, the Collateral Trustees and the Controlled
     Account Bank, to (i) comply with instructions originated by the Collateral
     Trustees directing the disposition of funds in the Account Collateral
     without the further consent of the Pledgor and (ii) waive or subordinate
     in favor of the Collateral Trustees all claims of the Controlled Account
     Bank (including claims by way of a security interest, right of setoff or
     right of recoupment) to the Account Collateral, which authenticated record
     shall be substantially in the form of Exhibit A hereto, or shall otherwise
     be in form and substance satisfactory to the Collateral Trustees (each a
     "Deposit Account Control Agreement"); provided, however, that this Section
     5(a) shall not at any time apply to any Deposit Accounts (the "Other
     Deposit Accounts") to the extent such accounts are permitted pursuant to
     Section 6.01(n) of the Master Agreement to be maintained with institutions
     located in the United States other than Permitted Account Banks (as
     defined in the Master Agreement).

          (b) If requested by the Required Representatives upon or during the
     continuance of a Default, each Pledgor will (i) immediately instruct each
     Person obligated at any time to make any payment to such Pledgor for any
     reason to make such payment to an Other Deposit Account or a Controlled
     Deposit Account and (ii) deposit in a Controlled Deposit Account or pay to
     the Collateral Trustees for deposit in a Controlled Deposit Account, at
     the end of each Business Day, all proceeds of Collateral and all other
     cash of such Pledgor.

          (c) Concurrently with or promptly after entering into a Deposit
     Account Control Agreement with any Controlled Account Bank, each Pledgor
     will instruct such Controlled Account Bank to transfer to a Controlled
     Deposit Account designated on Schedule V as a Cash Concentration Account
     (each, a "Cash Concentration Account"), at the end of each Business Day,
     in same day funds an amount equal to the credit balance of each other
     Controlled Deposit Account or Other Deposit Account. If any Pledgor shall
     fail to give any such instructions to any Controlled Account Banks, the
     Collateral Trustees may do so without further notice to any Pledgor.

          (d) Each Pledgor agrees that it will not maintain any deposit
     accounts other than a Deposit Account listed in Schedule V hereto or an
     Other Deposit Account, unless the Collateral Trustees shall have received
     at least 10 days' prior written notice of such addition and shall have
     received a Deposit Account Control Agreement authenticated by such new
     Controlled Account Bank and such Pledgor, or a supplement to an existing
     Deposit Account Control Agreement covering such new Controlled Deposit
     Account, as the case may be (and, upon the receipt by the Collateral
     Trustees of such Deposit Account Control Agreement or supplement, Schedule
     V hereto shall be automatically amended to include such new Controlled
     Deposit Account and, if any, such new Controlled Account Bank. Each
     Pledgor agrees that it will not terminate any bank as a Controlled Account
     Bank or terminate any Deposit Account Control Agreement,


                                      14
<PAGE>


     Controlled Deposit Account, other Deposit Account or Account Collateral,
     except that the Pledgor may terminate an Other Deposit Account, and
     terminate a bank as a Controlled Account Banks with respect to such Other
     Deposit Account, if it gives the Collateral Trustees at least 10 days'
     prior written notice of such termination (and, upon such termination,
     Schedule V hereto shall be automatically amended to delete such Controlled
     Account Bank, Controlled Deposit Account or Other Deposit Account).

          (e) Upon any termination by a Pledgor of any Controlled Deposit
     Account or Other Deposit Account, or any Controlled Account Banks with
     respect thereto, such Pledgor will immediately notify all Persons that
     were making payments to such Controlled Deposit Account or Other Deposit
     Account to make all future payments to another Controlled Deposit Account
     or Other Deposit Account listed in Schedule V (as amended from time to
     time, including pursuant to Section 5(d) hereof). Each Pledgor agrees to
     terminate any or all Account Collateral and Deposit Account Control
     Agreements upon request by the Collateral Trustees.

          (f) So long as no Actionable Default shall have occurred and be
     continuing, the Collateral Trustees will, to the extent funds are
     available in a Cash Concentration Account or the Collateral Account,
     direct the applicable Controlled Account Bank to transfer amounts on
     deposit in a Cash Concentration Account or Collateral Account to an
     operating account (each, an "Operating Account") to the extent necessary
     to pay all checks drawn on, and all amounts otherwise withdrawn from, the
     Operating Account.

          (g) The Collateral Trustees shall have sole right to direct the
     disposition of funds with respect to each of the Deposit Accounts; and it
     shall be a term and condition of each of Deposit Accounts, notwithstanding
     any term or condition to the contrary in any other agreement relating to
     such Deposit Accounts, that no amount (including interest on Cash
     Equivalents credited thereto) will be paid or released to or for the
     account of, or withdrawn by or for the account of, the Borrower or any
     other Person from such Deposit Accounts, as the case may be, without the
     prior written consent of the Collateral Trustees.

          (h) Subject to the applicable provisions of the Collateral Trust
     Agreement, the Collateral Trustees may, at any time that an Actionable
     Default shall have occurred and be continuing, and without notice to, or
     consent from, the Pledgor, (i) transfer, or direct the transfer of, funds
     from the Account Collateral to satisfy the Pledgor's obligations under the
     Loan Documents and (ii) transfer, or direct the transfer of, funds from
     any or all of the Deposit Accounts to the Collateral Account.

          Section 6. Investing of Amounts in the Cash Concentration Accounts,
the Collateral Account and the Cash Collateral Accounts. So long as the
Collateral Trustees shall not have received a notice of Actionable Default
pursuant to the Collateral Trust Agreement the Collateral Trustees will,
subject to the provisions of Sections 5, 7 and 20, from time to time direct the
applicable Controlled Account Bank to (a) invest amounts received with respect
to the Collateral Account, the Cash Concentration Account and each Cash
Collateral Account in Cash Equivalents as the Borrower may select, provided,
that amounts received in respect of the Cash Collateral Accounts may only be
invested in Permitted Cash Equivalents (as defined in the


                                      15
<PAGE>


Master Agreement) credited to (A) the applicable Cash Concentration Account,
Collateral Account or Cash Collateral Account, or (B) in the case of Cash
Equivalents consisting of Securities Collateral, a securities account subject
to a Securities Account Control Agreement, credited to such Collateral Account,
Cash Concentration Account or Cash Collateral Account and (b) invest interest
paid on the Cash Equivalents referred to in clause (a) above, and reinvest
other proceeds of any such Cash Equivalents that may mature or be sold, in each
case in such Cash Equivalents credited in the same manner. Interest and
proceeds that are not invested or reinvested in Cash Equivalents as provided
above shall be deposited and held in the relevant Cash Concentration Account,
Collateral Account or Cash Collateral Account. In addition, the Collateral
Trustees shall have the right at any time to direct the applicable Controlled
Account Banks to exchange such Cash Equivalents for similar Cash Equivalents of
smaller or larger determinations, or for other Cash Equivalents, credited to
such Collateral Account, Cash Concentration Account or Cash Collateral Account,
as the case may be.

          Section 7. Release of Amounts. So long as the Collateral Trustees
shall not have received a notice of Actionable Default, the Collateral Trustees
will direct the applicable Controlled Account Bank (which direction may be in
the form of a revocable standing instruction) to pay and release to or at the
order of the Borrower or Pledgor, or to the Debt Coordinator at the request of
such Borrower or Pledgor, funds from time to time on deposit in the Collateral
Account and other Deposit Accounts, to be applied to the repayment or Permanent
Reduction (as defined in the Master Agreement) of Senior Debt Exposure (as
defined in the Master Agreement) or as otherwise permitted under the Master
Agreement.

          Section 8. Maintaining Electronic Chattel Paper and Letter-of-Credit
Rights and Giving Notice of Commercial Tort Claims. So long as any Bank
Exposure shall remain unpaid or outstanding, or any Secured Hedge Agreement
shall be in effect, or any Bank shall have any Commitment under the Credit
Agreements.

          (a) Each Pledgor will maintain all electronic chattel paper so that
     the Collateral Trustees have control of the electronic chattel paper in
     the manner specified in Section 9-105 of the UCC;

          (b) Each Pledgor will maintain all letter-of-credit rights assigned
     to the Collateral Trustees so that the Collateral Trustees have control of
     the letter-of-credit rights in the manner specified in Section 9-107 of
     the UCC; and

          (c) Each Pledgor will promptly give notice to the Collateral Trustees
     of any commercial tort claim that may arise in the future and will
     promptly execute or otherwise authenticate a supplement to this Agreement,
     and otherwise take all necessary action, to subject such commercial tort
     claim to the first priority lien of this Agreement.

          Section 9. Representations and Warranties. Each Pledgor represents
and warrants as follows:

          (a) The Pledgor's exact legal name, as defined in Section 9-503(a) of
     the UCC, is correctly set forth on the signature page of this Agreement.
     The Pledgor is an organization of the type specified in Schedule III to
     this Agreement and is organized and


                                      16
<PAGE>


     in good standing under the laws of the jurisdiction specified in such
     Schedule III. The Pledgor has not previously changed its name, identity or
     corporate structure, except as disclosed in Schedule IIIA hereto.

          (b) All of the Equipment and Inventory of such Pledgor are located at
     the places specified in Schedule II hereto, as such Schedule II may be
     amended from time to time pursuant to Section 11(a). Set forth in Part A
     of Schedule II for each Pledgor is a complete and accurate list of all
     real property owned by such Pledgor, showing as of the date hereof the
     street address, county or other relevant jurisdiction, state, record owner
     and book value thereof. Set forth in Part B of Schedule II for each
     Pledgor is a complete and accurate list of all leases of real property
     under which any Pledgor is the lessee, showing as of the date hereof the
     street address, county or other relevant jurisdiction, state, lessor,
     lessee, expiration date and annual rental cost thereof. Set forth in Part
     C of Schedule II for each Pledgor is a complete and accurate list of all
     warehouses and other locations (other than as set forth in Part A or B of
     such Schedule II) where such Pledgor stores any of its Inventory or
     Equipment, showing as of the date hereof the street address, county or
     other relevant jurisdiction, for such warehouseman or other bailee, and
     the nature of its contractual or other relationship with such Pledgor. The
     Pledgor is located (within the meaning of Section 9-307 of the UCC) in the
     state or jurisdiction set forth in Schedule III hereto. Such Pledgor's
     federal tax identification number and organizational identification number
     are set forth opposite such Pledgor's name in Schedule III hereto. The
     Pledgor has not changed the location of its equipment and inventory, its
     chief executive office, its location (within the meaning of Section 9-307
     of the UCC), its federal tax identification number and its organizational
     identification number, except as disclosed in Schedule IIIA. All Security
     Collateral consisting of certificated securities and instruments have been
     delivered to the Collateral Trustees. None of the Receivables or Related
     Contracts is evidenced by a promissory note or other instrument that has
     not been delivered to the Collateral Trustees.

          (c) Such Pledgor is the legal and beneficial owner of the Collateral
     of such Pledgor free and clear of any Lien, claim, option or right of
     others, except for the security interest created under this Agreement and
     other Liens permitted to exist under the Credit Agreements. No effective
     financing statement or other instrument similar in effect covering all or
     any part of such Collateral or listing such Pledgor or any trade name of
     such Pledgor as debtor is on file in any recording office, except such as
     may have been filed in favor of the Collateral Trustees relating to the
     Collateral Documents. Such Pledgor has the trade names listed on Part B of
     Schedule V hereto.

          (d) Such Pledgor has exclusive possession and control of the
     Equipment and Inventory, other than Inventory and Equipment stored at any
     locations specified in Parts B and C of Schedule II (as such Schedule II
     may be amended from time to time pursuant to Section 11(a)), in which case
     such Pledgor shall seek to obtain a landlord's or warehouseman's agreement
     substantially in the form of Exhibit B hereto (or otherwise in form and
     substance satisfactory to the Required Representatives).

          (e) The Pledged Shares issued by Affiliates of such Pledgor and
     pledged by such Pledgor hereunder have been duly authorized and validly
     issued and are fully paid


                                      17
<PAGE>


     and non-assessable. The Pledged Debt issued by Affiliates of such Pledgor
     and pledged by such Pledgor hereunder has been duly authorized,
     authenticated or issued and delivered, is the legal, valid and binding
     obligation of the issuers thereof, is evidenced by one or more promissory
     notes (which notes have been delivered to the Collateral Trustees) and is
     not in default.

          (f) The Initial Pledged Shares constitute the percentage of the
     issued and outstanding shares of stock of the issuers thereof indicated on
     Schedule I hereto as of the date hereof. The Initial Pledged Debt
     constitutes all of the outstanding indebtedness owed to such Pledgor by
     the issuers thereof and is outstanding, as of the date hereof, in the
     principal amount indicated on Schedule I hereto as of the date hereof.

          (g) All of the investment property owned by such Pledgor as of the
     date hereof is listed on Schedule I hereto.

          (h) Such Pledgor has no deposit accounts, other than the Account
     Collateral listed on Schedule V hereto, as such Schedule V may be amended
     from time to time pursuant to Section 5(d), and legal, binding and
     enforceable Deposit Account Control Agreements (with respect to such
     Pledgor) are in effect for each deposit account that constitutes Account
     Collateral, except to the extent such Deposit Account Control Agreements
     are not required by Section 5(a). Such Pledgor has instructed all existing
     obligors to make all payments to either a Controlled Deposit Account or an
     Other Deposit Account to the extent required by Section 5(b).

          (i) All filings and other actions necessary (including actions
     necessary to obtain control of Collateral as provided in Sections 9-104,
     9-105, 9-106 and 9-107 of the UCC) or reasonably desirable to perfect and
     protect the security interest in the Collateral of such Pledgor created
     under this Agreement have been duly made or taken and are in full force
     and effect, and this Agreement creates in favor of the Collateral Trustees
     for the Equal and Ratable Benefit of the Secured Holders and their
     Representatives a valid and, together with such filings and other actions,
     perfected security interest in the Collateral of such Pledgor, securing
     the payment of the Secured Obligations, subject only to Permitted Liens.

          (j) No authorization or approval or other action by, and no notice to
     or filing with, any governmental authority or regulatory body or any other
     third party is required for (i) the grant by such Pledgor of the
     assignment, pledge and security interest granted hereunder or for the
     execution, delivery or performance of this Agreement and the Collateral
     Trust Agreement by such Pledgor, (ii) the perfection or maintenance of the
     assignment, pledge and security interest created hereunder (including the
     first priority nature of such assignment, pledge or security interest),
     except for (A) the filing of financing and continuation statements under
     the Uniform Commercial Code, which financing statements have been duly
     filed and are in full force and effect, (B) the recordation of the
     Intellectual Property Security Agreements referred to in Section 11(f)
     with the U.S. Patent and Trademark Office and the U.S. Copyright Office,
     which Agreements have been duly recorded and are in full force and effect,
     (C) the actions described in Section 4 with respect to Security
     Collateral, which actions have been taken


                                      18
<PAGE>


     and are in full force and effect, and (D) the execution of Pledged Account
     Letters by the Controlled Account Banks, or (iii) for the exercise by the
     Collateral Trustees of their voting or other rights provided for in this
     Agreement or the remedies in respect of the Collateral pursuant to this
     Agreement, except as may be required in connection with the disposition of
     any portion of the Security Collateral by laws affecting the offering and
     sale of securities generally.

          (k) The Inventory that has been produced or distributed by such
     Pledgor has been produced in all material respects in compliance with all
     requirements of applicable law, including, without limitation, to the
     extent applicable, the Fair Labor Standards Act.

          (l) As to itself and its Intellectual Property Collateral:

               (i) Except with respect to any Immaterial IP Collateral (as
          hereinafter defined), the rights of such Pledgor in or to the
          Intellectual Property Collateral do not conflict with, misappropriate
          or infringe upon the intellectual property rights of any third party,
          and no claim has been asserted that the use of such Intellectual
          Property Collateral does or may infringe upon the intellectual
          property rights of any third party.

               (ii) Such Pledgor is the exclusive owner of the entire and
          unencumbered right, title and interest in and to its Intellectual
          Property Collateral, as described on Schedule IV hereto, and is
          entitled to use all such Intellectual Property Collateral without
          limitation, subject only to the license terms of the Licenses.

               (iii) The Intellectual Property Collateral set forth on Schedule
          IV hereto includes all of the patents, patent applications, trademark
          registrations and applications, copyright registrations and
          applications and Licenses owned by such Pledgor.

               (iv) The Intellectual Property Collateral is subsisting and has
          not been adjudged invalid or unenforceable in whole or part and, to
          the best of such Pledgor's knowledge, is valid and enforceable. Such
          Pledgor is not aware of any uses of any item of Intellectual Property
          Collateral that could be expected to lead to such item becoming
          invalid or unenforceable.

               (v) Except with respect to (A) any Immaterial IP Collateral or
          (B) any other Intellectual Property Collateral as to which the
          Required Representatives have determined pursuant to a written
          agreement that the cost and expense of perfecting and maintaining the
          lien hereunder is disproportionately high relative to the fair market
          value of such Intellectual Property Collateral as determined in good
          faith by USI, such Pledgor has made or performed, all filings,
          recordings and other acts and has paid all required fees and taxes to
          maintain and protect its interest in each and every item of
          Intellectual Property Collateral in full force and effect throughout
          the world, and to protect and maintain its interest therein,
          including, without limitation, recordations of any of its interests
          in the Patents and


                                      19
<PAGE>


          Trademarks with the U.S. Patent and Trademark Office and in
          corresponding national and international patent offices, and
          recordation of any of its interests in the Copyrights with the U.S.
          Copyright Office and in corresponding national and international
          copyright offices. Such Pledgor has used proper statutory notice in
          connection with its use of each patent, trademark and copyright of
          the Intellectual Property Collateral.

               (vi) Except with respect to any Immaterial IP Collateral, no
          action, suit, investigation, litigation or proceeding has been
          asserted or is pending or threatened against such Pledgor (i) based
          upon or challenging or seeking to deny or restrict the use of any of
          the Intellectual Property Collateral or (ii) alleging that any
          services provided by, processes used by, or products manufactured or
          sold by such Pledgor infringe upon or misappropriate any patent,
          trademark, copyright or any other proprietary right of any third
          party. To the best of such Pledgor's knowledge, no Person is engaging
          in any activity that infringes upon or misappropriates the
          Intellectual Property Collateral, other than any Immaterial IP
          Collateral, or upon the rights of such Pledgor therein. Except as set
          forth on Schedule IV hereto, such Pledgor has not granted any
          license, release, covenant not to sue, non-assertion assurance, or
          other right to any Person with respect to any part of the
          Intellectual Property Collateral. The consummation of the
          transactions contemplated by the Collateral Trust Agreement will not
          result in the termination or impairment of any of the Intellectual
          Property Collateral, other than any Immaterial IP Collateral.

               (vii) Except any License that constitutes or exists in respect
          of Immaterial IP Collateral: (A) each License is to the best of such
          Pledgor's knowledge, valid and binding and in full force and effect
          and represents the entire agreement between the respective licensor
          and licensee with respect to the subject matter of such License; (B)
          with respect only to each License entered into after the date hereof,
          except Standardized Commercial licenses not subject to substantial
          negotiation or as otherwise may be agreed to in writing by the
          Required Representatives, such License is not an Excluded Agreement
          or Other Excluded Property and such License will not cease to be
          valid and binding and in full force and effect on terms identical to
          those currently in effect as a result of the rights and interest
          granted herein, nor will the grant of such rights and interest
          constitute a breach or default under such License or otherwise give
          the licensor or licensee a right to terminate such License; (C) such
          Pledgor has not received any notice of termination or cancellation
          under such License; (D) such Pledgor has not received any notice of a
          breach or default under such License, which breach or default has not
          been cured; (E) such Pledgor has not granted to any other third party
          any rights, adverse or otherwise, under such License; and (F) neither
          such Pledgor nor any other party to such License is in breach or
          default in any material respect, and no event has occurred that, with
          notice or lapse of time or both, would constitute such a breach or
          default or permit termination, modification or acceleration under
          such License.


                                      20
<PAGE>


               (viii) To the best of such Pledgor's knowledge, (A) none of the
          Trade Secrets of such Pledgor has been used, divulged, disclosed or
          appropriated to the detriment of such Pledgor for the benefit of any
          other Person other than such Pledgor; (B) no employee, independent
          contractor or agent of such Pledgor has misappropriated any trade
          secrets of any other Person in the course of the performance of his
          or her duties as an employee, independent contractor or agent of such
          Pledgor; and (C) no employee, independent contractor or agent of such
          Pledgor is in default or breach of any term of any employment
          agreement, non-disclosure agreement, assignment of inventions
          agreement or similar agreement or contract relating in any way to the
          protection, ownership, development, use or transfer of such Pledgor's
          Intellectual Property Collateral.

               (ix) Certain items of Intellectual Property Collateral, the fair
          market value of which does not individually exceed [$25,000] or in
          the aggregate exceed [$500,000] (as reasonably determined in good
          faith by USI as of the date hereof, and as of each date on which
          Schedule IV is supplemented pursuant to the terms hereof), have been
          designated as such on Schedule IV hereto (such items, together with
          such other Intellectual Property Collateral as the USI Agent and USI
          agree are not material, the "Immaterial IP Collateral"). The
          Immaterial IP Collateral, both individually and in the aggregate, is
          not necessary in any material respect to the continued conduct by any
          Pledgor of its business as such business is conducted on the date
          hereof or as the same may hereafter be conducted from time to time.

          Section 10. Further Assurances. (a) Each Pledgor agrees that from
time to time, at the expense of such Pledgor, such Pledgor will promptly
execute and deliver (or otherwise authenticate and deliver) all further
instruments and documents, and take all further action, that may be necessary
or reasonably desirable, or that the Collateral Trustees may reasonably
request, in order to perfect and protect any pledge, assignment or security
interest granted or purported to be granted by such Pledgor hereunder or to
enable the Collateral Trustees to exercise and enforce their rights and
remedies hereunder with respect to any Collateral of such Pledgor. Without
limiting the generality of the foregoing, each Pledgor will promptly with
respect to Collateral of such Pledgor: (i) mark conspicuously each document
included in Inventory, each chattel paper included in Receivables, each Related
Contract and, at the request of the Collateral Trustees or the Required
Representatives, each of its records pertaining to such Collateral with a
legend, in form and substance satisfactory to the Collateral Trustees,
indicating that such document, chattel paper, Related Contract or Collateral is
subject to the security interest granted hereby; (ii) if any such Collateral
shall be evidenced by a promissory note or other instrument, deliver and pledge
to the Collateral Trustees hereunder such note or instrument duly indorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Collateral Trustees; (iii) execute or
authenticate and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
reasonably desirable, or as the Collateral Trustees may reasonably request, in
order to perfect and preserve the security interest granted or purported to be
granted by such Pledgor hereunder; (iv) deliver and pledge to the Collateral
Trustees for the benefit of the Secured Holders certificates representing
Security Collateral that constitutes certificated securities, accompanied by
undated stock or bond powers executed in blank; (v) take all action necessary
to insure that


                                      21
<PAGE>


the Collateral Trustees have control of Collateral consisting of deposit
accounts, electronic chattel paper, investment property and letter-of-credit
rights as provided in Sections 9-104, 9-105, 9-106 and 9-107 of the UCC; and
(vi) deliver to the Collateral Trustees evidence that all other action that the
Collateral Trustees may deem reasonably necessary or desirable in order to
perfect and protect the security interest created by such Pledgor under this
Agreement has been taken. From time to time upon request by the Collateral
Trustees, each Pledgor will, at such Pledgor's expense, cause to be delivered
to the Collateral Trustees, for the benefit of the Secured Holders and their
Representatives, an opinion of counsel, from outside counsel reasonably
satisfactory to the Collateral Trustees, as to such matters relating to the
transactions contemplated hereby as the Collateral Trustees may reasonably
request.

          (b) Each Pledgor hereby authorizes the Collateral Trustees to file
one or more financing or continuation statements, and amendments thereto,
relating to all or any part of the Collateral of such Pledgor without the
signature of such Pledgor. A photocopy or other reproduction of this Agreement
or any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.

          (c) Each Pledgor will furnish to the Collateral Trustees from time to
time statements and schedules further identifying and describing the Collateral
of such Pledgor and such other reports in connection with such Collateral as
the Collateral Trustees may reasonably request, all in reasonable detail.

          (d) The Borrowers will furnish to the Collateral Trustees, on or
prior to each of the first and the fifth anniversary of the Effective Date (but
not more than six months prior thereto), at any time upon the request of the
Collateral Trustees, an opinion of counsel acceptable to the Required
Representatives to the effect that all financing or continuation statements
have been filed, and all other action has been taken (including action
necessary to give the Collateral Trustees control over the Collateral as
provided in Sections 9-104, 9-105, 9-106 and 9-107 of the UCC), to perfect
continuously from the date which is 90 days from the date hereof the security
interest granted hereunder.

          Section 11. As to Equipment and Inventory. (a) Each Pledgor will keep
the Equipment and Inventory of such Pledgor (other than Inventory sold in the
ordinary course of business) at the places therefor specified in Section 9(b)
or, upon 30 days' prior written notice to the Collateral Trustees, at such
other places designated by the Pledgor in such notice. Upon the giving of such
notice, Schedule II hereto shall be automatically amended to add any new
locations specified in the notice.

          (b) Each Pledgor will cause the Equipment of such Pledgor to be
maintained and preserved in the same condition, repair and working order as
when new, ordinary wear and tear excepted, and in accordance with any
manufacturer's manual, and will forthwith, or in the case of any loss or damage
to any of such Equipment as soon as practicable after the occurrence thereof,
make or cause to be made all repairs, replacements and other improvements in
connection therewith that are necessary or desirable to such end. Each Pledgor
will promptly furnish to the Collateral Trustees and the Representatives a
statement respecting any loss or damage exceeding [$5,000,000] to any of the
Equipment or Inventory of such Pledgor.


                                      22
<PAGE>


          (c) Each Pledgor will pay promptly when due all property and other
taxes, assessments and governmental charges or levies imposed upon, and all
claims (including, without limitation, claims for labor, materials and
supplies) against, the Equipment and Inventory of such Pledgor, except to the
extent payment thereof is not required by Section 7.06 of the USI Credit
Agreement. In producing its Inventory, each Pledgor will comply with all
requirements of applicable law, including, without limitation, to the extent
applicable, the Fair Labor Standards Act.

          Section 12. Insurance. (a) Each Pledgor will, at its own expense,
maintain insurance with respect to the Equipment and Inventory of such Pledgor
in such amounts, against such risks, in such form and with such insurers as is
customarily maintained by companies similarly situated to such Pledgor. Each
such policy shall at all times (i) name such Pledgor and the Collateral
Trustees as insured parties thereunder (without any representation or warranty
by or obligation upon the Collateral Trustees) as their interests may appear,
(ii) contain the agreement by the insurer that any loss thereunder shall be
payable to the Collateral Trustees following notice from the Collateral
Trustees of an Actionable Default, notwithstanding any action, inaction or
breach of representation or warranty by such Pledgor, (iii) provide that there
shall be no recourse against the Collateral Trustees for payment of premiums or
other amounts with respect thereto and (iv) provide that at least 30 days'
prior written notice of cancellation or of lapse shall be given to the
Collateral Trustees by the insurer. Each Pledgor will, if so requested by the
Collateral Trustees, deliver to the Collateral Trustees original or duplicate
policies of such insurance and, as often as the Collateral Trustees may
reasonably request, a report of a reputable insurance broker with respect to
such insurance. Further, each Pledgor will, at the request of the Collateral
Trustees, duly execute and deliver instruments of assignment of such insurance
policies to comply with the requirements of Section 11 and cause the insurers
to acknowledge notice of such assignment.

          (b) Reimbursement under any liability insurance maintained by any
Pledgor pursuant to this Section 12 may be paid directly to the Person who
shall have incurred liability covered by such insurance. In case of any loss
involving damage to Equipment or Inventory when subsection (c) of this Section
12 is not applicable, the applicable Pledgor will make or cause to be made the
necessary repairs to or replacements of such Equipment or Inventory, and any
proceeds of insurance properly received by or released to such Pledgor shall be
used by such Pledgor, except as otherwise required hereunder or by the Credit
Agreements, to pay or as reimbursement for the costs of such repairs or
replacements.

          (c) So long as no Actionable Default shall have occurred and be
continuing, all insurance payments received by the Collateral Trustees in
connection with any loss, damage or destruction of any Inventory or Equipment
will be released by the Collateral Trustees to the applicable Pledgor. Upon the
occurrence and during the continuance of any Actionable Default, all insurance
payments in respect of such Equipment or Inventory shall be paid to the
Collateral Trustees and shall, as directed by the Required Representatives, (i)
be released to the applicable Pledgor to be applied as set forth in the first
sentence of this subsection (c) or (ii) be held as additional Collateral
hereunder or applied as specified in Section 20(b).

          Section 13. Post-Closing Changes; Bailees; Receivables and Related
Contracts. (a) Each Pledgor will not change its name, identity, corporate
structure, federal tax identification


                                      23
<PAGE>


number, organizational identification number, or location from those set forth
in Section 9(a) of this Agreement without first giving at least 30 days'
advance written notice to the Collateral Trustees and taking all action
required by the Collateral Trustees for the purpose of perfecting or protecting
the liens granted by this Agreement. Each Pledgor will not become bound by a
security agreement signed or authenticated by another Person (determined as
provided in Section 9-203(d) of the UCC) without giving the Collateral Trustees
30 days' prior written notice thereof and taking all action required by the
Collateral Trustees to insure that the perfection and first priority nature of
the Collateral Trustees' lien on the Collateral will be maintained. Each
Pledgor will also keep the originals of the Related Contracts to which such
Pledgor is a party and all originals of all chattel paper that evidence
Receivables of such Pledgor at the locations therefor specified in Section 9(a)
or, upon 30 days' prior written notice to the Collateral Trustees, at such
other locations designated in such notice. Each Pledgor will hold and preserve
its records relating to the Collateral, the Related Contracts and chattel
paper, and will permit representatives of the Collateral Trustees at any time
during normal business hours to inspect and make abstracts from such records
and other documents.

          (b) If any material portion of its Collateral is at any time in the
possession or control of a warehouseman, bailee or agent, or if the Collateral
Trustees so request, such Pledgor will (i) notify such warehouseman, bailee or
agent of the security interests, (ii) instruct such warehouseman, bailee or
agent to hold all such Collateral for the Collateral Trustees' account subject
to the Collateral Trustees' instructions (which shall permit such Collateral to
be removed by such Pledgor in the ordinary course of business until the
Collateral Trustees notify such warehouseman, bailee or agent that an
Actionable Default has occurred and is continuing), (iii) using commercially
reasonable efforts, cause such warehouseman, bailee or agent to authenticate a
record acknowledging that it holds possession of such Collateral for the
Collateral Trustees' benefit and (iv) make such authenticated record available
to the Collateral Trustees.

          (c) Except as otherwise provided in this subsection (c), each Pledgor
will continue to collect, at its own expense, all amounts due or to become due
such Pledgor under the Receivables and the Related Contracts. In connection
with such collections, such Pledgor may take (and, at the Collateral Trustees'
direction, will take) such action as such Pledgor or the Collateral Trustees
may reasonably deem necessary or advisable to enforce collection of the
Receivables and the Related Contracts; provided, however, that the Collateral
Trustees shall have the right at any time, upon the occurrence and during the
continuance of an Actionable Default and upon written notice to such Pledgor of
its intention to do so, to notify the Account Obligors under any Receivables or
Related Contracts of the assignment of such Receivables or Related Contracts to
the Collateral Trustees and to direct such Account Obligors to make payment of
all amounts due or to become due to such Pledgor thereunder directly to the
Collateral Trustees and, upon such notification and at the expense of such
Pledgor, to enforce collection of any such Receivables or Related Contracts,
and to adjust, settle or compromise the amount or payment thereof, in the same
manner and to the same extent as such Pledgor might have done, and to otherwise
exercise all rights with respect to such Receivables and Related Contracts,
including, without limitation, those set forth in Section 9-607 of the UCC.
After receipt by any Pledgor of the notice from the Collateral Trustees
referred to in the proviso to the preceding sentence, (i) all amounts and
proceeds (including instruments) received by such Pledgor in respect of the
Receivables and the Related Contracts of such Pledgor shall be received in
trust for the benefit of the Collateral Trustees hereunder, shall be segregated
from other funds of such Pledgor and shall


                                      24
<PAGE>


be forthwith paid over to the Collateral Trustees in the same form as so
received (with any necessary indorsement) to be deposited in the Collateral
Account and (ii) such Pledgor will not adjust, settle or compromise the amount
or payment of any Receivable or amount due on any Related Contract, release
wholly or partly any Account Obligor thereof, or allow any credit or discount
thereon. No Pledgor will permit or consent to the subordination of its right to
payment under any of the Receivables or the Related Contracts to any other
indebtedness or obligations of the Account Obligor thereof.

          Section 14. As to Intellectual Property Collateral. (a) With respect
to each item of its Intellectual Property Collateral set forth on Schedule IV,
other than any Immaterial IP Collateral, each Pledgor agrees to take, at its
expense, all necessary steps, including, without limitation, in the U.S. Patent
and Trademark Office, the U.S. Copyright Office and any other governmental
authority, to (i) maintain the validity and enforceability of each such item of
Intellectual Property Collateral and maintain each such item of Intellectual
Property Collateral in full force and effect and (ii) pursue the registration
and maintenance of each patent, trademark, or copyright registration or
application, now or hereafter included in such Intellectual Property Collateral
of such Pledgor, including, without limitation, the payment of required fees
and taxes, the filing of responses to office actions issued by the U.S. Patent
and Trademark Office, the U.S. Copyright Office or other governmental
authorities, the filing of applications for renewal or extension, the filing of
affidavits under Sections 8 and 15 of the U.S. Trademark Act, the filing of
divisional, continuation, continuation-in-part, reissue and renewal
applications or extensions, the payment of maintenance fees and the
participation in interference, reexamination, opposition, cancellation,
infringement and misappropriation proceedings. No Pledgor shall, without the
written consent of the Required Representatives, discontinue use of or
otherwise abandon any Intellectual Property Collateral, other than any
Immaterial IP Collateral, or abandon any right to file an application for
letters, patent, trademark, or copyright, unless such Pledgor shall have
previously determined that such use or the pursuit or maintenance of such
Intellectual Property Collateral is no longer desirable in the conduct of such
Pledgor's business and that the loss thereof would not be reasonably likely to
have a Material Adverse Effect (as defined in the Credit Agreements), in which
case, such Pledgor will give prompt notice of any such abandonment to the
Collateral Trustees and the Representatives.

          (b) Each Pledgor agrees promptly (and, in any case, on or prior to
the date of the next quarterly compliance certificate delivered pursuant to
Section 7.02(a) of the USI Credit Agreement) to notify the Collateral Trustees
and the Representatives if such Pledgor learns (i) that any item of the
Intellectual Property Collateral may have become abandoned, placed in the
public domain, or invalid or unenforceable, or of any adverse determination or
development regarding such Pledgor's ownership of any of the Intellectual
Property Collateral or its right to register the same or to keep and maintain
and enforce the same, or (ii) of any adverse determination or the institution
of any proceeding (including, without limitation, the institution of any
proceeding in the U.S. Patent and Trademark Office or any court) regarding any
item of the Intellectual Property Collateral.

          (c) Except with respect to any Immaterial IP Collateral, in the event
that any Pledgor becomes aware that any item of the Intellectual Property
Collateral is being infringed or misappropriated by a third party, such Pledgor
shall promptly (and, in any case, on or prior to the date of the next quarterly
compliance certificate delivered pursuant to Section 7.02(a) of the USI


                                      25
<PAGE>


Credit Agreement) notify the Collateral Trustees and the Representatives and
shall take such actions, at its expense, as such Pledgor or the Required
Representatives deems reasonable and appropriate under the circumstances to
protect such Intellectual Property Collateral, including, without limitation,
suing for infringement or misappropriation and for an injunction against such
infringement or misappropriation.

          (d) Each Pledgor shall use proper statutory notice in connection with
its use of each item of its Intellectual  Property  Collateral,  other than any
Immaterial  IP  Collateral.  No Pledgor shall do or permit any act or knowingly
omit to do any act whereby any of its Intellectual  Property Collateral,  other
than any Immaterial IP Collateral, may lapse or become invalid or unenforceable
or placed in the public domain.

          (e) Each Pledgor shall take all steps which it or the Collateral
Trustees or the Required Representatives deem reasonable and appropriate under
the circumstances to preserve and protect each item of its Intellectual
Property Collateral, other than any Immaterial IP Collateral, including,
without limitation, maintaining the quality of any and all products or services
used or provided in connection with any of the Trademarks, consistent with the
quality of the products and services as of the date hereof, and taking all
steps necessary to ensure that all licensed users of any of the Trademarks use
such consistent standards of quality.

          (f) With respect to its Intellectual Property Collateral, each
Pledgor agrees to execute or otherwise authenticate an agreement, in
substantially the form set forth in Exhibit D hereto (an "Intellectual Property
Security Agreement"), for recording the security interest granted hereunder to
the Collateral Trustees in such Intellectual Property Collateral with the U.S.
Patent and Trademark Office, the U.S. Copyright Office and any other
governmental authorities necessary to perfect the security interest hereunder
in such Intellectual Property Collateral.

          (g) Each Pledgor agrees that, should it obtain an ownership interest
in any item of the type set forth in Section 1(f) which is not on the date
hereof a part of the Intellectual Property Collateral (the "After-Acquired
Intellectual Property"), (i) the provisions of Section 1 shall automatically
apply thereto, (ii) any such After-Acquired Intellectual Property and, in the
case of trademarks, the goodwill of the business connected therewith or
symbolized thereby shall automatically become part of the Intellectual Property
Collateral subject to the terms and conditions of this Agreement with respect
thereto, (iii) such Pledgor shall give prompt (and, in any case, on or prior to
the date of the next quarterly compliance certificate delivered pursuant to
Section 7.02(a) of the USI Credit Agreement) written notice thereof to the
Collateral Trustees in accordance herewith and (iv) such Pledgor shall execute
and deliver to the Collateral Trustees, or otherwise authenticate, an IP
Security Agreement Supplement in substantially the form of Exhibit E hereto
covering such After-Acquired Intellectual Property as "Additional Collateral"
thereunder and as defined therein, and shall record such IP Security Agreement
Supplement with the U.S. Patent and Trademark Office, the U.S. Copyright Office
and any other governmental authorities necessary to perfect the security
interest hereunder in such After-Acquired Intellectual Property.

          Section 15. Voting Rights; Dividends; Etc. (a) So long as no
Actionable Default shall have occurred and be continuing:


                                      26
<PAGE>


          (i) Each Pledgor shall be entitled to exercise any and all voting and
     other consensual rights pertaining to any Security Collateral of such
     Pledgor for any purpose; provided, however, that such Pledgor will not
     exercise or refrain from exercising any such right if such action would
     have a material adverse effect on the value of such Security Collateral.

          (ii) Each Pledgor shall be entitled to receive and retain any and all
     dividends, interest and other distributions paid in respect of the
     Security Collateral of such Pledgor if and to the extent that the payment
     thereof is not otherwise prohibited by the terms of the Secured
     Agreements; provided, however, that any and all dividends, interest and
     other distributions paid or payable other than in cash in respect of, and
     instruments and other property received, receivable or otherwise
     distributed in respect of, or in exchange for, any Security Collateral
     shall be, and shall be forthwith delivered to the Collateral Trustees to
     hold as, Security Collateral and shall, if received by such Pledgor, be
     received in trust for the benefit of the Collateral Trustees, be
     segregated from the other property or funds of such Pledgor and be
     forthwith delivered to the Collateral Trustees as Security Collateral in
     the same form as so received (with any necessary indorsement).

          (iii) The Collateral Trustees will execute and deliver (or cause to
     be executed and delivered) to each Pledgor all such proxies and other
     instruments as such Pledgor may reasonably request for the purpose of
     enabling such Pledgor to exercise the voting and other rights that it is
     entitled to exercise pursuant to paragraph (i) above and to receive the
     dividends or interest payments that it is authorized to receive and retain
     pursuant to paragraph (ii) above.

          (b) Upon the occurrence and during the continuance of an Actionable
Default:

          (i) All rights of each Pledgor (x) to exercise or refrain from
     exercising the voting and other consensual rights that it would otherwise
     be entitled to exercise pursuant to Section 15(a)(i) shall, upon notice to
     such Pledgor by the Collateral Trustees, cease and (y) to receive the
     dividends, interest and other distributions that it would otherwise be
     authorized to receive and retain pursuant to Section 15(a)(ii) shall
     automatically cease, and all such rights shall thereupon become vested in
     the Collateral Trustees, which shall thereupon have the sole right to
     exercise or refrain from exercising such voting and other consensual
     rights and to receive and hold as Security Collateral such dividends,
     interest and other distributions.

          (ii) All dividends, interest and other distributions that are
     received by any Pledgor contrary to the provisions of paragraph (i) of
     this Section 15(b) shall be received in trust for the benefit of the
     Collateral Trustees, shall be segregated from other funds of such Pledgor
     and shall be forthwith paid over to the Collateral Trustees as Security
     Collateral in the same form as so received (with any necessary
     indorsement).

          (iii) The Collateral Trustees shall be authorized to send to each
     Securities Intermediary as defined in and under any Control Agreement a
     Notice of Exclusive Control as defined in and under such Control
     Agreement.


                                      27
<PAGE>


          Section 16. Transfers and Other Liens; Additional Shares. (a) Each
Pledgor agrees that it will not (i) sell, assign or otherwise dispose of, or
grant any option with respect to, any of the Collateral, other than sales,
assignments and other dispositions of Collateral, and options relating to
Collateral, permitted under the terms of the Secured Agreements, or (ii) create
or suffer to exist any Lien upon or with respect to any of the Collateral of
such Pledgor, except for the pledge, assignment and security interest created
under this Agreement and Liens permitted under the Secured Agreements.

          (b) Each Pledgor agrees that it will (i) cause each issuer of the
Pledged Shares pledged by such Pledgor not to issue any stock or other
securities in addition to or in substitution for the Pledged Shares issued by
such issuer, except to such Pledgor, and (ii) pledge hereunder, immediately
upon its acquisition (directly or indirectly) thereof, any and all additional
shares of stock or other securities of each issuer of the Pledged Shares.

          Section 17. Collateral Trustees Appointed Attorney-in-Fact. Each
Pledgor hereby irrevocably appoints the Collateral Trustees such Pledgor's
attorneys-in-fact, with full authority in the place and stead of such Pledgor
and in the name of such Pledgor or otherwise, from time to time, upon the
occurrence and during the continuance of an Actionable Default, in the
Collateral Trustees' discretion, to take any action and to execute any
instrument that the Collateral Trustees may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:

          (a) to obtain and adjust insurance required to be paid to the
     Collateral Trustees pursuant to Section 12;

          (b) to ask for, demand, collect, sue for, recover, compromise,
     receive and give acquittance and receipts for moneys due and to become due
     under or in respect of any of the Collateral;

          (c) to receive, indorse and collect any drafts or other instruments,
     documents and chattel paper in connection with clause (a) or (b) above;
     and

          (d) to file any claims or take any action or institute any
     proceedings that the Collateral Trustees may deem necessary or desirable
     for the collection of any of the Collateral or otherwise to enforce
     compliance with the terms and conditions of any Related Contract or the
     rights of the Collateral Trustees with respect to any of the Collateral.

          Section 18. Collateral Trustees May Perform. If any Pledgor fails to
perform any agreement contained herein, the Collateral Trustees may, but
without any obligation to do so and without notice, itself perform, or cause
performance of, such agreement, and the expenses of the Collateral Trustees
incurred in connection therewith shall be payable by the Borrowers under
Section 21(b).

          Section 19. Collateral Trustees' Duties. The powers conferred on the
Collateral Trustees hereunder are solely to protect the Secured Holders'
interest in the Collateral and shall not impose any duty upon it to exercise
any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the


                                      28
<PAGE>


Collateral Trustees shall have no duty as to any Collateral, as to ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Collateral, whether or not any Secured
Holder has or is deemed to have knowledge of such matters, or as to the taking
of any necessary steps to preserve rights against any parties or any other
rights pertaining to any Collateral. The Collateral Trustees shall be deemed to
have exercised reasonable care in the custody and preservation of any
Collateral in their possession if such Collateral is accorded treatment
substantially equal to that which they accord their own property.

          Section 20. Remedies. If any Actionable Default shall have occurred
and be continuing:

          (a) The Collateral Trustees may exercise in respect of the
     Collateral, in addition to other rights and remedies provided for herein
     or otherwise available to them, all the rights and remedies of a secured
     party upon default under the UCC (whether or not the UCC applies to the
     affected Collateral) and also may: (i) require each Pledgor to, and each
     Pledgor hereby agrees that it will at its expense and upon request of the
     Collateral Trustees forthwith, assemble all or part of the Collateral as
     directed by the Collateral Trustees and make it available to the
     Collateral Trustees at a place and time to be designated by the Collateral
     Trustees that is reasonably convenient to both parties; (ii) without
     notice except as specified below, sell the Collateral or any part thereof
     in one or more parcels at public or private sale, at any of the Collateral
     Trustees' offices or elsewhere, for cash, on credit or for future
     delivery, and upon such other terms as the Collateral Trustees may deem
     commercially reasonable; (iii) occupy any premises owned or leased by any
     of the Pledgors where the Collateral or any part thereof is assembled or
     located for a reasonable period in order to effectuate its rights and
     remedies hereunder or under law, without obligation to such Pledgor in
     respect of such occupation; and (iv) exercise any and all rights and
     remedies of any of the Pledgors under or in connection with the Collateral
     or otherwise in respect of the Collateral, including, without limitation,
     (A) any and all rights of such Pledgor to demand or otherwise require
     payment of any amount under, or performance of any provision of, the
     Receivables, the Related Contracts and the other Collateral, (B) withdraw,
     or cause or direct the withdrawal, of all funds with respect to the
     Account Collateral and (C) exercise all other rights and remedies with
     respect to the Receivables, Related Contracts and the other Collateral,
     including, without limitation, those set forth in Section 9-607 of the
     UCC. Each Pledgor agrees that, to the extent notice of sale shall be
     required by law, at least ten days' notice to such Pledgor of the time and
     place of any public sale or the time after which any private sale is to be
     made shall constitute reasonable notification. The Collateral Trustees
     shall not be obligated to make any sale of Collateral regardless of notice
     of sale having been given. The Collateral Trustees may adjourn any public
     or private sale from time to time by announcement at the time and place
     fixed therefor, and such sale may, without further notice, be made at the
     time and place to which it was so adjourned. The Collateral Trustees shall
     exercise such rights and remedies in accordance with and subject to the
     terms of the Collateral Trust Agreement.

          (b) Any cash held by or on behalf of the Collateral Trustees and all
     cash proceeds received by or on behalf of the Collateral Trustees in
     respect of any sale of,


                                      29
<PAGE>


     collection from, or other realization upon all or any part of the
     Collateral may be deposited to the Collateral Account and disbursed
     pursuant to the Collateral Trust Agreement.

          (c) All payments received by any Pledgor under or in connection with
     any Receivables or Related Contracts or otherwise in respect of the
     Collateral shall be received in trust for the benefit of the Collateral
     Trustees, shall be segregated from other funds of such Pledgor and shall
     be forthwith paid over to the Collateral Trustees in the same form as so
     received (with any necessary indorsement).

          (d) The Collateral Trustees may, without notice to any Pledgor,
     except as required by law and at any time or from time to time, charge,
     set off and otherwise apply all or any part of the Secured Obligations
     against any funds held in the Collateral Account or in any other
     Controlled Deposit Account or Other Deposit Account related thereto.

          (e) In the event of any sale or other disposition of any of the
     Intellectual Property Collateral of any Pledgor, the goodwill of the
     business connected with, and symbolized by, any Trademarks subject to such
     sale or other disposition shall be included therein, and such Pledgor
     shall supply to the Collateral Trustees or its designee such Pledgor's
     know-how and expertise, and documents and things relating to any
     Intellectual Property Collateral subject to such sale or other
     disposition, and such Pledgor's customer lists and other records and
     documents relating to such Intellectual Property Collateral and to the
     manufacture, distribution, advertising and sale of products and services
     of such Pledgor.

          Section 21. Indemnity and Expenses. (a) Each Borrower agrees to
indemnify, defend and save and hold harmless each Collateral Trustee, each
Representative and each Secured Holder and each of their Affiliates and their
respective officers, directors, employees, agents and advisors (each, an
"Indemnified Party") from and against, and shall pay on demand, any and all
claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or resulting from this Agreement (including, without
limitation, enforcement of this Agreement), except to the extent such claim,
damage, loss, liability or expense is found in a final, non-appealable judgment
by a court of competent jurisdiction to have resulted from such Indemnified
Party's gross negligence or willful misconduct.

          (b) Each Borrower will upon demand pay to each Collateral Trustee the
amount of any and all reasonable expenses, including, without limitation, the
reasonable fees and expenses of its counsel and of any experts and agents, that
such Collateral Trustee may incur in connection with (i) the administration of
this Agreement, (ii) the custody, preservation, use or operation of, or the
sale of, collection from or other realization upon, any of the Collateral of
such Pledgor, (iii) the exercise or enforcement of any of the rights of such
Collateral Trustee, any Representative or any Secured Holder hereunder or (iv)
the failure by such Pledgor to perform or observe any of the provisions hereof.


                                      30
<PAGE>


          Section 22. Amendments; Waivers; Additional Pledgors; Etc. (a) No
amendment or waiver of any provision of this Agreement, and no consent to any
departure by any Pledgor herefrom, shall in any event be effective unless the
same shall be in writing and signed by the Collateral Trustees, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of the Collateral
Trustees or any other Secured Holder to exercise and no delay in exercising any
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right.

          (b) Upon the execution and delivery (or authentication and delivery)
by any Person of a security agreement supplement in substantially the form of
Exhibit H to the Master Agreement (each, a "Security Agreement Supplement"),
(i) such Person shall be referred to as an "Additional Pledgor" and shall be
and become a Pledgor hereunder and each reference in this Agreement and the
other Loan Documents to "Pledgor" shall also mean and be a reference to such
Additional Pledgor, and (ii) the supplemental schedules I, II, III, IV, V, VI,
and VII attached to each Security Agreement Supplement shall be incorporated
into and become a part of and supplement Schedules I, II, III, IV, V, VI, and
VII, respectively, hereto, and the Collateral Trustees may attach such
supplemental schedules to such Schedules; and each reference to such Schedules
shall mean and be a reference to such Schedules as supplemented pursuant to
each Security Agreement Supplement.

          Section 23. Notices; Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopier
or telex communication) and mailed, telegraphed, telecopied, telexed or
delivered as provided in the Collateral Trust Agreement.

          Section 24. Continuing Security Interest; Assignments Under the
Credit Agreements. This Agreement shall create a continuing security interest
in the Collateral and shall (a) remain in full force and effect until released
as provided in Section 8.02 of the Collateral Trust Agreement, (b) be binding
upon each Pledgor, its successors and assigns and (c) inure, together with the
rights and remedies of the Collateral Trustees hereunder, to the Equal and
Ratable Benefit of the Secured Holders and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing
clause (c), any Credit Party may assign or otherwise transfer all or any
portion of its rights and obligations under each of the Credit Agreements
(including, without limitation, all or any portion of its Commitments, the
Loans owing to it and the Note or Notes, if any, held by it) to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Credit Party herein or otherwise,
in each case as provided in the applicable provisions of each of the Credit
Agreements.

          Section 25. Release; Termination. All or any portion of the
Collateral shall be released by the Collateral Trustees solely on the terms and
subject to the conditions set forth in Article VIII of the Collateral Trust
Agreement.

          Section 26. Security Interest Absolute. The obligations of each
Pledgor (other than any Borrower) under this Agreement are independent of the
Secured Obligations of any Borrower under or in respect of the Secured
Agreements, and a separate action or actions may be


                                      31
<PAGE>


brought and prosecuted against each such Pledgor to enforce this Agreement,
irrespective of whether any action is brought against any Borrower or whether
such Pledgor or any other Pledgor is joined in any such action or actions. All
rights of the Collateral Trustees, the Representatives and the other Secured
Holders and the pledge, assignment and security interest hereunder, and all
obligations of each such Pledgor hereunder, shall be irrevocable, absolute and
unconditional irrespective of, and each such Pledgor hereby irrevocably waives
(to the maximum extent permitted by applicable law) any defenses it may now
have or may hereafter acquire in any way relating to, any or all of the
following:

          (a) any lack of validity or enforceability of any Secured Agreement
     or any other agreement or instrument relating thereto;

          (b) any change in the time, manner or place of payment of, or in any
     other term of, all or any of the Secured Obligations of any Borrower under
     or in respect of the Secured Agreements or any other amendment or waiver
     of or any consent to any departure from any Secured Agreement, including,
     without limitation, any increase in the Secured Obligations resulting from
     the extension of additional credit to any Borrower or any of its
     Subsidiaries or otherwise;

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

          (d) any manner of application of any Collateral or any other
     collateral, or proceeds thereof, to all or any of the Secured Obligations,
     or any manner of sale or other disposition of any Collateral or any other
     collateral for all or any of the Secured Obligations under or in respect
     of the Secured Agreements or any other assets of any Borrower or any of
     its Subsidiaries;

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

          (f) any failure of any Secured Holder or any Representative to
     disclose to any Pledgor any information relating to the business,
     condition (financial or otherwise), operations, performance, assets,
     nature of assets, liabilities or prospects of any other Pledgor now or
     hereafter known to such Secured Holder or such Representative (each
     Pledgor waiving any duty on the part of the Secured Holders or any
     Representative to disclose such information);

          (g) the failure of any other Person to execute this Agreement or any
     other Collateral Document, guaranty or agreement or the release or
     reduction of liability of any Pledgor with respect to the Secured
     Obligations; or

          (h) any other circumstance (including, without limitation, any
     statute of limitations) or any existence of or reliance on any
     representation by any Secured Holder that might otherwise constitute a
     defense available to, or a discharge of, such Pledgor or any other Pledgor
     or a third party pledgor of a security interest.


                                      32
<PAGE>


This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded
or must otherwise be returned by any Secured Holder or by any other Person upon
the insolvency, bankruptcy or reorganization of any Borrower or otherwise, all
as though such payment had not been made.

          Section 27. Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of an original executed
counterpart of this Agreement.

          Section 28. Mortgages. In the event that any of the Collateral
hereunder is also subject to a valid and enforceable Lien under the terms of
any mortgage and the terms of such mortgage are inconsistent with the terms of
this Agreement, then with respect to such Collateral, the terms of such
mortgage shall be controlling in the case of fixtures and real estate leases,
letting and licenses of, and contracts and agreements relating to the lease of,
real property, and the terms of this Agreement shall be controlling in the case
of all other Collateral.

          Section 29. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.


<PAGE>


                                      S-1

          IN WITNESS WHEREOF, each Pledgor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.

                                             AMES TRUE TEMPER PROPERTIES, INC.
                                             AMES TRUE TEMPER, INC.
                                             ARCHITECTURAL AREA LIGHTING, INC.
                                             ARROW CONSOLIDATED CORPORATION
                                             ASTERIA COMPANY
                                             BATHCRAFT INC.
                                             BAYLIS BROTHERS, INC.
                                             BRUCKNER MANUFACTURING CORP.
                                             CARLSBAD CORP.
                                             COLUMBIA LIGHTING, INC.
                                             COLUMBIA LIGHTING-LCA, INC.
                                             COLUMBIA LIGHTING MFG., CO.
                                             COLUMBIA LIGHTING PROPERTIES, INC.
                                             COLUMBIA MATERIALS, LLC
                                             COMPAX CORP.
                                             DUAL-LITE INC.
                                             DUAL-LITE MANUFACTURING, INC.
                                             ELJER INDUSTRIES, INC.
                                             ELJER PLUMBINGWARE, INC.
                                             ENVIRONMENTAL ENERGY COMPANY
                                             EZ HOLDINGS, INC.
                                             GARY CONCRETE PRODUCTS, INC.
                                             GATSBY SPAS, INC.
                                             HL CAPITAL CORP.
                                             IXL MANUFACTURING COMPANY, INC.
                                             JACUZZI INC.
                                             JACUZZI WHIRLPOOL BATH, INC.
                                             JUSI HOLDINGS, INC.
                                             KIM LIGHTING INC.
                                             KLI, INC.
                                             LCA GROUP INC.
                                             LCA (NS) INC.
                                             LIGHTING CORPORATION OF AMERICA,
                                             INC.
                                             LOKELANI DEVELOPMENT CORPORATION
                                             LUXOR INDUSTRIES, INC.
                                             MAILI KAI LAND DEVELOPMENT


<PAGE>


                                      S-2

                                             CORPORATION
                                             MOBILITE INC.
                                             NEPCO OF AUSTRALIA, INC.
                                             NEPCO OF CANADA, INC.
                                             NEPCO OF FORD HEIGHTS, INC.
                                             NEPCO OF FULTON, INC.
                                             NEPCO OF PAKISTAN, INC.
                                             NISSEN UNIVERSAL HOLDINGS INC.
                                             OUTDOOR PRODUCTS LLC
                                             PH PROPERTY DEVELOPMENT COMPANY
                                             PRESCOLITE LITE CONTROLS, INC.
                                             PRESCOLITE, INC.
                                             PROGRESS  LIGHTING INC.
                                             PROGRESSIVE LIGHTING, INC. (NC)
                                             PROGRESSIVE LIGHTING, INC. (SC)
                                             PROGRESS LIGHTING PROPERTIES, INC.
                                             REDMONT, INC.
                                             REXAIR HOLDINGS, INC.
                                             REXAIR, INC.
                                             SANITARY-DASH MANUFACTURING CO.,
                                             INC.
                                             SELKIRK CANADA U.S.A., INC.
                                             SELKIRK EUROPE U.S.A., INC.
                                             SELKIRK, INC.
                                             SPAULDING LIGHTING, INC.
                                             STRATEGIC CAPITAL MANAGEMENT, INC.
                                             STREAMWOOD CORPORATION
                                             SUNDANCE SPAS, INC.
                                             TA LIQUIDATION  CORP.
                                             TRIMFOOT CO.
                                             TT LIQUIDATION CORP.
                                             UGE LIQUIDATION INC.
                                             UNITED  STATES  BRASS  CORP.
                                             U.S. INDUSTRIES, INC.
                                             USI AMERICAN HOLDINGS, INC.
                                             USI ATLANTIC CORP.
                                             USI CAPITAL, INC.
                                             USI FUNDING, INC.
                                             USI GLOBAL CORP.
                                             USI PROPERTIES,  INC.
                                             USI REALTY CORP.
                                             ZURCO, INC.
                                             ZURNACQ OF CALIFORNIA, INC.
<PAGE>


                                      S-3

                                             ZURN (CAYMAN ISLANDS), INC.
                                             ZURN CONSTRUCTORS, INC.
                                             ZURN DEVCO, INC.
                                             ZURN EPC SERVICES, INC.
                                             ZURN GOLF HOLDING CORPORATION
                                             ZURN INDUSTRIES, INC.


                                             By: /s/
                                                --------------------------------
                                                 Name:  Steven C. Barre
                                                 Title: Vice President



<PAGE>



N
                                                   Schedule I to the Pledge and
                                                             Security Agreement

             PLEDGED SHARES, PLEDGED DEBT, AND SECURITIES ACCOUNTS


                                     Part A

                                 Pledged Shares

===============================================================================
                                                              Percentage
                                         Stock                    of
                       Class of   Par  Certificate   Number   Outstanding
Pledgor  Stock  Issuer  Stock    Value    No(s).    of Shares    Shares
===============================================================================

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

===============================================================================

                                     Part B

                                  Pledged Debt

================================================================================
                                                              Outstanding
          Debt   Description of   Debt Certificate   Final     Principal
Pledgor  Issuer       Debt              No(s).      Maturity     Amount
================================================================================

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

================================================================================



<PAGE>


                                     Part C

                              Securities Accounts

================================================================================
                 Name and Address of
  Pledgor   Securities Account Institution   Securities Account Name and Number
================================================================================

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

================================================================================


<PAGE>


                                                  Schedule II to the Pledge and
                                                             Security Agreement


                      LOCATIONS OF EQUIPMENT AND INVENTORY



[Name of Pledgor]

         A.       Owned Locations:


         B.       Leased Locations:


         C.       Other Locations (Describe):


[Name of Pledgor]

         A.       Owned Locations:


         B.       Leased Locations:


         C.       Other Locations (Describe):


[Etc.]




<PAGE>


                                                 Schedule III to the Pledge and
                                                             Security Agreement


          LOCATION, CHIEF EXECUTIVE OFFICE, FEDERAL TAX IDENTIFICATION
                NUMBER AND ORGANIZATIONAL IDENTIFICATION NUMBER


Grantor   Location   Jurisdiction     Chief       Federal Tax     Organizational
-------   --------        of         Executive   Identification       I.D. No.
                     Organization     Office        Number            --------
                     ------------     -------       -------







<PAGE>


                                                           Schedule IIIA to the
                                                             Security Agreement


              CHANGES IN LOCATION OF EQUIPMENT AND INVENTORY, ETC.



Changes in the Location of Equipment and Inventory

Changes in the Name, Identity or Corporate Structure

Changes in Location

Changes in the Chief Executive Office

Changes in the Federal Tax I.D. No.

Changes in the Organizational I.D. No.




<PAGE>


                                                  Schedule IV to the Pledge and
                                                             Security Agreement

                            PATENTS, TRADEMARKS AND
                      TRADE NAMES, COPYRIGHTS AND LICENSES


                                     Part A

Pledgor  Patents  Country  Patent No.  Applic. No.  Filing Date  Issue Date
-------  -------  -------  ----------  -----------  -----------  ----------






                                     Part B

          Trademarks and                  Reg.  Applic.  Filing  Issue
Pledgor     Trade Names   Country   Mark   No.    No.     Date   Date
-------     -----------   -------   ----   ---    ---     ----   ----







                                     Part C

                                                             Filing   Issue
Pledgor   Copyrights  Country   Title  Reg. No.  Applic. No.  Date     Date
-------   ----------  -------   -----  --------  -----------  ----     ----






                                     Part D

Pledgor        Licenses           Title             Date            Parties
-------        --------           -----             ----            -------



<PAGE>


                                                   Schedule V to the Pledge and
                                                             Security Agreement



                               ACCOUNT COLLATERAL


================================================================================
           Name and Address of Controlled    Mailing Address of
Grantor             Account Banks             Pledged Account    Account Number
================================================================================

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

================================================================================



<PAGE>




                                                   Schedule V to the Pledge and
                                                             Security Agreement



      ACCOUNT COLLATERAL NOT SUBJECT TO DEPOSIT ACCOUNT CONTROL AGREEMENT


             ======================================================
                Grantor      Name and Address      Account Number
                                of Bank
             ======================================================

             ------------------------------------------------------

             ------------------------------------------------------

            ------------------------------------------------------

            ------------------------------------------------------

            ------------------------------------------------------

            ------------------------------------------------------

            ------------------------------------------------------

            ------------------------------------------------------

            ======================================================




<PAGE>


                         Schedule VI to the Pledge and
                               Security Agreement


                             COMMERCIAL TORT CLAIMS

            [Describe nature of claims - see Comment 5 to UCC 9-108]



<PAGE>

                                                                 EXECUTION COPY











                              AMENDED AND RESTATED

                         PLEDGE AND SECURITY AGREEMENT



                          Dated as of August 15, 2001

                             Amending and Restating
                       the Pledge and Security Agreement


                                       by

                        the Pledgors referred to herein

                                  as Pledgors

                                       to

                            WILMINGTON TRUST COMPANY

                                      and

                               DAVID A. VANASKEY

                             as Collateral Trustees



<PAGE>


                        T a b l e  o f  C o n t e n t s

Section                                                                     Page

Section 1. Grant of Security..................................................5


Section 2. Security for Secured Obligations..................................11


Section 3. Pledgors Remain Liable............................................12


Section 4. Delivery and Control of Security Collateral.......................12


Section 5. Maintaining the Pledged Accounts..................................14


Section  6. Investing  of  Amounts  in the Cash  Concentration  Accounts,
            the Collateral Account and the Cash Collateral Accounts...........15


Section 7. Release of Amounts.................................................16


Section 8. Maintaining Electronic Chattel Paper and Letter-of-Credit Rights
           and Giving Notice of Commercial Tort Claims........................16


Section 9. Representations and Warranties.....................................16


Section 10. Further Assurances................................................21


Section 11. As to Equipment and Inventory.....................................22


Section 12. Insurance.........................................................23


Section 13. Post-Closing Changes; Bailees; Receivables and Related Contracts..23


Section 14. As to Intellectual Property Collateral............................25


Section 15. Voting Rights; Dividends; Etc.....................................26


 Section 16. Transfers and Other Liens; Additional Shares.....................28


 Section 17. Collateral Trustees Appointed Attorney-in-Fact...................28


 Section 18. Collateral Trustees May Perform..................................28


 Section 19. Collateral Trustees' Duties......................................28


 Section 20. Remedies.........................................................29


 Section 21. Indemnity and Expenses...........................................30


 Section 22. Amendments; Waivers; Additional Pledgors; Etc....................31


 Section 23. Notices; Etc.....................................................31


 Section 24. Continuing Security Interest; Assignments Under the Credit
             Agreements.......................................................31


 Section 25. Release; Termination.............................................31


 Section 26. Security Interest Absolute.......................................31


 Section 27. Execution in Counterparts........................................33


 Section 28. Mortgages........................................................33


 Section 29. Governing Law....................................................33




Schedules

Schedule I     -    Pledged Shares, Pledged Debt, and Securities Accounts
Schedule II    -    Locations of Equipment and Inventory
Schedule III   -    Location, Chief Executive Office, Jurisdiction of
                    Organization, Federal Tax Identification Number and
                    Organizational Identification Number
Schedule IIIA  -    Changes in Locations of Equipment and Inventory, Etc.
Schedule IV    -    Patents, Trademarks and Trade Names, Copyrights and Licenses
Schedule V     -    Account Collateral
Schedule VI    -    Account Collateral not Subject to Deposit Account Control
                    Agreement
Schedule VII   -    Commercial Tort Claims Collateral

Exhibits

Exhibit A      -    Form of Deposit Account Control Agreement
Exhibit B      -    Form of Landlord's Consent and Agreement
Exhibit C      -    Form of Securities Account Control Agreement (Securities
                    Account)
Exhibit D      -    Form of Intellectual Property Security Agreement
Exhibit E      -    Form of Intellectual Property Security Agreement Supplement