Exhibit
10.4


EXECUTION
COPY


AMENDED
AND RESTATED SECURITY AGREEMENT 


THIS AMENDED AND RESTATED SECURITY AGREEMENT (this
“Agreement”), dated as of May 31, 2007, among AAI CORPORATION, a
Maryland corporation (“AAI”), UNITED INDUSTRIAL CORPORATION, a Delaware
corporation (“UIC”, and together with AAI, collectively, the “Borrowers”,
and individually, a “Borrower”), the Subsidiaries of the Borrowers
signatory hereto and each other subsidiary of a Borrower hereafter a party
hereto (the Borrowers, each Subsidiary of the Borrowers a party hereto and each
other Subsidiary of a Borrower hereafter becoming a party hereto shall be
collectively known as the “Grantors”, and individually as a “Grantor”),
in favor of SUNTRUST BANK, a Georgia banking corporation, as the Administrative
Agent (the “Administrative Agent”), on its behalf and on behalf of the
other banks and lending institutions (the “Lenders”) from time to time
party to the Amended and Restated Revolving Credit Agreement, dated as of the
date hereof, by and among the Borrowers, the Administrative Agent, the Lenders,
and SunTrust Bank, as Issuing Bank and as Swingline Lender (as amended,
restated, supplemented, or otherwise modified from time to time, the “Amended
and Restated Credit Agreement”).


W
I  T  N  E  S  S  E  T  H:


WHEREAS, pursuant to the Amended
and Restated Credit Agreement, the Lenders have agreed to establish a revolving
credit facility in favor of the Borrowers; and


WHEREAS, it is a condition
precedent to the obligations of the Administrative Agent, the Issuing Bank, the
Swingline Lender, and the Lenders under the Amended and Restated Credit
Agreement that the Grantors enter into this Agreement to (i) secure all
obligations of the Borrowers under the Amended and Restated Credit Agreement,
(ii) secure the obligations of each Subsidiary of the Borrowers under the
Amended and Restated Subsidiary Guaranty Agreement and all other Loan Documents
to which each such Subsidiary is a party, and (iii) secure all Hedging
Obligations owed to the Administrative Agent, any Lender or any of their
affiliates to the extent expressly permitted by the Amended and Restated Credit
Agreement, and the Grantors desire to satisfy such condition precedent.


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


Section 1.01.  Definitions.  Capitalized terms defined in the Amended and
Restated Credit Agreement and not otherwise defined herein, when used in this
Agreement shall have the respective meanings provided for in the Amended and
Restated Credit Agreement.  The following
additional terms, when used in this Agreement, shall have the following
meanings:


“Account
Debtor” shall mean any person or entity that is obligated under an Account.













“Accounts”
shall mean all “accounts” (as defined in the UCC) now owned or hereafter
acquired by any Grantor or in which any Grantor has or acquires any rights,
and, in any event, shall mean and include, without limitation, (a) all
accounts receivable, contract rights, book debts, notes, drafts and other
obligations or indebtedness owing to any Grantor arising from the sale or lease
of goods or other property by any Grantor or the performance of services by any
Grantor (including, without limitation, any such obligation which might be
characterized as an account, contract right or general intangible under the UCC
in effect in any jurisdiction), (b) all of each Grantor’s rights in, to
and under all purchase and sales orders for goods, services or other property,
and all of each Grantor’s rights to any goods, services or other property
represented by any of the foregoing (including returned or repossessed goods
and unpaid sellers’ rights of rescission, replevin, reclamation and rights to
stoppage in transit), (c) all monies due to or to become due to any
Grantor under all contracts for the sale, lease or exchange of goods or other
property or the performance of services by any Grantor (whether or not yet
earned by performance on the part of such Grantor), and (d) all collateral
security and guarantees of any kind given to any Grantor with respect to any of
the foregoing.


“Chattel
Paper” shall mean all “chattel paper” (as defined in the UCC) owned or
acquired by any Grantor or in which any Grantor has or acquires any rights.


“Collateral”
shall mean, collectively, all of the following:


(i)                                                        all
Accounts;


(ii)                                                     all
Chattel Paper;


(iii)                                                  all
Deposit Accounts (other than payroll accounts);


(iv)                                                 all
Documents;


(v)                                                    all
Equipment;


(vi)                                                 all
Fixtures;


(vii)                                              all
General Intangibles;


(viii)                                           all
Instruments;


(ix)                                                   all
Inventory;


(x)                                                      all
Investment Property;


(xi)                                                   all
money, cash or cash equivalents;


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



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


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


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


provided, however, that
notwithstanding any of the other provisions set forth in this Agreement,
Collateral shall not include any property to the extent that a grant of a
security interest is prohibited by any requirements of law of a governmental
authority,  except to the extent that
such prohibition is ineffective under applicable law (including by means of
Sections 9-407, 9-408 or 9-409 of the UCC).


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


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


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


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


“Equipment”
shall mean all “equipment” (as defined in the UCC) now owned or hereafter
acquired by any Grantor and wherever located, and, in any event, shall include
without limitation all machinery, furniture, furnishings, processing equipment,
conveyors, machine tools, engineering processing equipment, manufacturing
equipment, materials handling equipment, trade fixtures, trucks, trailers,
forklifts, vehicles, computers and other electronic data processing and other
office equipment of any Grantor, and any and all additions, substitutions and
replacements of any of the foregoing, together with all attachments,
components, parts, equipment and accessories installed thereon or affixed
thereto, all fuel therefore and all manuals, drawings, instructions, warranties
and rights with respect thereto.



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


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


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


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


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


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



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


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


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


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


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


“Secured
Obligations” shall mean (i) all Obligations of the Borrowers under the
Amended and Restated Credit Agreement and the other Loan Documents (whether for
principal, interest, fees, expenses, indemnity or reimbursement payments, or
otherwise as provided therein), (ii) all obligations of the Borrowers, monetary
or otherwise, pursuant to any Hedging Transaction incurred to limit interest
rate or fee fluctuation with respect to the Loans and Letters of Credit entered
into with a Specified Hedge Provider, (iii) all obligations of each other
Grantor under the Subsidiary Guaranty Agreement or the Parent Guaranty
Agreement, as applicable, and all other Loan Documents to which such other
Grantor is a party to (whether for principal, interest, fees, expenses,
indemnity or reimbursement payments, or otherwise), (iv) all renewals,
extensions, refinancings and modifications thereof, and (v) all reasonable
costs and expenses incurred by the Administrative Agent in connection with the
exercise of its rights and remedies hereunder (including reasonable attorneys’
fees).  Where the context requires, any
affiliate of a Lender which is party to a Hedging Transaction entered into to
limit interest rate or fee fluctuations with respect to the Loans and Letters
of Credit shall be deemed to be a “Lender” for purposes of this Agreement and
such affiliate shall only be required to be an affiliate of a Lender at the
time the relevant Hedging Transaction is entered into in order for such Hedging
Transaction to be eligible to be designated as a “Secured Obligation”.



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“Secured Parties”
shall mean, collectively, the Administrative Agent, the Lenders and the
Specified Hedge Providers.


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


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


“Specified
Hedge Provider” shall mean each party to a Hedging Transaction entered into
to limit interest rate or fee fluctuations with respect to the Loans and
Letters of Credit if at the date of entering into such Hedging Transaction such
person was a Lender or an Affiliate of a Lender and such person executes and
delivers to the Administrative Agent a letter agreement in form and substance
acceptable to the Administrative Agent pursuant to which such person (i)
appoints the Administrative Agent as its agent under the applicable Loan
Documents and (ii) agrees to be bound by the provisions of Article IX and X of
the Amended and Restated Credit Agreement.


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


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


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



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


“United
States” or “U.S.” shall mean the United States of America, any of
the fifty states thereof, and the District of Columbia.


SECTION
2.   Representations and
Warranties.  Each Grantor
represents and warrants to the Administrative Agent, for the benefit of Secured
Parties, as follows:


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


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


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


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


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


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



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(g)           The Perfection
Certificate, which is attached hereto as Schedule III,  correctly sets forth (i) all names and
tradenames that each Grantor has used within the last five years and the names
of all Persons that have merged into or been acquired by each Grantor, (ii) the
chief executive offices of each Grantor over the last five years, (iii) all
other locations in which tangible assets of each Grantor have been located in
the last five years, (iv) the name of each bank at which each Grantor maintains
Deposit Accounts, the state of organization of each such bank, and the account
numbers for each Deposit Account, (v) all letters of credit under which each Grantor
is a beneficiary, (vi) all third parties with possession of any Inventory or
Equipment of each Grantor and (vii) each Grantor’s mailing address.


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


(i)            With respect to any
material Inventory, (i) such Inventory is located at one of the Grantor’s
locations set forth on the Perfection Certificate, (ii) no Inventory is now, or
shall at any time or times hereafter be stored at any other location without
the Administrative Agent’s reasonable prior consent, and if the Administrative
Agent gives such consent, such Grantor will concurrently therewith obtain, to
the extent required by the Amended and Restated Credit Agreement, bailee,
landlord and mortgagee agreements, (iii) such Grantor has good, indefeasible
and merchantable title to such Inventory and such Inventory is not subject to
any Lien or security interest or document whatsoever except for the Lien
granted to the Administrative Agent and except for Liens expressly permitted
under Section 7.2 of the Amended and Restated Credit Agreement or as set forth
in the Perfection Certificate, (iv) except as specifically disclosed to the
Administrative Agent, such Inventory is of good and merchantable quality, free
from any defects in all material respects, (v) such Inventory is not subject to
any licensing, patent, royalty, trademark, trade name or copyright agreements
with any third parties which would require any 



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consent of any third party upon sale or disposition of
that Inventory or the payment of any monies to any third party upon such sale
or other disposition, and (vi) to the Grantors’ knowledge, the completion of
manufacture, sale or other disposition of such Inventory by the Administrative
Agent following an Event of Default shall not require the consent of any Person
and shall not constitute a breach or default under any contract or agreement to
which such Grantor is a party or to which such property is subject.


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


SECTION
3.   The Security Interests.  In order to secure the full and punctual
payment and performance of the Secured Obligations in accordance with the terms
thereof, each Grantor hereby pledges, assigns, hypothecates, sets over and
conveys to the Administrative Agent on its behalf and on behalf of the Secured
Parties and grants to the Administrative Agent on its behalf and on behalf of
the Secured Parties a continuing security interest in and to, all of its rights
in and to all Collateral now or hereafter owned or acquired by such Grantor or
in which such Grantor now has or hereafter has or acquires any rights, and
wherever located.  The Security Interests
are granted as security only and shall not subject the Administrative Agent or
any other Secured Party to, or transfer to the Administrative Agent or any
other Secured Party, or in any way affect or modify, any obligation or
liability of the Grantor with respect to any Collateral or any transaction in
connection therewith.


SECTION 4. Further Assurances; Covenants.


(a)           General.


(i)            No
Grantor shall change the location of its chief executive office or principal
place of business unless it shall have given the Administrative Agent thirty
(30) days prior notice thereof, as well as executed and delivered to the
Administrative Agent all financing statements and financing statement
amendments which the Administrative Agent may reasonably request in connection
therewith.  No Grantor shall change the
locations, or establish new locations, where it keeps or holds any of the Collateral
or any records relating thereto from the applicable locations described in the
Perfection Certificate attached hereto as Schedule III unless such
Grantor shall have given the Administrative Agent thirty (30) days prior notice
of such change of location. The foregoing covenant shall not apply to any
Collateral (including trucks) perfected by recordation of the Administrative
Agent’s Lien on the appropriate certificate of title.



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(ii)           No
Grantor shall change its name, organizational identification number, identity,
jurisdiction of organization, or corporate structure in any manner unless it
shall have given the Administrative Agent thirty (30) days prior written notice
thereof, and executed and delivered to the Administrative Agent all financing
statements and financing statement amendments which the Administrative Agent
may reasonably request in connection therewith. 
No Grantor shall merge or consolidate into, or transfer any of the
Collateral to, any other Person other than another Grantor, without the prior
written consent of the Required Lenders.


(iii)          Each
Grantor hereby authorizes the Administrative Agent, its counsel or its
representative, at any time and from time to time, to file financing statements
and amendments that describe the collateral covered by such financing
statements as “all assets of the Grantor”, “all personal property of the
Grantor” or words of similar effect including the express exceptions set forth
herein, in such jurisdictions as the Administrative Agent may deem necessary or
desirable in order to perfect the security interests granted by such Grantor
under this Agreement.  Each Grantor will,
from time to time, at its expense, execute, deliver, file and record any
statement, assignment, instrument, document, agreement or other paper and take
any other action (including, without limitation, any filings with the United
States Patent and Trademark Office, Copyright or Patent filings and any filings
of financing or continuation statements under the UCC) that from time to time
may be necessary, or that the Administrative Agent may reasonably request, in
order to create, preserve, upgrade in rank (to the extent required hereby),
perfect, confirm or validate the Security Interests or to enable the
Administrative Agent to obtain the full benefits of this Agreement, or to
enable the Administrative Agent to exercise and enforce any of its rights,
powers and remedies hereunder with respect to any of its Collateral.  Each Grantor hereby authorizes the
Administrative Agent to execute and file financing statements, financing
statement amendments or continuation statements on behalf of such Grantor in
connection with this Agreement.  Each
Grantor agrees that a carbon, photographic, photostatic or other reproduction
of this Agreement or of a financing statement is sufficient as a financing
statement.  Grantors shall pay the
reasonable costs of, or incidental to, any recording or filing of any financing
statements, financing statement amendments or continuation statements necessary
in the sole reasonable discretion of the Administrative Agent, to perfect the
Administrative Agent and Secured Parties’ security interest in the Collateral.



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(iv)          Except
as set forth in the Perfection Certificate attached hereto as Schedule III,
no Grantor shall permit any of its tangible assets, including without
limitation, its Inventory and Equipment, to be in the possession of any other
Person unless pursuant to an agreement in form and substance reasonably
satisfactory to the Administrative Agent (A) such Person has acknowledged that
(1) it holds possession of such Inventory, Equipment and other tangible assets,
as the case may be, for the Administrative Agent’s benefit, subject to the
Administrative Agent’s instructions, and (2) such Person does not have a Lien
in such Inventory, Equipment or other tangible assets, (B) such Person agrees
not to hold such Inventory, Equipment or other tangible assets on behalf of any
other Person and (C) such Person agrees that, after the occurrence and during
the continuance of an Event of Default and upon request by the Administrative
Agent to issue and deliver to the Administrative Agent warehouse receipts,
bills of lading or any similar documents relating to such Collateral in the
Administrative Agent’s name and in form and substance reasonably acceptable to
the Administrative Agent.


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


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


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


(viii)        Except
as otherwise provided in Section 14 herein, no Grantor shall file any
amendment to or termination of a financing statement naming any Grantor as
debtor and the Administrative Agent as secured party, or any correction
statement with respect thereto, in any jurisdiction until such time as the
Secured Obligations have been satisfied (other than indemnities and other
similar contingent obligations surviving the termination of this Agreement for
which no claim has been made and which are unknown and not calculable at the
time of termination and those Obligations relating to the Hedging Obligations) and the Administrative Agent and the
Secured Parties have authorized such filing.


(ix)           Each
Grantor shall take all steps reasonably necessary to grant the Administrative
Agent control of all electronic chattel paper in accordance with the UCC and
all “transferable records” as defined in each of the Uniform Electronic
Transactions Act and the Electronic Signatures in Global and National Commerce
Act.



 11















(b)           Accounts, Etc.


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


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


(iii)          Each
Grantor will perform and comply in all material respects with all of its
obligations in respect of Accounts, Instruments and General Intangibles.


(c)           Equipment,
Etc.  Each Grantor shall, (i) within
ten (10) days after a written request by the Administrative Agent, in the case
of material Equipment now owned, and (ii) following a request by the
Administrative Agent pursuant to subclause (i) above, within ten (10) days
after acquiring any other material Equipment, deliver to the Administrative
Agent, any and all certificates of title, and applications therefor, if any, of
such Equipment and shall cause the Administrative Agent to be named as
lienholder on any such certificate of title and applications.  No Grantor shall permit any such items to
become a fixture to real estate or an accession to other personal property
unless such real estate or personal property is the subject of a fixture filing
(as defined in the UCC) creating a first priority perfected Lien in favor of
the Administrative Agent.


(d)           Patents,
Trademarks, Etc.  Each Grantor shall
notify the Administrative Agent promptly upon the occurrence of each of the
following (i) such Grantor’s  acquisition
after the date of this Agreement of any material Intellectual Property and (ii)
such Grantor’s obtaining knowledge, that any application or registration
relating to any material Intellectual Property owned by or licensed to such
Grantor is reasonably likely to become abandoned or dedicated, or of any
material adverse determination or development (including, without limitation,
the institution of, or any such determination or development in, any proceeding
in the United States Copyright Office, the United States Patent and Trademark
Office or any court) regarding such Grantor’s ownership of any material
Intellectual Property, its right to register the same, or to keep and maintain
the same.



 12
 









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


(i)            No
Grantor shall open or maintain any Deposit Accounts other than those listed on
the Perfection Certificate attached hereto as Schedule III and such
other Deposit Accounts as such Grantor shall open and maintain prior notice to
and if required under the Amended and Restated Credit Agreement, subject to
control agreements, in form and substance reasonably acceptable to the
Administrative Agent.


(ii)           No
Grantor shall become the beneficiary of any Letters of Credit, unless the
issuer of the Letter of Credit has consented to the assignment of the proceeds
of such Letter of Credit to the Administrative Agent which consent shall not be
unreasonably withheld, such assignment to be in form and substance reasonably
acceptable to the Administrative Agent.


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


(f)            Commercial
Tort Claims.  If any Grantor shall at
any time acquire a “commercial tort claim” (as such term is defined in the UCC)
with a claim for damages that could reasonably be expected to be in excess of
$100,000, such Grantor shall promptly notify the Administrative Agent thereof
in a writing, providing a reasonable description and summary thereof, and shall
execute a supplement to this Agreement granting a security interest in such
commercial tort claim to the Administrative Agent.


SECTION
5.  Reporting and Recordkeeping.  Each Grantor covenants and agrees with the
Administrative Agent that from and after the date of this Agreement and until
the Secured Obligations have been indefeasibly paid in full in cash (other than
indemnities and other similar contingent obligations surviving the termination
of this Agreement for which no claim has been made and which are unknown and
not calculable at the time of termination and those Obligations relating to the
Hedging Obligations):


(a)           Maintenance of Records Generally.  Each Grantor will keep and maintain at its
own cost and expense records of its Collateral, complete in all material
respects, including, without limitation, a record of all payments received and
all credits granted with respect to the Collateral and all other dealings with
its Collateral.  Each Grantor will mark
its books and records pertaining to its Collateral to evidence this Agreement
and the Security Interests.  All Chattel
Paper will be marked with the following legend:  “This writing and the obligations 



 13
 









evidenced or secured hereby are subject to the
security interest of SunTrust Bank, as Administrative Agent.”  For the Administrative Agent’s further
security, each Grantor agrees that the Administrative Agent shall have a
security interest in all of such Grantor’s books and records pertaining to its
Collateral and, upon the occurrence and during the continuation of any Event of
Default, such Grantor shall deliver and turn over full and complete copies of
any such books and records to the Administrative Agent or to its
representatives at any time on demand of the Administrative Agent.  Upon reasonable notice from the
Administrative Agent, each Grantor shall permit any representative of the
Administrative Agent, to inspect such books and records and will provide
photocopies thereof to the Administrative Agent subject to the limitations as
provided in the Amended and Restated Credit Agreement.


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


(i)            Each
Grantor shall keep complete and accurate records of its Accounts in all
material respects.  Upon the reasonable
request of the Administrative Agent, and prior to an Event of Default no more
frequently than one time per calendar quarter, such Grantor shall deliver to
the Administrative Agent all documents, including, without limitation,
repayment histories and present status reports, relating to its Accounts so
scheduled and such other matters and information relating to the status of its
then existing Accounts as the Administrative Agent shall reasonably request.


(ii)           In
the event any amounts due and owing in excess of $250,000 in the aggregate are
in dispute between any Account Debtor and any Grantor, such Grantor shall provide
the Administrative Agent with written notice thereof promptly after such
Grantor’s learning thereof explaining in detail the reason for the dispute, all
claims related thereto and the amount in controversy.


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


(iv)          Each
Grantor will promptly upon, but in no event later than twenty (20) Business
Days after:


(A)    Such Grantor’s learning thereof, inform the
Administrative Agent, in writing, of any material delay in such Grantor’s
performance of any of its obligations to any Account Debtor and of any
assertion of any claims, offsets or counterclaims by any Account Debtor and of
any allowances, credits or other monies granted by such Grantor to any Account
Debtor, in each case involving amounts in excess of $250,000 in the aggregate
for all Accounts of such Account Debtor; and



 14
 









(B)    Such Grantor’s receipt or learning thereof,
furnish to and inform the Administrative Agent of all material adverse
information relating to the financial condition of any Account Debtor with
respect to Accounts exceeding $250,000 in the aggregate; and


(v)           Such
Grantor will promptly notify the Administrative Agent in writing if any
Account, the face value of which exceeds $250,000, arises out of a contract
with the United States of America, or any department, agency, subdivision or
instrumentality thereof, or of any state (or department, agency, subdivision or
instrumentality thereof) where such state has a state assignment of claims act
or other law comparable to the Federal Assignment of Claims Act, and will take
any action required or reasonably requested by the Administrative Agent to give
notice of the Administrative Agent’s security interest in such Accounts under
the provisions of the Federal Assignment of Claims Act or any comparable law or
act enacted by any state or local governmental authority; and


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


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


(d)           Notices.  In addition to the notices required by Section
5(b) hereof, each Grantor will advise the Administrative Agent promptly,
but in no event later than thirty (30) days after the occurrence thereof, in
reasonable detail, (i) of any Lien or claim made or asserted against any
of the Collateral that is not expressly permitted by the terms of the Amended
and Restated Credit Agreement, and (ii) of the occurrence of any other event
which would have a material ad­verse effect on the aggregate value of the
Collateral or on the validity, perfection or priority of the Security
Interests.


SECTION
6.  General Authority.  Each Grantor hereby irrevocably appoints the
Administrative Agent its true and lawful attorney, with full power of
substitution, in the name of such Grantor, the Administrative Agent or
otherwise, for the sole use and benefit of the Administrative Agent on its
behalf and on behalf of the Secured Parties, but at such Grantor’s expense, to
exercise, at any time (subject to the proviso below) all or any of the
following powers:



 15
 









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


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


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


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


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


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


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


(a)           The existence or occurrence of any “Event
of Default” as provided under the terms of the Amended and Restated  Credit Agreement;


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


(c)           Any Grantor shall fail to observe or
perform any covenant or agreement set forth in this Agreement other than those
referenced in paragraphs (a) and (b) above, and if such failure is capable of
being remedied, such failure shall remain unremedied for thirty (30) days.


SECTION
8.  Remedies upon Event of
Default.


(a)            If any Event of Default has occurred
and is continuing, the Administrative Agent may, without further notice,
exercise all rights and remedies under this Agreement or any other Loan
Document or that are available to a secured creditor under the UCC or that are
otherwise available at law or in equity, at any time, in any order and in any
combination, including to collect any and all Secured Obligations from the
Grantors, and, in addition, the Administrative Agent may sell the Collateral or
any part thereof at public or private sale, for cash, upon credit or for future
delivery, and at such price or prices as the Administrative Agent may deem
satisfactory.  The Administrative Agent
shall give the Borrowers not less than ten days’ prior written notice of the
time and place of any sale or other intended disposition of Collateral, except
any Collateral which is perishable or threatens to decline speedily in value or
is of a type customarily sold on a recognized market.  Each Grantor agrees that any such notice
constitutes “reasonable notification” within the meaning of Section 9-611
of the UCC (to the extent such Section or any successor provision under the UCC
is applicable).



 16
 









(b)           The Administrative Agent may be the
purchaser of any or all of the Collateral so sold at any public sale (or, if
such Collateral is of a type customarily sold in a recognized market or is of a
type which is the subject of widely distributed standard price quotations or if
otherwise permitted under applicable law, at any private sale) and thereafter
hold the same, absolutely, free from any right or claim of whatsoever
kind.  Each Grantor agrees during an
Event of Default to execute and deliver such documents and take such other
action as the Administrative Agent deems necessary or advisable in order that
any such sale may be made in compliance with law.  Upon any such sale the Administrative Agent
shall have the right to deliver, assign and transfer to the purchaser thereof the
Collateral so sold.  Each purchaser at
any such sale shall hold the Collateral so sold to it absolutely, free from any
claim or right of any kind, including any equity or right of redemption of the
Grantors.  To the extent permitted by
law, each Grantor hereby specifically waives all rights of redemption, stay or
appraisal which it has or may have under any law now existing or hereafter
adopted.  The notice (if any) of such
sale shall (1) in case of a public sale, state the time and place fixed for
such sale, and (2) in the case of a private sale, state the day after which
such sale may be consummated.  Any such
public sale shall be held at such time or times within ordinary business hours
and at such place or places as the Administrative Agent may fix in the notice
of such sale.  At any such sale
Collateral may be sold in one lot as an entirety or in separate parcels, as the
Administrative Agent may determine.  The
Administrative Agent shall not be obligated to make any such sale pursuant to
any such notice.  The Administrative
Agent may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time
and place fixed for the sale, and such sale may be made at any time or place to
which the same may be so adjourned.  In
case of any sale of all or any part of the Collateral on credit or for future
delivery, such Collateral so sold may be retained by the Administrative Agent
until the selling price is paid by the purchaser thereof, but the
Administrative Agent shall not incur any liability in case of the failure of
such purchaser to take up and pay for such Collateral so sold and, in case of
any such failure, such Collateral may again be sold upon like notice.  The Administrative Agent, instead of
exercising the power of sale herein conferred upon it, may proceed by a suit or
suits at law or in equity to foreclose the Security Interests and sell
Collateral, or any portion thereof, under a judgment or decree of a court or
courts of competent jurisdiction.  The
Grantors shall remain liable for any deficiency.


(c)           For the purpose of enforcing any and
all rights and remedies under this Agreement, the Administrative Agent may (i)
require any Grantor to, and each Grantor agrees that it will, at the joint and
several expense of the Grantors, and upon the request of the Administrative
Agent, forthwith assemble all or any part of its Collateral as directed by the
Administrative Agent and make it available at a place designated by the
Administrative Agent which is, in the Administrative Agent’s opinion,
reasonably convenient to the Administrative Agent and such Grantor, whether at
the premises of such Grantor or otherwise, (ii) to the extent permitted by
applicable law, enter, with or without process of law and without breach of the
peace, any premise where any such Collateral is or may be located and, without
charge or liability to the Administrative Agent, seize and remove such
Collateral from such premises, 



 17
 









(iii) have access to and use such Grantor’s books and
records, computers and software relating to the Collateral, and (iv) prior
to the disposition of any of the Collateral, store or transfer such Collateral
without charge in or by means of any storage or transportation facility owned
or leased by such Grantor, process, repair or recondition such Collateral or
otherwise prepare it for disposition in any manner and to the extent the
Administrative Agent deems appropriate and, in connection with such preparation
and disposition, use without charge any trademark, trade name, copyright,
patent or technical process used such Grantor.


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


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


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


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



 18
 









SECTION
10.  Application of Proceeds.
The proceeds of any sale of, or other realization upon, all or any part of the
Collateral of the Grantors shall be applied by the Administrative Agent in the
manner set forth in Section 8.2 of
the Amended and Restated Credit Agreement.


SECTION
11.  Concerning the
Administrative Agent.  The
provisions of Article IX of the Amended and Restated Credit Agreement shall
inure to the benefit of the Administrative Agent in respect of this Agreement
and shall be binding upon the parties to the Amended and Restated Credit
Agreement in such respect.  In furtherance
and not in derogation of the rights, privileges and immunities of the
Administrative Agent therein set forth:


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


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


SECTION
12.  Appointment of
Co-Administrative Agents. 
At any time or times, in order to comply with any legal requirement in
any jurisdiction, the Administrative Agent may appoint another bank or trust
company or one or more other Persons reasonably acceptable to the Required
Lenders and, so long as no Event of Default has occurred or is continuing, the
Borrowers, either to act as co-agent or co-agents, jointly with the
Administrative Agent, or to act as separate agent or agents on behalf of the
Administrative Agent and the Secured Parties with such power and authority as
may be necessary for the effectual operation of the provisions hereof and
specified in the instrument of appointment (which may, in the discretion of the
Administrative Agent, include provisions for the protection of such co-agent or
separate agent similar to the provisions of Section 10).


SECTION
13.  Expenses.  In the event that any Grantor fails to comply
with the provisions of the Amended and Restated Credit Agreement, this
Agreement or any other Loan Document, such that the value of any of its
Collateral or the validity, perfection, rank or value of the Security Interests
are thereby diminished or potentially diminished or put at risk in any material
way, the Administrative Agent may, but shall not be required to, effect such
compliance on behalf of such Grantor, and the Grantors shall jointly and
severally reimburse the Administrative Agent for the reasonable and actual
costs thereof on demand.  All insurance
expenses and all expenses of protecting, storing, warehousing, appraising,
insuring, handling, maintaining and shipping such Collateral, any and all
excise, stamp, intangibles, transfer, property, sales, and use taxes imposed by
any state, federal, or local authority or any other 



 19
 









governmental authority on any of such Collateral, or
in respect of periodic appraisals and inspections of such Collateral, or in
respect of the sale or other disposition thereof, shall be borne and paid by
the Grantors jointly and severally; and if the Grantors fail promptly to pay
any portion thereof when due, the Administrative Agent may, at its option, but
shall not be required to, pay the same and charge the Grantors’ accounts
therefor, and the Grantors agree jointly and severally to reimburse the
Administrative Agent therefor on demand. 
All sums so paid or incurred by the Administrative Agent for any of the
foregoing and any and all other sums for which the Grantors may become liable
hereunder and all costs and expenses (including reasonable attorneys’ fees,
legal expenses and court costs) incurred by the Administrative Agent in
enforcing or protecting the Security Interests or any of its rights or remedies
thereon shall be payable by the Grantors on demand and shall bear interest
(after as well as before judgment) until paid at the default rate of interest
set forth in the Amended and Restated Credit Agreement and shall be additional
Secured Obligations hereunder.


SECTION
14.  Termination of Security
Interests; Release of Collateral.  Upon the repayment in full in cash
of all Secured Obligations (other than indemnities and other similar contingent
obligations surviving the termination of this Agreement for which no claim has
been made and which are unknown and not calculable at the time of termination
and those Obligations relating to the Hedging Obligations), termination of all
commitments of the Lenders under the Amended and Restated  Credit Agreement and the cash
collateralization of the LC Exposure, the Security Interests shall terminate
and all rights to the Collateral shall revert to the Grantors.  Upon any such termination of the Security
Interests or release of such Collateral, the Administrative Agent will, at the
expense of the Borrowers, execute and deliver to the Borrowers such documents
as the Grantors shall reasonably request, but without recourse or warranty to
the Administrative Agent, including but not limited to written authorization to
file termination statements to evidence the termination of the Security
Interests in such Collateral.


SECTION
15.  Notices.  All notices, requests and other
communications to the Grantors or the Administrative Agent hereunder shall be
delivered in the manner required by the Amended and Restated Credit Agreement
and shall be sufficiently given to the Administrative Agent or any Grantor if
addressed or delivered to them at, in the case of the Administrative Agent and
the Borrowers, its addresses and telecopier numbers specified in the Amended
and Restated Credit Agreement and in the case of any other Grantors, at their
respective addresses and telecopier numbers provided in the Subsidiary Guaranty
Agreement or the Parent Guaranty Agreement, as applicable.  All such notices and communications shall be
deemed to have been duly given at the times set forth in the Amended and
Restated Credit Agreement.


SECTION
16.  No Waiver; Remedies
Cumulative.


(a)           No failure or delay
of the Administrative Agent of any kind in exercising any power, right or
remedy hereunder and no course of dealing between any Grantor on the one hand
and the Administrative Agent or any holder of any Note on the other hand shall
operate as a waiver thereof, nor shall any single or partial exercise of any such
power, right or remedy hereunder or under any other Loan Document, or any
abandonment or discontinuance of steps to enforce such a power, right or
remedy, preclude any other or further exercise thereof or the exercise of any
other power, right or remedy.  The rights
of the Administrative Agent hereunder 



 20
 









and of the Lenders under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have.  No waiver of any
provision of this Agreement or consent to any departure by any Grantor
therefrom shall in any event be effective unless the same shall be permitted by
subsection (b) below, and then such waiver and consent shall be effective
only in the specific instance and for the purpose for which given.  No notice or demand on any Grantor in any
case shall entitle such Grantor to any other or further notice in similar or
other circumstances.


(b)           Neither this Agreement nor any
provision hereof may be waived, amended or modified except pursuant to a
written agreement entered into between the Grantors with respect to which such
waiver, amendment or modification relates and the Administrative Agent, with
the prior written consent of the Required Lenders (except as otherwise provided
in the Amended and Restated Credit Agreement).


SECTION
17.  Successors and Assigns.  This Agreement is for the benefit of the
Administrative Agent and the Secured Parties and their permitted successors and
assigns, and in the event of an assignment of all or any of the Secured Obligations,
the rights hereunder, to the extent applicable to the indebtedness so assigned,
may be transferred with such indebtedness. 
This Agreement shall be binding on the Grantors and their successors and
assigns; provided, however, that no Grantor may assign any of its rights or obligations
hereunder without the prior written consent of the Administrative Agent and the
Lenders.


SECTION
18.  Governing Law;
Jurisdiction; Consent to Service of Process.


(a)           This Agreement shall
be construed in accordance with and be governed by the law (without giving
effect to the conflict of law principles thereof) of the State of New York.


(b)           Each party to this
Agreement hereby irrevocably and unconditionally submits, for itself and its
property, to the exclusive jurisdiction of the United States courts located
within the Southern District in the State of New York, and of any state court
of the State of New York located in New York county and any appellate court
from any thereof, in any action or proceeding arising out of or relating to
this Agreement or any other Loan Document or the transactions contemplated
hereby or thereby, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such New York state court or, to the extent permitted by applicable law,
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law.  Nothing in this Agreement shall
affect any right that the Administrative Agent, the Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
against any Grantor or its properties in the courts of any jurisdiction.


(c)           Each party to this
Agreement irrevocably and unconditionally waives any objection which it
may now or hereafter have to the laying of venue of any such suit, action
or proceeding described in paragraph (b) of this Section and brought in any
court referred to in paragraph (b) of this Section.  Each party hereto irrevocably waives, to the
fullest extent permitted by applicable law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.



 21
 









(d)           Each party to this Agreement
irrevocably consents to the service of process in the manner provided for
notices in Section 10.1 of the Amended and Restated Credit
Agreement.  Nothing in this Agreement
will affect the right of the Administrative Agent or any Lender to serve
process in any other manner permitted by law.


SECTION
19.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER,
AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.


SECTION
20.  Severability.   Any provision of this Agreement held to be
illegal, invalid or unenforceable in any jurisdiction, shall, as to such
jurisdiction, be ineffective to the extent of such illegality, invalidity or
unenforceability without affecting the legality, validity or enforceability of
the remaining provisions hereof or thereof; and the illegality, invalidity or
unenforceability of a particular provision in a particular jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.


SECTION
21.  Counterparts; Integration.  This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. This Agreement constitutes
the entire agreement among the parties hereto regarding the subject matters
hereof and supersedes all prior agreements and understandings, oral or written,
regarding such subject matter.


SECTION
22.  Additional Grantors.  Pursuant to Section 5.10 of the Amended
and Restated Credit Agreement, each Subsidiary that is required to become a
Subsidiary Loan Party after the date of the Amended and Restated Credit
Agreement is required to enter into this Agreement as a Grantor upon becoming
such a Subsidiary Loan Party.  Upon
execution and delivery after the date hereof by the Administrative Agent and
such Subsidiary of an instrument in the form of Exhibit A, such
Subsidiary shall become a Grantor hereunder with the same force and effect as
if originally named as a Grantor herein. 
The execution and delivery of any instrument adding an additional
Grantor as a party to this Agreement shall not require the consent of any other
Grantor hereunder.  The rights and
obligations of each Grantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Grantor as a party to this Agreement.



 22
 









SECTION
23.  Amended and Restated
Credit Agreement.  In the
event of any conflict or inconsistency between the terms of this Agreement and
the terms of the Amended and Restated Credit Agreement, the Amended and
Restated Credit Agreement shall control and govern to the extent of any such
conflict or inconsistency.


[Signature Page Follows]


 



 23















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


	
  

  	
   

  	
  AAI CORPORATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ James H. Perry

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
  James H. Perry

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UNITED INDUSTRIAL CORPORATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ James H. Perry

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
  James H. Perry

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AAI/ACL TECHNOLOGIES, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ James H. Perry

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
  James H. Perry

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AAI SERVICES CORPORATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ James H. Perry

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
  James H. Perry

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


 


 


[Signatures Continued on Next Page]


[SIGNATURE PAGE TO AMENDED AND RESTATED SECURITY
AGREEMENT]


 













 


	
  

  	
   

  	
  SYMTX, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ James H. Perry

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
  James H. Perry

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MCTURBINE INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Francis X. Reinhardt

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
  Francis X. Reinhardt

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
  Vice President, Financial Integration and Control

  



 


 


 


 


[SIGNATURE PAGE TO AMENDED AND RESTATED SECURITY
AGREEMENT]