Document:

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                      AMENDED AND RESTATED PLEDGE AGREEMENT

      THIS AMENDED AND RESTATED PLEDGE AGREEMENT (this "Pledge Agreement"),
dated as of June 13, 2002, is by and among the parties identified as "Pledgors"
on the signature pages hereto and such other parties as may become Pledgors
hereunder after the date hereof (individually a "Pledgor", and collectively the
"Pledgors") and BANK OF AMERICA, N.A., as collateral agent (in such capacity,
the "Collateral Agent") for the holders of the Secured Obligations referenced
below.

                               W I T N E S S E T H

      WHEREAS, pursuant to the Existing Credit Agreement the banks party thereto
provided $60 million in credit facilities to the Borrower;

      WHEREAS, pursuant to the Stock Pledge Agreement (the "Existing Pledge
Agreement") dated as of June 5, 1997 by the Borrower in favor of Bank of
America, N.A., as agent, the Borrower pledged the Capital Stock of certain of
its Subsidiaries to secure the credit facilities provided under the Existing
Credit Agreement;

      WHEREAS, pursuant to that Credit Agreement (as amended, modified and
supplemented, the "Credit Agreement") dated as of the date hereof among the
Borrower, the Guarantors identified therein, the Lenders identified therein and
Bank of America, N.A., as Administrative Agent, the Lenders have agreed to amend
and restate the credit facilities provided under Existing Credit Agreement on
the terms set forth in the Credit Agreement to provide, among other things, an
increase in the size of the credit facilities to $325 million; and

      WHEREAS, this Pledge Agreement is given in amendment to, restatement of
and substitution for the Existing Pledge Agreement.

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

      1.    Definitions. Capitalized terms used and not otherwise defined herein
shall have the meanings provided in the Credit Agreement. In addition, the
following terms, which are defined in the UCC as in effect in the State of North
Carolina on the date hereof, are used herein as so defined: Accession, Financial
Asset, Proceeds and Security. As used herein:

            "Event of Default" has the meaning provided in Section 8 hereof.

            "Pledged Collateral" has the meaning provided in Section 2 hereof.

            "Pledged Shares" has the meaning provided in Section 2 hereof.

            "Secured Obligations" means, without duplication, (i) all of the
      obligations of the Credit Parties to the Lenders (including the Swingline
      Lender and the Issuing Lender), the Administrative Agent and the
      Collateral Agent, whenever arising, under the Credit Agreement or any of
      the other Credit Documents (including, but not limited to, any interest
      accruing after the occurrence of a Bankruptcy Event with respect to any
      Credit Party, regardless of whether such interest is an allowed claim
      under the Bankruptcy Code), whether now existing or hereafter arising, due
      or to become due, direct or indirect, absolute or contingent, howsoever
      evidenced, created, held or acquired, whether primary, secondary, direct,
      contingent, or joint and several, as such obligations may be amended,
      modified, increased, extended, renewed or replaced from time to time, (ii)
      all of the
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      obligations owing by the Credit Parties to the Lenders or any affiliate of
      a Lender, whenever arising, under any Hedging Agreement to the extent
      permitted under the Credit Agreement, and (iii) all costs and expenses
      incurred in connection with enforcement and collection of the Secured
      Obligations, including reasonable attorneys' fees actually incurred but
      excluding the allocated cost of internal counsel.

            "UCC" means the Uniform Commercial Code.

      2.    Pledge and Grant of Security Interest. To secure the prompt payment
and performance in full when due, whether by lapse of time, acceleration,
mandatory prepayment or otherwise, of the Secured Obligations, each Pledgor
hereby grants, pledges and assigns to the Collateral Agent, for the benefit of
the holders of the Secured Obligations, a continuing security interest in, and a
right to set-off against, any and all right, title and interest of such Pledgor
in and to the following, whether now owned or existing or owned, acquired, or
arising hereafter (collectively, the "Pledged Collateral"):

            (a)   Pledged Shares. (i) One hundred percent (100%) (or, if less,
      the full amount owned by such Pledgor) of the issued and outstanding
      Capital Stock owned by such Pledgor of each Domestic Subsidiary set forth
      on Schedule 2(a) attached hereto and (ii) sixty-five percent (65%) (or, if
      less, the full amount owned by such Pledgor) of the issued and outstanding
      shares of Capital Stock entitled to vote (within the meaning of Treas.
      Reg. Section 1.956-2(c)(2)) ("Voting Equity") and one hundred percent
      (100%) (or, if less, the full amount owned by such Pledgor) of the issued
      and outstanding Capital Stock not entitled to vote (within the meaning of
      Treas. Reg. Section 1.956-2(c)(2)) ("Non-Voting Equity") owned by such
      Pledgor of each Foreign Subsidiary set forth on Schedule 2(a) attached
      hereto, in each case together with the certificates (or other agreements
      or instruments), if any, representing such Capital Stock, and all options
      and other rights, contractual or otherwise, with respect thereto
      (collectively, together with the Capital Stock described in Section 2(b)
      and 2(c) below, the "Pledged Shares"), including, but not limited to, the
      following:

                  (A)   all shares, securities, membership interests or other
            equity interests representing a dividend on any of the Pledged
            Shares, or representing a distribution or return of capital upon or
            in respect of the Pledged Shares, or resulting from a stock split,
            revision, reclassification or other exchange therefor, and any
            subscriptions, warrants, rights or options issued to the holder of,
            or otherwise in respect of, the Pledged Shares; and

                  (B)   without affecting the obligations of the Pledgors under
            any provision prohibiting such action hereunder or under the Credit
            Agreement, in the event of any consolidation or merger involving the
            issuer of any Pledged Shares and in which such issuer is not the
            surviving entity, all Capital Stock of the successor entity formed
            by or resulting from such consolidation or merger.

            (b)   Additional Shares. (i) One hundred percent (100%) (or, if
      less, the full amount owned by such Pledgor) of the issued and outstanding
      Capital Stock owned by such Pledgor of any Person that hereafter becomes a
      Domestic Subsidiary and (ii) sixty-five percent (65%) (or, if less, the
      full amount owned by such Pledgor) of the Voting Equity and one hundred
      percent (100%) (or, if less, the full amount owned by such Pledgor) of the
      Non-Voting Equity owned by such Pledgor of any Person that hereafter
      becomes a Foreign Subsidiary, including, without limitation, the
      certificates (or other agreements or instruments) representing such
      Capital Stock.

            (c)   Accessions and Proceeds. All Accessions and all Proceeds of
      any and all of the foregoing.

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      Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that a Pledgor may from time to time
hereafter deliver additional Capital Stock to the Collateral Agent as collateral
security for the Secured Obligations. Upon delivery to the Collateral Agent,
such additional Capital Stock shall be deemed to be part of the Pledged
Collateral of such Pledgor and shall be subject to the terms of this Pledge
Agreement whether or not Schedule 2(a) is amended to refer to such additional
Capital Stock.

      3.    Security for Secured Obligations. The security interest created
hereby in the Pledged Collateral of each Pledgor constitutes continuing
collateral security for all of the Secured Obligations.

      4.    Delivery of the Pledged Collateral. Each Pledgor hereby agrees that:

            (a)   Each Pledgor shall deliver to the Collateral Agent (i)
      simultaneously with or prior to the execution and delivery of this Pledge
      Agreement, all certificates representing the Pledged Shares of such
      Pledgor and (ii) promptly upon the receipt thereof by or on behalf of a
      Pledgor, all other certificates and instruments constituting Pledged
      Collateral of a Pledgor. Prior to delivery to the Collateral Agent, all
      such certificates and instruments constituting Pledged Collateral of a
      Pledgor shall be held in trust by such Pledgor for the benefit of the
      Collateral Agent pursuant hereto. All such certificates shall be delivered
      in suitable form for transfer by delivery or shall be accompanied by duly
      executed instruments of transfer or assignment in blank, substantially in
      the form provided in Schedule 4(a) attached hereto.

            (b)   Additional Securities. If such Pledgor shall receive by virtue
      of its being or having been the owner of any Pledged Collateral, any (i)
      certificate, including without limitation, any certificate representing a
      dividend or distribution in connection with any increase or reduction of
      capital, reclassification, merger, consolidation, sale of assets,
      combination of shares or other equity interests, stock splits, spin-off or
      split-off, promissory notes or other instruments; (ii) option or right,
      whether as an addition to, substitution for, or an exchange for, any
      Pledged Collateral or otherwise; (iii) dividends payable in securities; or
      (iv) distributions of securities in connection with a partial or total
      liquidation, dissolution or reduction of capital, capital surplus or
      paid-in surplus, then such Pledgor shall receive such certificate,
      instrument, option, right or distribution in trust for the benefit of the
      Collateral Agent, shall segregate it from such Pledgor's other property
      and shall deliver it forthwith to the Collateral Agent in the exact form
      received together with any necessary endorsement and/or appropriate stock
      power duly executed in blank, substantially in the form provided in
      Schedule 4(a), to be held by the Collateral Agent as Pledged Collateral
      and as further collateral security for the Secured Obligations.

            (c)   Financing Statements. Each Pledgor shall execute and deliver
      to the Collateral Agent such UCC or other applicable financing statements
      as may be reasonably requested by the Collateral Agent in order to perfect
      and protect the security interest created hereby in the Pledged Collateral
      of such Pledgor.

      5.    Representations and Warranties. Each Pledgor hereby represents and
warrants to the Collateral Agent, for the benefit of the holders of the Secured
Obligations, that so long as any of the Secured Obligations remains outstanding
and until all of the commitments relating thereto have been terminated:

            (a)   Authorization of Pledged Shares. The Pledged Shares are duly
      authorized and validly issued, are fully paid and nonassessable and are
      not subject to the preemptive rights of any Person.

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            (b)   Title. Each Pledgor has good and indefeasible title to the
      Pledged Collateral of such Pledgor and will at all times be the legal and
      beneficial owner of such Pledged Collateral free and clear of any Lien,
      other than Permitted Liens. There exists no "adverse claim" within the
      meaning of Section 8-102 of the UCC with respect to the Pledged Shares of
      such Pledgor.

            (c)   Exercising of Rights. The exercise by the Collateral Agent of
      its rights and remedies hereunder will not violate any law or governmental
      regulation or any material contractual restriction binding on or affecting
      a Pledgor or any of its property.

            (d)   Pledgor's Authority. No authorization, approval or action by,
      and no notice or filing with any Governmental Authority or with the issuer
      of any Pledged Stock is required either (i) for the pledge made by a
      Pledgor or for the granting of the security interest by a Pledgor pursuant
      to this Pledge Agreement (except as have been already obtained) or (ii)
      for the exercise by the Collateral Agent or the holders of the Secured
      Obligations of their rights and remedies hereunder (except as may be
      required by laws affecting the offering and sale of securities).

            (e)   Security Interest/Priority. This Pledge Agreement creates a
      valid security interest in favor of the Collateral Agent for the benefit
      of the holders of the Secured Obligations, in the Pledged Collateral. The
      taking of possession by the Collateral Agent of the certificates
      representing the Pledged Shares and all other certificates and instruments
      constituting Pledged Collateral will perfect and establish the first
      priority of the Collateral Agent's security interest in the Pledged Shares
      and, when properly perfected by filing or registration, in all other
      Pledged Collateral represented by such Pledged Shares and instruments
      securing the Secured Obligations. Except as set forth in this Section
      5(e), no action is necessary to perfect or otherwise protect such security
      interest.

            (f)   Partnership and Membership Interests. Except as previously
      disclosed to the Collateral Agent, none of the Pledged Shares consisting
      of partnership or limited liability company interests (i) is dealt in or
      traded on a securities exchange or in a securities market, (ii) by its
      terms expressly provides that it is a security governed by Article 8 of
      the UCC, (iii) is an investment company security, (iv) is held in a
      securities account or (v) constitutes a Security or a Financial Asset.

            (g)   No Other Interests. No Pledgor owns any Capital Stock in any
      Subsidiary other than as set forth on Schedule 2(a) attached hereto.

      6.    Covenants. Each Pledgor hereby covenants, that so long as any of the
Secured Obligations remains outstanding and until all of the commitments
relating thereto have been terminated, such Pledgor shall:

            (a)   Books and Records. Mark its books and records (and shall cause
      the issuer of the Pledged Shares of such Pledgor to mark its books and
      records) to reflect the security interest granted to the Collateral Agent,
      for the benefit of the holders of the Secured Obligations, pursuant to
      this Pledge Agreement.

            (b)   Defense of Title. Warrant and defend title to and ownership of
      the Pledged Collateral of such Pledgor at its own expense against the
      claims and demands of all other parties claiming an interest therein, keep
      the Pledged Collateral free from all Liens, except for Permitted Liens,
      and not sell, exchange, transfer, assign, lease or otherwise dispose of
      Pledged Collateral of such Pledgor or any interest therein, except as
      permitted under the Credit Agreement and the other Credit Documents.

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            (c)   Further Assurances. Promptly execute and deliver at its
      expense all further instruments and documents and take all further action
      that may be necessary and desirable or that the Collateral Agent may
      reasonably request in order to (i) perfect and protect the security
      interest created hereby in the Pledged Collateral of such Pledgor
      (including, without limitation, any and all action necessary to satisfy
      the Collateral Agent that the Collateral Agent has obtained a first
      priority perfected security interest in all Pledged Collateral); (ii)
      enable the Collateral Agent to exercise and enforce its rights and
      remedies hereunder in respect of the Pledged Collateral of such Pledgor;
      and (iii) otherwise effect the purposes of this Pledge Agreement,
      including, without limitation and if requested by the Collateral Agent,
      delivering to the Collateral Agent irrevocable proxies in respect of the
      Pledged Collateral of such Pledgor.

            (d)   Amendments. Not make or consent to any amendment or other
      modification or waiver with respect to any of the Pledged Collateral of
      such Pledgor or enter into any agreement or allow to exist any restriction
      with respect to any of the Pledged Collateral of such Pledgor other than
      pursuant hereto or as may be permitted under the Credit Agreement.

            (e)   Compliance with Securities Laws. File all reports and other
      information now or hereafter required to be filed by such Pledgor with the
      United States Securities and Exchange Commission and any other state,
      federal or foreign agency in connection with the ownership of the Pledged
      Collateral of such Pledgor.

            (f)   Issuance or Acquisition of Capital Stock. Not, without
      executing and delivering, or causing to be executed and delivered, to the
      Collateral Agent such agreements, documents and instruments as the
      Collateral Agent may require, issue or acquire any Capital Stock
      consisting of an interest in a partnership or a limited liability company
      that (i) is dealt in or traded on a securities exchange or in a securities
      market, (ii) by its terms expressly provides that it is a security
      governed by Article 8 of the UCC, (iii) is an investment company security,
      (iv) is held in a securities account or (v) constitutes a Security or a
      Financial Asset.

      7.    Advances by Holders of the Secured Obligations. On failure of any
Pledgor to perform any of the covenants and agreements contained herein, the
Collateral Agent may, at its sole option and in its sole discretion, perform the
same and in so doing may expend such sums as the Collateral Agent may reasonably
deem advisable in the performance thereof, including, without limitation, the
payment of any insurance premiums, the payment of any taxes, a payment to obtain
a release of a Lien or potential Lien, expenditures made in defending against
any adverse claim and all other expenditures that the Collateral Agent or the
holders of the Secured Obligations may make for the protection of the security
hereof or may be compelled to make by operation of law. All such sums and
amounts so expended shall be repayable by the Pledgors on a joint and several
basis promptly upon timely notice thereof and demand therefor, shall constitute
additional Secured Obligations and shall bear interest from the date said
amounts are expended at the default rate specified in Section 3.1 of the Credit
Agreement for Revolving Loans that are Base Rate Loans. No such performance of
any covenant or agreement by the Collateral Agent or the holders of the Secured
Obligations on behalf of any Pledgor, and no such advance or expenditure
therefor, shall relieve the Pledgors of any default under the terms of this
Pledge Agreement, the other Credit Documents or any other documents relating to
the Secured Obligations. The holders of the Secured Obligations may make any
payment hereby authorized in accordance with any bill, statement or estimate
procured from the appropriate public office or holder of the claim to be
discharged without inquiry into the accuracy of such bill, statement or estimate
or into the validity of any tax assessment, sale, forfeiture, tax lien, title or
claim except to the extent such payment is being contested in good faith by a
Pledgor in appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP.

      8.    Events of Default. The occurrence of an event that would constitute
an Event of Default under the Credit Agreement shall be an Event of Default
hereunder (an "Event of Default").

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      9.    Remedies.

      (a)   General Remedies. Upon the occurrence of an Event of Default and
during the continuation thereof, the Collateral Agent and the holders of the
Secured Obligations shall have, in addition to the rights and remedies provided
herein, in the Credit Documents, in any other documents relating to the Secured
Obligations, or by law (including, without limitation, levy of attachment and
garnishment), the rights and remedies of a secured party under the UCC of the
jurisdiction applicable to the affected Pledged Collateral.

      (b)   Sale of Pledged Collateral. Upon the occurrence of an Event of
Default and during the continuation thereof, without limiting the generality of
this Section 9 and without notice, the Collateral Agent may, in its sole
discretion, sell or otherwise dispose of or realize upon the Pledged Collateral,
or any part thereof, in one or more parcels, at public or private sale, at any
exchange or broker's board or elsewhere, at such price or prices and on such
other terms as the Collateral Agent may deem commercially reasonable, for cash,
credit or for future delivery or otherwise in accordance with applicable law. To
the extent permitted by law, any holder of the Secured Obligations may in such
event, bid for the purchase of such securities. Each Pledgor agrees that, to the
extent notice of sale shall be required by law and has not been waived by such
Pledgor, any requirement of reasonable notice shall be met if notice, specifying
the place of any public sale or the time after which any private sale is to be
made, is personally served on or mailed, postage prepaid, to such Pledgor, in
accordance with the notice provisions of Section 11.1 of the Credit Agreement at
least ten days before the time of such sale. The Collateral Agent shall not be
obligated to make any sale of Pledged Collateral of such Pledgor regardless of
notice of sale having been given. The Collateral Agent 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.

      (c)   Private Sale. Upon the occurrence of an Event of Default and during
the continuation thereof, the Pledgors recognize that the Collateral Agent may
deem it impracticable to effect a public sale of all or any part of the Pledged
Shares or any of the securities constituting Pledged Collateral and that the
Collateral Agent may, therefore, determine to make one or more private sales of
any such Pledged Collateral to a restricted group of purchasers who will be
obligated to agree, among other things, to acquire such Pledged Collateral for
their own account, for investment and not with a view to the distribution or
resale thereof. Each Pledgor acknowledges that any such private sale may be at
prices and on terms less favorable to the seller than the prices and other terms
that might have been obtained at a public sale and, notwithstanding the
foregoing, agrees that such private sale shall be deemed to have been made in a
commercially reasonable manner and that the Collateral Agent shall have no
obligation to delay sale of any such Pledged Collateral for the period of time
necessary to permit the issuer of such Pledged Collateral to register such
Pledged Collateral for public sale under the Securities Act. Each Pledgor
further acknowledges and agrees that any offer to sell such Pledged Collateral
that has been (i) publicly advertised on a bona fide basis in a newspaper or
other publication of general circulation in the financial community of New York,
New York (to the extent that such offer may be advertised without prior
registration under the Securities Act), or (ii) made privately in the manner
described above shall be deemed to involve a "public sale" under the UCC,
notwithstanding that such sale may not constitute a "public offering" under the
Securities Act, and the Collateral Agent may, in such event, bid for the
purchase of such Pledged Collateral.

      (d)   Retention of Pledged Collateral. To the extent permitted under
applicable law, in addition to the rights and remedies hereunder, upon the
occurrence of an Event of Default, the Collateral Agent may, after providing the
notices required by Sections 9-620 and 9-621 of the UCC or otherwise complying
with the requirements of applicable law of the relevant jurisdiction, accept or
retain all or any portion of the Pledged Collateral in satisfaction of the
Secured Obligations. Unless and until the

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Collateral Agent shall have provided such notices, however, the Collateral Agent
shall not be deemed to have accepted or retained any Pledged Collateral in
satisfaction of any Secured Obligations for any reason.

      (e)   Deficiency. In the event that the proceeds of any sale, collection
or realization are insufficient to pay all amounts to which the Collateral Agent
or the holders of the Secured Obligations are legally entitled, the Pledgors
shall be jointly and severally liable for the deficiency, together with interest
thereon at the default rate specified in Section 3.1 of the Credit Agreement for
Revolving Loans that are Base Rate Loans, together with the costs of collection
and reasonable attorneys' fees actually incurred (excluding the allocated cost
of internal counsel). Any surplus remaining after the full payment and
satisfaction of the Secured Obligations shall be returned to the Pledgors or to
whomsoever a court of competent jurisdiction shall determine to be entitled
thereto.

      10.   Rights of the Collateral Agent.

      (a)   Power of Attorney. In addition to other powers of attorney contained
herein, each Pledgor hereby designates and appoints the Collateral Agent, on
behalf of the holders of the Secured Obligations, and each of its designees or
agents, as attorney-in-fact of such Pledgor, irrevocably and with power of
substitution, with authority to take any or all of the following actions upon
the occurrence and during the continuation of an Event of Default:

            (i)    to demand, collect, settle, compromise and adjust, and give
      discharges and releases concerning the Pledged Collateral, all as the
      Collateral Agent may reasonably deem appropriate;

            (ii)   to commence and prosecute any actions at any court for the
      purposes of collecting any of the Pledged Collateral and enforcing any
      other right in respect thereof;

            (iii)  to defend, settle or compromise any action brought and, in
      connection therewith, give such discharge or release as the Collateral
      Agent may reasonably deem appropriate;

            (iv)   to pay or discharge taxes, liens, security interests or other
      encumbrances levied or placed on or threatened against the Pledged
      Collateral;

            (v)    to direct any parties liable for any payment in connection
      with any of the Pledged Collateral to make payment of any and all monies
      due and to become due thereunder directly to the Collateral Agent or as
      the Collateral Agent shall direct;

            (vi)   to receive payment of and receipt for any and all monies,
      claims, and other amounts due and to become due at any time in respect of
      or arising out of any Pledged Collateral;

            (vii)  to sign and endorse any drafts, assignments, proxies, stock
      powers, verifications, notices and other documents relating to the Pledged
      Collateral;

            (viii) to execute and deliver all assignments, conveyances,
      statements, financing statements, renewal financing statements, security
      and pledge agreements, affidavits, notices and other agreements,
      instruments and documents that the Collateral Agent may reasonably deem
      appropriate in order to perfect and maintain the security interests and
      liens granted in this Pledge Agreement and in order to fully consummate
      all of the transactions contemplated therein;

            (ix)   to exchange any of the Pledged Collateral or other property
      upon any merger, consolidation, reorganization, recapitalization or other
      readjustment of the issuer thereof and, in

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      connection therewith, deposit any of the Pledged Collateral with any
      committee, depository, transfer agent, registrar or other designated
      agency upon such terms as the Collateral Agent may reasonably deem
      appropriate;

            (x)    to vote for a shareholder resolution, or to sign an
      instrument in writing, sanctioning the transfer of any or all of the
      Pledged Collateral into the name of the Collateral Agent or one or more of
      the holders of the Secured Obligations or into the name of any transferee
      to whom the Pledged Collateral or any part thereof may be sold pursuant to
      Section 9 hereof; and

            (xi)   to do and perform all such other acts and things as the
      Collateral Agent may reasonably deem appropriate or convenient in
      connection with the Pledged Collateral.

      This power of attorney is a power coupled with an interest and shall be
irrevocable for so long as any of the Secured Obligations shall remain
outstanding and until all of the commitments relating thereto shall have been
terminated. The Collateral Agent shall be under no duty to exercise or withhold
the exercise of any of the rights, powers, privileges and options expressly or
implicitly granted to the Collateral Agent in this Pledge Agreement, and shall
not be liable for any failure to do so or any delay in doing so. The Collateral
Agent shall not be liable for any act or omission or for any error of judgment
or any mistake of fact or law in its individual capacity or its capacity as
attorney-in-fact except acts or omissions resulting from its gross negligence or
willful misconduct. This power of attorney is conferred on the Collateral Agent
solely to protect, preserve and realize upon its security interest in the
Pledged Collateral.

      (b)   Performance by the Collateral Agent of Obligations. If any Pledgor
fails to perform any agreement or obligation contained herein, the Collateral
Agent itself may perform, or cause performance of, such agreement or obligation,
and the expenses of the Collateral Agent incurred in connection therewith shall
be payable by the Pledgors on a joint and several basis pursuant to Section 26
hereof.

      (c)   The Collateral Agent's Duty of Care. Other than the exercise of
reasonable care to assure the safe custody of the Pledged Collateral while being
held by the Collateral Agent hereunder, the Collateral Agent shall have no duty
or liability to preserve rights pertaining thereto, it being understood and
agreed that the Pledgors shall be responsible for preservation of all rights in
the Pledged Collateral, and the Collateral Agent shall be relieved of all
responsibility for the Pledged Collateral upon surrendering it or tendering the
surrender of it to the Pledgors. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment
substantially equal to that which the Collateral Agent accords its own property,
which shall be no less than the treatment employed by a reasonable and prudent
agent in the industry, it being understood that the Collateral Agent shall not
have responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Pledged Collateral, whether or not the Collateral Agent has or is deemed to have
knowledge of such matters, or (ii) taking any necessary steps to preserve rights
against any parties with respect to any of the Pledged Collateral.

      (d)   Voting Rights in Respect of the Pledged Collateral.

            (i)   So long as no Event of Default shall have occurred and be
      continuing, to the extent permitted by law, each Pledgor may exercise any
      and all voting and other consensual rights pertaining to the Pledged
      Collateral of such Pledgor or any part thereof for any purpose not
      inconsistent with the terms of this Pledge Agreement or the Credit
      Agreement; and

            (ii)  Upon the occurrence and during the continuance of an Event of
      Default, all rights of a Pledgor to exercise the voting and other
      consensual rights that it would otherwise be

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      entitled to exercise pursuant to paragraph (i) of this subsection shall
      cease and all such rights shall thereupon become vested in the Collateral
      Agent, which shall then have the sole right to exercise such voting and
      other consensual rights.

      (e)   Dividend Rights in Respect of the Pledged Collateral.

            (i)   So long as no Event of Default shall have occurred and be
      continuing and subject to Section 4(b) hereof, each Pledgor may receive
      and retain any and all dividends (other than stock dividends and other
      dividends constituting Pledged Collateral addressed hereinabove) or
      interest paid in respect of the Pledged Collateral to the extent they are
      allowed under the Credit Agreement.

            (ii)  Upon the occurrence and during the continuance of an Event of
      Default:

                  (A)   all rights of a Pledgor to receive the dividends and
            interest payments that it would otherwise be authorized to receive
            and retain pursuant to paragraph (i) of this subsection shall cease
            and all such rights shall thereupon be vested in the Collateral
            Agent, which shall then have the sole right to receive and hold as
            Pledged Collateral such dividends and interest payments; and

                  (B)   all dividends and interest payments that are received by
            a Pledgor contrary to the provisions of paragraph (A) of this
            subsection shall be received in trust for the benefit of the
            Collateral Agent, shall be segregated from other property or funds
            of such Pledgor, and shall be forthwith paid over to the Collateral
            Agent as Pledged Collateral in the exact form received, to be held
            by the Collateral Agent as Pledged Collateral and as further
            collateral security for the Secured Obligations.

      (f)   Release of Pledged Collateral. The Collateral Agent may release any
of the Pledged Collateral from this Pledge Agreement or may substitute any of
the Pledged Collateral for other Pledged Collateral without altering, varying or
diminishing in any way the force, effect, lien, pledge or security interest of
this Pledge Agreement as to any Pledged Collateral not expressly released or
substituted, and this Pledge Agreement shall continue as a first priority lien
on all Pledged Collateral not expressly released or substituted.

      11.   Rights of Required Lenders. All rights of the Collateral Agent
hereunder, if not exercised by the Collateral Agent, may be exercised by the
Required Lenders.

      12.   Application of Proceeds. Upon the occurrence and during the
continuation of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of the Pledged Collateral, when received by the
Collateral Agent or any of the holders of the Secured Obligations in cash or its
equivalent, will be applied in reduction of the Secured Obligations in the order
set forth in the Credit Agreement or other document relating to the Secured
Obligations, and each Pledgor irrevocably waives the right to direct the
application of such payments and proceeds and acknowledges and agrees that the
Collateral Agent shall have the continuing and exclusive right to apply and
reapply any and all such payments and proceeds in the manner set forth in this
Section 12, notwithstanding any entry to the contrary upon any of its books and
records.

      13.   Costs of Counsel. At all times hereafter, whether or not upon the
occurrence of an Event of Default, the Pledgors agree to promptly pay upon
demand any and all reasonable costs and expenses (including, without limitation,
attorneys' fees actually incurred but excluding the allocated costs of internal
counsel) of the Collateral Agent and the holders of the Secured Obligations (a)
as required under Section 11.5 of the Credit Agreement and (b) as necessary to
protect the Pledged Collateral or to exercise

                                       9
<PAGE>
any rights or remedies under this Pledge Agreement or with respect to any of the
Pledged Collateral. All of the foregoing costs and expenses shall constitute
Secured Obligations hereunder.

      14.   Continuing Agreement.

      (a)   This Pledge Agreement shall be a continuing agreement in every
respect and shall remain in full force and effect so long as any of the Secured
Obligations remains outstanding and until all of the commitments relating
thereto have been terminated (other than any obligations with respect to the
indemnities and the representations and warranties set forth in the Credit
Documents). Upon such payment and termination, this Pledge Agreement shall be
automatically terminated and the Collateral Agent and the holders of the Secured
Obligations shall forthwith release all of its liens and security interests
hereunder and shall, upon the request and at the expense of the Pledgors,
execute and deliver all UCC termination statements and/or other documents
reasonably requested by the Pledgors evidencing such termination.
Notwithstanding the foregoing, all releases and indemnities provided hereunder
shall survive termination of this Pledge Agreement.

      (b)   This Pledge Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment, in whole
or in part, of any of the Secured Obligations is rescinded or must otherwise be
restored or returned by the Collateral Agent or any holder of the Secured
Obligations as a preference, fraudulent conveyance or otherwise under any
bankruptcy, insolvency or similar law, all as though such payment had not been
made; provided that in the event payment of all or any part of the Secured
Obligations is rescinded or must be restored or returned, all reasonable costs
and expenses (including, without limitation, attorneys' fees actually incurred
(excluding the allocated cost of internal counsel) and disbursements) incurred
by the Collateral Agent or any holder of the Secured Obligations in defending
and enforcing such reinstatement shall be deemed to be included as a part of the
Secured Obligations.

      15.   Amendments and Waivers. This Pledge Agreement and the provisions
hereof may not be amended, waived, modified, changed, discharged or terminated
except as set forth in Section 11.6 of the Credit Agreement.

      16.   Successors in Interest. This Pledge Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Pledgor, its successors and assigns, and shall inure, together with the rights
and remedies of the Collateral Agent and the holders of the Secured Obligations
hereunder, to the benefit of the Collateral Agent and the holders of the Secured
Obligations and their successors and permitted assigns; provided, however, that
none of the Pledgors may assign its rights or delegate its duties hereunder
without the prior written consent of the requisite Lenders under the Credit
Agreement. To the fullest extent permitted by law, each Pledgor hereby releases
the Collateral Agent and each holder of the Secured Obligations, and their
respective successors and assigns, from any liability for any act or omission
relating to this Pledge Agreement or the Collateral, except for any liability
arising from the gross negligence or willful misconduct of the Collateral Agent
or such holder, or their respective officers, employees or agents.

      17.   Notices. All notices required or permitted to be given under this
Pledge Agreement shall be given as provided in Section 11.1 of the Credit
Agreement.

      18.   Counterparts. This Pledge Agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.

                                       10
<PAGE>
      19.   Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Pledge Agreement.

      20.   Governing Law; Submission to Jurisdiction; Venue.

      (a)   THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. Any legal action or proceeding with respect
to this Pledge Agreement may be brought in the state or federal courts located
in Nashville, Tennessee or Charlotte, North Carolina, and, by execution and
delivery of this Pledge Agreement, each Pledgor hereby irrevocably accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of such courts. Nothing herein shall affect the right of the
Collateral Agent to commence legal proceedings or to otherwise proceed against
any Pledgor in any other jurisdiction.

      (b)   Each Pledgor hereby irrevocably waives any objection that it may now
or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Pledge Agreement brought
in the courts referred to in subsection (a) hereof and hereby further
irrevocably waives and agrees not to plead or claim in any such court that any
such action or proceeding brought in any such court has been brought in an
inconvenient forum.

      21.   Waiver of Jury Trial. EACH PARTY TO THIS PLEDGE AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY CREDIT DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY CREDIT DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN
CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS PLEDGE AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.

      22.   Severability. If any provision of this Pledge Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.

      23.   Entirety. This Pledge Agreement, the other Credit Documents and the
other documents relating to the Secured Obligations represent the entire
agreement of the parties hereto and thereto, and supersede all prior agreements
and understandings, oral or written, if any, including any commitment letters or
correspondence relating to the Credit Documents, any other documents relating to
the Secured Obligations, or the transactions contemplated herein and therein.

      24.   Survival. All representations and warranties of the Pledgors
hereunder shall survive the execution and delivery of this Pledge Agreement, the
other Credit Documents and the other documents relating to the Secured
Obligations, the delivery of the Notes and the extension of credit thereunder or
in connection therewith.

                                       11
<PAGE>
      25.   Other Security. To the extent that any of the Secured Obligations
are now or hereafter secured by property other than the Pledged Collateral
(including, without limitation, real and other personal property owned by a
Pledgor), or by a guarantee, endorsement or property of any other Person, then
the Collateral Agent shall have the right to proceed against such other
property, guarantee or endorsement upon the occurrence of any Event of Default,
and the Collateral Agent shall have the right, in its sole discretion, to
determine which rights, security, liens, security interests or remedies the
Collateral Agent shall at any time pursue, relinquish, subordinate, modify or
take with respect thereto, without in any way modifying or affecting any of them
or the Secured Obligations or any of the rights of the Collateral Agent or the
holders of the Secured Obligations under this Pledge Agreement, under any of the
other Credit Documents or under any other document relating to the Secured
Obligations.

      26.   Joint and Several Obligations of Pledgors.

      (a)   Each of the Pledgors is accepting joint and several liability
hereunder in consideration of the financial accommodation to be provided by the
holders of the Secured Obligations, for the mutual benefit, directly and
indirectly, of each of the Pledgors and in consideration of the undertakings of
each of the Pledgors to accept joint and several liability for the obligations
of each of them.

      (b)   Each of the Pledgors jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Pledgors with respect to the payment and
performance of all of the Secured Obligations arising under this Pledge
Agreement, the other Credit Documents and any other documents relating to the
Secured Obligations, it being the intention of the parties hereto that all the
Secured Obligations shall be the joint and several obligations of each of the
Pledgors without preferences or distinction among them.

      (c)   Notwithstanding any provision to the contrary contained herein, in
any other of the Credit Documents or in any other documents relating to the
Secured Obligations, the obligations of each Guarantor under the Credit
Agreement and the other Credit Documents shall be limited to an aggregate amount
equal to the largest amount that would not render such obligations subject to
avoidance under Section 548 of the Bankruptcy Code or any comparable provisions
of any applicable state law.

                  [remainder of page intentionally left blank]

                                       12
<PAGE>
      Each of the parties hereto has caused a counterpart of this Pledge
Agreement to be duly executed and delivered as of the date first above written.

PLEDGORS:                           ACCREDO HEALTH, INCORPORATED,
                                    a Delaware corporation

                                    By:_____________________________________
                                    Name:  Thomas W. Bell, Jr.
                                    Title: Secretary

                                    SOUTHERN HEALTH SYSTEMS, INC.,
                                    a Tennessee corporation
                                    NOVA FACTOR, INC.,
                                    a Tennessee corporation
                                    HEMOPHILIA HEALTH SERVICES, INC.,
                                    a Tennessee corporation
                                    PHARMACARE RESOURCES INC.,
                                    a New York corporation
                                    SUNRISE HEALTH MANAGEMENT, INC.,
                                    a Georgia corporation
                                    BIO PARTNERS IN CARE, INC.,
                                    a Missouri corporation
                                    GENTIVA HEALTH SERVICES (QUANTUM) CORP.,
                                    a Delaware corporation
                                    GENTIVA HEALTH SERVICES (INFUSION), INC.,
                                    a Delaware corporation
                                    GENTIVA HEALTH RESOURCES, INC. (NEW YORK),
                                    a New York corporation

                                    By:_____________________________________
                                    Name:  Thomas W. Bell, Jr.
                                    Title: Secretary
                                           of each of the foregoing Pledgors

                           [Signature pages continue]
<PAGE>
Accepted and agreed to as of the date first above written.

BANK OF AMERICA, N.A.,
as Collateral Agent

By:________________________
Name:
Title:
<PAGE>
                                    SCHEDULES

Schedule 2(a)           Pledged Stock
Schedule 4(a)           Form of Stock Power
<PAGE>
                                  Schedule 2(a)

                                  Pledged Stock

<TABLE>
<CAPTION>
                                                                               Class of      Number of   Certificate  Percentage of
              Pledgor                              Issuer                    Capital Stock    Shares       Number     Capital Stock
<S>                               <C>                                        <C>             <C>         <C>          <C>
Accredo Health, Incorporated      Southern Health Systems, Inc.                 Common       10,000,000       3            100%
Southern Health Systems, Inc.     Nova Factor, Inc.                             Common           100          1            100%
Accredo Health, Incoporated       Hemophilia Health Services, Inc.              Common           100          4            100%
Accredo Health, Incoporated       Pharmacare Resources Inc.                     Common           20           4            100%
Hemophilia Health Services, Inc.  Sunrise Health Management, Inc.               Common         954,777       28            100%
Accredo Health, Incoporated       Bio Partners In Care, Inc.                    Common         999,997        8            100%
Accredo Health, Incoporated       Gentiva Health Services (Quantum) Corp.       Common          1,000         5            100%
Accredo Health, Incoporated       Gentiva Health Services (Infusion), Inc.      Common          1,000         5            100%
Gentiva Health Services
(Quantum) Corp.                   Gentiva Health Resources, Inc. (New York)     Common           100          2            100%
</TABLE>
<PAGE>
                                  Schedule 4(a)

                             Irrevocable Stock Power

   FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to

the following shares of capital stock of ____________________[ISSUER], a
____________ corporation:

<TABLE>
<CAPTION>
       No. of Shares                                       Certificate No.
       -------------                                       ---------------
<S>                                                        <C>

</TABLE>

and irrevocably appoints __________________________________ its agent and
attorney-in-fact to transfer all or any part of such capital stock and to take
all necessary and appropriate action to effect any such transfer. The agent and
attorney-in-fact may substitute and appoint one or more persons to act for him.
The effectiveness of a transfer pursuant to this stock power shall be subject to
any and all transfer restrictions referenced on the face of the certificates
evidencing such interest or in the certificate of incorporation or bylaws of the
subject corporation, to the extent they may from time to time exist.

                                                   [HOLDER]

                                                   By:__________________________
                                                   Name:
                                                   Title:<PAGE>
                     AMENDED AND RESTATED SECURITY AGREEMENT

      THIS AMENDED AND RESTATED SECURITY AGREEMENT (this "Security Agreement"),
dated as of June 13, 2002, is by and among the parties identified as "Grantors"
on the signature pages hereto and such other parties as may become Grantors
hereunder after the date hereof (individually a "Grantor", and collectively the
"Grantors") and BANK OF AMERICA, N.A., as collateral agent (in such capacity,
the "Collateral Agent") for the holders of the Secured Obligations referenced
below.

                               W I T N E S S E T H

      WHEREAS, pursuant to the Existing Credit Agreement the banks party thereto
provided $60 million in credit facilities to the Borrower and the Borrower and
the guarantors party thereto granted a security interest in the collateral
identified therein to secure the credit facilities;

      WHEREAS, pursuant to that Credit Agreement (as amended, modified and
supplemented, the "Credit Agreement") dated as of the date hereof among the
Borrower, the Guarantors identified therein, the Lenders identified therein and
Bank of America, N.A., as Administrative Agent, the Lenders have agreed to amend
and restate the credit facilities provided under Existing Credit Agreement on
the terms set forth in the Credit Agreement to provide, among other things, an
increase in the size of the credit facilities to $325 million; and

      WHEREAS, this Security Agreement is given in amendment to, restatement of
and substitution for the security agreement provided in the Existing Credit
Agreement.

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

      1.    Definitions.

      (a)   Capitalized terms used and not otherwise defined herein shall have
the meanings provided in the Credit Agreement. In addition, the following terms,
which are defined in the UCC as in effect in the State of North Carolina on the
date hereof, are used herein as so defined: Accession, Account, As-Extracted
Collateral, Chattel Paper, Commercial Tort Claim, Commingled Goods, Consumer
Goods, Deposit Account, Document, Equipment, Farm Products, Fixtures, General
Intangible, Goods, Instrument, Inventory, Investment Property, Letter-of-Credit
Right, Manufactured Home, Proceeds, Software, Standing Timber, Supporting
Obligation and Tangible Chattel Paper.

      (b)   As used herein:

            "Collateral" has the meaning provided in Section 2 hereof.

            "Copyright License" means any written agreement, naming any Grantor
      as licensor, granting any right under any Copyright including, without
      limitation, any thereof referred to in Schedule 6.9 of the Credit
      Agreement.

            "Copyrights" means (a) all registered United States copyrights in
      all Works, now existing or hereafter created or acquired, all
      registrations and recordings thereof, and all applications in connection
      therewith, including, without limitation, registrations, recordings and
      applications in the United States Copyright Office including, without
      limitation, any thereof referred to in Schedule 6.9 of the Credit
      Agreement, and (b) all renewals thereof including, without limitation, any
      thereof referred to in Schedule 6.9 of the Credit Agreement.
<PAGE>
            "Patent License" means any written agreement providing for the grant
      by or to a Grantor of any right to manufacture, use or sell any invention
      covered by a Patent, including, without limitation, any thereof referred
      to in Schedule 6.9 of the Credit Agreement.

            "Patents" means (a) all letters patent of the United States or any
      other country and all reissues and extensions thereof, including, without
      limitation, any letters patent referred to in Schedule 6.9 of the Credit
      Agreement, and (b) all applications for letters patent of the United
      States or any other country and all divisions, continuations and
      continuations-in-part thereof, including, without limitation, any thereof
      referred to in Schedule 6.9 of the Credit Agreement.

            "Secured Obligations" means, without duplication, (i) all of the
      obligations of the Credit Parties to the Lenders (including the Swingline
      Lender and the Issuing Lender), the Administrative Agent and the
      Collateral Agent, whenever arising, under the Credit Agreement or any of
      the other Credit Documents (including, but not limited to, any interest
      accruing after the occurrence of a Bankruptcy Event with respect to any
      Credit Party, regardless of whether such interest is an allowed claim
      under the Bankruptcy Code), whether now existing or hereafter arising, due
      or to become due, direct or indirect, absolute or contingent, howsoever
      evidenced, created, held or acquired, whether primary, secondary, direct,
      contingent, or joint and several, as such obligations may be amended,
      modified, increased, extended, renewed or replaced from time to time, (ii)
      all of the obligations owing by the Credit Parties to the Lenders or any
      affiliate of a Lender, whenever arising, under any Hedging Agreement to
      the extent permitted under the Credit Agreement, and (iii) all costs and
      expenses incurred in connection with enforcement and collection of the
      obligations described in the foregoing clauses (i) and (ii), including
      reasonable attorneys' fees actually incurred but excluding the allocated
      cost of internal counsel.

            "Trademark License" means any written agreement providing for the
      grant by or to a Grantor of any right to use any Trademark, including,
      without limitation, any thereof referred to in Schedule 6.9 of the Credit
      Agreement.

            "Trademarks" means (a) all trademarks, trade names, corporate names,
      company names, business names, fictitious business names, trade styles,
      service marks, logos and other source or business identifiers, and the
      goodwill associated therewith, now existing or hereafter adopted or
      acquired, all registrations and recordings thereof, and all applications
      in connection therewith, whether in the United States Patent and Trademark
      Office or in any similar office or agency of the United States, any state
      thereof or any other country or any political subdivision thereof, or
      otherwise, including, without limitation, any thereof referred to in
      Schedule 6.9 of the Credit Agreement, and (b) all renewals thereof.

            "UCC" means the Uniform Commercial Code.

            "Work" means any work that is subject to copyright protection
      pursuant to Title 17 of the United States Code.

      2.    Grant of Security Interest in the Collateral. To secure the prompt
payment and performance in full when due, whether by lapse of time,
acceleration, mandatory prepayment or otherwise, of the Secured Obligations,
each Grantor hereby grants to the Collateral Agent, for the benefit of the
holders of the Secured Obligations, a continuing security interest in, and a
right to set off against, any and all right, title and interest of such Grantor
in and to the following (collectively, the "Collateral"), whether now owned or
existing or owned, acquired, or arising hereafter:

            (a)   all Accounts;

                                       2
<PAGE>
            (b)   all cash and currency;

            (c)   all Chattel Paper;

            (d)   those Commercial Tort Claims identified on Schedule 2(d)
      attached hereto;

            (e)   all Copyrights;

            (f)   all Copyright Licenses;

            (g)   all Deposit Accounts;

            (h)   all Documents;

            (i)   all Equipment;

            (j)   all Fixtures;

            (k)   all General Intangibles (other than any Capital Stock in the
      Excluded Subsidiary);

            (l)   all Instruments;

            (m)   all Inventory;

            (n)   all Investment Property;

            (o)   all Letter-of-Credit Rights;

            (p)   all Patents;

            (q)   all Patent Licenses;

            (r)   all Software;

            (s)   all Supporting Obligations;

            (t)   all Trademarks;

            (u)   all Trademark Licenses;

            (v)   all other personal property of such Grantor of whatever type
      or description (other than any Capital Stock in the Excluded Subsidiary);
      and

            (w)   to the extent not otherwise included, all Accessions and all
      Proceeds of any and all of the foregoing.

            Notwithstanding anything to the contrary contained herein, the
      security interests granted under this Security Agreement shall not extend
      to (i) any property that is subject to a Lien securing purchase money
      Indebtedness permitted under the Credit Agreement pursuant to documents
      that prohibit such Grantor from granting any other Liens in such property
      or (ii) any lease, license or other contract if the grant of a security
      interest in such lease, license or contract in the manner contemplated by
      this Security Agreement, under the terms thereof and under applicable law,
      is

                                       3
<PAGE>
      prohibited and would result in the termination thereof; provided in each
      case that any such limitation on the security interests granted hereunder
      shall only apply to the extent that (A) after commercially reasonable
      efforts not involving the expenditure of money, consent from the relevant
      party or parties has not been obtained and (B) any such prohibition could
      not be rendered ineffective pursuant to the UCC or any other applicable
      law (including the Bankruptcy Code) or principles of equity.

      The Grantors and the Collateral Agent, on behalf of the holders of the
Secured Obligations, hereby acknowledge and agree that the security interest
created hereby in the Collateral (i) constitutes continuing collateral security
for all of the Secured Obligations, whether now existing or hereafter arising
and (ii) is not to be construed as an assignment of any Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks or Trademark Licenses.

      3.    Provisions Relating to Accounts.

      (a)   Anything herein to the contrary notwithstanding, each of the
Grantors shall remain liable under each of the Accounts to observe and perform
all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise to
each such Account. Neither the Collateral Agent nor any holder of the Secured
Obligations shall have any obligation or liability under any Account (or any
agreement giving rise thereto) by reason of or arising out of this Security
Agreement or the receipt by the Collateral Agent or any holder of the Secured
Obligations of any payment relating to such Account pursuant hereto, nor shall
the Collateral Agent or any holder of the Secured Obligations be obligated in
any manner to perform any of the obligations of a Grantor under or pursuant to
any Account (or any agreement giving rise thereto), to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by it or
as to the sufficiency of any performance by any party under any Account (or any
agreement giving rise thereto), to present or file any claim, to take any action
to enforce any performance or to collect the payment of any amounts that may
have been assigned to it or to which it may be entitled at any time or times.

      (b)   Once during each calendar year or at any time after the occurrence
and during the continuation of an Event of Default, the Collateral Agent shall
have the right, but not the obligation, to make test verifications of the
Accounts in any manner and through any medium that it reasonably considers
advisable, and the Grantors shall furnish all such assistance and information as
the Collateral Agent may require in connection with such test verifications. At
any time and from time to time, upon the Collateral Agent's request and at the
expense of the Grantors, the Grantors shall cause independent public accountants
or others satisfactory to the Collateral Agent to furnish to the Collateral
Agent reports showing reconciliations, aging and test verifications of, and
trial balances for, the Accounts. The Collateral Agent in its own name or in the
name of others may communicate with account debtors on the Accounts to verify
with them to the Collateral Agent's satisfaction the existence, amount and terms
of any Accounts.

      4.    Representations and Warranties. Each Grantor hereby represents and
warrants to the Collateral Agent, for the benefit of the holders of the Secured
Obligations, that so long as any of the Secured Obligations remains outstanding
and until all of the commitments relating thereto have been terminated:

            (a)   Legal Name; State of Incorporation; Chief Executive Office. As
      of the date hereof:

                  (i)   Each Grantor's exact legal name, state of incorporation
            or formation and chief executive office as of the Closing Date is
            (and for the four months prior to the Closing Date was) as set forth
            on Schedule 6.19(c) of the Credit Agreement.

                  (ii)  Other than as set forth on Schedule 4(a)(ii) attached
            hereto, no Grantor has been party to a merger, consolidation or
            other change in structure or used any tradename in the four months
            prior to the Closing Date.

                                       4
<PAGE>
                  (iii) All of the Collateral of the Grantor is (and for the
            four months prior to the Closing Date was) at the locations set
            forth on Schedule 6.20(b) of the Credit Agreement.

            (b)   Ownership. Each Grantor is the legal and beneficial owner of
      its Collateral and has the right to pledge, sell, assign or transfer the
      same.

            (c)   Security Interest/Priority. This Security Agreement creates a
      valid security interest in favor of the Collateral Agent, for the benefit
      of the holders of the Secured Obligations, in the Collateral of such
      Grantor and, when properly perfected by filing, shall constitute a valid
      perfected security interest in such Collateral, to the extent such
      security interest can be perfected by filing under the UCC, free and clear
      of all Liens except for Permitted Liens.

            (d)   Types of Collateral. None of the Collateral consists of, or is
      the Accessions or the Proceeds of, As-Extracted Collateral, Consumer
      Goods, Farm Products, Manufactured Homes, or Standing Timber.

            (e)   Accounts. (i) Each Account of the Grantors and the papers and
      documents relating thereto are genuine and in all material respects what
      they purport to be, (ii) each Account arises out of (A) a bona fide sale
      of goods sold and delivered by such Grantor (or is in the process of being
      delivered) or (B) services theretofore actually rendered by such Grantor
      to, the account debtor named therein, (iii) no Account of a Grantor is
      evidenced by any Instrument or Chattel Paper unless such Instrument or
      Chattel Paper has been theretofore endorsed over and delivered to, or
      submitted to the control of, the Collateral Agent and (iv) no surety bond
      was required or given in connection with any Account of a Grantor or the
      contracts or purchase orders out of which they arose.

            (f)   Copyrights, Patents and Trademarks. All Copyrights, Copyright
      Licenses, Patents, Patent Licenses, registered Trademarks, Trademark
      applications and Trademark Licenses owned by any Grantor in its own name
      are set forth on Schedule 6.9 of the Credit Agreement.

      5.    Covenants. Each Grantor covenants that, so long as any of the
Secured Obligations remains outstanding and until all of the commitments
relating thereto have been terminated, such Grantor shall:

            (a)   Other Liens. Defend the Collateral against the claims and
      demands of all other parties claiming an interest therein, keep the
      Collateral free from all Liens, except for Permitted Liens, and not sell,
      exchange, transfer, assign, lease or otherwise dispose of the Collateral
      or any interest therein, except (i) as permitted under the Credit
      Agreement and (ii) no Grantor shall be required to defend or maintain any
      Trademark, Trademark License, Copyright, Copyright License, Patent or
      Patent Licens, if, in the reasonable business judgment of such Grantor
      such action would not be advisable.

            (b)   Preservation of Collateral. Keep the Collateral in good order,
      condition and repair and not use the Collateral in violation of the
      provisions of this Security Agreement or any other agreement relating to
      the Collateral or any policy insuring the Collateral or any applicable
      statute, law, bylaw, rule, regulation or ordinance.

            (c)   Instruments/Tangible Chattel Paper/Documents. If any amount
      payable under or in connection with any of the Collateral shall be or
      become evidenced by any Instrument or Tangible Chattel Paper, or if any
      property constituting Collateral shall be stored or shipped subject to a
      Document, such Grantor shall ensure that such Instrument, Tangible Chattel
      Paper or Document is either in the possession of such Grantor at all times
      or, if requested by the Collateral Agent, is immediately delivered to the
      Collateral Agent, duly endorsed in a manner satisfactory to the

                                       5
<PAGE>
      Collateral Agent. Such Grantor shall ensure that any Collateral consisting
      of Tangible Chattel Paper is marked with a legend acceptable to the
      Collateral Agent indicating the Collateral Agent's security interest in
      such Tangible Chattel Paper.

            (d)   Change in Structure, Location or Type. Change its name or
      state of formation or be party to a merger, consolidation or other change
      in structure or use any tradename without providing written notice to the
      Collateral Agent within thirty (30) days thereof.

            (e)   Inspection. Upon reasonable notice, and during reasonable
      hours, at all times allow the Collateral Agent or its representatives to
      visit and inspect the Collateral as set forth in Section 7.10 of the
      Credit Agreement.

            (f)   Authorization. Authorize the Collateral Agent to prepare and
      file such financing statements (including renewal statements), amendments
      and supplements or such other instruments as the Collateral Agent may from
      time to time reasonably deem necessary or appropriate in order to perfect
      and maintain the security interests granted hereunder in accordance with
      the UCC.

            (g)   Perfection of Security Interest. Execute and deliver to the
      Collateral Agent such agreements, assignments or instruments (including
      affidavits, notices, reaffirmations and amendments and restatements of
      existing documents, as the Collateral Agent may reasonably request) and do
      all such other things as the Collateral Agent may reasonably deem
      necessary or appropriate (i) to assure to the Collateral Agent the
      effectiveness and priority of its security interests hereunder, including
      (A) such financing statements (including renewal statements), amendments
      and supplements or such other instruments as the Collateral Agent may from
      time to time reasonably request in order to perfect and maintain the
      security interests granted hereunder in accordance with the UCC, (B) with
      regard to Copyrights, a Notice of Grant of Security Interest in Copyrights
      for filing with the United States Copyright Office in the form of Schedule
      5(f)(i) attached hereto, (C) with regard to Patents, a Notice of Grant of
      Security Interest in Patents for filing with the United States Patent and
      Trademark Office in the form of Schedule 5(f)(ii) attached hereto and (D)
      with regard to Trademarks, a Notice of Grant of Security Interest in
      Trademarks for filing with the United States Patent and Trademark Office
      in the form of Schedule 5(f)(iii) attached hereto, (ii) to consummate the
      transactions contemplated hereby and (iii) to otherwise protect and assure
      the Collateral Agent of its rights and interests hereunder. To that end,
      each Grantor agrees that the Collateral Agent may file one or more
      financing statements (with collateral descriptions broader and/or less
      specific than the description of the Collateral contained herein)
      disclosing the Collateral Agent's security interest in any or all of the
      Collateral of such Grantor without such Grantor's signature thereon, and
      further each Grantor also hereby irrevocably makes, constitutes and
      appoints the Collateral Agent, its nominee or any other Person whom the
      Collateral Agent may designate, as such Grantor's attorney-in-fact with
      full power and for the limited purpose to sign in the name of such Grantor
      any such financing statements (including renewal statements), amendments
      and supplements, notices or any similar documents that in the Collateral
      Agent's reasonable discretion would be necessary or appropriate in order
      to perfect and maintain perfection of the security interests granted
      hereunder, such power, being coupled with an interest, being and remaining
      irrevocable so long as the Secured Obligations remain unpaid and until the
      commitments relating thereto shall have been terminated. Each Grantor
      hereby agrees that a carbon, photographic or other reproduction of this
      Security Agreement or any such financing statement is sufficient for
      filing as a financing statement by the Collateral Agent without notice
      thereof to such Grantor wherever the Collateral Agent may in its sole
      discretion desire to file the same (the Collateral Agent shall give prompt
      notice to the Borrower after any such filing but the failure to give such
      notice shall not affect the validity of such filing). In the event for any
      reason the law of any jurisdiction other than North Carolina becomes or is
      applicable to the Collateral of any Grantor or any part thereof, or to any
      of the Secured Obligations, such Grantor agrees to execute and deliver all
      such instruments and to do all such other

                                       6
<PAGE>
      things as the Collateral Agent in its sole discretion reasonably deems
      necessary or appropriate to preserve, protect and enforce the security
      interests of the Collateral Agent under the law of such other jurisdiction
      (and, if a Grantor shall fail to do so promptly upon the request of the
      Collateral Agent, then the Collateral Agent may execute any and all such
      requested documents on behalf of such Grantor pursuant to the power of
      attorney granted hereinabove). If any Collateral is in the possession or
      control of a Grantor's agents and the Collateral Agent so requests, such
      Grantor agrees to notify such agents in writing of the Collateral Agent's
      security interest therein and, upon the Collateral Agent's request,
      instruct them to hold all such Collateral for the account of the holders
      of the Secured Obligations and subject to the Collateral Agent's
      instructions. Each Grantor agrees to mark its books and records to reflect
      the security interest of the Collateral Agent in the Collateral.

            (h)   Control. Execute and deliver all agreements, assignments,
      instruments or other documents as the Collateral Agent shall reasonably
      request for the purpose of obtaining and maintaining control within the
      meaning of the UCC with respect to any Collateral consisting of Deposit
      Accounts, Investment Property, Letter-of-Credit Rights and Electronic
      Chattel Paper.

            (i)   Treatment of Accounts. Not grant or extend the time for
      payment of any Account, or compromise or settle any Account for less than
      the full amount thereof, or release any Person or property, in whole or in
      part, from payment thereof, or allow any credit or discount thereon, other
      than as normal and customary in the ordinary course of a Grantor's
      business or as required by law.

            (j)   Insurance. Insure, repair and replace the Collateral of such
      Grantor as set forth in the Credit Agreement. All insurance proceeds shall
      be subject to the security interest of the Collateral Agent hereunder.

            (k)   Commercial Tort Claims.

                  (i)   Promptly notify the Collateral Agent in writing of the
            initiation of any Commercial Tort Claim before any Governmental
            Authority by or in favor of such Grantor or any of its Subsidiaries.

                  (ii)  Execute and deliver such statements, documents and
            notices and do and cause to be done all such things as the
            Collateral Agent may reasonably deem necessary or appropriate, or as
            are required by law, to create, perfect and maintain the Collateral
            Agent's security interest in any Commercial Tort Claim.

      6.    Advances by Holders of the Secured Obligations. On failure of any
Grantor to perform any of the covenants and agreements contained herein, the
Collateral Agent may, at its sole option and in its sole discretion, perform the
same and in so doing may expend such sums as the Collateral Agent may reasonably
deem advisable in the performance thereof, including, without limitation, the
payment of any insurance premiums, the payment of any taxes, a payment to obtain
a release of a Lien or potential Lien, expenditures made in defending against
any adverse claim and all other expenditures that the Collateral Agent or the
holders of the Secured Obligations may make for the protection of the security
hereof or that may be compelled to made by operation of law. All such sums and
amounts so expended shall be repayable by the Grantors on a joint and several
basis (subject to Section 25 hereof) promptly upon timely notice thereof and
demand therefor, shall constitute additional Secured Obligations and shall bear
interest from the date said amounts are expended at the default rate specified
in Section 3.1 of the Credit Agreement for Revolving Loans that are Base Rate
Loans. No such performance of any covenant or agreement by the Collateral Agent
or the holders of the Secured Obligations on behalf of any Grantor, and no such
advance or expenditure therefor, shall relieve the Grantors of any default under
the terms of this Security Agreement, the other Credit Documents or any other
documents relating to the Secured Obligations. The holders of the Secured
Obligations may make any payment hereby authorized in accordance with any bill,
statement or estimate

                                       7
<PAGE>
procured from the appropriate public office or holder of the claim to be
discharged without inquiry into the accuracy of such bill, statement or estimate
or into the validity of any tax assessment, sale, forfeiture, tax lien, title or
claim except to the extent such payment is being contested in good faith by a
Grantor in appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP.

      7.    Remedies.

      (a)   General Remedies. Upon the occurrence of an Event of Default and
during the continuation thereof, the Collateral Agent and the holders of the
Secured Obligations shall have, in addition to the rights and remedies provided
herein, in the Credit Documents, in any other documents relating to the Secured
Obligations, or by law (including, without limitation, levy of attachment and
garnishment), the rights and remedies of a secured party under the UCC of the
jurisdiction applicable to the affected Collateral and, further, the Collateral
Agent may, with or without judicial process or the aid and assistance of others,
(i) enter on any premises on which any of the Collateral may be located and,
without resistance or interference by the Grantors, take possession of the
Collateral, (ii) dispose of any Collateral on any such premises, (iii) require
the Grantors to assemble and make available to the Collateral Agent at the
expense of the Grantors any Collateral at any place and time designated by the
Collateral Agent that is reasonably convenient to both parties, (iv) remove any
Collateral from any such premises for the purpose of effecting sale or other
disposition thereof, and/or (v) without demand and without advertisement,
notice, hearing or process of law, all of which each of the Grantors hereby
waives to the fullest extent permitted by law, at any place and time or times,
sell and deliver any or all Collateral held by or for it at public or private
sale, by one or more contracts, in one or more parcels, for cash, upon credit or
otherwise, at such prices and upon such terms as the Collateral Agent deems
advisable, in its sole discretion (provided such prices and terms shall be
commercially reasonable and otherwise subject to any and all mandatory legal
requirements). Each of the Grantors acknowledges that any private sale
referenced above may be at prices and on terms less favorable to the seller than
the prices and terms that might have been obtained at a public sale and agrees
that such private sale shall be deemed to have been made in a commercially
reasonable manner. Neither the Collateral Agent's compliance with applicable law
nor its disclaimer of warranties relating to the Collateral shall be considered
to adversely affect the commercial reasonableness of any sale. In addition to
all other sums due the Collateral Agent and the holders of the Secured
Obligations with respect to the Secured Obligations, the Grantors shall pay the
Collateral Agent and each of the holders of the Secured Obligations all
reasonable documented costs and expenses incurred by the Collateral Agent or any
such holder of the Secured Obligations, including, but not limited to,
reasonable attorneys' fees actually incurred (excluding the allocated cost of
internal counsel) and court costs, in obtaining or liquidating the Collateral,
in enforcing payment of the Secured Obligations, or in the prosecution or
defense of any action or proceeding by or against the Collateral Agent or the
holders of the Secured Obligations or the Grantors concerning any matter arising
out of or connected with this Security Agreement, any Collateral or the Secured
Obligations, including, without limitation, any of the foregoing arising in,
arising under or related to a case under the Bankruptcy Code. To the extent the
rights of notice cannot be legally waived hereunder, each Grantor agrees that
any requirement of reasonable notice shall be met if such notice is personally
served on or mailed, postage prepaid, to the Borrower in accordance with the
notice provisions of Section 11.1 of the Credit Agreement at least ten Business
Days before the time of sale or other event giving rise to the requirement of
such notice. The Collateral Agent and the holders of the Secured Obligations
shall not be obligated to make any sale or other disposition of the Collateral
regardless of notice having been given. To the extent permitted by law, any
holder of the Secured Obligations may be a purchaser at any such sale. To the
extent permitted by applicable law, each of the Grantors hereby waives all of
its rights of redemption with respect to any such sale. Subject to the
provisions of applicable law, the Collateral Agent and the holders of the
Secured Obligations may postpone or cause the postponement of the sale of all or
any portion of the Collateral by announcement at the time and place of such
sale, and such sale may, without further notice, to the extent permitted by law,
be made at the time and place to which the sale was postponed, or the Collateral
Agent and the holders of the Secured Obligations may further postpone such sale
by announcement made at such time and place.

                                       8
<PAGE>
      (b)   Remedies relating to Accounts. Upon the occurrence of an Event of
Default and during the continuation thereof, whether or not the Collateral Agent
has exercised any or all of its rights and remedies hereunder, each Grantor will
promptly upon request of the Collateral Agent instruct all account debtors to
remit all payments in respect of Accounts to a mailing location selected by the
Collateral Agent. In addition, the Collateral Agent shall have the right to
enforce any Grantor's rights against its customers and account debtors, and the
Collateral Agent or its designee may notify any Grantor's customers and account
debtors that the Accounts of such Grantor have been assigned to the Collateral
Agent or of the Collateral Agent's security interest therein, and may (either in
its own name or in the name of a Grantor or both) demand, collect (including
without limitation by way of a lockbox arrangement), receive, take receipt for,
sell, sue for, compound, settle, compromise and give acquittance for any and all
amounts due or to become due on any Account, and, in the Collateral Agent's
discretion, file any claim or take any other action or proceeding to protect and
realize upon the security interest of the holders of the Secured Obligations in
the Accounts. Each Grantor acknowledges and agrees that the Proceeds of its
Accounts remitted to or on behalf of the Collateral Agent in accordance with the
provisions hereof shall be solely for the Collateral Agent's own convenience and
that such Grantor shall not have any right, title or interest in such Accounts
or in any such other amounts except as expressly provided herein. The Collateral
Agent and the holders of the Secured Obligations shall have no liability or
responsibility to any Grantor for acceptance of a check, draft or other order
for payment of money bearing the legend "payment in full" or words of similar
import or any other restrictive legend or endorsement or be responsible for
determining the correctness of any remittance. Each Grantor hereby agrees to
indemnify the Collateral Agent and the holders of the Secured Obligations from
and against all liabilities, damages, losses, actions, claims, judgments, costs,
expenses, charges and reasonable attorneys' fees actually incurred (excluding
the allocated cost of internal counsel) suffered or incurred by the Collateral
Agent or the holders of the Secured Obligations (each, an "Indemnified Party")
because of the maintenance of the foregoing arrangements except as relating to
or arising out of the gross negligence or willful misconduct of an Indemnified
Party or its officers, employees or agents. In the case of any investigation,
litigation or other proceeding, the foregoing indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by a
Grantor, its directors, shareholders or creditors or an Indemnified Party or any
other Person or any other Indemnified Party is otherwise a party thereto.

      (c)   Access. In addition to the rights and remedies hereunder, upon the
occurrence of an Event of Default and during the continuation thereof, the
Collateral Agent shall have the right to enter and remain upon the various
premises of the Grantors without cost or charge to the Collateral Agent, and use
the same, together with materials, supplies, books and records of the Grantors
for the purpose of collecting and liquidating the Collateral, or for preparing
for sale and conducting the sale of the Collateral, whether by foreclosure,
auction or otherwise. In addition, the Collateral Agent may remove Collateral,
or any part thereof, from such premises and/or any records with respect thereto,
in order to effectively collect or liquidate such Collateral.

      (d)   Nonexclusive Nature of Remedies. Failure by the Collateral Agent or
the holders of the Secured Obligations to exercise any right, remedy or option
under this Security Agreement, any other Credit Document, any other documents
relating to the Secured Obligations, or as provided by law, or any delay by the
Collateral Agent or the holders of the Secured Obligations in exercising the
same, shall not operate as a waiver of any such right, remedy or option. No
waiver hereunder shall be effective unless it is in writing, signed by the party
against whom such waiver is sought to be enforced and then only to the extent
specifically stated, which in the case of the Collateral Agent or the holders of
the Secured Obligations shall only be granted as provided herein. To the extent
permitted by law, neither the Collateral Agent, the holders of the Secured
Obligations shall be liable hereunder for any acts or omissions or for any error
of judgment or mistake of fact or law other than their gross negligence or
willful misconduct hereunder. The rights and remedies of the Collateral Agents
and the holders of the Secured Obligations under this Security Agreement shall
be cumulative and not exclusive of any other right or remedy that the Collateral
Agent or the holders of the Secured Obligations may have.

                                       9
<PAGE>
      (e)   Retention of Collateral. To the extent permitted under applicable
law, in addition to the rights and remedies hereunder, upon the occurrence of an
Event of Default, the Collateral Agent may, after providing the notices required
by Sections 9-620 and 9-621 of the UCC or otherwise complying with the
requirements of applicable law of the relevant jurisdiction, accept or retain
all or any portion of the Collateral in satisfaction of the Secured Obligations.
Unless and until the Collateral Agent shall have provided such notices, however,
the Collateral Agent shall not be deemed to have accepted or retained any
Collateral in satisfaction of any Secured Obligations for any reason.

      (f)   Deficiency. In the event that the proceeds of any sale, collection
or realization are insufficient to pay all amounts to which the Collateral Agent
or the holders of the Secured Obligations are legally entitled, the Grantors
shall be jointly and severally liable for the deficiency (subject to Section 25
hereof), together with interest thereon at the default rate specified in Section
3.1 of the Credit Agreement for Revolving Loans that are Base Rate Loans,
together with the costs of collection and reasonable attorneys' fees actually
incurred (excluding the allocated cost of internal counsel). Any surplus
remaining after the full payment and satisfaction of the Secured Obligations
shall be returned to the Grantors or to whomsoever a court of competent
jurisdiction shall determine to be entitled thereto.

      8.    Release of Collateral. Upon request, the Collateral Agent shall
promptly deliver to the Borrower (at the Borrower's expense) appropriate release
documentation to the extent the release of Collateral is permitted under, and on
the terms and conditions set forth in, the Credit Agreement; provided that any
such release, or the substitution of any of the Collateral for other Collateral,
will not alter, vary or diminish in any way the force, effect, lien, pledge or
security interest of this Security Agreement as to any and all Collateral not
expressly released or substituted, and this Security Agreement shall continue as
a first priority lien (subject to Permitted Liens) on any and all Collateral not
expressly released or substituted.

      9.    Rights of the Collateral Agent.

      (a)   Power of Attorney. In addition to other powers of attorney contained
herein, each Grantor hereby designates and appoints the Collateral Agent, on
behalf of the holders of the Secured Obligations, and each of its designees or
agents, as attorney-in-fact of such Grantor, irrevocably and with power of
substitution, with authority to take any or all of the following actions upon
the occurrence and during the continuation of an Event of Default:

            (i)    to demand, collect, settle, compromise and adjust, and give
      discharges and releases concerning the Collateral, all as the Collateral
      Agent may reasonably deem appropriate;

            (ii)   to commence and prosecute any actions at any court for the
      purposes of collecting any of the Collateral and enforcing any other right
      in respect thereof;

            (iii)  to defend, settle or compromise any action brought and, in
      connection therewith, give such discharge or release as the Collateral
      Agent may reasonably deem appropriate;

            (iv)   to receive, open and dispose of mail addressed to a Grantor
      and endorse checks, notes, drafts, acceptances, money orders, bills of
      lading, warehouse receipts or other instruments or documents evidencing
      payment, shipment or storage of the goods giving rise to the Collateral on
      behalf of and in the name of such Grantor, or securing, or relating to
      such Collateral;

                                       10
<PAGE>
            (v)    to pay or discharge taxes, liens, security interests or other
      encumbrances levied or placed on or threatened against the Collateral;

            (vi)   to direct any parties liable for any payment in connection
      with any of the Collateral to make payment of any and all monies due and
      to become due thereunder directly to the Collateral Agent or as the
      Collateral Agent shall direct;

            (vii)  to receive payment of and receipt for any and all monies,
      claims, and other amounts due and to become due at any time in respect of
      or arising out of any Collateral;

            (viii) to sell, assign, transfer, make any agreement in respect of,
      or otherwise deal with or exercise rights in respect of, any Collateral or
      the goods or services that have given rise thereto, as fully and
      completely as though the Collateral Agent were the absolute owner thereof
      for all purposes;

            (ix)   to adjust and settle claims under any insurance policy
      relating thereto;

            (x)    to execute and deliver all assignments, conveyances,
      statements, financing statements, renewal financing statements, security
      and pledge agreements, affidavits, notices and other agreements,
      instruments and documents that the Collateral Agent may reasonably deem
      appropriate in order to perfect and maintain the security interests and
      liens granted in this Security Agreement and in order to fully consummate
      all of the transactions contemplated therein;

            (xi)   to institute any foreclosure proceedings that the Collateral
      Agent may reasonably deem appropriate; and

            (xii)  to do and perform all such other acts and things as the
      Collateral Agent may reasonably deem appropriate in connection with the
      Collateral.

      This power of attorney is a power coupled with an interest and shall be
irrevocable for so long as any of the Secured Obligations shall remain
outstanding and until all of the commitments relating thereto shall have been
terminated. The Collateral Agent shall be under no duty to exercise or withhold
the exercise of any of the rights, powers, privileges and options expressly or
implicitly granted to the Collateral Agent in this Security Agreement, and shall
not be liable for any failure to do so or any delay in doing so. The Collateral
Agent shall not be liable for any act or omission or for any error of judgment
or any mistake of fact or law in its individual capacity or its capacity as
attorney-in-fact except acts or omissions resulting from its gross negligence or
willful misconduct. This power of attorney is conferred on the Collateral Agent
solely to protect, preserve and realize upon its security interest in the
Collateral.

      (b)   Performance by the Collateral Agent of Obligations. If any Grantor
fails to perform any agreement or obligation contained herein, the Collateral
Agent itself may perform, or cause performance of, such agreement or obligation,
and the expenses of the Collateral Agent incurred in connection therewith shall
be payable by the Grantors on a joint and several basis (subject to Section 25
hereof).

      (c)   The Collateral Agent's Duty of Care. Other than the exercise of
reasonable care to assure the safe custody of the Collateral while being held by
the Collateral Agent hereunder, the Collateral Agent shall have no duty or
liability to preserve rights pertaining thereto, it being understood and agreed
that the Grantors shall be responsible for preservation of all rights in the
Collateral, and the Collateral Agent shall be relieved of all responsibility for
the Collateral upon surrendering it or tendering the surrender of it to the
Grantors. The Collateral Agent shall be deemed to have exercised reasonable care
in the custody and preservation of the Collateral in its possession if such
Collateral is accorded treatment substantially equal to

                                       11
<PAGE>
that which the Collateral Agent accords its own property, which shall be no less
than the treatment employed by a reasonable and prudent agent in the industry,
it being understood that the Collateral Agent shall not have responsibility for
taking any necessary steps to preserve rights against any parties with respect
to any of the Collateral. In the event of a public or private sale of Collateral
pursuant to Section 7 hereof, the Collateral Agent shall have no obligation to
clean, repair or otherwise prepare the Collateral for sale.

      10.   Rights of Required Lenders. All rights of the Collateral Agent
hereunder, if not exercised by the Collateral Agent, may be exercised by the
Required Lenders.

      11.   Application of Proceeds. Upon the occurrence and during the
continuation of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of the Collateral, when received by the Collateral
Agent or any of the holders of the Secured Obligations in cash or its
equivalent, will be applied in reduction of the Secured Obligations in the order
set forth in the Credit Agreement or other document relating to the Secured
Obligations, and each Grantor irrevocably waives the right to direct the
application of such payments and proceeds and acknowledges and agrees that the
Collateral Agent shall have the continuing and exclusive right to apply and
reapply any and all such payments and proceeds in the Collateral Agent's sole
discretion, notwithstanding any entry to the contrary upon any of its books and
records.

      12.   Continuing Agreement.

      (a)   This Security Agreement shall be a continuing agreement in every
respect and shall remain in full force and effect so long as any of the Secured
Obligations remains outstanding and until all of the commitments relating
thereto have been terminated (other than any obligations with respect to the
indemnities and the representations and warranties set forth in the Credit
Documents). Upon such payment and termination, this Security Agreement shall be
automatically terminated and the Collateral Agent and the holders of the Secured
Obligations shall forthwith release all of its liens and security interests
hereunder and shall, upon the request and at the expense of the Grantors,
execute and deliver all UCC termination statements and/or other documents
reasonably requested by the Grantors evidencing such termination.
Notwithstanding the foregoing, all releases and indemnities provided hereunder
shall survive termination of this Security Agreement.

      (b)   This Security Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment, in whole
or in part, of any of the Secured Obligations is rescinded or must otherwise be
restored or returned by the Collateral Agent or any holder of the Secured
Obligations as a preference, fraudulent conveyance or otherwise under any
bankruptcy, insolvency or similar law, all as though such payment had not been
made; provided that in the event payment of all or any part of the Secured
Obligations is rescinded or must be restored or returned, all reasonable costs
and expenses (including, without limitation, attorneys' fees actually incurred
(excluding the allocated cost of internal counsel) and disbursements) incurred
by the Collateral Agent or any holder of the Secured Obligations in defending
and enforcing such reinstatement shall be deemed to be included as a part of the
Secured Obligations.

      13.   Amendments and Waivers. This Security Agreement and the provisions
hereof may not be amended, waived, modified, changed, discharged or terminated
except as set forth in Section 11.6 of the Credit Agreement.

      14.   Successors in Interest. This Security Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Grantor, its successors and assigns, and shall inure, together with the rights
and remedies of the Collateral Agent and the holders of the Secured Obligations
hereunder, to the benefit of the Collateral Agent and the holders of the Secured
Obligations and their successors and permitted assigns; provided, however, that
none of the Grantors may assign its rights or delegate its duties hereunder
without the prior written consent of the requisite Lenders under the Credit
Agreement. To the

                                       12
<PAGE>
fullest extent permitted by law, each Grantor hereby releases the Collateral
Agent and each holder of the Secured Obligations, their respective successors
and assigns and their respective officers, attorneys, employees and agents, from
any liability for any act or omission or any error of judgment or mistake of
fact or of law relating to this Security Agreement or the Collateral, except for
any liability arising from the gross negligence or willful misconduct of the
Collateral Agent or such holder, or their respective officers, attorneys,
employees or agents.

      15.   Notices. All notices required or permitted to be given under this
Security Agreement shall be given as provided in Section 11.1 of the Credit
Agreement.

      16.   Counterparts. This Security Agreement may be executed in any number
of counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Security Agreement to produce or
account for more than one such counterpart.

      17.   Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Security Agreement.

      18.   Governing Law; Submission to Jurisdiction; Venue.

      (a)   THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any legal action or
proceeding with respect to this Security Agreement may be brought in the state
or federal courts located in Nashville, Tennessee or Charlotte, North Carolina,
and, by execution and delivery of this Security Agreement, each Grantor hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of such courts. Nothing herein shall affect
the right of the Collateral Agent to commence legal proceedings or to otherwise
proceed against any Grantor in any other jurisdiction.

      (b)   Each Grantor hereby irrevocably waives any objection that it may now
or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Security Agreement brought
in the courts referred to in subsection (a) hereof and hereby further
irrevocably waives and agrees not to plead or claim in any such court that any
such action or proceeding brought in any such court has been brought in an
inconvenient forum.

      19.   Waiver of Jury Trial. EACH PARTY TO THIS SECURITY AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY CREDIT DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY CREDIT DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN
CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS SECURITY AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.

      20.   Severability. If any provision of this Security Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full

                                       13
<PAGE>
force and effect and shall be construed without giving effect to the illegal,
invalid or unenforceable provisions.

      21.   Entirety. This Security Agreement, the other Credit Documents and
the other documents relating to the Secured Obligations represent the entire
agreement of the parties hereto and thereto, and supersede all prior agreements
and understandings, oral or written, if any, including any commitment letters or
correspondence relating to the Credit Documents, any other documents relating to
the Secured Obligations, or the transactions contemplated herein and therein.

      22.   Survival. All representations and warranties of the Grantors
hereunder shall survive the execution and delivery of this Security Agreement,
the other Credit Documents and the other documents relating to the Secured
Obligations, the delivery of the Notes and the extension of credit thereunder or
in connection therewith.

      23.   Other Security. To the extent that any of the Secured Obligations
are now or hereafter secured by property other than the Collateral (including,
without limitation, real property and securities owned by a Grantor), or by a
guarantee, endorsement or property of any other Person, then the Collateral
Agent shall have the right to proceed against such other property, guarantee or
endorsement upon the occurrence of any Event of Default, and the Collateral
Agent shall have the right, in its sole discretion, to determine which rights,
security, liens, security interests or remedies the Collateral Agent shall at
any time pursue, relinquish, subordinate, modify or take with respect thereto,
without in any way modifying or affecting any of them or the Secured Obligations
or any of the rights of the Collateral Agent or the holders of the Secured
Obligations under this Security Agreement, under any of the other Credit
Documents or under any other document relating to the Secured Obligations.

      24.   Joint and Several Obligations of Grantors.

      (a)   Subject to subsection (c) of this Section 25, each of the Grantors
is accepting joint and several liability hereunder in consideration of the
financial accommodation to be provided by the holders of the Secured
Obligations, for the mutual benefit, directly and indirectly, of each of the
Grantors and in consideration of the undertakings of each of the Grantors to
accept joint and several liability for the obligations of each of them.

      (b)   Subject to subsection (c) of this Section 25, each of the Grantors
jointly and severally hereby irrevocably and unconditionally accepts, not merely
as a surety but also as a co-debtor, joint and several liability with the other
Grantors with respect to the payment and performance of all of the Secured
Obligations arising under this Security Agreement, the other Credit Documents
and any other documents relating to the Secured Obligations, it being the
intention of the parties hereto that all the Secured Obligations shall be the
joint and several obligations of each of the Grantors without preferences or
distinction among them.

      (c)   Notwithstanding any provision to the contrary contained herein, in
any other of the Credit Documents or in any other documents relating to the
Secured Obligations, the obligations of each Guarantor under the Credit
Agreement and the other Credit Documents shall be limited to an aggregate amount
equal to the largest amount that would not render such obligations subject to
avoidance under Section 548 of the Bankruptcy Code or any comparable provisions
of any applicable state law.

                  [remainder of page intentionally left blank]

                                       14
<PAGE>
      Each of the parties hereto has caused a counterpart of this Security
Agreement to be duly executed and delivered as of the date first above written.

GRANTORS:                            ACCREDO HEALTH, INCORPORATED,
                                     a Delaware corporation

                                     By:_____________________________________
                                     Name:
                                     Title:

                                     SOUTHERN HEALTH SYSTEMS, INC.,
                                     a Tennessee corporation
                                     NOVA FACTOR, INC.,
                                     a Tennessee corporation
                                     HEMOPHILIA HEALTH SERVICES, INC.,
                                     a Tennessee corporation
                                     PHARMACARE RESOURCES INC.,
                                     a New York corporation
                                     SUNRISE HEALTH MANAGEMENT, INC.,
                                     a Georgia corporation
                                     BIO PARTNERS IN CARE, INC.,
                                     a Missouri corporation
                                     GENTIVA HEALTH SERVICES (QUANTUM) CORP.,
                                     a Delaware corporation
                                     GENTIVA HEALTH SERVICES (INFUSION), INC.,
                                     a Delaware corporation
                                     GENTIVA HEALTH RESOURCES, INC. (NEW YORK),
                                     a New York corporation

                                     By:_____________________________________
                                     Name:
                                     Title:
                                            of each of the foregoing Grantors

                                     [Signature pages continue]
<PAGE>
Accepted and agreed to as of the date first above written.

Bank of America, N.A.,
as Collateral Agent

By:__________________________________
Name:
Title:
<PAGE>
                                    SCHEDULES

<TABLE>
<S>                  <C>
Schedule 2(d)        Commercial Tort Claims
Schedule 4(a)(ii)    Mergers, Consolidations, Changes in Structure, Use of Tradenames
Schedule 5(f)(i)     Notice of Grant of Security Interest in Copyrights
Schedule 5(f)(ii)    Notice of Grant of Security Interest in Patents
Schedule 5(f)(iii)   Notice of Grant of Security Interest in Trademarks
</TABLE>
<PAGE>
                                  Schedule 2(d)

                             Commercial Tort Claims

Hemophilia Health Services Inc v. William Peter Johnson, Patricia Ann Johnson,
Curative Health Services Inc., eBioCare.com Inc/b/a Millenium Health, Patti
Johnson , Maria Johnson and John Does 1 through 10. Suit against former
employees and their daughters and new employer alleging breach of written non
compete agreements; violation of T.C.A. 47-50-109, Procurement of breach of
contract; misappropriation of confidential and proprietary information in
violation of the Uniform Trade Secrets Act; breach of fiduciary duty;
interference with business relationships and prospective business relationships
and engagement in a plan or conspiracy to induce customers , employees and
patients to breach contracts and to misappropriate HHS confidential information.
Case is pending in the Superior Court of New Jersey, Chancery Division, Atlantic
County. Court has granted an injunction and trial is set for August.
<PAGE>
                                Schedule 4(a)(ii)

        Mergers, Consolidations, Changes in Structure, Use of Tradenames

None.
<PAGE>
                                Schedule 5(f)(i)

                                     NOTICE

                                       OF

                           GRANT OF SECURITY INTEREST

                                       IN

                                   COPYRIGHTS

United States Copyright Office

Ladies and Gentlemen:

      Please be advised that pursuant to the Amended and Restated Security
Agreement dated as of June 13, 2002 (as the same may be amended, modified,
extended or restated from time to time, the "Security Agreement") by and among
the Grantors party thereto (each an "Grantor" and collectively, the "Grantors")
and Bank of America, N.A., as Collateral Agent (the "Collateral Agent") for the
holders of the Secured Obligations referenced therein, the undersigned Grantor
has granted a continuing security interest in and continuing lien upon, the
copyrights and copyright applications shown on Schedule 1 attached hereto to the
Collateral Agent for the ratable benefit of the holders of the Secured
Obligations.

      The undersigned Grantor and the Collateral Agent, on behalf of the holders
of the Secured Obligations, hereby acknowledge and agree that the security
interest in the copyrights and copyright applications set forth on Schedule 1
attached hereto (i) may only be terminated in accordance with the terms of the
Security Agreement and (ii) is not to be construed as an assignment of any
copyright or copyright application.

                                                 Very truly yours,

                                                 [NAME]

                                                 By:____________________________
                                                 Name:
                                                 Title:

                                                 Grantor's Address:

Acknowledged and Accepted:

BANK OF AMERICA, N.A., as Collateral Agent

By:_________________________________
Name:
Title:
<PAGE>
                               Schedule 5(f)(ii)

                                     NOTICE

                                       OF

                           GRANT OF SECURITY INTEREST

                                       IN

                                    PATENTS

United States Patent and Trademark Office

Ladies and Gentlemen:

      Please be advised that pursuant to the Amended and Restated Security
Agreement dated as of June 13, 2002 (the "Security Agreement") by and among the
Grantors party thereto (each an "Grantor" and collectively, the "Grantors") and
Bank of America, N.A., as Collateral Agent (the "Collateral Agent") for the
holders of the Secured Obligations referenced therein, the undersigned Grantor
has granted a continuing security interest in and continuing lien upon, the
patents and patent applications set forth on Schedule 1 attached hereto to the
Collateral Agent for the ratable benefit of the holders of the Secured
Obligations.

      The undersigned Grantor and the Collateral Agent, on behalf of the holders
of the Secured Obligations, hereby acknowledge and agree that the security
interest in the patents and patent applications set forth on Schedule 1 attached
hereto (i) may only be terminated in accordance with the terms of the Security
Agreement and (ii) is not to be construed as an assignment of any patent or
patent application.

                                                 Very truly yours,

                                                 [NAME]

                                                 By:____________________________
                                                 Name:
                                                 Title:

                                                 Grantor's Address:

Acknowledged and Accepted:

BANK OF AMERICA, N.A., as Collateral Agent

By:_________________________________
Name:
Title:
<PAGE>
                               Schedule 5(f)(iii)

                                     NOTICE

                                       OF

                           GRANT OF SECURITY INTEREST

                                       IN

                                   TRADEMARKS

United States Patent and Trademark Office

Ladies and Gentlemen:

      Please be advised that pursuant to the Amended and Restated Security
Agreement dated as of June 13, 2002 (the "Security Agreement") by and among the
Grantors party thereto (each an "Grantor" and collectively, the "Grantors") and
Bank of America, N.A., as Collateral Agent (the "Collateral Agent") for the
holders of the Secured Obligations referenced therein, the undersigned Grantor
has granted a continuing security interest in and continuing lien upon, the
trademarks and trademark applications set forth on Schedule 1 attached hereto to
the Collateral Agent for the ratable benefit of the holders of the Secured
Obligations.

      The undersigned Grantor and the Collateral Agent, on behalf of the holders
of the Secured Obligations, hereby acknowledge and agree that the security
interest in the trademarks and trademark applications set forth on Schedule 1
attached hereto (i) may only be terminated in accordance with the terms of the
Security Agreement and (ii) is not to be construed as an assignment of any
trademark or trademark application.

                                                 Very truly yours,

                                                 [NAME]

                                                 By:____________________________
                                                 Name:
                                                 Title:

                                                 Grantor's Address:

Acknowledged and Accepted:

BANK OF AMERICA, N.A., as Collateral Agent

By:_________________________________
Name:
Title:

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