Document:

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                                                                    EXHIBIT 10.2

                           SECOND AMENDED AND RESTATED
                       GUARANTEE AND COLLATERAL AGREEMENT

                                     made by

                          DAY INTERNATIONAL GROUP, INC.

                         and certain of its Subsidiaries

                                   in favor of

                          LEHMAN COMMERCIAL PAPER INC.,

                             as Administrative Agent

                         Dated as of September 16, 2003

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                                TABLE OF CONTENTS

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SECTION 1.            DEFINED TERMS..........................................................      2
         1.1      Definitions................................................................      2
         1.2      Other Definitional Provisions..............................................      8

SECTION 2.            GUARANTEE..............................................................      8
         2.1      Guarantee..................................................................      8
         2.2      Right of Contribution......................................................      9
         2.3      Subrogation................................................................     10
         2.4      Amendments, etc. with respect to the Borrower Obligations..................     10
         2.5      Guarantee Absolute and Unconditional.......................................     11
         2.6      Reinstatement..............................................................     13
         2.7      Payments...................................................................     13

SECTION 3.            GRANT OF SECURITY INTEREST.............................................     13

SECTION 4.            REPRESENTATIONS AND WARRANTIES.........................................     14
         4.1      Representations in Credit Agreement........................................     14
         4.2      Title; No Other Liens......................................................     15
         4.3      Perfected First Priority Liens.............................................     15
         4.4      Jurisdiction of Organization; Chief Executive Office.......................     15
         4.5      Inventory and Equipment....................................................     15
         4.6      Farm Products..............................................................     15
         4.7      Investment Property........................................................     15
         4.8      Receivables................................................................     16
         4.9      Intellectual Property......................................................     16

SECTION 5.            COVENANTS..............................................................     16
         5.1      Covenants in Credit Agreement..............................................     17
         5.2      Delivery of Instruments and Chattel Paper..................................     17
         5.3      Maintenance of Insurance...................................................     17
         5.4      Payment of Obligations.....................................................     17
         5.5      Maintenance of Perfected Security Interest; Further Documentation..........     18
         5.6      Changes in Name, etc.......................................................     18
         5.7      Notices....................................................................     18
         5.8      Investment Property........................................................     19
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         5.9      Receivables................................................................     20
         5.10     Intellectual Property......................................................     21
         5.11     Commercial Tort Claims.....................................................     21

SECTION 6.            REMEDIAL PROVISIONS....................................................     21
         6.1      Certain Matters Relating to Receivables....................................     21
         6.2      Communications with Obligors; Grantors Remain Liable.......................     22
         6.3      Pledged Stock..............................................................     23
         6.4      Proceeds to be Turned Over To Administrative Agent.........................     24
         6.5      Application of Proceeds....................................................     24
         6.6      Code and Other Remedies....................................................     24
         6.7      Registration Rights........................................................     25
         6.8      Deficiency.................................................................     26

SECTION 7.            THE ADMINISTRATIVE AGENT...............................................     26
         7.1      Administrative Agent's Appointment as Attorney-in-Fact, etc................     27
         7.2      Duty of Administrative Agent...............................................     28
         7.3      Execution of Financing Statements..........................................     29
         7.4      Authority of Administrative Agent..........................................     29
         7.5      Right of Inspection........................................................     29

SECTION 8.            MISCELLANEOUS..........................................................     30
         8.1      Amendments in Writing......................................................     30
         8.2      Notices....................................................................     30
         8.3      No Waiver by Course of Conduct; Cumulative Remedies........................     30
         8.4      Enforcement Expenses; Indemnification......................................     30
         8.5      Successors and Assigns.....................................................     31
         8.6      Set-Off....................................................................     31
         8.7      Counterparts...............................................................     32
         8.8      Severability...............................................................     32
         8.9      Section Headings...........................................................     32
         8.10     Integration................................................................     32
         8.11     GOVERNING LAW..............................................................     32
         8.12     Submission To Jurisdiction; Waivers........................................     32
         8.13     Acknowledgements...........................................................     33
         8.14     Additional Grantors........................................................     33
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         8.15     Releases...................................................................     33
         8.16     WAIVER OF JURY TRIAL.......................................................     34
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Schedules

Schedule 1        Notice Addresses of Guarantors
Schedule 2        Description of Pledged Securities
Schedule 3        Filings and Other Actions Required to Perfect Security
                  Interest
Schedule 4        Jurisdiction of Organization, Identification Number and
                  Location of Chief Executive Office
Schedule 5        Locations of Inventory and Equipment
Schedule 6        Intellectual Property

Annexes

Annex I           Assumption Agreement
Annex II          Acknowledgment and Consent

A copy of the Schedules and Annexes will be furnished supplementally to the
Commission upon request.

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                  SECOND AMENDED AND RESTATED GUARANTEE AND COLLATERAL
AGREEMENT, dated as of September 16, 2003, made by each of the signatories
hereto (together with any other entity that may become a party hereto as
provided herein, the "Grantors"), in favor of LEHMAN COMMERCIAL PAPER INC., as
Administrative Agent (in such capacity, the "Administrative Agent") for the
banks and other financial institutions (the "Lenders") from time to time parties
to the Second Amended and Restated Senior Secured Credit Agreement, dated as of
September 16, 2003 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among DAY INTERNATIONAL GROUP, INC., a Delaware
corporation (the "Borrower"), the Lenders, LEHMAN BROTHERS INC., as sole
advisor, sole book manager and joint lead arranger, and BANC ONE CAPITAL
MARKETS, INC., as joint lead arranger, BANK ONE, NA, as syndication agent,
NATIONAL CITY BANK, as documentation agent, and the Administrative Agent.

                              W I T N E S S E T H:

                  WHEREAS, the Borrower, certain of the Lenders, Banc One
Capital Markets, Inc., as successor to SG Cowen Securities Corporation, as
advisor and arranger, and Bank One, NA, as successor to Societe Generale, as
administrative agent (in such capacity, the "Existing Administrative Agent"),
are parties to the Amended and Restated Senior Secured Credit Agreement, dated
as of October 19, 1999 (as amended, the "Existing Credit Agreement");

                  WHEREAS, in connection with the Existing Credit Agreement,
certain of the parties hereto entered into the Amended and Restated Guarantee
and Collateral Agreement, dated as of October 19, 1999 (the "Existing Guarantee
and Collateral Agreement");

                  WHEREAS, prior to the date hereof, certain of the Grantors
under the Existing Guarantee and Collateral Agreement have been merged or
otherwise consolidated into the Grantors hereunder;

                  WHEREAS, the Existing Credit Agreement is being amended and
restated by the Credit Agreement, and in connection therewith, the parties
hereto wish to enter into this Agreement to amend and restate the Existing
Guarantee and Collateral Agreement;

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

                  WHEREAS, the Borrower is a member of an affiliated group of
companies that includes each other Grantor;

                  WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement will be used in part to enable the Borrower to make valuable
transfers to one or more of the other Grantors in connection with the operation
of their respective businesses;

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                  WHEREAS, certain of the Qualified Counterparties may enter
into Specified Hedge Agreements with one or more of the Grantors;

                  WHEREAS, the Borrower and the other Grantors are engaged in
related businesses, and each Grantor will derive substantial direct and indirect
benefit from the extensions of credit under the Credit Agreement and from the
Specified Hedge Agreements; and

                  WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrower under the
Credit Agreement that the Grantors shall have executed and delivered this
Agreement to the Administrative Agent;

                  NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
to induce the Lenders to make their respective extensions of credit to the
Borrower thereunder, each Grantor hereby agrees with the Administrative Agent,
for the benefit of the Secured Parties, that the Existing Guarantee and
Collateral Agreement is hereby amended and restated to read in its entirety as
follows:

                            SECTION 1. DEFINED TERMS

         1.1      Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement and the following terms are used herein as defined
in the New York UCC: Accounts, Certificated Security, Chattel Paper, Commercial
Tort Claims, Documents, Equipment, Farm Products, General Intangibles, Goods,
Instruments, Inventory, Letter-of-Credit Rights and Supporting Obligations.

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

                  "Agreement": this Second Amended and Restated Guarantee and
         Collateral Agreement, as the same may be amended, supplemented or
         otherwise modified from time to time.

                  "Borrower Credit Agreement Obligations": the collective
         reference to the unpaid principal of and interest on the Loans and
         Reimbursement Obligations and all other obligations and liabilities of
         the Borrower (including, without limitation, interest accruing at the
         then applicable rate provided in the Credit Agreement after the
         maturity of the Loans and Reimbursement Obligations and interest
         accruing at the then applicable rate provided in the Credit Agreement
         after the filing of any petition in bankruptcy, or the commencement of
         any insolvency, reorganization or like proceeding, relating to the
         Borrower, whether or not a claim for post-filing or post-petition
         interest is allowed in such proceeding) to the Administrative Agent or
         any Lender, whether direct or indirect, absolute or contingent, due or
         to become due, or now existing or hereafter incurred, which may arise
         under, out of, or in connection with, the Credit Agreement, this
         Agreement, or the other Loan Documents, or any Letter of Credit, or any
         other document made, delivered or

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         given in connection therewith, in each case whether on account of
         principal, interest, reimbursement obligations, fees, indemnities,
         costs, expenses or otherwise (including, without limitation, all fees
         and disbursements of counsel to the Administrative Agent or to the
         Lenders that are required to be paid by the Borrower pursuant to the
         terms of any of the foregoing agreements).

                  "Borrower Hedge Agreement Obligations": the collective
         reference to all obligations and liabilities of the Borrower
         (including, without limitation, interest accruing at the then
         applicable rate provided in any Specified Hedge Agreement after the
         filing of any petition in bankruptcy, or the commencement of any
         insolvency, reorganization or like proceeding, relating to the
         Borrower, whether or not a claim for post-filing or post-petition
         interest is allowed in such proceeding) to any Qualified Counterparty,
         whether direct or indirect, absolute or contingent, due or to become
         due, or now existing or hereafter incurred, which may arise under, out
         of, or in connection with, any Specified Hedge Agreement or any other
         document made, delivered or given in connection therewith, in each case
         whether on account of principal, interest, reimbursement obligations,
         fees, indemnities, costs, expenses or otherwise (including, without
         limitation, all fees and disbursements of counsel to the relevant
         Qualified Counterparty that are required to be paid by the Borrower
         pursuant to the terms of any Specified Hedge Agreement).

                  "Borrower Obligations": the collective reference to (i) the
         Borrower Credit Agreement Obligations, (ii) the Borrower Hedge
         Agreement Obligations, but only to the extent that, and only so long
         as, the Borrower Credit Agreement Obligations are secured and
         guaranteed pursuant hereto, and (iii) all other obligations and
         liabilities of the Borrower, whether direct or indirect, absolute or
         contingent, due or to become due, or now existing or hereafter
         incurred, which may arise under, out of, or in connection with, this
         Agreement (including, without limitation, all fees and disbursements of
         counsel to the Administrative Agent or to the Secured Parties that are
         required to be paid by the Borrower pursuant to the terms of this
         Agreement).

                  "Collateral":  as defined in Section 3.

                  "Collateral Account": any collateral account established by
         the Administrative Agent as provided in Section 6.1 or 6.4.

                  "Contracts": with respect to any Grantor, all contracts,
         agreements, instruments and indentures in any form, and portions
         thereof, to which such Grantor is a party or under which such Grantor
         has any right, title or interest or to which such Grantor or any
         property of such Grantor is subject, as the same may be amended,
         supplemented or otherwise modified from time to time, including,
         without limitation, (i) all rights of any Grantor to receive moneys due
         and to become due to it thereunder or in connection therewith, (ii) all
         rights of any Grantor to damages arising thereunder and (iii) all
         rights of any Grantor to perform and to exercise all remedies
         thereunder.

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                  "Copyright Licenses": any written agreement naming any Grantor
         as licensor or licensee (including, without limitation, those listed in
         Schedule 6), granting any right under any Copyright, including, without
         limitation, the grant of rights to manufacture, distribute, exploit and
         sell materials derived from any Copyright.

                  "Copyrights": (i) all copyrights arising under the laws of the
         United States, any other country or any political subdivision thereof,
         whether registered or unregistered and whether published or unpublished
         (including, without limitation, those listed in Schedule 6), all
         registrations and recordings thereof, and all applications in
         connection therewith, including, without limitation, all registrations,
         recordings and applications in the United States Copyright Office, and
         (ii) the right to obtain all renewals thereof.

                  "Deposit Account": as defined in the Uniform Commercial Code
         of any applicable jurisdiction and, in any event, including, without
         limitation, any demand, time, savings, passbook or like account
         maintained with a depositary institution.

                  "Excluded Assets": the collective reference to (i) any
         contract, agreement, instrument, indenture, General Intangible,
         Copyright License, Patent License or Trademark License ("Intangible
         Assets"), in each case to the extent the grant by the relevant Grantor
         of a security interest pursuant to this Agreement in such Grantor's
         right, title and interest in such Intangible Asset (A) is prohibited by
         legally enforceable provisions of any contract, agreement, instrument
         or indenture governing such Intangible Asset, (B) would give any other
         party to such contract, agreement, instrument or indenture a legally
         enforceable right to terminate its obligations thereunder or (C) is
         permitted only with the consent of another party, if the requirement to
         obtain such consent is legally enforceable and such consent has not
         been obtained; provided, that in any event any Receivable or any money
         or other amounts due or to become due under any such contract,
         agreement, instrument or indenture shall not be Excluded Assets to the
         extent that any of the foregoing is (or if it contained a provision
         limiting the transferability or pledge thereof would be) subject to
         Section 9-406 of the New York UCC, (ii) Foreign Subsidiary Voting Stock
         excluded from the definition of "Pledged Stock" set forth in this
         Section 1.1 and (iii) any Equipment subject to a Lien permitted by
         Section 7.3(g) of the Credit Agreement.

                  "Foreign Subsidiary": any Subsidiary organized under the laws
         of any jurisdiction outside the United States of America.

                  "Foreign Subsidiary Voting Stock": the voting Capital Stock of
         any Foreign Subsidiary.

                  "Guarantor Hedge Agreement Obligations": the collective
         reference to all obligations and liabilities of a Guarantor (including,
         without limitation, interest accruing at the then applicable rate
         provided in any Specified Hedge Agreement

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         after the filing of any petition in bankruptcy, or the commencement of
         any insolvency, reorganization or like proceeding, relating to such
         Guarantor, whether or not a claim for post-filing or post-petition
         interest is allowed in such proceeding) to any Qualified Counterparty,
         whether direct or indirect, absolute or contingent, due or to become
         due, or now existing or hereafter incurred, which may arise under, out
         of, or in connection with, any Specified Hedge Agreement or any other
         document made, delivered or given in connection therewith, in each case
         whether on account of principal, interest, reimbursement obligations,
         fees, indemnities, costs, expenses or otherwise (including, without
         limitation, all fees and disbursements of counsel to the relevant
         Qualified Counterparty that are required to be paid by such Guarantor
         pursuant to the terms of any Specified Hedge Agreement).

                  "Guarantor Obligations": with respect to any Guarantor, the
         collective reference to (i) any Guarantor Hedge Agreement Obligations
         of such Guarantor, but only to the extent that, and only so long as,
         the other Obligations of such Guarantor are secured and guaranteed
         pursuant hereto, and (ii) all obligations and liabilities of such
         Guarantor which may arise under or in connection with this Agreement
         (including, without limitation, Section 2) or any other Loan Document
         to which such Guarantor is a party, in each case whether on account of
         guarantee obligations, reimbursement obligations, fees, indemnities,
         costs, expenses or otherwise (including, without limitation, all fees
         and disbursements of counsel to the Administrative Agent or to any
         Secured Party that are required to be paid by such Guarantor pursuant
         to the terms of this Agreement or any other Loan Document).

                  "Guarantors":  the collective reference to each Grantor other
         than the Borrower.

                  "Hedge Agreements": as to any Person, all interest rate swaps,
         currency exchange agreements, commodity swaps, caps or collar
         agreements or similar arrangements entered into by such Person
         providing for protection against fluctuations in interest rates,
         currency exchange rates or commodity prices or the exchange of nominal
         interest obligations, either generally or under specific contingencies,
         including, without limitation, all Interest Rate Protection Agreements,
         Permitted Hedge Arrangements and Interest Hedge Agreements. For
         avoidance of doubt, Hedge Agreements shall include any interest rate
         swap or similar agreement that provides for the payment by the Borrower
         or any of its Subsidiaries of amounts based upon a floating rate in
         exchange for receipt by the Borrower or such Subsidiary of amounts
         based upon a fixed rate.

                  "Intellectual Property": the collective reference to all
         rights, priorities and privileges relating to intellectual property,
         whether arising under United States, multinational or foreign laws or
         otherwise, including, without limitation, the Copyrights, the Copyright
         Licenses, the Patents, the Patent Licenses, the Trademarks and the
         Trademark Licenses, and all rights to sue at law or in equity

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         for any infringement or other impairment thereof, including the right
         to receive all proceeds and damages therefrom.

                  "Intercompany Note": any promissory note evidencing loans made
         by any Grantor to the Borrower or any of its Subsidiaries.

                  "Investment Property": the collective reference to (i) all
         "investment property" as such term is defined in Section 9-102(a)(49)
         of the New York UCC (other than any Foreign Subsidiary Voting Stock
         excluded from the definition of "Pledged Stock" in this Section 1.1)
         and (ii) whether or not constituting "investment property" as so
         defined, all Pledged Notes and all Pledged Stock.

                  "Issuers": the collective reference to each issuer of any
         Investment Property.

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

                  "Obligations": (i) in the case of the Borrower, the Borrower
         Obligations, and (ii) in the case of each Guarantor, its Guarantor
         Obligations.

                  "Patent License": all agreements, whether written or oral,
         providing for the grant by or to any Grantor of any right to
         manufacture, use or sell any invention covered in whole or in part by a
         Patent, including, without limitation, any of the foregoing referred to
         in Schedule 6.

                   "Patents": (i) all letters patent of the United States, any
         other country or any political subdivision thereof, all reissues and
         extensions thereof and all goodwill associated therewith, including,
         without limitation, any of the foregoing referred to in Schedule 6,
         (ii) all applications for letters patent of the United States or any
         other country and all divisions, continuations and
         continuations-in-part thereof, including, without limitation, any of
         the foregoing referred to in Schedule 6, and (iii) all rights to obtain
         any reissues or extensions of the foregoing.

                   "Pledged Notes": all promissory notes listed on Schedule 2,
         all Intercompany Notes at any time issued to any Grantor and all other
         promissory notes issued to or held by any Grantor (other than
         promissory notes issued in connection with extensions of trade credit
         by any Grantor in the ordinary course of business).

                  "Pledged Securities": the collective reference to the Pledged
         Notes and the Pledged Stock.

                  "Pledged Stock": the shares of Capital Stock listed on
         Schedule 2, together with any other shares, stock certificates, options
         or rights of any nature whatsoever in respect of the Capital Stock of
         any Person that may be issued or granted to, or held by, any Grantor
         while this Agreement is in effect; provided

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         that in no event shall more than 65% of the total outstanding Foreign
         Subsidiary Voting Stock of any Foreign Subsidiary be required to be
         pledged hereunder.

                  "Proceeds": all "proceeds" as such term is defined in Section
         9-102(a)(64) of the Uniform Commercial Code in effect in the State of
         New York on the date hereof and, in any event, including, without
         limitation, all dividends or other income from the Investment Property,
         collections thereon or distributions or payments with respect thereto.

                  "Qualified Counterparty": with respect to any Specified Hedge
         Agreement, any counterparty thereto that, at the time such Specified
         Hedge Agreement was entered into, was a Lender or an affiliate of a
         Lender.

                  "Receivable": any right to payment for goods sold, leased,
         licensed, assigned or otherwise disposed of, or for services rendered,
         whether or not such right is evidenced by an Instrument or Chattel
         Paper and whether or not it has been earned by performance (including,
         without limitation, any Account).

                  "Secured Parties": the collective reference to the
         Administrative Agent, the Lenders (including any Issuing Lender in its
         capacity as Issuing Lender) and any Qualified Counterparties.

                  "Securities Act":  the Securities Act of 1933, as amended.

                  "Specified Hedge Agreement": any Hedge Agreement entered into
         by (i) the Borrower or any Guarantor and (ii) any Qualified
         Counterparty.

                  "Trademark License": any agreement, whether written or oral,
         providing for the grant by or to any Grantor of any right to use any
         Trademark, including, without limitation, any of the foregoing referred
         to in Schedule 6.

                  "Trademarks": (i) all trademarks, trade names, corporate
         names, company names, business names, fictitious business names, trade
         styles, service marks, logos and other source or business identifiers,
         and all goodwill associated therewith, now existing or hereafter
         adopted or acquired, all registrations and recordings thereof, and all
         applications in connection therewith, whether in the United States
         Patent and Trademark Office or in any similar office or agency of the
         United States, any State thereof or any other country or any political
         subdivision thereof, or otherwise, and all common-law rights related
         thereto, including, without limitation, any of the foregoing referred
         to in Schedule 6, and (ii) the right to obtain all renewals thereof.

                  "Vehicles": all cars, trucks, trailers, construction and earth
         moving equipment and other vehicles covered by a certificate of title
         law of any state and all tires and other appurtenances to any of the
         foregoing.

         1.2      Other Definitional Provisions. (a) The words "hereof,"
"herein", "hereto" and "hereunder" and words of similar import when used in this
Agreement shall refer to

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this Agreement as a whole and not to any particular provision of this Agreement,
and Section and Schedule references are to this Agreement unless otherwise
specified.

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

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

                              SECTION 2. GUARANTEE

         2.1      Guarantee. (a) (i) The Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantee to the Administrative
Agent, for the ratable benefit of the Secured Parties and their respective
successors, indorsees, transferees and assigns, the prompt and complete payment
and performance by the Borrower when due (whether at stated maturity, by
acceleration or otherwise) of the Borrower Obligations (other than, in the case
of each Guarantor, Borrower Obligations arising pursuant to clause (ii) of this
Section 2.1(a) in respect of Guarantor Hedge Agreement Obligations in respect of
which such Guarantor is a primary obligor).

         (ii)     The Borrower hereby unconditionally and irrevocably guarantees
to the Administrative Agent, for the benefit of each Qualified Counterparty and
its respective successors, endorsees, transferees and assigns, the prompt and
complete payment and performance by each Guarantor when due (whether at stated
maturity, by acceleration or otherwise) of the Guarantor Hedge Agreement
Obligations of such Guarantor in favor of such Qualified Counterparty.

         (b)      Anything herein or in any other Loan Document to the contrary
notwithstanding, (i) the maximum liability of each Guarantor hereunder and under
the other Loan Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor under applicable federal and state laws relating to
fraudulent conveyances or transfers or the insolvency of debtors (after giving
effect to the right of contribution established in Section 2.2) and (ii) the
maximum liability of the Borrower under this Section 2 shall in no event exceed
the amount which can be guaranteed by the Borrower under applicable federal and
state laws relating to fraudulent conveyances or transfers or the insolvency of
debtors (after giving effect to the right of contribution established in Section
2.2).

                  (c) (i)  Each Guarantor agrees that the Borrower
Obligations may at any time and from time to time exceed the amount of the
liability of such Guarantor hereunder without impairing the guarantee of such
Guarantor contained in this Section 2 or affecting the rights and remedies of
the Administrative Agent or any Secured Party hereunder.

         (ii)     The Borrower agrees that the Guarantor Hedge Agreement
Obligations may at any time and from time to time exceed the amount of the
liability of the Borrower under this Section 2 without impairing the guarantee
of the Borrower contained in this

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Section 2 or affecting the rights and remedies of the Administrative Agent or
any Secured Party hereunder.

                  (d)      Subject to Section 8.15 hereof, the guarantee
contained in this Section 2 shall remain in full force and effect until all the
Borrower Obligations (other than the Borrower Obligations arising under Section
2.1(a)(ii) hereof) and the obligations of each Guarantor under the guarantee
contained in this Section 2 (other than Guarantor Obligations in respect of
Borrower Obligations arising under Section 2.1(a)(ii) hereof) shall have been
satisfied by full and final payment in cash, no Letter of Credit shall be
outstanding and the Commitments shall be terminated, notwithstanding that from
time to time during the term of the Credit Agreement the Borrower may be free
from any Borrower Obligations and any or all of the Guarantors may be free from
their respective Guarantor Hedge Agreement Obligations.

                  (e)      No payment made by the Borrower, any of the
Guarantors, any other guarantor or any other Person or received or collected by
the Administrative Agent or any Secured Party from the Borrower, any of the
Guarantors, any other guarantor or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Borrower Obligations or the
Guarantor Hedge Agreement Obligations shall be deemed to modify, reduce, release
or otherwise affect the liability of the Borrower or any Guarantor under this
Section 2 which shall, notwithstanding any such payment (other than any payment
made by the Borrower, such Guarantor, any other guarantor or any other Person in
respect of the Borrower Obligations or the Guarantor Hedge Agreement Obligations
or any payment received or collected from the Borrower, such Guarantor, any
other guarantor or any other Person in respect of the Borrower Obligations or
the Guarantor Hedge Agreement Obligations), remain liable for the Borrower
Obligations and the Guarantor Hedge Agreement Obligations up to the maximum
liability of the Borrower or such Guarantor hereunder until the Borrower
Obligations and the Guarantor Hedge Agreement Obligations are fully and finally
paid in cash, no Letter of Credit shall be outstanding and the Commitments are
terminated.

         2.2      Right of Contribution. (a) Each Guarantor hereby agrees that
to the extent that a Guarantor shall have paid more than its proportionate share
of any payment made hereunder or the Guarantor Hedge Agreement Obligations, such
Guarantor shall be entitled to seek and receive contribution from and against
any other Guarantor hereunder which has not paid its proportionate share of such
payment.

                  (b)      The Borrower and each Guarantor agree that to the
extent that the Borrower or any Guarantor shall have paid more than its
proportionate share of any payment made hereunder in respect of any Guarantor
Hedge Agreement Obligation of any other Guarantor, the Borrower or such
Guarantor, as the case may be, shall be entitled to seek and receive
contribution from and against the Borrower and any other Guarantor which has not
paid its proportionate share of such payment.

                  (c)      The Borrower's and each Guarantor's right of
contribution under this Section 2.2 shall be subject to the terms and conditions
of Section 2.3. The

                                       9

<PAGE>

provisions of this Section 2.2 shall in no respect limit the obligations and
liabilities of the Borrower or any Guarantor to the Administrative Agent and the
Secured Parties, and the Borrower and each Guarantor shall remain liable to the
Administrative Agent and the Secured Parties for the full amount guaranteed by
the Borrower or such Guarantor hereunder, except as otherwise provided in
Sections 2.1(e) and 8.15.

         2.3      Subrogation. Notwithstanding any payment made by the Borrower
or any Guarantor hereunder or any set-off or application of funds of the
Borrower or any Guarantor by the Administrative Agent or any Secured Party,
neither the Borrower nor any Guarantor shall be entitled to be subrogated to any
of the rights of the Administrative Agent or any Secured Party against the
Borrower or any other Guarantor or any collateral security or guarantee or right
of offset held by the Administrative Agent or any Secured Party for the payment
of the Borrower Obligations or the Guarantor Hedge Agreement Obligations, nor
shall the Borrower or any Guarantor seek or be entitled to seek any contribution
or reimbursement from the Borrower or any other Guarantor in respect of payments
made by the Borrower or such Guarantor hereunder, until all amounts owing to the
Administrative Agent and the Secured Parties by the Borrower on account of the
Borrower Obligations are fully and finally paid in cash, no Letter of Credit
shall be outstanding and the Commitments are terminated. If any amount shall be
paid to the Borrower or any Guarantor on account of such subrogation rights at
any time when all of the Borrower Obligations shall not have been fully and
finally paid in cash, such amount shall be held by the Borrower or such
Guarantor in trust for the Administrative Agent and the Secured Parties,
segregated from other funds of the Borrower or such Guarantor, and shall,
forthwith upon receipt by the Borrower or such Guarantor, be turned over to the
Administrative Agent in the exact form received by the Borrower or such
Guarantor (duly indorsed by the Borrower or such Guarantor to the Administrative
Agent, if required), to be applied against the Borrower Obligations or the
Guarantor Hedge Agreement Obligations, whether matured or unmatured, in such
order as the Administrative Agent may determine.

         2.4      Amendments, etc. with respect to the Borrower Obligations. The
Borrower and each Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against the Borrower or any Guarantor
and without notice to or further assent by the Borrower or any Guarantor, any
demand for payment of any of the Borrower Obligations or Guarantor Hedge
Agreement Obligations made by the Administrative Agent or any Secured Party may
be rescinded by the Administrative Agent or such Secured Party and any of the
Borrower Obligations or Guarantor Hedge Agreement Obligations continued, and the
Borrower Obligations or Guarantor Hedge Agreement Obligations, or the liability
of any other Person upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Administrative Agent or any
Secured Party (with the consent of such of the Borrower and the Guarantors as
shall be required thereunder), and the Specified Hedge Agreements, the Credit
Agreement and the other Loan Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders or

                                       10

<PAGE>

all Lenders, as the case may be) may (with the consent of such of the Borrower
and the Guarantors as shall be required thereunder) deem advisable from time to
time, and any collateral security, guarantee or right of offset at any time held
by the Administrative Agent or any Secured Party for the payment of the Borrower
Obligations or Guarantor Hedge Agreement Obligations may (with the consent of
such of the Borrower and the Guarantors as shall be required thereunder) be
sold, exchanged, waived, surrendered or released. Neither the Administrative
Agent nor any Secured Party shall, except to the extent set forth in, and for
the benefit of the parties to, the agreements and instruments governing such
collateral security or guarantee, have any obligation to protect, secure,
perfect or insure any Lien at any time held by it as security for the Borrower
Obligations or Guarantor Hedge Agreement Obligations or for the guarantees
contained in this Section 2 or any property subject thereto.

         2.5      Guarantee Absolute and Unconditional. (a) Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Borrower Obligations (other than any notice with respect to any Guarantor
Hedge Agreement Obligation with respect to which such Guarantor is a primary
obligor and to which it is entitled pursuant to the applicable Specified Hedge
Agreement) and notice of or proof of reliance by the Administrative Agent or any
Secured Party upon the guarantee contained in this Section 2 or acceptance of
the guarantee contained in this Section 2; the Borrower Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 2; and all dealings between the Borrower and any of
the Guarantors, on the one hand, and the Administrative Agent and the Secured
Parties, on the other hand, likewise shall be conclusively presumed to have been
had or consummated in reliance upon the guarantee contained in this Section 2.
Each Guarantor waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon the Borrower or any of the Guarantors
with respect to the Borrower Obligations (other than any diligence, presentment,
protest, demand or notice with respect to any Guarantor Hedge Agreement
Obligation with respect to which such Guarantor is a primary obligor and to
which it is entitled pursuant to the applicable Specified Hedge Agreement). Each
Guarantor understands and agrees that the guarantee of such Guarantor contained
in this Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability of the
Credit Agreement or any other Loan Document, any of the Borrower Obligations or
any collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or any
Secured Party, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
the Borrower or any other Person against the Administrative Agent or any Secured
Party, or (c) any other circumstance whatsoever (with or without notice to or
knowledge of the Borrower or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower for the
Borrower Obligations, or of such Guarantor under the guarantee of such Guarantor
contained in this Section 2, in bankruptcy or in any other instance. When making
any demand hereunder or otherwise pursuing its rights and remedies hereunder
against any Guarantor, the Administrative Agent or any Secured Party may, but
shall be under no obligation to, make a similar demand on or otherwise

                                       11

<PAGE>

pursue such rights and remedies as it may have against the Borrower, any other
Guarantor or any other Person or against any collateral security or guarantee
for the Borrower Obligations or any right of offset with respect thereto, and
any failure by the Administrative Agent or any Secured Party to make any such
demand, to pursue such other rights or remedies or to collect any payments from
the Borrower, any other Guarantor or any other Person or to realize upon any
such collateral security or guarantee or to exercise any such right of offset,
or any release of the Borrower, any other Guarantor or any other Person or any
such collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability under this Section 2, and shall not
impair or affect the rights and remedies, whether express, implied or available
as a matter of law, of the Administrative Agent or any Secured Party against any
Guarantor. For the purposes hereof, "demand" shall include the commencement and
continuance of any legal proceedings.

                  (b)      The Borrower waives any and all notice of the
creation, renewal, extension or accrual of any of the Guarantor Hedge Agreement
Obligations and notice of or proof of reliance by the Administrative Agent or
any Secured Party upon the guarantee by the Borrower contained in this Section 2
or acceptance of the guarantee by the Borrower contained in this Section 2; the
Guarantor Hedge Agreement Obligations, and any of them, shall conclusively be
deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon the guarantee by the Borrower contained in
this Section 2; and all dealings between the Borrower and any of the Guarantors,
on the one hand, and the Administrative Agent and the Secured Parties, on the
other hand, with respect to any Guarantor Hedge Agreement Obligation likewise
shall be conclusively presumed to have been had or consummated in reliance upon
the guarantee by the Borrower contained in this Section 2. The Borrower waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower with respect to the Guarantor Hedge Agreement
Obligations. The Borrower understands and agrees that the guarantee by the
Borrower contained in this Section 2 shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of the Guarantor Hedge Agreement Obligations or any
other collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or any
Secured Party, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
any Person against the Administrative Agent or any Secured Party, or (c) any
other circumstance whatsoever (with or without notice to or knowledge of the
Borrower or any Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the applicable Guarantor for the
applicable Guarantor Hedge Agreement Obligations, or of the Borrower under its
guarantee contained in this Section 2, in bankruptcy or in any other instance.
When making any demand under this Section 2 or otherwise pursuing its rights and
remedies under this Section 2 against the Borrower, the Administrative Agent or
any Secured Party may, but shall be under no obligation to, make a similar
demand on or otherwise pursue such rights and remedies as it may have against
any Guarantor or any other Person or against any collateral security or
guarantee for the Guarantor Hedge Agreement Obligations or any right of offset
with respect thereto, and any failure by the Administrative Agent or any Secured
Party to make any

                                       12

<PAGE>

such demand, to pursue such other rights or remedies or to collect any payments
from any Guarantor or any other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release of
any Guarantor or any other Person or any such collateral security, guarantee or
right of offset, shall not relieve the Borrower of any obligation or liability
under this Section 2, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Administrative
Agent or any Secured Party against the Borrower under this Section 2. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.

         2.6      Reinstatement. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations or Guarantor
Hedge Agreement Obligations is rescinded or must otherwise be restored or
returned by the Administrative Agent or any Secured Party upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Borrower or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made.

         2.7      Payments. The Borrower and each Guarantor hereby guarantees
that payments by it hereunder will be paid to the Administrative Agent without
set-off or counterclaim (i) in the case of obligations in respect of Borrower
Obligations arising under the Credit Agreement or any other Loan Document in
Dollars or Euros (in the case of Tranche A Term Loans denominated in Euros), as
applicable, at the Payment Office specified in the Credit Agreement and (ii) in
the case of obligations in respect of any Borrower Hedge Agreement Obligations
or any Guarantor Hedge Agreement Obligations, in the currency and at the place
specified in the applicable Specified Hedge Agreement.

                     SECTION 3. GRANT OF SECURITY INTEREST

                  Each Grantor hereby assigns and transfers to the
Administrative Agent, and hereby grants to the Administrative Agent, for the
ratable benefit of the Secured Parties, a security interest in, all of the
following property now owned or at any time hereafter acquired by such Grantor
or in which such Grantor now has or at any time in the future may acquire any
right, title or interest (collectively, the "Collateral"), as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of such Grantor's
Obligations:

                  (a)      all Accounts;

                  (b)      all Chattel Paper;

                  (c)      all Contracts;

                  (d)      all Deposit Accounts;

                                       13

<PAGE>

                  (e)      all Documents;

                  (f)      all Equipment;

                  (g)      all General Intangibles;

                  (h)      all Instruments;

                  (i)      all Intellectual Property;

                  (j)      all Inventory;

                  (k)      all Investment Property;

                  (l)      all Vehicles;

                  (m)      all Letter-of-Credit Rights;

                  (n)      all Commercial Tort Claims to the extent they have
been notified to the Administrative Agent pursuant to Section 5.11;

                  (o)      all Goods and other property not otherwise described
above;

                  (p)      all books and records pertaining to the Collateral;
and

                  (q)      to the extent not otherwise included, all Proceeds
and products of any and all of the foregoing, all Supporting Obligations in
respect of any of the foregoing and all collateral security and guarantees given
by any Person with respect to any of the foregoing;

Provided, that the Collateral shall not include any Excluded Assets.

                   SECTION 4. REPRESENTATIONS AND WARRANTIES

                  To induce the Administrative Agent and the Lenders to enter
into the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby represents
and warrants to the Administrative Agent and each Lender that:

         4.1      Representations in Credit Agreement. In the case of each
Guarantor, the representations and warranties set forth in Section 4 of the
Credit Agreement as they relate to such Guarantor or to the Loan Documents to
which such Guarantor is a party, each of which is hereby incorporated herein by
reference, are true and correct, and the Administrative Agent and each Lender
shall be entitled to rely on each of them as if they were fully set forth
herein, provided that each reference in each such representation and warranty to
the Borrower's knowledge shall, for the purposes of this Section 4.1, be deemed
to be a reference to such Guarantor's knowledge.

                                       14

<PAGE>

         4.2      Title; No Other Liens. Except for the security interest
granted to the Administrative Agent for the ratable benefit of the Secured
Parties pursuant to this Agreement and the other Liens permitted to exist on the
Collateral by the Credit Agreement, such Grantor owns each item of the
Collateral free and clear of any and all Liens or claims of others. No financing
statement or other public notice with respect to all or any part of the
Collateral is on file or of record in any public office, except such as have
been filed in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, pursuant to this Agreement or as are permitted by the Credit
Agreement or for which termination statements will be delivered on the Closing
Date.

         4.3      Perfected First Priority Liens. The security interests granted
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3 (which, in the case of all filings and other documents
referred to on said Schedule, have been delivered to the Administrative Agent in
completed and duly executed form) will constitute valid perfected security
interests in all of the Collateral in favor of the Administrative Agent, for the
ratable benefit of the Secured Parties, as collateral security for such
Grantor's Obligations, enforceable in accordance with the terms hereof against
all creditors of such Grantor and any Persons purporting to purchase any
Collateral from such Grantor, (b) in respect of Collateral consisting of Pledged
Stock, are prior to all other Liens on such Pledged Stock in existence on the
date hereof and (c) in respect of all other Collateral as to which a security
interest may be perfected under the Uniform Commercial Code where perfection
provisions are applicable to such Collateral, are prior to all other Liens on
such Collateral in existence on the date hereof except for Liens permitted by
the Credit Agreement.

         4.4      Jurisdiction of Organization; Chief Executive Office. On the
date hereof, such Grantor's jurisdiction of organization, identification number
from the jurisdiction of organization (if any), and the location of such
Grantor's chief executive office or sole place of business or principal
residence, as the case may be, are specified on Schedule 4. Such Grantor has
furnished to the Administrative Agent a certified charter, certificate of
incorporation or other organization document and long-form good standing
certificate as of a date which is recent to the date hereof.

         4.5      Inventory and Equipment. On the date hereof, the Inventory and
the Equipment (other than mobile goods) are kept at the locations listed on
Schedule 5.

         4.6      Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.

         4.7      Investment Property. (a) The shares of Pledged Stock pledged
by such Grantor hereunder constitute all the issued and outstanding shares of
all classes of the Capital Stock of each Issuer owned by such Grantor or, in the
case of Foreign Subsidiary Voting Stock, if less, 65% of the outstanding Foreign
Subsidiary Voting Stock of each relevant Issuer.

                  (b)      All the shares of the Pledged Stock have been duly
and validly issued and are fully paid and nonassessable.

                                       15

<PAGE>

                  (c)      Each of the Pledged Notes constitutes the legal,
valid and binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.

                  (d)      Such Grantor is the record and beneficial owner of,
and has good and marketable title to, the Investment Property pledged by it
hereunder, free of any and all Liens or options in favor of, or claims of, any
other Person, except the security interest created by this Agreement.

         4.8      Receivables. (a) No amount payable to such Grantor under or in
connection with any Receivable is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Administrative Agent to the extent required
by Section 5.2.

                  (b)      None of the obligors on any Receivable is a
Governmental Authority, except for Receivables constituting not more than 5% of
the face amount of all Receivables.

                  (c)      The amounts represented by such Grantor to the
Secured Parties from time to time as owing to such Grantor in respect of the
Receivables will at such times be accurate in all material respects.

         4.9      Intellectual Property. (a) Schedule 6 lists all Intellectual
Property owned by such Grantor in its own name on the date hereof.

                  (b)      On the date hereof, (i) such Grantor (x) is the owner
of, and has the right to use, or (y) has a valid and enforceable license or
other right to use, the material Intellectual Property described on Schedule 6
and (ii) such Grantor has not received any written notice or claim contesting
the validity, enforceability, use or ownership of any material Intellectual
Property.

                  (c)      Except as set forth in Schedule 6, on the date
hereof, none of the Intellectual Property is the subject of any licensing or
franchise agreement pursuant to which such Grantor is the licensor or
franchisor.

                              SECTION 5. COVENANTS

                  Each Grantor covenants and agrees with the Administrative
Agent and the Secured Parties that, from and after the date of this Agreement
until the Obligations shall have been paid in full, no Letter of Credit shall be
outstanding and the Commitments shall have terminated:

         5.1      Covenants in Credit Agreement. In the case of each Guarantor,
such Guarantor shall take, or shall refrain from taking, as the case may be,
each action that is necessary to be taken or not taken, as the case may be, so
that no Default or Event of

                                       16

<PAGE>

Default is caused by the failure to take such action or to refrain from taking
such action by such Guarantor or any of its Subsidiaries.

         5.2      Delivery of Instruments and Chattel Paper. If any amount
payable under or in connection with any of the Collateral shall be or become
evidenced by any Instrument, Certificated Security or Chattel Paper, such
Instrument, Certificated Security or Chattel Paper shall be immediately
delivered to the Administrative Agent, duly indorsed in a manner reasonably
satisfactory to the Administrative Agent, to be held as Collateral pursuant to
this Agreement; provided, that the Grantors shall not be obligated to deliver to
the Administrative Agent any Instruments or Chattel Paper held by any Grantor at
any time to the extent that the aggregate face amount of all such Instruments
and Chattel Paper held by all Grantors at such time does not exceed $100,000.

         5.3      Maintenance of Insurance. (a) Such Grantor will maintain, with
financially sound and reputable companies, insurance policies (i) insuring the
Inventory and Equipment against loss by fire, explosion, theft and such other
casualties as may be reasonably satisfactory to the Administrative Agent and
(ii) insuring such Grantor, the Administrative Agent and the Secured Parties
against liability for personal injury and property damage relating to such
Inventory and Equipment, such policies to be in such form and amounts and having
such coverage as may be reasonably satisfactory to the Administrative Agent and
the Lenders.

                  (b)      All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 30 days after receipt by the
Administrative Agent of written notice thereof, (ii) name the Administrative
Agent as insured party or loss payee, (iii) include deductibles consistent with
past practice or otherwise reasonably satisfactory to the Administrative Agent
and (iv) be reasonably satisfactory in all other respects to the Administrative
Agent.

                  (c)      The Borrower shall deliver to the Administrative
Agent and the Lenders a report of a reputable insurance broker with respect to
such insurance as the Administrative Agent may from time to time reasonably
request.

         5.4      Payment of Obligations. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no such
charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.

         5.5      Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest created by
this Agreement as a perfected security interest having at least the priority
described in Section 4.3 and shall defend such

                                       17

<PAGE>

security interest against the claims and demands of all Persons whomsoever,
except where such defense would not be required of such Grantor pursuant to
Sections 4(h), (i) and (k) of any Patent and Trademark Security Agreement made
by such Grantor in connection herewith.

                  (b)      Such Grantor will furnish to the Administrative Agent
and the Lenders from time to time statements and schedules further identifying
and describing the assets and property of such Grantor and such other reports in
connection with the Collateral as the Administrative Agent may reasonably
request, all in reasonable detail.

                  (c)      At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of such Grantor,
such Grantor will promptly and duly execute and deliver, and have recorded, such
further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, (i) the filing of any financing
or continuation statements under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security interests
created hereby and (ii) in the case of Investment Property, Deposit Accounts and
Letter-of-Credit Rights, taking any actions necessary to enable the
Administrative Agent to obtain "control" (within the meaning of the applicable
Uniform Commercial Code) with respect thereto.

         5.6      Changes in Name, etc. Such Grantor will not, except upon 30
days' prior written notice to the Administrative Agent and delivery to the
Administrative Agent of all additional executed financing statements and other
documents reasonably requested by the Administrative Agent to maintain the
validity, perfection and priority of the security interests provided for herein:

                  (a)      change its jurisdiction of organization or the
location of its chief executive office or sole place of business or principal
residence from that referred to in Section 4.3; or

                  (b)      change its name.

         5.7      Notices. Such Grantor will advise the Administrative Agent and
the Lenders promptly, in reasonable detail, of:

                  (a)      any Lien (other than security interests created
hereby or Liens permitted under the Credit Agreement) on any of the Collateral
which would adversely affect the ability of the Administrative Agent to exercise
any of its remedies hereunder; and

                  (b)      the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the aggregate value
of the Collateral or on the security interests created hereby.

                                       18

<PAGE>

         5.8      Investment Property. (a) If such Grantor shall become entitled
to receive or shall receive any certificate (including, without limitation, any
certificate representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the Capital
Stock of any Issuer, whether in addition to, in substitution of, as a conversion
of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect
thereof, such Grantor shall accept the same as the agent of the Administrative
Agent and the Secured Parties, hold the same in trust for the Administrative
Agent and the Secured Parties and deliver the same forthwith to the
Administrative Agent in the exact form received, duly indorsed by such Grantor
to the Administrative Agent, if required, together with an undated stock power
covering such certificate duly executed in blank by such Grantor and with, if
the Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations. Any sums paid upon or in respect of the Investment
Property upon the liquidation or dissolution of any Issuer shall be paid over to
the Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations, and in case any distribution of capital shall be
made on or in respect of the Investment Property, or any property shall be
distributed upon or with respect to the Investment Property pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to
the reorganization thereof, the property so distributed shall, unless otherwise
subject to a perfected security interest in favor of the Administrative Agent in
the case of Collateral where perfection cannot be accomplished by delivery and
possession thereof, be delivered to the Administrative Agent to be held by it
hereunder as additional collateral security for the Obligations. If any sums of
money or property so paid or distributed in respect of the Investment Property
shall be received by such Grantor, such Grantor shall, until such money or
property is paid or delivered to the Administrative Agent, unless otherwise
subject to a perfected security interest in favor of the Administrative Agent in
the case of Collateral where perfection cannot be accomplished by delivery and
possession thereof, hold such money or property in trust for the Secured
Parties, segregated from other funds of such Grantor, as additional collateral
security for the Obligations. Notwithstanding the foregoing, the Grantors shall
not be required to pay over to the Administrative Agent or deliver to the
Administrative Agent as Collateral any proceeds of any liquidation or
dissolution of any Issuer, or any distribution of capital or property in respect
of any Investment Property, to the extent that (i) such liquidation, dissolution
or distribution, if treated as a Disposition of the relevant Issuer, would be
permitted by the Credit Agreement and (ii) the proceeds thereof are applied
toward prepayment of Loans and reduction of Commitments to the extent required
by the Credit Agreement.

                  (b)      Without the prior written consent of the
Administrative Agent, such Grantor will not (i) vote to enable, or take any
other action to permit, any Issuer to issue any stock or other equity securities
of any nature or to issue any other securities convertible into or granting the
right to purchase or exchange for any stock or other equity securities of any
nature of any Issuer, unless such securities are delivered to the Administrative
Agent, concurrently with the issuance thereof, to be held by the Administrative
Agent as Collateral, (ii) sell, assign, transfer, exchange, or otherwise dispose
of, or grant any option with respect to, the Investment Property or Proceeds

                                       19

<PAGE>

thereof (except pursuant to a transaction expressly permitted by the Credit
Agreement), (iii) create, incur or permit to exist any Lien or option in favor
of, or any claim of any Person with respect to, any of the Investment Property
or Proceeds thereof, or any interest therein, except for the security interests
created by this Agreement or (iv) enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Administrative Agent to
sell, assign or transfer any of the Pledged Securities or Proceeds thereof.

                  (c)      In the case of each Grantor which is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement relating
to the Pledged Securities issued by it and will comply with such terms insofar
as such terms are applicable to it, (ii) it will notify the Administrative Agent
promptly in writing of the occurrence of any of the events described in Section
5.8(a) with respect to the Pledged Securities issued by it and (iii) the terms
of Sections 6.3(c) and 6.7 shall apply to it, Mutatis Mutandis, with respect to
all actions that may be required of it pursuant to Section 6.3(c) or 6.7 with
respect to the Pledged Securities issued by it.

                  (d)      Each Issuer that is a partnership or a limited
liability company (i) confirms that none of the terms of any equity interest
issued by it provides that such equity interest is a "security" within the
meaning of Sections 8-102 and 8-103 of the New York UCC (a "Security"), (ii)
agrees that it will take no action to cause or permit any such equity interest
to become a Security, (iii) agrees that it will not issue any certificate
representing any such equity interest and (iv) agrees that if, notwithstanding
the foregoing, any such equity interest shall be or become a Security, such
Issuer will (and the Grantor that holds such equity interest hereby instructs
such Issuer to) comply with instructions originated by the Administrative Agent
without further consent by such Grantor.

         5.9      Receivables. (a) Other than in the ordinary course of business
consistent with its past practice, such Grantor will not (i) grant any extension
of the time of payment of any Receivable, (ii) compromise or settle any
Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable in any manner that could adversely affect the value
thereof.

                  (b)      Such Grantor will deliver to the Administrative Agent
a copy of each material demand, notice or document received by it that questions
or calls into doubt the validity or enforceability of more than 10% of the
aggregate amount of the then outstanding Receivables.

         5.10     Intellectual Property. Within 45 days after the end of each
calendar quarter, such Grantor will notify the Administrative Agent of any
acquisition by such Grantor of (i) any material registration of Copyright,
Patent or Trademark or (ii) any exclusive rights under a material Copyright
License, Patent License or Trademark License, and shall take such actions as may
be reasonably requested by the Administrative Agent (but only to the extent such
actions are within such Grantor's

                                       20

<PAGE>

control) to perfect the security interest granted to the Administrative Agent
and the other Secured Parties therein (including, without limitation, (x) the
execution and delivery of a Patent and Trademark Security Agreement (or
amendments to any such agreement previously executed or delivered by such
Grantor) or other comparable agreements with respect to Copyrights or Copyright
Licenses and (y) the making of appropriate filings (I) of financing statements
under the Uniform Commercial Code of any applicable jurisdiction and/or (II) in
the United States Patent and Trademark Office, or with respect to Copyrights and
Copyright Licenses, other applicable office).

         5.11     Commercial Tort Claims. If any Grantor shall at any time
commence a suit, action or proceeding with respect to any Commercial Tort Claim
held by it with a value which such Grantor reasonably believes to be of
$1,000,000 or more, such Grantor shall promptly notify the Administrative Agent
thereof in a writing signed by such Grantor and describing the details thereof
and shall grant to the Administrative Agent for the benefit of the Secured
Parties in such writing a security interest therein and in the proceeds thereof,
all upon the terms of this Agreement, with such writing to be in form and
substance reasonably satisfactory to the Administrative Agent.

                         SECTION 6. REMEDIAL PROVISIONS

         6.1      Certain Matters Relating to Receivables. (a) The
Administrative Agent shall have the right, at any time and from time to time
after the occurrence and during the continuance of an Event of Default, to make
test verifications of the Receivables in any manner and through any medium that
it reasonably considers advisable, and each Grantor shall furnish all such
assistance and information as the Administrative Agent may require in connection
with such test verifications. At any time and from time to time after the
occurrence and during the continuance of an Event of Default, upon the
Administrative Agent's reasonable request and at the expense of the relevant
Grantor, such Grantor shall cause independent public accountants or others
satisfactory to the Administrative Agent to furnish to the Administrative Agent
reports showing reconciliations, aging and test verifications of, and trial
balances for, the Receivables.

                  (b)      The Administrative Agent hereby authorizes each
Grantor to collect such Grantor's Receivables, subject to the Administrative
Agent's direction and control after the occurrence and during the continuance of
an Event of Default, and the Administrative Agent may curtail or terminate said
authority at any time after the occurrence and during the continuance of an
Event of Default. If required by the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, any payments of
Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any
event, within two Business Days) deposited by such Grantor in the exact form
received, duly indorsed by such Grantor to the Administrative Agent if required,
in a Collateral Account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for the
account of the Secured Parties only as provided in Section 6.5, and (ii) until
so turned over, shall be held by such Grantor in trust for the Administrative
Agent and the Secured Parties, segregated from other funds of such Grantor. Each
such deposit of Proceeds of

                                       21
<PAGE>

Receivables shall be accompanied by a report identifying in reasonable detail
the nature and source of the payments included in the deposit.

                  (c)      At any time and from time to time after the
occurrence and during the continuance of an Event of Default, at the
Administrative Agent's request, each Grantor shall deliver to the Administrative
Agent all original and other documents evidencing, and relating to, the
agreements and transactions which gave rise to the Receivables, including,
without limitation, all original orders, invoices and shipping receipts.

                  (d)      At any time after the occurrence and during the
continuance of an Event of Default, each Grantor will cooperate with the
Administrative Agent to establish a system of lockbox accounts, under the sole
dominion and control of the Administrative Agent, into which all Receivables
shall be paid and from which all collected funds will be transferred to a
Collateral Account.

         6.2      Communications with Obligors; Grantors Remain Liable. (a) The
Administrative Agent in its own name or in the name of others may at any time
and from time to time after the occurrence and during the continuance of an
Event of Default communicate with obligors under the Receivables and parties to
the Contracts (in each case, to the extent constituting Collateral) to verify
with them to the Administrative Agent's satisfaction the existence, amount and
terms of any Receivables or Contracts.

                  (b)      Upon the request of the Administrative Agent at any
time after the occurrence and during the continuance of an Event of Default,
each Grantor shall notify obligors on the Receivables and parties to the
Contracts (in each case, to the extent constituting Collateral) that the
Receivables and the Contracts have been assigned to the Administrative Agent for
the ratable benefit of the Secured Parties and that payments in respect thereof
shall be made directly to the Administrative Agent.

                  (c)      Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Receivables (or any agreement
giving rise thereto) and Contracts 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 thereto. Neither the Administrative
Agent nor any Secured Party shall have any obligation or liability under any
Receivable (or any agreement giving rise thereto) or Contract by reason of or
arising out of this Agreement or the receipt by the Administrative Agent or any
Secured Party of any payment relating thereto, nor shall the Administrative
Agent or any Secured Party be obligated in any manner to perform any of the
obligations of any Grantor under or pursuant to any Receivable (or any agreement
giving rise thereto) or Contract, 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 thereunder, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.

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<PAGE>

         6.3      Pledged Stock. (a) Unless an Event of Default shall have
occurred and be continuing and the Administrative Agent shall have given notice
to the relevant Grantor of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted
to receive all cash dividends paid in respect of the Pledged Stock and all
payments made in respect of the Pledged Notes, in each case to the extent
permitted in the Credit Agreement, and to exercise all voting and corporate
rights with respect to the Pledged Securities; PROVIDED, HOWEVER, that no vote
shall be cast or corporate right exercised or other action taken (other than in
connection with a transaction expressly permitted by the Credit Agreement)
which, in the Administrative Agent's reasonable judgment, would materially
impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document.

                  (b)      If an Event of Default shall occur and be continuing
and the Administrative Agent shall give notice of its intent to exercise such
rights to the relevant Grantor or Grantors, (i) the Administrative Agent shall
have the right to receive any and all cash dividends, payments or other Proceeds
paid in respect of the Pledged Securities and make application thereof to the
Obligations in the order set forth in Section 6.5, and (ii) any or all of the
Pledged Securities shall be registered in the name of the Administrative Agent
or its nominee, and the Administrative Agent or its nominee may thereafter
exercise (x) all voting, corporate and other rights pertaining to such Pledged
Securities at any meeting of shareholders of the relevant Issuer or Issuers or
otherwise and (y) any and all rights of conversion, exchange and subscription
and any other rights, privileges or options pertaining to such Pledged
Securities as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the corporate structure of any Issuer, or upon the
exercise by any Grantor or the Administrative Agent of any right, privilege or
option pertaining to such Pledged Securities, and in connection therewith, the
right to deposit with and deliver any and all of the Pledged Securities to any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Administrative Agent may reasonably determine),
all without liability except to account for property actually received by it,
but the Administrative Agent shall have no duty to any Grantor to exercise any
such right, privilege or option and shall not be responsible for any failure to
do so or delay in so doing.

                  (c)      Each Grantor hereby authorizes and instructs each
Issuer of any Pledged Securities pledged by such Grantor hereunder to (i) comply
with any instruction received by it from the Administrative Agent in writing
that (x) states that an Event of Default has occurred and is continuing and (y)
is otherwise in accordance with the terms of this Agreement, without any other
or further instructions from such Grantor, and each Grantor agrees that each
Issuer shall be fully protected in so complying, and (ii) unless otherwise
expressly permitted hereby, pay any dividends or other payments with respect to
the Pledged Securities directly to the Administrative Agent.

         6.4      Proceeds to be Turned Over To Administrative Agent. In
addition to the rights of the Administrative Agent and the Secured Parties
specified in Section 6.1 with

                                       23

<PAGE>

respect to payments of Receivables, if an Event of Default shall occur and be
continuing, and the Administrative Agent shall have instructed any Grantor to do
so, all Proceeds received by such Grantor consisting of cash, checks and
Instruments shall be held by such Grantor in trust for the Administrative Agent
and the Secured Parties, segregated from other funds of such Grantor, and shall,
forthwith upon receipt by such Grantor, be turned over to the Administrative
Agent in the exact form received by such Grantor (duly indorsed by such Grantor
to the Administrative Agent, if required). All Proceeds received by the
Administrative Agent hereunder shall be held by the Administrative Agent in a
Collateral Account maintained under its sole dominion and control. All Proceeds
while held by the Administrative Agent in a Collateral Account (or by such
Grantor in trust for the Administrative Agent and the Secured Parties) shall
continue to be held as collateral security for all the Obligations and shall not
constitute payment thereof until applied as provided in Section 6.5.

         6.5      Application of Proceeds. At such intervals as may be agreed
upon by the Borrower and the Administrative Agent, or, if an Event of Default
shall have occurred and be continuing, at any time at the Administrative Agent's
election, the Administrative Agent may apply all or any part of Proceeds
constituting Collateral, whether or not held in any Collateral Account, and any
proceeds of the guarantee set forth in Section 2, in payment of the Obligations
in the following order:

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

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

                  Third, to the Administrative Agent, for application by it
         towards prepayment of the Obligations, PRO RATA among the Secured
         Parties according to the amounts of the Obligations then held by the
         Secured Parties; and

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

         6.6      Code and Other Remedies. If an Event of Default shall occur
and be continuing, the Administrative Agent, on behalf of the Secured Parties,
may exercise, in addition to all other rights and remedies granted to them in
this Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the New York UCC or any other applicable law. Without limiting the generality of
the foregoing, the Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices

                                       24

<PAGE>

are hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do any
of the foregoing), in one or more parcels at public or private sale or sales, at
any exchange, broker's board or office of the Administrative Agent or any
Secured Party or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. The Administrative Agent
or any Secured Party shall have the right upon any such public sale or sales,
and, to the extent permitted by law, upon any such private sale or sales, to
purchase the whole or any part of the Collateral so sold, free of any right or
equity of redemption in any Grantor, which right or equity is hereby waived and
released. Each Grantor further agrees, at the Administrative Agent's request, to
assemble the Collateral and make it available to the Administrative Agent at
places which the Administrative Agent shall reasonably select, whether at such
Grantor's premises or elsewhere. The Administrative Agent shall apply the net
proceeds of any action taken by it pursuant to this Section 6.6 with respect to
any Grantor's Collateral, after deducting all reasonable costs and expenses of
every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Collateral of such Grantor or in any way relating to
the Collateral of such Grantor or the rights of the Administrative Agent and the
Secured Parties hereunder with respect thereto, including, without limitation,
reasonable attorneys' fees and disbursements, to the payment in whole or in part
of the Obligations of such Grantor, in the order specified in Section 6.5, and
only after such application and after the payment by the Administrative Agent of
any other amount required by any provision of law, including, without
limitation, Section 9-615(a)(3) of the New York UCC, need the Administrative
Agent account for the surplus, if any, to any Grantor. To the extent permitted
by applicable law, each Grantor waives all claims, damages and demands it may
acquire against the Administrative Agent or any Secured Party arising out of the
exercise by them of any rights hereunder. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least 10 days before such sale or other
disposition.

         6.7      Registration Rights. (a) If the Administrative Agent shall
determine to exercise its right to sell any or all of the Pledged Stock pursuant
to Section 6.6, and if in the reasonable opinion of the Administrative Agent it
is necessary or advisable to have the Pledged Stock, or that portion thereof to
be sold, registered under the provisions of the Securities Act, the relevant
Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Administrative Agent, necessary or advisable to
register the Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering of
the Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission

                                       25

<PAGE>

applicable thereto. Each Grantor agrees to cause such Issuer to comply with the
provisions of the securities or "Blue Sky" laws of any and all jurisdictions
which the Administrative Agent shall designate and to make available to its
security holders, as soon as practicable, an earnings statement (which need not
be audited) which will satisfy the provisions of Section 11(a) of the Securities
Act.

                  (b)      Each Grantor recognizes that the Administrative Agent
may be unable to effect a public sale of any or all the Pledged Stock, by reason
of certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Administrative
Agent shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.

                  (c)      Each Grantor agrees to use its best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Stock pursuant to this Section 6.7
valid and binding and in compliance with any and all other applicable
Requirements of Law. Each Grantor further agrees that a breach of any of the
covenants contained in this Section 6.7 will cause irreparable injury to the
Administrative Agent and the Secured Parties, that the Administrative Agent and
the Secured Parties have no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained in this Section
6.7 shall be specifically enforceable against such Grantor, and such Grantor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no Event of
Default has occurred and is continuing under the Credit Agreement.

         6.8      Deficiency. Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Obligations and the fees and disbursements of any
attorneys employed by the Administrative Agent or any Secured Party to collect
such deficiency.

                       SECTION 7. THE ADMINISTRATIVE AGENT

         7.1      Administrative Agent's Appointment as Attorney-in-Fact, etc.
(a) Each Grantor hereby irrevocably constitutes and appoints the Administrative
Agent and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all

                                       26

<PAGE>

documents and instruments which may be necessary or desirable to accomplish the
purposes of this Agreement, and, without limiting the generality of the
foregoing, each Grantor hereby gives the Administrative Agent the power and
right, on behalf of such Grantor, without notice to or assent by such Grantor,
to do any or all of the following:

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

                           (ii)     in the case of any Intellectual Property,
execute and deliver, and have recorded, any and all agreements, instruments,
documents and papers as the Administrative Agent may request to evidence the
Administrative Agent's and the Secured Parties' security interest in such
Intellectual Property and the goodwill and general intangibles of such Grantor
relating thereto or represented thereby;

                           (iii)    pay or discharge taxes and Liens levied or
placed on or threatened against the Collateral, effect any repairs or any
insurance called for by the terms of this Agreement and pay all or any part of
the premiums therefor and the costs thereof;

                           (iv)     execute, in connection with any sale
provided for in Section 6.6 or 6.7, any indorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral;

                           (v)      (1) direct any party liable for any payment
under any of the Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (2) ask for or demand, collect, and receive
payment of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any Collateral; (3)
sign and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral; (4) commence and prosecute any suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect the Collateral or
any portion thereof and to enforce any other right in respect of any Collateral;
(5) defend any suit, action or proceeding brought against such Grantor with
respect to any Collateral; (6) subject to any existing rights of joint owners of
Patents, Trademarks and Copyrights, settle, compromise or adjust any such suit,
action or proceeding and, in connection therewith, give such discharges or
releases as the Administrative Agent may deem appropriate; (7) subject to any
existing reserved rights or licenses, assign any Copyright, Patent or Trademark
(along with the goodwill of the business to which any such Copyright, Patent or
Trademark pertains), throughout the world for such term or terms, on such
conditions, and in such manner, as the Administrative Agent shall in its sole
discretion determine; and (8) generally, sell,

                                       27

<PAGE>

transfer, pledge and make any agreement with respect to or otherwise deal with
any of the Collateral as fully and completely as though the Administrative Agent
were the absolute owner thereof for all purposes, and do, at the Administrative
Agent's option and such Grantor's expense, at any time, or from time to time,
all acts and things which the Administrative Agent deems necessary to protect,
preserve or realize upon the Collateral and the Administrative Agent's and the
Secured Parties' security interests therein and to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do; and

                           (vi)     license or sublicense whether on an
exclusive or non-exclusive basis, any Intellectual Property for such term and on
such conditions and in such manner as the Administrative Agent shall in its sole
judgment determine and, in connection therewith, such Grantor hereby grants to
the Administrative Agent for the benefit of the Secured Parties a royalty-free,
world-wide irrevocable license of its Intellectual Property.

                  Anything in this Section 7.1 (a) to the contrary
notwithstanding, the Administrative Agent agrees that it will not exercise any
rights under the power of attorney provided for in this Section 7.1(a) unless an
Event of Default shall have occurred and be continuing.

                  (b)      If any Grantor fails to perform or comply with any of
its agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.

                  (c)      The expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due Revolving Credit Loans that are Base
Rate Loans under the Credit Agreement, from the date of payment by the
Administrative Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the Administrative Agent on demand.

                  (d)      Each Grantor hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the security
interests created hereby are released.

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

                                       28

<PAGE>

or any other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Administrative Agent
and the Secured Parties hereunder are solely to protect the Administrative
Agent's and the Secured Parties' interests in the Collateral and shall not
impose any duty upon the Administrative Agent or any Secured Party to exercise
any such powers. The Administrative Agent and the Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct.

         7.3      Execution of Financing Statements. Pursuant to any applicable
law, each Grantor authorizes the Administrative Agent to file or record
financing statements and other filing or recording documents or instruments with
respect to the Collateral without the signature of such Grantor in such form and
in such offices as the Administrative Agent determines appropriate to perfect
the security interests of the Administrative Agent under this Agreement. Each
Grantor authorizes the Administrative Agent to use the collateral description
"all personal property" or "all assets" in any such financing statements. Each
Grantor hereby ratifies and authorizes the filing by the Administrative Agent of
any financing statement with respect to the Collateral made prior to the date
hereof.

         7.4      Authority of Administrative Agent. Each Grantor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the Secured Parties, be governed by the Credit Agreement and by such
other agreements with respect thereto as may exist from time to time among them,
but, as between the Administrative Agent and the Grantors, the Administrative
Agent shall be conclusively presumed to be acting as agent for the Secured
Parties with full and valid authority so to act or refrain from acting, and no
Grantor shall be under any obligation, or entitlement, to make any inquiry
respecting such authority. Notwithstanding any other provision herein or in any
Loan Document, the only duty or responsibility of the Administrative Agent to
any Qualified Counterparty under this Agreement is the duty to remit to such
Qualified Counterparty any amounts to which it is entitled pursuant to Section
6.5.

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

                                       29

<PAGE>

notice to such Grantor, to enter during normal business hours into and upon any
premises owned, leased or operated by such Grantor where any of such Grantor's
Inventory or Equipment is located for the purpose of inspecting the same,
observing its use or otherwise protecting its interests therein.

                            SECTION 3. MISCELLANEOUS

         8.1      Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 10.1 of the Credit Agreement. No consent of any
Qualified Counterparty shall be required for any waiver, amendment, supplement
or other modification to this Agreement.

         8.2      Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 10.2 of the Credit Agreement; PROVIDED that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on SCHEDULE 1, unless and until such
Guarantor shall change such address by notice to the Administrative Agent given
in accordance with Section 10.2 of the Credit Agreement.

         8.3      No Waiver by Course of Conduct; Cumulative Remedies. Neither
the Administrative Agent nor any Secured Party shall by any act (except by a
written instrument pursuant to Section 8.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. No failure to exercise, nor any
delay in exercising, on the part of the Administrative Agent or any Secured
Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent or
any Secured Party of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy which the Administrative Agent or
such Secured Party would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any other rights or remedies provided by law.

         8.4      Enforcement Expenses; Indemnification. (a) Each Guarantor
agrees to pay, or reimburse each Secured Party and the Administrative Agent for,
all its costs and expenses incurred in collecting against such Guarantor under
the guarantee contained in Section 2 or otherwise enforcing or preserving any
rights under this Agreement and the other Loan Documents to which such Guarantor
is a party, including, without limitation, the fees and disbursements of counsel
(including the allocated fees and expenses of in-house counsel) to each Secured
Party and of counsel to the Administrative Agent.

                  (b)      Each Guarantor agrees to pay, and to save the
Administrative Agent and the Secured Parties harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
stamp, excise, sales or other taxes which

                                       30

<PAGE>

may be payable or determined to be payable with respect to any of the Collateral
or in connection with any of the transactions contemplated by this Agreement.

                  (c)      Each Guarantor agrees to pay, and to save the
Administrative Agent and the Secured Parties harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement to the extent the Borrower would be required to do so pursuant to
Section 10.5 of the Credit Agreement.

                  (d)      The agreements in this Section shall survive
repayment of the Obligations and all other amounts payable under the Credit
Agreement and the other Loan Documents.

         8.5      Successors and Assigns. This Agreement shall be binding upon
the successors and assigns of each Grantor and shall inure to the benefit of the
Administrative Agent and the Secured Parties and their successors and assigns;
PROVIDED that, except pursuant to mergers and consolidations expressly permitted
under the Credit Agreement, no Grantor may assign, transfer or delegate any of
its rights or obligations under this Agreement without the prior written consent
of the Administrative Agent.

         8.6      Set-Off. Each Grantor hereby irrevocably authorizes the
Administrative Agent and each Secured Party at any time and from time to time
while an Event of Default shall have occurred and be continuing, without notice
to such Grantor or any other Grantor, any such notice being expressly waived by
each Grantor, to set-off and appropriate and apply any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by the Administrative Agent or such Secured Party to or for the
credit or the account of such Grantor, or any part thereof in such amounts as
the Administrative Agent or such Secured Party may elect, against and on account
of the obligations and liabilities of such Grantor to the Administrative Agent
or such Secured Party hereunder and claims of every nature and description of
the Administrative Agent or such Secured Party against such Grantor, in any
currency, whether arising hereunder, under the Credit Agreement, any other Loan
Document or otherwise, as the Administrative Agent or such Secured Party may
elect, whether or not the Administrative Agent or any Secured Party has made any
demand for payment and although such obligations, liabilities and claims may be
contingent or unmatured. The Administrative Agent and each Secured Party shall
notify such Grantor promptly of any such set-off and the application made by the
Administrative Agent or such Secured Party of the proceeds thereof, PROVIDED
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Administrative Agent and each Secured
Party under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which the
Administrative Agent or such Secured Party may have.

                                       31

<PAGE>

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

         8.8      Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

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

         8.10     Integration. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Administrative Agent and the
Secured Parties with respect to the subject matter hereof and thereof, and there
are no promises, undertakings, representations or warranties by the
Administrative Agent or any Secured Party relative to subject matter hereof and
thereof not expressly set forth or referred to herein or in the other Loan
Documents.

         8.11     Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

         8.12     Submission to Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:

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

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

                  (c)      agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to such
Grantor at its address referred to in Section 8.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto;

                                       32

<PAGE>

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

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

         8.13     Acknowledgements. (a) Each Grantor hereby acknowledges that:

                  (b)      it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents to which
it is a party;

                  (c)      neither the Administrative Agent nor any Secured
Party has any fiduciary relationship with or duty to any Grantor arising out of
or in connection with this Agreement or any of the other Loan Documents, and the
relationship between the Grantors, on the one hand, and the Administrative Agent
and Secured Parties, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and

                  (d)      no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Secured Parties or among the Grantors and the Secured Parties.

         8.14     Additional Grantors. Each Subsidiary of the Borrower that is
required to become a party to this Agreement pursuant to Section 6.9 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the form
of Annex 1 hereto.

         8.15     Releases. (a) At such time as the Loans, the Reimbursement
Obligations and the other Obligations (other than Borrower Hedge Agreement
Obligations and Guarantor Hedge Agreement Obligations) shall have been paid in
full, the Commitments have been terminated and no Letters of Credit shall be
outstanding, the Collateral shall be released from the Liens created hereby, and
this Agreement and all obligations (other than those expressly stated to survive
such termination) of the Administrative Agent and each Grantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantors. At the
request and sole expense of any Grantor following any such termination, the
Administrative Agent shall deliver to such Grantor any Collateral held by the
Administrative Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination.

                  (b)      If any of the Collateral shall be sold, transferred
or otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then the Administrative Agent, at the request and sole expense of
such Grantor, shall execute and deliver to such Grantor all releases or other
documents reasonably necessary or desirable for the release of the Liens created
hereby on such Collateral. At the request and sole expense of the Borrower, a
Subsidiary Guarantor shall be released from its obligations hereunder in the
event that all the Capital Stock of such Subsidiary Guarantor shall be

                                       33

<PAGE>

sold, transferred or otherwise disposed of in a transaction permitted by the
Credit Agreement; PROVIDED that the Borrower shall have delivered to the
Administrative Agent, at least ten Business Days prior to the date of the
proposed release, a written request for release identifying the relevant
Subsidiary Guarantor and the terms of the sale or other disposition in
reasonable detail, including the price thereof and any expenses in connection
therewith, together with a certification by the Borrower stating that such
transaction is in compliance with the Credit Agreement and the other Loan
Documents.

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

         8.16     WAIVER OF JURY TRIAL. EACH GRANTOR AND, BY ACCEPTANCE OF THE
BENEFITS HEREOF, EACH AGENT AND EACH SECURED PARTY, HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       34

<PAGE>

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

                                            DAY INTERNATIONAL GROUP, INC.

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

                                            DAY INTERNATIONAL, INC.

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

                                            DAY INTERNATIONAL FINANCE, INC.

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

                                            VARN INTERNATIONAL INC.

                                            By:    /s/ Thomas J. Koenig
                                               ---------------------------------
                                               Name:
                                               Title:<PAGE>

                                                                    EXHIBIT 10.3

                     PATENT AND TRADEMARK SECURITY AGREEMENT

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

                              W I T N E S S E T H :

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                        2

<PAGE>

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

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

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

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

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

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

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

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

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

                           (i)      all Patents;

                                        3

<PAGE>

                           (ii)     all Patent Licenses;

                           (iii)    all Trademarks;

                           (iv)     all Trademark Licenses;

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

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

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

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

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

                                        4

<PAGE>

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

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

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

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

                                        5

<PAGE>

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

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

                                        6
<PAGE>

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

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

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

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

                                       7

<PAGE>

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

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

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

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

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

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

                                        8

<PAGE>

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

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

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

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

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

                                       9
<PAGE>

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

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

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

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

                                       10
<PAGE>

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

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

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

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

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

                                       11
<PAGE>

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

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

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

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

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

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

                                       12

<PAGE>

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

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

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

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

                                       13
<PAGE>

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

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

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

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

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

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

                                       14

<PAGE>

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

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

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

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

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

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

                                       15

<PAGE>

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

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

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

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

                                       16
<PAGE>

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

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

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

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

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

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

                                       17

<PAGE>

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

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

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

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

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

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

                                       18

<PAGE>

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

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

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

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

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

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

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

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

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

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

                                       19
<PAGE>

PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

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

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

                                       20

<PAGE>

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

                                       DAY INTERNATIONAL GROUP, INC.

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

                                       DAY INTERNATIONAL, INC.

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

                                       VARN INTERNATIONAL, INC.

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

                                       DAY INTERNATIONAL FINANCE, INC.

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

<PAGE>

ACKNOWLEDGED AND AGREED AS OF
THE DATE HEREOF BY:

LEHMAN COMMERCIAL PAPER INC., as Administrative Agent

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

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