INTERCREDITOR AGREEMENT

Intercreditor Agreement

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JORDAN INDUSTRIES INC | U.S. Bank National Association | CONGRESS FINANCIAL CORPORATION

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Title: INTERCREDITOR AGREEMENT
Governing Law: New York Date: 6/17/2004

INTERCREDITOR AGREEMENT, Parties: jordan industries inc , u.s. bank national association , congress financial corporation

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EXHIBIT 10(w)

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INTERCREDITOR AGREEMENT

dated as of February 18, 2004

by and between

U.S. BANK NATIONAL ASSOCIATION,

as Collateral Agent

and

CONGRESS FINANCIAL CORPORATION (CENTRAL),

as Administrative Agent

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INTERCREDITOR AGREEMENT

This INTERCREDITOR AGREEMENT, dated as of February 18, 2004 (as the

same may be amended, modified or supplemented from time to time, this

"Agreement"), is by and between: (i) U.S. Bank National Association, as

Collateral Agent under the Indenture (as defined below) for the benefit of the

holders from time to time of the Note Obligations (in such capacity, the

"Collateral Agent") and (ii) CONGRESS FINANCIAL CORPORATION (CENTRAL), as

Administrative Agent (in such capacity, the "Administrative Agent") under the

Credit Agreement (as defined below) for the benefit of the holders from time to

time of the Priority Obligations.

RECITALS

WHEREAS, pursuant to a Credit Agreement, dated as of August 16,

2001, entered into by JII, LLC as Borrower and led by the Administrative Agent,

the Borrower and other Obligors have entered into the Priority Lien Security

Documents pursuant to which the Obligors have granted the Administrative Agent a

first priority security interest in the Collateral;

WHEREAS, pursuant to an Indenture, dated of even date herewith (as

the same may be amended, restated, modified, supplemented, renewed, refunded,

replaced or refinanced from time to time, the "Indenture"), by and between JII

Holdings, LLC ("JII Holdings") and JII Holdings Finance Corporation ("JII

Finance") (collectively, the "Issuers"), the Guarantors and U.S. Bank National

Association, as trustee (in such capacity, the "Note Debt Trustee") for the

benefit of the holders of the Note Obligations, the Borrower, the Issuers, and

the other Obligors have entered into the Security Documents pursuant to which

they have granted the Collateral Agent a security interest in the Collateral

which security interest is subordinate to the security interest of the Priority

Lien;

WHEREAS, the parties hereto desire to enter into this Agreement to

confirm their relative rights with respect to the Collateral as provided in this

Agreement;

NOW THEREFORE, in consideration of the premises, covenants and

agreements as herein set forth and for other good and valuable consideration,

the receipt and adequacy of which are hereby acknowledged, the parties hereto

hereby agree as follows:

AGREEMENT

ARTICLE 1.

DEFINITIONS

For purposes of this Agreement, the terms listed in this Article 1

shall have the respective meanings set forth in this Article 1. All other

capitalized terms used herein and not defined herein shall have the meaning

ascribed thereto in the Indenture.

"Additional Notes" means an unlimited principal amount of Notes

(other than the Initial Notes) issued under the Indenture after the date of the

Indenture, as part of the same class as the Initial Notes.

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"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or

state law for the relief of debtors.

"Business Day" means any day other than a Legal Holiday.

"Capital Stock" means:

(1) in the case of a corporation, corporate stock;

(2) in the case of an association or business entity, any and all

shares, interests, participations, rights or other equivalents

(however designated) of corporate stock;

(3) in the case of a partnership or limited liability company,

partnership interests (whether general or limited) or

membership interests; and

(4) any other interest or participation that confers on a Person

the right to receive a share of the profits and losses of, or

distributions of assets of, the issuing Person, but excluding

from all of the foregoing any debt securities convertible into

Capital Stock, whether or not such debt securities include any

right of participation with Capital Stock.

"Collateral" means all present and future properties and assets of

JII Holdings or any other Obligor upon which a security interest is granted to

secure Note Obligations pursuant to the security documents, other than Excluded

Assets.

"Collateral Agent" means the Note Debt Trustee in its capacity as

Collateral Agent under the security documents together with its successors in

such capacity.

"Credit Agreement" means that certain Loan and Security Agreement,

dated August 16, 2001, by and among JII LLC (formerly known as JII, Inc.), as

borrower, Congress Financial Corporation (Central), as agent, Wachovia Bank, as

a lender and the other financial institutions from time to time party thereto,

as lenders, providing for up to $110.0 million of revolving credit based on the

value of certain assets, including inventory, accounts receivable and fixed

assets, including any related notes, Guarantees, collateral documents,

instruments and agreements executed in connection therewith, and, in each case,

as amended, restated, modified, renewed, refunded, replaced (whether upon or

after termination or otherwise) or refinanced (including by means of sales of

debt securities to institutional investors) in whole or in part from time to

time.

"Credit Agreement Agent" means Congress Financial Corporation, in

its capacity as Collateral Agent under the Priority Lien Security Documents, and

any successor thereto in such capacity.

"Credit Bid Rights" means, in respect of any order relating to a

sale of assets in any Insolvency or Liquidation Proceeding, that:

(1) such order grants the Holders of Notes (individually and in

any

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combination) the right to bid at the sale of such assets and

the right to offset such holders' claims secured by Note Liens

upon such assets against the purchase price of such assets if

the bids of such holders:

(a) is the highest bid or otherwise determined by the court

to be the best offer at the sale; and

(b) includes a cash purchase price component payable at the

closing of the sale in an amount that would be

sufficient on the date of the closing of the sale, if

such amount were applied to such payment on such date,

to Discharge all unpaid Priority Obligations (except

Unasserted Contingent Obligations) and to satisfy all

liens entitled to priority over the Priority Liens that

attach to the proceeds of the sale, and such order

requires or permits such amount to be so applied; and

(2) such order allows the claims of the Holders of Notes in such

Insolvency or Liquidation proceeding to the extent required

for the grant of such rights.

"Credit Facilities" means, one or more debt facilities (including,

without limitation, the Credit Agreement) or commercial paper facilities, in

each case, with banks or other institutional lenders providing for revolving

credit loans, term loans, receivables financing (including through the sale of

receivables to such lenders or to special purpose entities formed to borrow from

such lenders against such receivables) or letters of credit, in each case, as

amended, restated, modified, renewed, refunded, replaced (whether upon or after

termination or otherwise) or refinanced (including by means of sales of debt

securities to institutional investors) in whole or in part from time to time.

"Default" means any event that is, or with the passage of time or

the giving of notice or both would be, if it continues uncured, an Event of

Default.

"Discharge of the Priority Obligations" means termination of all

commitments to extend credit that would constitute Priority Debt, payment in

full in cash of the principal of and interest and premium (if any) on all

Priority Debt (except undrawn letters of credit), discharge or cash

collateralization (at the lower of (1) 105% of the aggregate undrawn amount and

(2) the percentage of the aggregate undrawn amount required for release of liens

under the terms of the applicable Priority Lien Document) of all letters of

credit outstanding under any Priority Debt, and payment in full in cash of all

other Priority Obligations (except Unasserted Contingent Obligations) that are

outstanding and unpaid at the time the Priority Debt is paid in full in cash.

"Discharge" and "Discharged" shall have the correlative meaning.

"Domestic Restricted Subsidiary" shall have the meaning ascribed

thereto in the Indenture.

"Equity Interests" means Capital Stock and all warrants, options or

other rights to acquire Capital Stock (but excluding any debt security that is

convertible into, or exchangeable for, Capital Stock); provided, however, that

Equity Interest shall not include Incentive Arrangements (as defined in the

Indenture) that do not include the issuance of Capital Stock, or

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warrants, options or other rights to acquire Capital Stock or obligations or

payments thereunder.

"Event of Default" has the meaning set forth in Section 6.01 of the

Indenture.

"Excluded Assets" means:

(1) any lease, license, contract, property right or agreement to

which JII Holdings or any Restricted Subsidiary is a party or

any of its rights or interests thereunder if and only for so

long as the grant of a security interest under the security

documents shall constitute or result in a breach, termination

or default under any such lease, license, contract, property

right or agreement (other than to the extent that any such

term would be rendered ineffective pursuant to Sections 9-406,

9-407, 9-408 or 9-409 of the UCC of any relevant jurisdiction

or any other applicable law or principles of equity);

provided, that such lease, license, contract, property right

or agreement shall be an Excluded Asset only to the extent and

for so long as the consequences specified above shall result

and shall cease to be an Excluded Asset and shall become

subject to the security interest granted under the security

documents immediately and automatically, at such time as such

consequences shall no longer result;

(2) any voting Equity Interests of any Excluded Foreign Subsidiary

representing more than 65% of the total outstanding voting

Equity Interest of that Excluded Foreign Subsidiary;

(3) assets subject to Liens described in clause (7) of the

definition of "Permitted Liens;"

(4) any property or assets acquired by JII Holdings or any of its

Restricted Subsidiaries after the date of the Indenture in

which the Collateral Agent does not have a perfected security

interest on such acquisition date, solely to the extent JII

Holdings or such Restricted Subsidiary was not required to

grant the Collateral Agent a perfected security interest

therein pursuant to Section 4.19 of the Indenture;

(5) at any time, any securities of a Subsidiary if, and only to

the extent that, at such time, the pledge of such securities

in favor of the Collateral Agent to secure the Note

Obligations would trigger a requirement under Rule 3-10 or

Rule 3-16 of Regulation S-X under the Securities Act (or any

other law, rule or regulation) to file separate financial

statements of that Subsidiary with the Securities and Exchange

Commission (or any other governmental agency);

(6) money, deposit accounts and letter-of-credit rights that are

not supporting obligations, all as defined in Article 9 of the

New York Uniform Commercial Code (except that the exclusion of

money, deposit accounts and letter-of-credit rights that are

not supporting obligations from the Collateral will not

affect, limit or impair any security interest of the

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Collateral Agent in any proceeds of Collateral at any time

held as money, held on deposit in any deposit account or

constituting letter-of-credit rights); provided that in the

event, and to the extent, that, after the date of the

Indenture, the security interest granted therein may be

perfected by the filing of a financing statement, money,

deposit accounts and letter-of-credit rights that are not

supporting obligations shall cease to be Excluded Assets;

(7) at any time, property that is excluded from the coverage of

Article 9 of the New York Uniform Commercial Code or in

respect of which a security interest created thereunder may

not then be perfected by the filing of a financing statement

and that has, in the good faith judgment of the Issuers, an

aggregate Fair Market Value, for all such property, of less

than $2,500,000 (except that the exclusion of such property

from the Collateral will not affect, limit or impair any

security interest of the Collateral Agent in any proceeds of

Collateral at any time held as personal property of a type

that is excluded from the coverage of Article 9 of the New

York Uniform Commercial Code or in respect of which a security

interest created thereunder may not be perfected by the filing

of a financing statement); and

(8) any asset or property owned by JII Holdings or any Restricted

Subsidiary on the date of the Indenture, in which the Priority

Lien Collateral Agent, as of the date of the Indenture, has

not been granted a perfected security interest to secure any

Priority Obligations, including, without limitation, any

interests in real property leased by JII Holdings or any of

its Restricted Subsidiaries and copyrights; provided, that, if

the Priority Lien Collateral Agent holds an unperfected

security interest in any such asset or property, such asset or

property shall be an "Excluded Asset" only with respect to the

requirement that the security interest of the Collateral Agent

therein securing Note Obligations be perfected;

provided, that any property in which JII Holdings or any other Obligor is

required to grant a security interest in favor of the Collateral Agent to secure

the Note Obligations pursuant to Section 4.12(c) of the Indenture shall not be

an Excluded Asset.

"Excluded Foreign Subsidiary" means, at any time, any Foreign

Subsidiary that is (or is treated as) for United States federal income tax

purposes either a (1) corporation or (2) pass-through entity owned directly or

indirectly by another Foreign Subsidiary that is (or is treated as) a

corporation.

"Foreign Subsidiary" means, any Restricted Subsidiary of JII

Holdings that is not a Domestic Restricted Subsidiary.

"GAAP" means, generally accepted accounting principles set forth in

the opinions and pronouncements of the Accounting Principles Board of the

American Institute of Certified Public Accountants and a statements and

pronouncements of the Financial Accounting

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Standards Board or in such other statements by such other entity as have been

approved by a significant segment of the accounting profession, which are in

effect from time to time.

"Guarantee" means a guarantee other than by endorsement of

negotiable instruments for collection in the ordinary course of business, direct

or indirect, in any manner including, without limitation, by way of a pledge of

assets or through letters of credit or reimbursement agreements in respect

thereof, of all or any part of any Indebtedness (whether arising by virtue of

partnership arrangements, or by agreements to keep-well, to purchase assets,

goods, securities or services, to take or pay or to maintain financial statement

conditions or otherwise).

"Guarantee Date" means the first date, if any, on which all the

Domestic Restricted Subsidiaries guarantee the Notes and the other Note

Obligations pursuant to Section 4.23 of the Indenture or voluntarily thereafter.

"Guarantors" means each of:

(1) Jordan;

(2) from and after the Guarantee Date, the Subsidiary Guarantors;

(3) from and after the Guarantee Date, any other Subsidiary of JII

Holdings that executes a Note Guarantee in accordance with the

provisions of the Indenture,

and their respective successors and assigns, in each case, until the Note

Guarantee of such Person has been released in accordance with the provisions of

the Indenture.

"Hedging Obligations" means, with respect to any specified Person,

the obligations of such Person under:

(1) interest rate swap agreements (whether from fixed to floating

or from floating to fixed), interest rate cap agreements and

interest rate collar agreements;

(2) other agreements or arrangements designed to manage interest

rates or interest rate risk; and

(3) other agreements or arrangements designed to protect such

Person against fluctuations in currency exchange rates or

commodity prices.

"Holder" means a person in whose name a Note is registered.

"Immaterial Subsidiary" shall have the meaning ascribed thereto in

the Indenture.

"Incentive Arrangements" shall have the meaning ascribed thereto in

the Indenture.

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"Indebtedness" means, with respect to any specified Person, any

indebtedness of such Person (excluding accrued expenses and trade payables),

whether or not contingent:

(1) in respect of borrowed money;

(2) evidenced by bonds, notes, debentures or similar instruments

or letters of credit (or reimbursement agreements in respect

thereof);

(3) in respect of banker's acceptances;

(4) representing Capital Lease Obligations;

(5) representing the balance deferred and unpaid of the purchase

price of any property or services due more than six months

after such property is acquired or such services are

completed; or

(6) representing any net Hedging Obligations,

if and to the extent any of the preceding items (other than letters of credit

and Hedging Obligations) would appear as a liability upon a balance sheet of the

specified Person prepared in accordance with GAAP. In addition, the term

"Indebtedness" includes all Indebtedness of others secured by a Lien on any

asset of the specified Person (whether or not such Indebtedness is assumed by

the specified Person) and, to the extent not otherwise included, the Guarantee

by the specified Person of any Indebtedness of any other Person, but shall not

include any Incentive Arrangements or obligations or payments thereunder.

"Initial Notes" means the first $173,333,300 aggregate principal

amount of Notes issued under the Indenture on the date of the Indenture.

"Insolvency or Liquidation Proceeding" means:

(1) any case commenced by or against JII Holdings or any other

Obligor under any Bankruptcy Law, any other proceeding for the

reorganization, recapitalization or adjustment or marshalling

of the assets or liabilities of JII Holdings or any other

Obligor, any receivership or assignment for the benefit of

creditors relating to JII Holdings or any other Obligor or any

similar case or proceeding relative to JII Holdings or any

other Obligor or its creditors, as such, in each case whether

or not voluntary;

(2) any liquidation, dissolution, marshalling of assets or

liabilities or other winding up of or relating to JII Holdings

or any other Obligor, in each case whether or not voluntary

and whether or not involving bankruptcy or insolvency; or

(3) any other proceeding of any type or nature in which

substantially all claims of creditors of JII Holdings or any

other Obligor are determined and any payment or distribution

is or may be made on account of such claims.

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"JII Exchange Offer" means the offer to exchange all outstanding Old

JII Notes for the Notes.

"Jordan" means Jordan Industries, Inc.

"Legal Holiday" means a Saturday, a Sunday or a day on which banking

institutions are closed (1) in the City of New York, (2) in the city in which

the Corporate Trust Office of the Note Debt Trustee is located, (3) at a place

of payment or (4) at any other location identified in the definition of

"Business Day" (or the equivalent thereof) in the applicable Priority Lien

Document; provided that the Note Debt Trustee and the Collateral Agent have

previously been advised of such location in writing; and provided, further,

that, for purposes of the Credit Agreement, such locations shall be Illinois,

New York and North Carolina, unless and until the Note Debt Trustee and the

Collateral Agent are notified in writing of any substitute or additional

location or are authorized by law, regulation or executive order to remain

closed. If a payment date is a Legal Holiday at a place of payment, payment may

be made at that place on the next succeeding day that is not a Legal Holiday.

"Lenders" means, at any time, the parties then holding (or committed

to provide) loans, letters of credit or other extensions of credit or

obligations that constitute (or when provided will constitute) Priority

Obligations.

"Lien" means, with respect to any asset, any mortgage, lien, pledge,

charge, security interest or encumbrance of any kind in respect of such asset,

whether or not filed, recorded or otherwise perfected under applicable law,

including any conditional sale or other title retention agreement, any lease in

the nature thereof, any option or other agreement to sell or give a security

interest in and, except in connection with any Qualified Receivables

Transaction, any filing of or agreement to give any financing statement under

the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

"Note Debt" means:

(1) the Initial Notes; and

(2) any Additional Notes that are permitted to be issued under

Section 4.09 of the Indenture.

provided, that the satisfaction of the requirement in clause (2) shall be

conclusively established, for purposes of entitling the holders of such Note

Debt to share equally and ratably with the other holders of Note Obligations in

the benefits and proceeds of the Collateral Agent's security interests in the

Collateral, if JII Holdings delivers to the Collateral Agent an Officers'

Certificate stating that such requirement has been satisfied and that such Note

Debt constitutes "Note Obligations", and the holders of such Note Debt and

Obligations in respect thereof will be entitled to rely conclusively thereon.

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"Note Documents" means the Indenture, the Notes (including

Additional Notes), the Note Guarantees, the security documents and all

agreements governing, securing or relating to any Note Obligations (other than

this Agreement).

"Note Guarantee" means the Guarantee by each Guarantor of the

Issuers' obligations under the Indenture and on the Notes, executed pursuant to

the provisions of the Indenture.

"Note Lien" means a Lien granted pursuant to a security document by

JII Holdings or any other Obligor to the Collateral Agent (or any other holder,

or representative of holders, of Note Obligations) upon any property or assets

of JII Holdings or such other Obligor to secure Note Obligations.

"Note Obligations" means Note Debt and all other Obligations in

respect thereof.

"Notes" means the 13% New Secured Notes due 2007 (including without

limitation, Additional Notes).

"Obligations" means in respect of Priority Lien Documents or Note

Documents:

(1) any principal (including reimbursement obligations with

respect to letters of credit whether or not drawings have been

made thereon), interest (including any interest accruing at

the then applicable rate provided in any applicable Secured

Debt Document after the maturity of the Indebtedness

thereunder or during the existence of an event of default and

any reimbursement obligations therein and interest accruing at

the then applicable rate provided in any applicable Secured

Debt Document after the filing of any petition in bankruptcy,

or the commencement of any insolvency, reorganization or like

proceeding, whether or not a claim for post-filing or

post-petition interest is allowed in such proceeding),

penalties, fees, indemnifications, reimbursements, damages and

other liabilities payable under the Secured Debt Document;

(2) the obligation to pay an amount equal to all damages that a

court shall determine any holder of the applicable Secured

Debt has suffered by reason of a breach by the applicable

obligor thereunder of any obligation, covenant or undertaking

with respect to any applicable Secured Debt Document; and

(3) any net obligations of the obligor under any applicable

Secured Debt Document to any holder of Secured Debt (or any

representative on its behalf) or any Affiliate thereof under

any Hedging Obligations in respect of interest rates of

currency exchange rates.

"Obligor" means Jordan, JII Holdings, JII Finance and each

Subsidiary of JII Holdings that at any time is directly obligated, guarantees

and/or provides collateral security or credit support for any Note Obligations

or Priority Obligations, as the case may be.

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"Officer" means, with respect to any Person, the Chairman of the

Board, the Chief Executive Officer, the President, the Chief Operating Officer,

the Chief Financial Officer, the Treasurer, any assistant Treasurer, the

Controller, the Secretary or any Vice-President of such Person.

"Officers' Certificate" means a certificate signed on behalf of JII

Holdings by two Officers of JII Holdings, one of whom must be the principal

executive officer, the principal financial officer, the treasurer, or the

principal accounting officer of JII Holdings, that meets the requirements of

Section 15.05 of the Indenture.

"Old JII Notes" means each of (1) the 10 3/8% Series B Senior Notes

due 2007 of Jordan (Cusip No. 480695AJ4); and (2) the 10 3/8% Series D Senior

Notes due 2007 of Jordan (Cusip No. 480695AN5).

"Opinion of Counsel" means an opinion from legal counsel who is

reasonably acceptable to the Note Debt Trustee, that meets the requirements of

Section 15.05 of the Indenture. The counsel may be an employee of or counsel to

JII Holdings, the Borrower or the Note Debt Trustee.

"Person" means any individual, corporation, partnership, joint

venture, association, joint-stock company, trust, unincorporated organization,

limited liability company or government or other entity.

"Permitted Debt" means:

(1) the incurrence by JII Holdings and its Restricted Subsidiaries

of additional Indebtedness and letters of credit under Credit

Facilities in an aggregate principal amount at any one time

outstanding under this clause (1) (with letters of credit

being deemed to have a principal amount equal to the maximum

potential liability of JII Holdings and its Restricted

Subsidiaries thereunder and Hedging Obligations being deemed

to have a principal amount equal to the net obligations of JII

Holdings and its Restricted Subsidiaries thereunder from time

to time) not to exceed the greater of:

(a) from the date of the Indenture through August 31, 2004,

$80.0 million, from September 1, 2004 through May 31,

2005, $60.0 million, from June 1, 2005 through February

28, 2006, $40.0 million, and from and after March 1,

2006, $30.0 million, in each case less 75% of the

aggregate amount of all Net Proceeds of Asset Sales

applied by JII Holdings or any of its Restricted

Subsidiaries since the date of the Indenture to repay

any term Indebtedness under a Credit Facility or to

repay any revolving credit Indebtedness under a Credit

Facility pursuant to Section 4.10 of the Indenture; or

(b) $30.0 million;

provided, however, that for purposes of calculating the amounts

available under

<PAGE>

this clause (1), such amounts shall be reduced by the amount of any

Indebtedness of any Receivables Subsidiary outstanding at any time;

(2) the incurrence by JII Holdings and its Restricted Subsidiaries

of the Existing Indebtedness;

(3) the incurrence by the Issuers and the Guarantors of

Indebtedness represented by the Note Debt and the related

Guarantees to be issued on or after the date of the Indenture

and the incurrence by the Issuers and the Guarantors of

Indebtedness represented by the Exchange Securities and the

related Guarantees;

(4) the incurrence by JII Holdings or any of its Restricted

Subsidiaries of Indebtedness represented by Capital Lease

Obligations, mortgage financings or purchase money

obligations, in each case, incurred for the purpose of

financing all or any part of the purchase price or cost of

design, construction, installation or improvement of property,

plant or equipment used in the business of JII Holdings or any

of its Restricted Subsidiaries, in an aggregate principal

amount, including all Permitted Refinancing Indebtedness

incurred to renew, refund, refinance, replace, defease or

discharge any Indebtedness incurred pursuant to this clause

(4), not to exceed $10.0 million at any time outstanding;

(5) Indebtedness of a Subsidiary incurred and outstanding on or

prior to the date on which such Subsidiary was acquired by JII

Holdings (other than Indebtedness incurred in contemplation

of, or in connection with, the transaction or series of

related transactions pursuant to which such Subsidiary became

a Subsidiary of or was otherwise acquired by JII Holdings);

provided, that such Indebtedness is non-recourse to JII

Holdings or any of its Subsidiaries other than the Subsidiary

acquired; provided, further, that for any such Indebtedness

outstanding at any time under this clause (5) in excess of

$10.0 million on the date that such Subsidiary is acquired by

JII Holdings, JII Holdings would have been able to incur $1.00

of additional Indebtedness pursuant to Section 4.09(a) of the

Indenture after giving effect to the incurrence of such

Indebtedness pursuant to this clause (5);

(6) the incurrence by JII Holdings or any of its Restricted

Subsidiaries of Permitted Refinancing Indebtedness in exchange

for, or the net proceeds of which are used to renew, refund,

refinance, replace, defease or discharge any Indebtedness

(other than intercompany Indebtedness) that was permitted by

the Indenture to be incurred under Section 4.09(a) of the

Indenture or clauses (2), (3), (5) or (6) of this definition;

(7) the incurrence by JII Holdings or any of its Restricted

Subsidiaries of intercompany Indebtedness between or among JII

Holdings and any of its Restricted Subsidiaries; provided,

however, that:

<PAGE>

(a) if JII Holdings or any Subsidiary Guarantor is the

obligor on such Indebtedness and the payee is not JII

Holdings or a Subsidiary Guarantor or a Receivables

Subsidiary, such Indebtedness must be expressly

subordinated in right of payment to the prior payment in

full in cash of all Obligations then due with respect to

the Notes, in the case of JII Holdings, or the

Subsidiary Guarantee, in the case of a Subsidiary

Guarantor; and

(b) (i) any subsequent issuance or transfer of Equity

Interests that results in any such Indebtedness being

held by a Person other than JII Holdings or a Restricted

Subsidiary of JII Holdings and (ii) any sale or other

transfer of any such Indebtedness to a Person that is

not either JII Holdings or a Restricted Subsidiary of

JII Holdings, will be deemed, in each case, to

constitute an incurrence of such Indebtedness by JII

Holdings or such Restricted Subsidiary, as the case may

be, that was not permitted by this clause (7);

(8) the issuance by any of JII Holdings' Restricted Subsidiaries

to JII Holdings or to any of its Restricted Subsidiaries of

shares of preferred equity; provided, however, that any:

(a) subsequent issuance or transfer of Equity Interests that

results in any such preferred equity being held by a

Person other than JII Holdings or a Restricted

Subsidiary of JII Holdings; and

(b) sale or other transfer of any such preferred equity to a

Person that is not either JII Holdings or a Restricted

Subsidiary of JII Holdings,

will be deemed, in each case, to constitute an issuance of

such preferred equity by such Restricted Subsidiary that was

not permitted by this clause (8);

(9) the incurrence by JII Holdings or any of its Restricted

Subsidiaries of Hedging Obligations in the ordinary course of

business;

(10) the guarantee by JII Holdings or any of the Subsidiary

Guarantors of Indebtedness of JII Holdings or a Restricted

Subsidiary of JII Holdings that was permitted to be incurred

by another provision of this definition; provided, that if the

Indebtedness being guaranteed is subordinated in right of

payment to or pari passu with the Notes, then the Guarantee

shall be subordinated or pari passu, as applicable, to the

same extent as the Indebtedness guaranteed; provided, further,

that neither JII Holdings nor any Subsidiary Guarantor may

guarantee any Indebtedness pursuant to this clause (10)

incurred under clause (5) of this definition unless JII

Holdings would have been able to incur $1.00 of additional

Indebtedness pursuant

<PAGE>

to Section 4.09(a) of the Indenture after giving effect to the

incurrence of such Indebtedness pursuant to such clause (5) of

this definition;

(11) the incurrence by JII Holdings or any of its Restricted

Subsidiaries of Indebtedness in respect of workers'

compensation claims, self-insurance obligations, bankers'

acceptances, performance and surety bonds in the ordinary

course of business;

(12) the incurrence by JII Holdings or any of its Restricted

Subsidiaries of Indebtedness arising from the honoring by a

bank or other financial institution of a check, draft or

similar instrument inadvertently drawn against insufficient

funds, so long as such Indebtedness is covered within five

business days;

(13) the incurrence by Foreign Subsidiaries of Indebtedness in an

aggregate principal amount at any time outstanding pursuant to

this clause (13), including all Permitted Refinancing

Indebtedness incurred to renew, refund, refinance, replace,

defease or discharge any Indebtedness incurred pursuant to

this clause (13), not to exceed $5.0 million (or the

equivalent thereof, measured at the time of each incurrence,

in applicable foreign currency);

(14) the incurrence by JII Holdings or any of its Restricted

Subsidiaries of additional Indebtedness in an aggregate

principal amount (or accreted value, as applicable) at any

time outstanding, including all Permitted Refinancing

Indebtedness incurred to renew, refund, refinance, replace,

defease or discharge any Indebtedness incurred pursuant to

this clause (14), not to exceed $10.0 million; provided, that

such Indebtedness may not be secured;

(15) Indebtedness of JII Holdings and its Restricted Subsidiaries

in connection with the performance, surety, statutory, appeal

or similar bonds in the ordinary course of business;

(16) Indebtedness of JII Holdings and its Restricted Subsidiaries

in connection with agreements providing for indemnification,

purchase price adjustments and similar obligations in

connection with the sale or disposition of any of their

business, properties or assets to any Person that is not an

Affiliate; and

(17) the incurrence by a Receivables Subsidiary of Indebtedness in

a Qualified Receivables Transaction that is without

credit-related recourse to JII Holdings or to any other

Subsidiary of JII Holdings or their assets (other than such

Receivables Subsidiary and its assets and, as to JII Holdings

or any Subsidiary of JII Holdings, other than pursuant to

representations, warranties, covenants and indemnities

customary for such transactions) and is not guaranteed by any

such Person.

<PAGE>

"Permitted Refinancing Indebtedness" shall have the meaning ascribed

thereto in the Indenture.

"Pledged Collateral" shall mean (1) any tangible property in the

possession of the Priority Lien Collateral Agent (or its agents or bailees) in

which a security interest is perfected by such possession, including, without

limitation, any investment property, cash collateral account, deposit account,

electronic chattel paper or letter of credit rights or (2) any other Collateral

as to which the Priority Lien Collateral Agent (or its agents or bailees) has

control and in which a security interest is perfected by such control. For

purposes hereof, the terms "investment property", "deposit account", "electronic

chattel paper" and "letter of credit rights" shall have the meanings given such

terms in the New York Uniform Commercial Code, as in effect on the date hereof.

"Priority Debt" means:

(1) the principal of and interest on Indebtedness under the Credit

Agreement which, when advanced (or, in the case of any

reimbursement obligation for a letter of credit issued under

the Credit Agreement, when such letter of credit was issued),

either (a) was permitted to be incurred by clause (1) of the

definition of "Permitted Debt" or (b) was advanced (or, in the

case of any such reimbursement obligation, relates to a letter

of credit that was issued) upon delivery to the Note Debt

Trustee, the Collateral Agent and the Credit Agreement Agent

of an Officers' Certificate to the effect that such

Indebtedness was permitted to be incurred by clause (1) of the

definition of "Permitted Debt," including without limitation

any such Indebtedness incurred in any insolvency or

liquidation proceeding to the extent permitted by clause (1)

of the definition of "Permitted Debt;" and

(2) the principal of and interest on Indebtedness under any Credit

Facility other than the Credit Agreement to the extent such

Indebtedness was permitted to be incurred by clause (1) of the

definition of "Permitted Debt" and by the Credit Agreement but

only if on or before the day on which such Indebtedness was

incurred by JII Holdings or any of its Restricted Subsidiaries

such Indebtedness is designated by JII Holdings, in an

Officers' Certificate delivered to the trustee, the Collateral

Agent and the Credit Agreement Agent on or before such date,

as Priority Debt for the purposes of the Indenture;

provided, that no Indebtedness under the Credit Agreement or any other Credit

Facility that, pursuant to an agreement executed by or on behalf of the Lenders,

is contractually subordinated in right of payment to any other Indebtedness

incurred other than pursuant to the Credit Agreement or other Credit Facility by

JII Holdings or any of its Subsidiaries shall constitute Priority Debt.

"Priority Lien" means a Lien granted pursuant to a Priority Lien

Document by JII Holdings or any other Obligor to any holder, or representative

of holders, of Priority Obligations upon any property or assets of JII Holdings

or such other Obligor to secure Priority Obligations.

<PAGE>

"Priority Lien Collateral Agent" means the Credit Agreement Agent

or, after all Priority Obligations in respect of the Credit Agreement have been

Discharged, a single representative of all holders of Priority Liens most

recently designated by JII Holdings in an Officers' Certificate delivered to the

Collateral Agent or the successor of such representative in its capacity as

such.

"Priority Lien Documents" means the Credit Agreement, the Priority

Lien Security Documents and all other agreements governing, securing or relating

to any Priority Obligations (other than this Agreement).

"Priority Lien Security Documents" means one or more security

agreements, pledge agreements, collateral assignments, mortgages, deeds of trust

or other grants or transfers for security executed and delivered by any of JII

Holdings or any other Obligor creating (or purporting to create) a Lien upon

property owned or to be acquired by JII Holdings or any other Obligor in favor

of any holder or holders of Priority Debt, or any trustee, agent or

representative acting for any such holders, as security for any Priority

Obligations in each case, as amended, modified, renewed, restated or replaced,

in whole or in part, from time to time, in accordance with its terms.

"Priority Obligations" means the Priority Debt and all other

Obligations of JII LLC or any other Obligor under the Priority Lien Documents.

"Receivables Subsidiary" shall have the meaning ascribed thereto in

the Indenture.

"Restricted Subsidiary" of a Person means any Subsidiary of the

referent Person that is not an Unrestricted Subsidiary.

"Secured Debt" means Note Debt and Priority Debt.

"Secured Debt Document" means the Note Documents and the Priority

Lien Documents.

"security documents" means one or more security agreements, pledge

agreements, collateral assignments, mortgages, collateral agency agreements,

control agreements, deeds of trust or other grants or transfers for security

executed and delivered by JII Holdings or any other Obligor creating (or

purporting to create) a Note Lien upon Collateral in favor of the Collateral

Agent as security for any Note Obligations, in each case, as amended, modified,

renewed, restated or replaced, in whole or in part, from time to time, in

accordance with their terms.

"Subsidiary" shall have the meaning ascribed thereto in the

Indenture.

"Subsidiary Guarantee" means the guarantee of the Notes by a

Subsidiary Guarantor executed pursuant to the provisions of the Indenture.

"Subsidiary Guarantors" means:

<PAGE>

(1) JII Holdings' direct and indirect Domestic Restricted

Subsidiaries existing on the Guarantee Date, other than the

Immaterial Subsidiaries, Receivables Subsidiaries and JII

Finance; and

(2) any other Subsidiary that executes a Subsidiary Guarantee in

accordance with the provisions of the Indenture.

"Unasserted Contingent Obligations" means, at any time, Obligations

for taxes, costs, indemnifications, reimbursements, damages and other

liabilities in respect of which no claim or demand for payment has been made at

such time (except (i) the principal of and interest and premium (if any) on, and

fees relating to, any Indebtedness, (ii) contingent obligations to reimburse the

issuer of an outstanding letter of credit for amounts that may be drawn or paid

thereunder and (iii) any such contingent claims or demands as to which the

Priority Lien Collateral Agent or any holder of Priority Obligations has then

notified JII Holdings).

"Unrestricted Subsidiary" shall have the meaning ascribed thereto in

the Indenture.

ARTICLE 2.

REPRESENTATIONS AND WARRANTIES

Section 2.1 Representations and Warranties of Collateral Agent. The

Collateral Agent represents, warrants, acknowledges and agrees on behalf of

itself and any holders of the Note Obligations on the date hereof that (1) it is

authorized to enter into this Agreement on behalf of itself and each holder of

Note Obligations, (2) it has the corporate power and authority and the legal

right to execute and deliver and perform its obligations under this Agreement

and has taken all necessary corporate action to authorize its execution,

delivery and performance of this Agreement, and (3) this Agreement constitutes a

legal, valid and binding obligation of the Collateral Agent.

Section 2.2 Representations and Warranties of Administrative Agent. The

Administrative Agent represents, warrants, acknowledges and agrees on behalf of

itself and the Lenders under the Credit Agreement on the date hereof that (1) it

is authorized to enter into this Agreement on behalf of itself and such Lenders,

(2) it has the corporate power and authority and the legal right to execute and

deliver and perform its obligations under this Agreement and has taken all

necessary corporate action to authorize its execution, delivery and performance

of this Agreement, and (3) this Agreement constitutes a legal, valid and binding

obligation of the Administrative Agent.

ARTICLE 3.

INTERCREDITOR RELATIONS

Section 3.1 Agreement for the Benefit of Holders of Priority Liens. The

Note Debt Trustee and the Collateral Agent agree, and each Holder of Notes by

accepting a Note agrees, that (1) the Note Liens are, to the extent and in the

manner provided in this Article 3, junior and subordinate in ranking to all

Priority Liens, whenever granted or attaching, upon any present or future

Collateral and (2) the Priority Liens, whenever granted or attaching, upon any

present or future Collateral, will be prior and senior to the Note Liens.

<PAGE>

Section 3.2 Ranking. Notwithstanding (a) anything to the contrary

contained in the Security Documents, (b) the time of incurrence of any Secured

Debt, (c) the time, order or method of attachment of the Note Liens or the

Priority Liens, (d) the time or order of filing or recording of financing

statements or other documents filed or recorded to perfect any Lien upon any

Collateral, (e) the time of taking possession or control over any Collateral,

(f) the rules for determining priority under the Uniform Commercial Code or any

other law governing relative priorities of secured creditors, (g) that any

Priority Lien may not have been perfected, (h) that any Priority Lien may be or

have become subordinated, by equitable subordination or otherwise, to any other

Lien, or (i) any other circumstance of any kind or nature whatsoever, whether

similar or dissimilar to any of the foregoing, the Note Liens will in all

circumstances be junior and subordinate in ranking to all Priority Liens,

whenever granted, upon any present or future Collateral, and the Priority Liens,

whenever granted, upon any present or future Collateral to the extent the

Priority Liens secure the Priority Obligations will be prior and superior to the

Note Liens.

Section 3.3 Collateral Sharing with Additional Notes. Any Additional Notes

issued under the Indenture in accordance with the requirements set forth in the

definition of "Note Debt" and permitted to be incurred under the Credit

Facilities and Section 4.09 of the Indenture will be treated as Note Obligations

for all purposes under the Indenture and the Security Documents.

Section 3.4 Restriction on Enforcement of Note Liens.

(a) So long as any Priority Obligations exist that have not been

Discharged, the holders of Priority Liens will have the exclusive right to

enforce, foreclose, collect or realize upon any Collateral. Subject to Section

3.14 and the second set of clauses (1) through (4) below, the Note Debt Trustee

and Holders of Notes will not authorize or instruct the Collateral Agent, and

the Collateral Agent will not, and will not authorize or direct any Person

acting for it, the Note Debt Trustee or any holder of Note Obligations, to

exercise any right or remedy with respect to any Collateral (including any right

of set-off) or take any action to enforce, collect or realize upon any

Collateral, including without limitation, any right, remedy or action to:

(1) take possession of or control over any Collateral;

(2) exercise any collection rights in respect of any

Collateral or retain any proceeds of accounts and other obligations

receivable paid to it directly by any account debtor;

(3) exercise any right of set-off against any Collateral;

(4) foreclose upon any Collateral or take or accept any

transfer of title in lieu of foreclosure upon any Collateral;

(5) enforce any claim to the proceeds of insurance upon any

Collateral;

(6) deliver any notice, claim or demand relating to the

Collateral to any Person (including any securities intermediary,

depositary bank or landlord) in the

<PAGE>

possession or control of any Collateral or acting as bailee, custodian or

agent for any holder of Priority Liens in respect of any Collateral;

(7) otherwise enforce any remedy available upon default for

the enforcement of any Lien upon the Collateral;

(8) deliver any notice or commence any proceeding for any of

the foregoing purposes; or

(9) seek relief in any Insolvency or Liquidation Proceeding

permitting it to do any of the foregoing;

except that, in any event, any such right or remedy may be exercised and any

such action may be taken, authorized or instructed:

(1) without any conditi

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