Exhibit 10.35
Execution Copy

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SECURITY AGREEMENT
 
By
 
CONSTAR INTERNATIONAL INC.
 
and
 
THE DOMESTIC SUBSIDIARIES PARTY HERETO,
as Grantors
 
and
 
CITICORP NORTH AMERICA, INC.,
as Collateral Agent
 

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Dated as of November 20, 2002
 

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TABLE OF CONTENTS
 

         
Page

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ARTICLE I
DEFINITIONS
SECTION 1.01.
  
Uniform Commercial Code Defined Terms
  
2
SECTION 1.02.
  
Credit Agreement Defined Terms
  
3
SECTION 1.03.
  
Definition of Certain Terms Used Herein
  
3
SECTION 1.04.
  
Rules of Construction
  
10
SECTION 1.05.
  
Resolution of Drafting Ambiguities
  
11
ARTICLE II
SECURITY INTEREST
SECTION 2.01.
  
Security Interest
  
11
SECTION 2.02.
  
No Assumption of Liability
  
11
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01.
  
Title and Authority
  
12
SECTION 3.02.
  
Filings
  
12
SECTION 3.03.
  
Validity of Security Interest
  
13
SECTION 3.04.
  
Limitations on and Absence of Other Liens
  
13
SECTION 3.05.
  
Other Actions
  
13
SECTION 3.06.
  
Chief Executive Office; Change of Name; Jurisdiction of Organization
  
17
SECTION 3.07.
  
Location of Equipment
  
17
SECTION 3.08.
  
Condition and Maintenance of Equipment
  
17
SECTION 3.09.
  
Corporate Names; Prior Transactions
  
17
SECTION 3.10.
  
No Claims
  
17
SECTION 3.11.
  
No Conflicts, Consents, etc
  
18
ARTICLE IV
COVENANTS
SECTION 4.01.
  
Change of Name; Location of Collateral; Records; Place of Business
  
18

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SECTION 4.02.
  
Protection of Security
  
19
SECTION 4.03.
  
Further Assurances
  
19
SECTION 4.04.
  
Inspection and Verification
  
20
SECTION 4.05.
  
Taxes; Encumbrances
  
20
SECTION 4.06.
  
Assignment of Security Interest
  
21
SECTION 4.07.
  
Continuing Obligations of the Grantors
  
21
SECTION 4.08.
  
Use and Disposition of Collateral
  
21
SECTION 4.09.
  
Limitation on Modification of Accounts
  
21
SECTION 4.10.
  
Insurance
  
22
SECTION 4.11.
  
Legend
  
22
SECTION 4.12.
  
Certain Covenants and Provisions Regarding Patent, Trademark and Copyright
Collateral
  
22
ARTICLE V
REMEDIES
SECTION 5.01.
  
Remedies upon Default
  
25
SECTION 5.02.
  
Application of Proceeds
  
26
SECTION 5.03.
  
Grant of License to Use Intellectual Property
  
27
ARTICLE VI
COLLATERAL ACCOUNT
SECTION 6.01.
  
Establishment Of Collateral Account
  
27
SECTION 6.02.
  
Proceeds of Destruction, Taking and Collateral Dispositions
  
28
SECTION 6.03.
  
Application of Proceeds
  
29
ARTICLE VII
MISCELLANEOUS
SECTION 7.01.
  
Notices
  
29
SECTION 7.02.
  
Security Interest Absolute
  
29
SECTION 7.03.
  
Survival of Agreement
  
30
SECTION 7.04.
  
Binding Effect
  
30
SECTION 7.05.
  
Successors and Assigns
  
30
SECTION 7.06.
  
Collateral Sharing Agreement
  
30
SECTION 7.07.
  
GOVERNING LAW
  
30

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SECTION 7.08.
  
Waivers; Amendment; Several Agreement
  
31
SECTION 7.09.
  
WAIVER OF JURY TRIAL
  
31
SECTION 7.10.
  
Severability
  
31
SECTION 7.11.
  
Counterparts
  
32
SECTION 7.12.
  
Headings
  
32
SECTION 7.13.
  
Jurisdiction; Consent to Service of Process
  
32
SECTION 7.14.
  
Termination
  
33
SECTION 7.15.
  
Additional Grantors
  
33
SCHEDULES
Schedule I
  
Domestic Subsidiaries
    
Schedule II
  
Commercial Tort Claims
    
Schedule III
  
Prior Liens
    
Schedule IV
  
Required Consents
    
Schedule V
  
Violations of Proceedings
    
Schedule VI
  
Separation Agreements
    
ANNEXES
Annex I
  
Form of Joinder Agreement
    
Annex II
  
Form of Perfection Certificate
    

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SECURITY AGREEMENT
 
SECURITY AGREEMENT (as amended, amended and restated, supplemented or otherwise
modified from time to time, this “Agreement”) dated as of November 20, 2002
among CONSTAR INTERNATIONAL INC., a Delaware corporation (the “Borrower”), each
Domestic Subsidiary of the Borrower listed on Schedule I hereto (collectively,
together with each Domestic Subsidiary that becomes a party hereto pursuant to
Section 7.15 of this Agreement, the “Subsidiary Guarantors” and, together with
Borrower, the “Grantors”) and CITICORP NORTH AMERICA, INC., as collateral agent
(in such capacity, and together with any successors in such capacity, the
“Collateral Agent”) for the Secured Parties (as defined herein).
 
R E C I T A L S
 
A. The Borrower, Citicorp North America, Inc., as administrative agent (in such
capacity and together with any successors in such capacity, the “Administrative
Agent”) for the Lenders (as defined herein), JP Morgan Chase Bank, as
documentation agent (in such capacity and together with any successors in such
capacity, the “Documentation Agent”), SunTrust Bank, as co-documentation agent
(in such capacity and together with any successors in such capacity, the
“Co-Documentation Agent”), Deutsche Bank Securities Inc., as syndication agent
(in such capacity, and together with any successors in such capacity, the
“Syndication Agent”), Salomon Smith Barney Inc. and Deutsche Bank Securities
Inc., as joint lead arrangers and joint bookrunners (in such capacities, and
together with any successors in such capacities, the “Arrangers”), and the
lending institutions from time to time party thereto (together with the
Administrative Agent, the Documentation Agent and the Arranger in their capacity
as a lender, the “Lenders”) have, in connection with the execution and delivery
of this Agreement, entered into that certain credit agreement, dated as of
November 20, 2002 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Credit Agreement,” which term shall also
include and refer to any successor or replacement), providing for the making of
Loans to the Borrower and the issuance of and participations in Letters of
Credit for the account of the Borrower, pursuant to, and upon the terms and
subject to the conditions specified in, the Credit Agreement.
 
B. Each Subsidiary Guarantor has, pursuant to the Guarantee Agreement, dated as
of November 20, 2002, among other things, unconditionally guaranteed the
obligations of the Borrower under the Credit Agreement.
 
C. The Borrower and each Subsidiary Guarantor will receive substantial benefits
from the execution, delivery and performance of the obligations under the Credit
Agreement and is, therefore, willing to enter into this Agreement.

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D. It is contemplated that, to the extent permitted by the Credit Agreement, one
or more of the Grantors may enter into one or more Hedging Agreements with one
or more of the Lenders or their respective Affiliates (collectively, the
“Hedging Exchangers”) fixing interest rates, commodity prices or foreign
currency rates pursuant to the Credit Agreement.
 
E. It is contemplated that, to the extent permitted by the Credit Agreement, one
or more of the Grantors may from time to time enter into one or more Cash
Management Agreements (as hereinafter defined) with one or more Lenders or their
respective Affiliates (collectively, the “Cash Management Exchangers”).
 
F. Each Grantor is or, as to Collateral (as hereinafter defined) acquired by
such Grantor after the date hereof will be, the legal and/or beneficial owner of
the Collateral pledged by it hereunder.
 
G. Contemporaneously with the execution and delivery of this Agreement, the
Borrower and the Subsidiary Guarantors have executed and delivered to the
Collateral Agent a Pledge Agreement (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Pledge Agreement”).
 
H. This Agreement is given by each Grantor in favor of the Collateral Agent for
the benefit of the Secured Parties (as hereinafter defined) to secure the
payment and performance of all of the Obligations (as hereinafter defined).
 
NOW THEREFORE, in consideration of the foregoing and other benefits accruing
each Grantor, the receipt and sufficiency of which are hereby acknowledged, each
Grantor hereby makes the following representations and warranties to the
Collateral Agent for the benefit of the Secured Parties (and each of their
respective successors and assigns), as follows:
 
ARTICLE I
 
DEFINITIONS
 
SECTION 1.01. Uniform Commercial Code Defined Terms. Unless otherwise defined
herein, terms used herein that are defined in the UCC shall have the meanings
assigned to them in the UCC, including the following which are capitalized
herein:
 
“Accounts”; “Bank”; “Certificates of Title”; “Chattel Paper”; “Commercial Tort
Claim”; “Commodity Account”; “Commodity Contract”; “Commodity Customer”;
“Commodity Intermediary”; “Deposit Accounts”; “Documents”; “Electronic Chattel
Paper”; “Entitlement Holder”; “Entitlement Order”; “Equipment”; “Financial
Asset”; “Fixtures”; “Goods”;

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“Instruments” (as defined in Article 9 rather than Article 3); “Inventory”;
“Investment Property”; “Letter-of-Credit Rights”; “Letters of Credit”;
“Securities”; “Securities Account”; “Securities Intermediary”; “Security
Entitlement”; “Supporting Obligations”; and “Tangible Chattel Paper”.
 
SECTION 1.02. Credit Agreement Defined Terms. Capitalized terms used but not
otherwise defined herein that are defined in the Credit Agreement shall have the
meanings given to them in the Credit Agreement, including the following:
 
“Affiliate”, “Agents”; “Asset Sale”; “Business Day”; “Capital Lease
Obligations”; “Constar IPO”; “Domestic Subsidiary”; “Equity Interests”; “Event
of Default”; “Financial Officer”; “GAAP”; “Governmental Authority”; “Guarantee
Agreement”; “Hedging Agreements”; “Indebtedness”; “Loan Documents”; “Loans”;
“Lien”; “Net Proceeds”; “Non-U.S. Subsidiary”; “Notes”; “Permitted Investments”;
“Permitted Liens”; “Person”; “Security Documents”; and “Subsidiary”.
 
SECTION 1.03. Definition of Certain Terms Used Herein. As used herein, the
following terms shall have the following meanings:
 
“Account Debtor” shall mean any Person who is or who may become obligated to any
Grantor under, with respect to or on account of an Account.
 
“Accounts Receivable” shall mean all Accounts and all right, title and interest
in any returned goods, together with all rights, titles, securities and
guarantees with respect thereto, including any rights to stoppage in transit,
replevin, reclamation and resales, and all related security interests, liens and
pledges, whether voluntary or involuntary, in each case whether now existing or
owned or hereafter arising or acquired.
 
“Arrangers” shall have the meaning assigned to such term in the Recitals of this
Agreement.
 
“Books and Records” shall mean all instruments, files, records, ledger sheets
and documents evidencing, covering or relating to any of the Collateral.
 
“Borrower” shall have the meaning assigned to such term in the Recitals of this
Agreement.
 
“Cash Management Agreements” means agreements of the Borrower or any of its
Domestic Subsidiaries arising from treasury, depository and cash management
services provided by one or more of the Agents or the Lenders.

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“Cash Management Exchangers” shall have the meaning assigned to such term in the
Recitals of this Agreement.
 
“Charges” shall mean any and all property and other taxes, assessments and
special assessments, levies, fees and all governmental charges imposed upon or
assessed against, and all claims (including, without limitation, landlords’,
carriers’, mechanics’, maritime, workmen’s, repairmen’s, laborers’,
materialmen’s, suppliers’ and warehousemen’s Liens and other claims arising by
operation of law) against, all or any portion of the Collateral.
 
“Collateral” shall mean all of the following, in each case, whether now owned or
hereafter acquired:
 
(a) Accounts Receivable;
 
(b) Books and Records;
 
(c) cash and Deposit Accounts;
 
(d) Chattel Paper;
 
(e) Collateral Account and Collateral Account Funds;
 
(f) Commercial Tort Claims described on Schedule II annexed hereto;
 
(g) Documents;
 
(h) Equipment;
 
(i) Fixtures;
 
(j) General Intangibles;
 
(k) Goods;
 
(l) Instruments;
 
(m) Inventory;
 
(n) Investment Property;
 
(o) Letter-of-Credit Rights;
 
(p) Letters of Credit;

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(q) Separation Agreement Rights;
 
(r) Supporting Obligations;
 
(s) to the extent not covered by clauses (a) through (r) of this definition, all
other personal property, whether tangible or intangible; and
 
(t) Proceeds of any and all of the foregoing;
 
provided that “Collateral” for the purposes of this Agreement shall not include
any Collateral as defined in the Pledge Agreement.
 
“Collateral Account” shall mean that collateral account established pursuant to
Section 6.01 of this Agreement.
 
“Collateral Account Funds” shall mean, collectively, the following from time to
time on deposit in the Collateral Account: all funds, investments (including,
without limitation, all Permitted Investments) and all certificates and
instruments from time to time representing or evidencing such investments; all
notes, certificates of deposit, checks and other instruments from time to time
hereafter delivered to or otherwise possessed by the Collateral Agent for or on
behalf of any Grantor in substitution for, or in addition to, any or all of the
Collateral; and all interest, dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the items constituting Collateral.
 
“Collateral Material Adverse Effect” shall mean, as of any date of determination
and whether individually or in the aggregate, (a) any event, circumstance,
occurrence or condition which has caused or resulted in (or would reasonably be
expected to cause or result in) a material adverse effect on the business or
operations or prospects as presently conducted; (b) any event, circumstance,
occurrence or condition which has caused or resulted in (or would reasonably be
expected to cause or result in) a material adverse effect on the value or
utility of the Collateral taken as a whole; or (c) any event, circumstance,
occurrence or condition which has caused or resulted in (or would reasonably be
expected to cause or result in) a material adverse effect on the legality,
priority or enforceability of the Lien created by this Agreement or the rights
and remedies of the Collateral Agent hereunder.
 
“Collateral Sharing Agreement” shall mean the Collateral Sharing Agreement,
dated as of November     , 2002, between the Collateral Agent and the Borrower
for the benefit of the Secured Parties.
 
“Control” shall mean (i) in the case of each Deposit Account, “control,” as such
term is defined in Section 9-104 of the UCC, (ii) in the case of any Security
Entitlement, “control,”

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-6-
 
as such term is defined in Section 8-106 of the UCC, and (iii) in the case of
any Commodity Contract, “control,” as such term is defined in Section 9-106 of
the UCC.
 
“Control Agreement” shall mean an agreement in form and substance acceptable to
the Collateral Agent.
 
“Copyright License” shall mean each written agreement, now or hereafter in
effect, granting any right to any third party under any Copyright now or
hereafter owned by any Grantor or which such Grantor otherwise has the right to
license, or granting any right to such Grantor under any Copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
 
“Copyrights” shall mean all of the following, in each case whether now owned or
hereafter acquired by any Grantor: (a) all copyright rights in any work subject
to the copyright laws of the United States or any other country, whether as
author, assignee, transferee or otherwise, and (b) all registrations and
applications for registration of any such copyright in the United States or any
other country, including registrations, recordings, supplemental registrations
and pending applications for registration in the United States Copyright Office
or any other country, including those listed on Schedule 15(b) of the Perfection
Certificate.
 
“Credit Agreement” shall have the meaning assigned to such term in the Recitals
of this Agreement.
 
“Destruction” means any and all damage to, or loss or destruction of, or loss of
title to, all or any portion of the Collateral.
 
“Documentation Agent” shall have the meaning assigned to such term in the
Recitals of this Agreement.
 
“General Intangibles” shall mean, collectively, all “general intangibles,” as
such term is defined in the UCC, and in any event shall include, without
limitation, all choses in action and causes of action and all other intangible
personal property of any Grantor of every kind and nature now owned or hereafter
acquired by any Grantor, including all rights and interests in partnerships,
limited partnerships, limited liability companies and other unincorporated
entities, corporate or other business records, indemnification claims, contract
rights (including rights under leases, whether entered into as lessor or lessee,
Hedging Agreements and other agreements), Intellectual Property, goodwill,
registrations, franchises and tax refund claims.
 
“Hedging Exchangers” shall have the meaning assigned to such term in the
Recitals of this Agreement.

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“Intellectual Property” shall mean all intellectual and similar property of any
Grantor of every kind and nature now owned or hereafter acquired by any Grantor,
including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade
secrets, confidential or proprietary technical and business information,
know-how, show-how or other data or information, software and databases and all
embodiments or fixations thereof and related documentation, registrations and
franchises, and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing.
 
“Lenders” shall have the meaning assigned to such term in the Recitals of this
Agreement.
 
“License” shall mean any Patent License, Trademark License, Copyright License or
other license or sublicense to which any Grantor is a party, including, without
limitation, those listed on Schedules 15(a) and 15(b) of the Perfection
Certificate (other than those license agreements in existence on the date hereof
and listed on Schedules 15(a) and 15(b) of the Perfection Certificate and those
license agreements entered into after the date hereof, which by their terms
prohibit assignment or a grant of a security interest by such Grantor as
licensee thereunder except to the extent such prohibitions are rendered
ineffective by the provisions of Sections 9-406, 9-407 and 9-408 of the UCC).
 
“Obligations” shall mean all obligations (whether or not constituting future
advances, obligatory or otherwise) of the Borrower and any and all of the
Subsidiary Guarantors from time to time arising under or in respect of this
Agreement, the Credit Agreement, the Hedging Agreements, the Cash Management
Agreements and the other Loan Documents (including, without limitation, the
obligations to pay principal, interest and all other charges, fees, expenses,
commissions, reimbursements, premiums, indemnities and other payments related to
or in respect of the obligations contained in this Agreement, the Credit
Agreement, the Hedging Agreements, the Cash Management Agreements and the other
Loan Documents), in each case whether (i) such obligations are direct or
indirect, secured or unsecured, joint or several, absolute or contingent, due or
to become due whether at stated maturity, by acceleration or otherwise, (ii)
arising in the regular course of business or otherwise, (iii) for payment or
performance and/or (iv) now existing or hereafter arising (including, without
limitation, interest and other obligations arising or accruing after the
commencement of any bankruptcy, insolvency, reorganization or similar proceeding
with respect to any Grantor or any other Person, or which would have arisen or
accrued but for the commencement of such proceeding, even if such obligation or
the claim therefor is not enforceable or allowable in such proceeding).
 
“Operative Agreement” shall mean (i) in the case of any limited liability
company or partnership or other non-corporate entity, any membership or
partnership agreement or other organizational agreement or document thereof and
(ii) in the case of any corporation, any charter or certificate of incorporation
and by-laws thereof.

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-8-
 
“Patent License” shall mean any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention on
which a Patent, now or hereafter owned by any Grantor or which any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a Patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.
 
“Patents” shall mean all of the following now owned or hereafter acquired by any
Grantor: (a) all letters patent of the United States or any other country, all
registrations and recordings thereof, and all applications for letters patent of
the United States or any other country, including registrations, recordings and
pending applications in the United States Patent and Trademark Office or any
other country, including those listed on Schedule 15(a) of the Perfection
Certificate, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
 
“Perfection Certificate” shall mean a certificate substantially in the form of
Annex II hereto, completed and supplemented with the schedules and attachments
contemplated thereby, and duly executed by the Grantors.
 
“Pledge Agreement” shall have the meaning assigned to such term in the Recitals
of this Agreement.
 
“Prior Liens” shall mean, collectively, the Liens identified in Schedule III
annexed hereto relating to those items of Collateral identified in such
Schedule.
 
“Proceeds” shall mean, collectively, all “proceeds,” as such term is defined in
the UCC, and in any event shall include, without limitation, any consideration
received from the sale, exchange, license, lease or other disposition of
ownership or control of any asset or property that constitutes Collateral, any
value received as a consequence of the possession of any Collateral and any
payment received from any insurer or other Person or entity as a result of the
destruction, loss, theft, damage or other involuntary conversion of whatever
nature of any asset or property that constitutes Collateral, and shall include
(a) all cash and negotiable instruments received by or held on behalf of the
Collateral Agent, (b) any claim of any Grantor against any third party for (and
the right to sue and recover for and the rights to damages or profits due or
accrued arising out of or in connection with) (i) past, present or future
infringement of any Patent now or hereafter owned by any Grantor, or licensed
under a Patent License, (ii) past, present or future infringement or dilution of
any Trademark now or hereafter owned by any Grantor or licensed under a
Trademark License or injury to the goodwill associated with or symbolized by any
Trademark now or hereafter owned by any Grantor, (iii) past, present or future
breach of any License and (iv) past, present or future infringement of any
Copyright now or hereafter owned by any Grantor or licensed under a Copyright
License and

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-9-
 
(c) any and all other amounts from time to time paid or payable under or in
connection with any of the Collateral.
 
“Requirements of Law” shall mean, collectively, any and all requirements of any
Governmental Authority including, without limitation, any and all laws, rules,
regulations, or similar statutes or case law.
 
“Secured Parties” shall mean, collectively, the Collateral Agent, the
Administrative Agent, the Syndication Agent, the Arrangers, the Documentation
Agent, the Co-Documentation Agent, the Lenders, the Hedging Exchangers and the
Cash Management Exchangers.
 
“Security Interest” shall have the meaning assigned to such term in Section
2.01.
 
“Separation Agreement Rights” shall mean, with respect to each Grantor,
collectively, all of such Grantor’s rights, title and interest in, to and under
the Separation Agreements including, without limitation, (i) all rights and
remedies relating to monetary damages, including indemnification rights and
remedies, and claims for damages or other relief pursuant to or in respect of
the Separation Agreements, (ii) all rights and remedies relating to monetary
damages, including indemnification rights and remedies, and claims for monetary
damages under or in respect of the agreements, documents and instruments
referred to in the Separation Agreements or related thereto and (iii) all
proceeds, collections, recoveries and rights of subrogation with respect to the
foregoing.
 
“Separation Agreements” means all agreements and documentation to be entered
into by Crown Cork & Seal Company, Inc., a Pennsylvania corporation (“CCSC”), or
its Subsidiaries or Affiliates, on the one hand, and the Borrower or its
Subsidiaries or Affiliates, on the other hand, in connection with the Constar
IPO and the separation of the Borrower from CCSC, including, without limitation,
the agreements listed in Schedule VI annexed hereto.
 
“Subsidiary Guarantors” shall have the meaning assigned to such term in the
Recitals of this Agreement.
 
“Syndication Agent” shall have the meaning assigned to such term in the Recitals
of this Agreement.
 
“Taking” means any taking of the Collateral or any portion thereof, in or by
condemnation or other eminent domain proceedings pursuant to any law, general or
special, or by reason of the temporary requisition or use of the Collateral or
any portion thereof, by any Governmental Authority.
 
“Trademark License” shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to use any Trademark now or
hereafter owned by any

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-10-
 
Grantor or that any Grantor otherwise has the right to license, or granting to
any Grantor any right to use any Trademark now or hereafter owned by any third
party, and all rights of any Grantor under any such agreement.
 
“Trademarks” shall mean all of the following now owned or hereafter acquired by
any Grantor: (a) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, trade
dress, logos, other source or business identifiers, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all registration and recording
applications filed in connection therewith, including registrations and
registration applications in the United States Patent and Trademark Office, any
State of the United States or any similar offices in any other country or any
political subdivision thereof, and all extensions or renewals thereof, including
those listed on Schedule 15(a) of the Perfection Certificate, (b) all goodwill
associated therewith or symbolized thereby and (c) all other assets, rights and
interests that uniquely reflect or embody such goodwill.
 
“UCC” shall mean the Uniform Commercial Code as in effect on the date hereof in
the State of New York; provided, however, that if by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of the
Collateral Agent’s and the Secured Parties’ security interest in any item or
portion of the Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the State of New York, the term “UCC” shall
mean the Uniform Commercial Code as in effect on the date hereof in such other
jurisdiction for purposes of the provisions hereof relating to such attachment,
perfection or priority and for purposes of definitions relating to such
provisions.
 
SECTION 1.04. Rules of Construction. Unless the context otherwise requires:
 
(1) a term has the meaning assigned to it;
 
(2) an accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;
 
(3) “or” is not exclusive;
 
(4) words in the singular include the plural, and in the plural include the
singular;
 
(5) provisions apply to successive events and transactions;
 
references to “subject to the terms of the Collateral Sharing Agreement” or
words of similar meaning shall have effect if the Collateral Sharing Agreement
is then in effect.

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SECTION 1.05. Resolution of Drafting Ambiguities. Each Grantor acknowledges and
agrees that it was represented by counsel in connection with the execution and
delivery hereof, that it and its counsel reviewed and participated in the
preparation and negotiation hereof and that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party (i.e., the
Collateral Agent) shall not be employed in the interpretation hereof.
 
ARTICLE II
 
SECURITY INTEREST
 
SECTION 2.01. Security Interest. (a) As security for the payment or performance,
as the case may be, in full of the Obligations, each Grantor hereby bargains,
sells, conveys, assigns, sets over, mortgages, pledges, hypothecates and
transfers to the Collateral Agent and its successor and assigns, for the ratable
benefit of the Secured Parties, and hereby grants to the Collateral Agent for
the ratable benefit of the Secured Parties, a first priority security interest
in, all of such Grantor’s right, title and interest in, to and under the
Collateral. The Liens granted hereunder to secure the Obligations are referred
to herein as the “Security Interest”.
 
(b) Without limiting the foregoing, the Collateral Agent is hereby authorized to
file one or more financing statements (including fixture filings), continuation
statements, filings with the United States Patent and Trademark Office or United
States Copyright Office (or any successor office or any similar office in any
other country) or other documents for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each
Grantor, without the signature of any Grantor, and naming any Grantor or the
Grantors as debtors and the Collateral Agent as secured party.
 
SECTION 2.02. No Assumption of Liability. The Security Interest is granted as
security only and shall not subject the Collateral Agent or any other Secured
Party to, or in any way alter or modify, any obligation or liability of any
Grantor with respect to or arising out of the Collateral.
 
ARTICLE III
 
REPRESENTATIONS AND WARRANTIES
 
The Grantors jointly and severally represent and warrant to the Collateral Agent
and the Secured Parties that:

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SECTION 3.01. Title and Authority. Each Grantor has good and valid rights in and
title to the Collateral with respect to which it has purported to grant a
Security Interest hereunder and has full power and authority to grant to the
Collateral Agent the Security Interest in such Collateral pursuant hereto and to
execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other Person other than
any consent or approval which has been obtained.
 
SECTION 3.02. Filings. (a) All information set forth herein and in the
Perfection Certificate, including the Schedules annexed hereto and thereto, has
been duly prepared, completed and executed and the information set forth herein
and therein is correct and complete in all material respects. The Collateral
described on the Schedules annexed to the Perfection Certificate constitutes all
of the property of such type of Collateral owned or held by the Grantors. Fully
completed UCC financing statements (including fixture filings, as applicable) or
other appropriate filings, recordings or registrations containing a description
of the Collateral have been delivered to the Collateral Agent for filing in each
governmental, municipal or other office specified in Schedule 7 to the
Perfection Certificate, which are all the filings, recordings and registrations
that are necessary to publish notice of and protect the validity of and to
establish a legal, valid and perfected security interest in favor of the
Collateral Agent for the benefit of the Secured Parties in respect of all
Collateral in which the Security Interest may be perfected by filing, recording
or registration in the United States (or any political subdivision thereof) and
its territories and possessions, and, no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing
of continuation statements.
 
(b) Each Grantor represents and warrants that fully executed security agreements
in the form hereof and containing a description of all Collateral consisting of
Intellectual Property with respect to United States Patents and United States
registered Trademarks (and Patents and Trademarks for which United States
registration applications are pending) and with respect to United States
registered Copyrights have been delivered to the Collateral Agent for recording
by the United States Patent and Trademark Office and the United States Copyright
Office pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the
regulations thereunder, as applicable. Other than the filing of such security
agreements with the United States Patent and Trademark Office and the United
States Copyright Office (as applicable) and the filing of appropriate financing
statements in the relevant government offices pursuant to the UCC, no further or
subsequent filing, refiling, recording, prerecording, registration or
preregistration is necessary to establish a legal, valid and perfected security
interest in favor of the Collateral Agent for its benefit and the benefit of the
other Secured Parties in respect of all such Collateral (other than such actions
as are necessary to perfect the Security Interest with respect to any Collateral
consisting of Patents, Trademarks and Copyrights (or registration or application
for registration thereof) acquired or developed after the date hereof).

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SECTION 3.03. Validity of Security Interest. The Security Interest constitutes
(a) a legal and valid security interest in all the Collateral securing the
payment and performance of the Obligations, (b) subject to the filings described
in Section 3.02 above, a perfected security interest in all Collateral in which
a security interest may be perfected by filing, recording or registering a
financing statement or analogous document in the United States (or any political
subdivision thereof) and its territories and possessions pursuant to the UCC or
other applicable law in such jurisdictions, (c) a security interest that shall
be perfected in all Collateral in which a security interest may be perfected
upon the receipt and recording of this Agreement with the United States Patent
and Trademark Office and the United States Copyright Office, as applicable and
(d) a perfected Security Interest in all Collateral in which a security interest
may be perfected by possession or control by the Collateral Agent, in each case,
to the extent required pursuant to the provisions hereof. The Security Interest
is and shall be prior to any other Lien on any of the Collateral, other than
Prior Liens and Permitted Liens of the type described in clauses (iii), (v),
(vi), (xi) and (xiv) of the definition thereof.
 
SECTION 3.04. Limitations on and Absence of Other Liens. The Collateral is owned
by the Grantors free and clear of any Lien, except for Permitted Liens. The
Grantors have not filed or consented to the filing of (a) any financing
statement or analogous document under the UCC or any other applicable laws
covering any Collateral which has not been released, (b) any assignment in which
any Grantor assigns any Collateral or any security agreement or similar
instrument covering any Collateral with the United States Patent and Trademark
Office or the United States Copyright Office or (c) any assignment in which any
Grantor assigns any Collateral or any security agreement or similar instrument
covering any Collateral with any foreign governmental, municipal or other
office, which financing statement or analogous document, assignment, security
agreement or similar instrument is still in effect, except, in each case, for
Permitted Liens.
 
SECTION 3.05. Other Actions. In order to further ensure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
the Collateral Agent’s security interest in the Collateral, each Grantor agrees,
in each case at such Grantor’s own expense, to take the following actions with
respect to the following Collateral:
 
(a) Instruments and Tangible Chattel Paper. As of the date hereof, each Grantor
hereby represents and warrants that (i) no amount individually or in the
aggregate in excess of $250,000 payable under or in connection with any of the
Collateral is evidenced by any Instrument or Tangible Chattel Paper other than
such Instruments and Tangible Chattel Paper listed in Schedule 13 of the
Perfection Certificate and (ii) each such Instrument and each such item of
Tangible Chattel Paper has been properly endorsed, assigned and delivered to the
Collateral Agent, accompanied by instruments of transfer or assignment duly
executed in blank. If any amount individually or in the aggregate in excess of
$250,000 payable under or in connection with any of the

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-14-
 
Collateral shall be evidenced by any Instrument or Tangible Chattel Paper, the
Grantor acquiring such Instrument or Tangible Chattel Paper shall forthwith
endorse, assign and deliver the same to the Collateral Agent, accompanied by
such instruments of transfer or assignment duly executed in blank as the
Collateral Agent may from time to time specify; provided, however, that so long
as no Event of Default shall have occurred and be continuing, the Collateral
Agent shall return such Instrument or Tangible Chattel Paper to such Grantor
from time to time, to the extent necessary for collection in the ordinary course
of such Grantor’s business.
 
(b) Deposit Accounts. Each Grantor hereby represents and warrants that (i) it
has neither opened nor maintains any Deposit Accounts other than the Collateral
Account established and maintained pursuant to this Agreement and the accounts
listed in Schedule 17 of the Perfection Certificate and (ii) the Collateral
Agent has a perfected first priority security interest in the Collateral Account
and each Deposit Account listed in Schedule 17 of the Perfection Certificate by
Control (other than such Deposit Accounts (x) in which the average monthly
balance on deposit in such account is less than $25,000 individually or $250,000
in the aggregate for all such Deposit Accounts or (y) in which the granting of a
security interest and entering into a Control Agreement with respect to such
Deposit Accounts is prohibited by Requirements of Law). No Grantor shall
hereafter establish and maintain any Deposit Account unless (1) the applicable
Grantor shall have given the Collateral Agent 30 days’ prior written notice of
its intention to establish such new Deposit Account with a Bank, (2) such Bank
shall be reasonably acceptable to the Collateral Agent and (3) such Bank and
such Grantor shall have duly executed and delivered to the Collateral Agent a
Control Agreement with respect to such Deposit Account. The Collateral Agent
agrees with each Grantor that the Collateral Agent shall not give any
instructions directing the disposition of funds from time to time credited to
any Deposit Account or withhold any withdrawal rights from such Grantor with
respect to funds from time to time credited to any Deposit Account unless an
Event of Default has occurred and is continuing or, after giving effect to any
withdrawal, would occur. No Grantor shall grant Control of any Deposit Account
to any Person other than the Collateral Agent.
 
(c) Investment Property. (i) Each Grantor hereby represents and warrants that it
(1) has neither opened nor maintains any Securities Accounts or Commodity
Accounts other than those listed in Schedule 17 of the Perfection Certificate
and the Collateral Agent has a perfected first priority security interest in
such Securities Accounts and Commodity Accounts by Control (other than such
Securities Accounts or Commodity Accounts (x) in which the average monthly
balance on deposit in such account is less than $25,000 individually or $250,000
in the aggregate for all such Securities Accounts or Commodity Accounts or (y)
in which the granting of a security interest and entering into a Control
Agreement with respect to such Securities Accounts or Commodity Accounts is
prohibited by Requirements of Law) and (2) it does not hold, own or have any
interest in any certificated securities or uncertificated securities other than
those constituting Pledged Stock under the Pledge Agreement and those maintained
in Securities Accounts or Commodity Accounts listed in Schedule 17 of the
Perfection Certificate.
 
(ii) Subject to the limitation on the pledge of Equity Interests of any Non-U.S.
Subsidiary to 65% of the issued and outstanding shares of voting stock of such
Non-U.S. Subsidiary in accordance with Section 1 of the Pledge Agreement, if any

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-15-
 
Grantor shall at any time hold or acquire any certificated securities
constituting Investment Property, such Grantor shall promptly, but in no event
later than three (3) Business Days, endorse, assign and deliver the same to the
Collateral Agent, accompanied by such instruments of transfer or assignment duly
executed in blank, all in form and substance reasonably satisfactory to the
Collateral Agent. If any securities now or hereafter acquired by any Grantor
constituting Investment Property are uncertificated and are issued to such
Grantor or its nominee directly by the issuer thereof, such Grantor shall
promptly, but in no event later than three (3) Business Days, notify the
Collateral Agent thereof and pursuant to an agreement in form and substance
satisfactory to the Collateral Agent, either (a) cause the issuer to agree to
comply with instructions from the Collateral Agent as to such securities,
without further consent of any Grantor or such nominee, or (b) arrange for the
Collateral Agent to become the registered owner of the securities. No Grantor
shall hereafter establish and maintain any Securities Account or Commodity
Account with any Securities Intermediary or Commodity Intermediary unless (1)
the applicable Grantor shall have given the Collateral Agent 30 days’ prior
written notice of its intention to establish such new Securities Account or
Commodity Account with such Securities Intermediary or Commodity Intermediary,
(2) such Securities Intermediary or Commodity Intermediary shall be reasonably
acceptable to the Collateral Agent and (3) such Securities Intermediary or
Commodity Intermediary, as the case may be, and such Grantor shall have duly
executed and delivered a Control Agreement with respect to such Securities
Account or Commodity Account, as the case may be. Each Grantor shall accept any
cash and Investment Property in trust for the benefit of the Collateral Agent
and within one (1) Business Day of actual receipt thereof, deposit any cash or
Investment Property and any new securities, instruments, documents or other
property by reason of ownership of the Investment Property received by it into a
Securities Account or Commodity Account subject to a Control Agreement in favor
of the Collateral Agent. The Collateral Agent agrees with each Grantor that the
Collateral Agent shall not give any Entitlement Orders or instructions or
directions to any issuer of uncertificated securities, Securities Intermediary
or Commodity Intermediary, and shall not withhold its consent to the exercise of
any withdrawal or dealing rights by such Grantor, unless an Event of Default has
occurred and is continuing, or, after giving effect to any such investment and
withdrawal rights, would occur. No Grantor shall grant control over any
Investment Property to any Person other than the Collateral Agent.
 
(iii) As between the Collateral Agent and the Grantors, the Grantors shall bear
the investment risk with respect to the Investment Property, and the risk of
loss of, damage to or the destruction of the Investment Property, whether in the
possession of, or maintained as a security entitlement or deposit by, or subject
to the control of, the Collateral Agent, a Securities Intermediary, a Commodity
Intermediary, any Grantor or any other Person; provided, however, that nothing
contained in this Section

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-16-
 
3.05(c) shall release or relieve any Securities Intermediary or Commodity
Intermediary of its duties and obligations to the Grantors or any other Person
under any Control Agreement or under applicable law. Each Grantor shall promptly
pay all Charges and fees of whatever kind or nature with respect to the
Investment Property pledged by it under this Agreement. In the event any Grantor
shall fail to make such payment contemplated in the immediately preceding
sentence, the Collateral Agent may do so for the account of such Grantor and the
Grantors shall promptly reimburse and indemnify the Collateral Agent from all
costs and expenses incurred by the Collateral Agent under this Section 3.05(c).
 
(d) Electronic Chattel Paper and Transferable Records. If any amount
individually or in the aggregate in excess of $250,000 payable under or in
connection with any of the Collateral shall be evidenced by any Electronic
Chattel Paper or any “transferable record,” as that term is defined in Section
201 of the Federal Electronic Signatures in Global and National Commerce Act, or
in Section 16 of the Uniform Electronic Transactions Act as in effect in any
relevant jurisdiction, the Grantor acquiring such Electronic Chattel Paper or
transferable record shall promptly notify the Collateral Agent thereof and shall
take such action as the Collateral Agent may reasonably request to vest in the
Collateral Agent control under UCC Section 9-105 of such Electronic Chattel
Paper or control under Section 201 of the Federal Electronic Signatures in
Global and National Commerce Act or, as the case may be, Section 16 of the
Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of
such transferable record. The Collateral Agent agrees with such Grantor that the
Collateral Agent will arrange, pursuant to procedures satisfactory to the
Collateral Agent and so long as such procedures will not result in the
Collateral Agent’s loss of control, for the Grantor to make alterations to the
Electronic Chattel Paper or transferable record permitted under UCC Section
9-105 or, as the case may be, Section 201 of the Federal Electronic Signatures
in Global and National Commerce Act of Section 16 of the Uniform Electronic
Transactions Act for a party in control to allow without loss of control, unless
an Event of Default has occurred and is continuing or would occur after taking
into account any action by such Grantor with respect to such Electronic Chattel
Paper or transferable record.
 
(e) Letter-of-Credit Rights. If any Grantor is at any time a beneficiary under a
Letter of Credit now or hereafter issued in favor of such Grantor in an amount
individually or in the aggregate in excess of $250,000, such Grantor shall
promptly notify the Collateral Agent thereof and such Grantor shall, pursuant to
an agreement in form and substance satisfactory to the Collateral Agent, either
(i) arrange for the issuer and any confirmer of such Letter of Credit to consent
to an assignment to the Collateral Agent of the proceeds of any drawing under
the Letter of Credit or (ii) arrange for the Collateral Agent to become the
transferee beneficiary of such Letter of Credit, with

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the Collateral Agent agreeing, in each case, that the proceeds of any drawing
under the Letter of Credit are to be applied as provided by the Borrower, or
after an Event of Default, as provided in the Collateral Sharing Agreement.
 
(f) Commercial Tort Claims. As of the date hereof each Grantor hereby represents
and warrants that it holds no Commercial Tort Claims other than those listed in
Schedule II hereto. If any Grantor shall at any time hold or acquire a
Commercial Tort Claim having a value individually or in the aggregate in excess
of $100,000, such Grantor shall immediately notify the Collateral Agent in
writing signed by such Grantor of the brief details thereof and grant to the
Collateral Agent 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 satisfactory to the Collateral Agent.
 
SECTION 3.06. Chief Executive Office; Change of Name; Jurisdiction of
Organization. The exact legal name, type of organization, jurisdiction of
organization, Federal Taxpayer Identification Number, organizational
identification number and chief executive office of such Grantor is indicated
next to its name in Schedules 1(a) and 2(a) of the Perfection Certificate. Such
Grantor is a registered organization except to the extent disclosed in Schedule
1(a) of the Perfection Certificate.
 
SECTION 3.07. Location of Equipment. All Equipment and Inventory of such Grantor
is located at the chief executive office or such other location listed in
Schedule 2(a), 2(b), 2(c), 2(d) or 2(e) of the Perfection Certificate.
 
SECTION 3.08. Condition and Maintenance of Equipment. The Equipment of such
Grantor is in good repair, working order and condition, reasonable wear and tear
excepted. Each Grantor shall cause the Equipment to be maintained and preserved
in good repair, working order and condition, reasonable wear and tear excepted,
and shall as quickly as commercially practicable make or cause to be made all
repairs, replacements and other improvements which are necessary or appropriate
in the conduct of such Grantor’s business, except where the failure to make such
repairs, replacements or improvements would not have a Collateral Material
Adverse Effect.
 
SECTION 3.09. Corporate Names; Prior Transactions. Such Grantor has not, during
the past five (5) years, been known by or used any other corporate or fictitious
name or been a party to any merger or consolidation, or acquired all or
substantially all of the assets of any Person, or acquired any of its property
or assets out of the ordinary course of business, except as set forth in
Schedules 1(b), 1(c) and 4 of the Perfection Certificate.
 
SECTION 3.10. No Claims. The use by such Grantor of the Collateral and all such
rights with respect to the foregoing do not infringe on the rights of any Person
other than such

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-18-
 
infringement which would not, individually or in the aggregate, result in a
Collateral Material Adverse Effect. No claim has been made and remains
outstanding that such Grantor’s use of any Collateral does or may violate the
rights of any third Person that would, individually or in the aggregate, have a
Collateral Material Adverse Effect.
 
SECTION 3.11. No Conflicts, Consents, etc. Neither the execution and delivery
hereof by each Grantor nor the consummation of the transactions herein
contemplated nor the fulfillment of the terms hereof (i) violates any Operative
Agreement of such Grantor or any issuer of Pledged Stock, (ii) violates the
terms of any agreement, indenture, mortgage, deed of trust, equipment lease,
instrument or other document to which such Grantor is a party, or by which it is
bound or to which any of its properties or assets are subject, which violation
would, individually or in the aggregate, have a Collateral Material Adverse
Effect, (iii) conflicts with any Requirement of Law applicable to any such
Grantor or its property, which conflict would, individually or in the aggregate,
have a Collateral Material Adverse Effect, or (iv) results in or requires the
creation or imposition of any Lien (other than the Lien contemplated hereby or
by any of the other Loan Documents) upon or with respect to any of the property
now owned or hereafter acquired by such Grantor. No consent, authorization,
approval, license or other action by, and no notice to or filing with, any
Governmental Authority or regulatory body or other Person (including, without
limitation, equityholders or creditors of such Grantor) is required (A) for the
pledge by such Grantor of the Collateral pledged by it pursuant to this
Agreement or for the execution, delivery or performance hereof by such Grantor
other than such as have been obtained or made and are in full force and effect
and except for such filings as may be necessary to perfect the Liens granted
pursuant to this Agreement, except as set forth in Schedule IV annexed hereto,
(B) for the exercise by the Collateral Agent of the voting or other rights
provided for in this Agreement or (C) for the exercise by the Collateral Agent
of the remedies in respect of the Collateral pursuant to this Agreement subject
to the provisions of Article V hereof. In the event that the Collateral Agent
desires to exercise any remedies, voting or consensual rights or
attorney-in-fact powers set forth in this Agreement and determines it necessary
to obtain any approvals or consents of any Governmental Authority or any other
Person therefor, then, upon the reasonable request of the Collateral Agent, such
Grantor agrees to use its commercially reasonable efforts to assist and aid the
Collateral Agent to obtain as soon as practicable any necessary approvals or
consents for the exercise of any such remedies, rights and powers.
 
ARTICLE IV
 
COVENANTS
 
SECTION 4.01. Change of Name; Location of Collateral; Records; Place of
Business. (a) Each Grantor agrees promptly to notify the Collateral Agent in
writing of any

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change (i) in its corporate name or in any trade name used to identify it in the
conduct of its business or in the ownership of its properties, (ii) in the
location of its chief executive office, its principal place of business, any
office in which it maintains books or records relating to Collateral owned by it
or any office or facility at which Collateral owned by it is located (including
the establishment of any such new office or facility), (iii) in its identity or
corporate structure or (iv) in its Federal Taxpayer Identification Number. Each
Grantor agrees not to effect or permit any change referred to in the preceding
sentence unless all filings have been made under the UCC or otherwise that are
required in order for the Collateral Agent to continue at all times following
such change to have a valid, legal and perfected first priority security
interest in all the Collateral for its benefit and the benefit of the Secured
Parties subject to no other Liens other than Prior Liens and Permitted Liens of
the type described in clauses (iii), (v), (vi), (xi) and (xiv) of the definition
thereof. Each Grantor agrees promptly to notify the Collateral Agent if any
material portion of the Collateral owned or held by such Grantor is damaged or
destroyed.
 
(b) Each Grantor agrees to maintain, at its own cost and expense, such complete
and accurate records with respect to the Collateral owned by it as is consistent
with its current practices and in accordance with such prudent and standard
practices used in industries that are the same as or similar to those in which
such Grantor is engaged, but in any event to include complete accounting records
indicating all payments and proceeds received with respect to any part of the
Collateral, in each case to the extent required by GAAP, and, at such time or
times as the Collateral Agent may reasonably request, promptly to prepare and
deliver to the Collateral Agent a duly certified schedule or schedules in form
and detail satisfactory to the Collateral Agent showing the identity, amount and
location of any and all Collateral.
 
SECTION 4.02. Protection of Security. Each Grantor shall, at its own cost and
expense, take any and all actions necessary to defend title to the Collateral
against all Persons and to defend the Security Interest of the Collateral Agent
in the Collateral and the priority thereof against any Lien other than those
permitted hereunder and pursuant to the Credit Agreement.
 
SECTION 4.03. Further Assurances. Each Grantor agrees, at its own expense, to
execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such actions as the Collateral Agent may
from time to time reasonably request to better assure, preserve, protect and
perfect the Security Interest and the rights and remedies created hereby,
including the payment of any fees and taxes required in connection with the
execution and delivery of this Agreement, the granting of the Security Interest
and the filing of any financing statements (including fixture filings) or other
documents in connection herewith or therewith. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any
promissory note or other instrument, such note or instrument shall be promptly,
but in no event later than three (3) Business Days, pledged and

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-20-
 
delivered to the Collateral Agent, duly endorsed in a manner satisfactory to the
Collateral Agent.
 
Without limiting the generality of the foregoing, each Grantor hereby authorizes
the Collateral Agent, with prompt notice thereof to the Grantors, to supplement
this Agreement by supplementing Schedules 15(a) and 15(b) of the Perfection
Certificate or adding additional schedules to the Perfection Certificate to
specifically identify any asset or item that may constitute Copyrights,
Licenses, Patents or Trademarks; provided, however, that any Grantor shall have
the right, exercisable within thirty (30) days after it has been notified by the
Collateral Agent of the specific identification of such Collateral, to advise
the Collateral Agent in writing of any inaccuracy of the representations and
warranties made by such Grantor hereunder with respect to such Collateral. Each
Grantor agrees that it will use its commercially reasonable efforts to take such
action as shall be necessary in order that all representations and warranties
hereunder shall be true and correct with respect to such Collateral within
thirty (30) days after the date it has been notified by the Collateral Agent of
the specific identification of such Collateral.
 
SECTION 4.04. Inspection and Verification. The Collateral Agent and such Persons
as the Collateral Agent may reasonably designate shall have the right, at the
Grantors’ own cost and expense, to at all reasonable times and upon reasonable
notice under the circumstances inspect the Collateral, all records related
thereto (and to make extracts and copies from such records) and the premises
upon which any of the Collateral is located, to discuss the Grantors’ affairs
with the officers of the Grantors and their independent accountants and to
verify under reasonable procedures, the validity, amount, quality, quantity,
value, condition and status of, or any other matter relating to, the Collateral,
including, in the case of Accounts or Collateral in the possession of any third
person, by contacting Account Debtors or the third person possessing such
Collateral for the purpose of making such a verification, with substantially
concurrent notice to the Grantors. Notwithstanding the foregoing, the Collateral
Agent’s right to inspect any premises leased by any Grantor shall only be
required to the extent permitted by third party landlords with rights to govern
access; provided, however, that to the extent any third party landlord does not
permit the Collateral Agent to have access to any leased premises, the
applicable Grantor shall use commercially reasonable efforts to cause such third
party landlord to permit access to the Collateral Agent at such leased premises.
The Collateral Agent shall have the absolute right to share any information it
gains from such inspection or verification with any Secured Party.
 
SECTION 4.05. Taxes; Encumbrances. At its option, the Collateral Agent may
discharge past due taxes, assessments, charges, fees, Liens, security interests
or other encumbrances at any time levied or placed on the Collateral except to
the extent same constitute Permitted Liens, and may pay for the maintenance and
preservation of the Collateral to the extent any Grantor fails to do so as
required by this Agreement, and each Grantor jointly and

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severally agrees to reimburse the Collateral Agent on demand for any payment
made or any expense incurred by the Collateral Agent pursuant to the foregoing
authorization; provided, however, that nothing in this Section 4.05 shall be
interpreted as excusing any Grantor from the performance of, or imposing any
obligation on the Collateral Agent or any Secured Party to cure or perform, any
covenants or other promises of any Grantor with respect to taxes, assessments,
charges, fees, liens, security interests or other encumbrances and maintenance
as set forth herein or in the other Loan Documents.
 
SECTION 4.06. Assignment of Security Interest. If at any time any Grantor shall
take a security interest in any property of an Account Debtor or any other
Person to secure payment and performance of an Account, such Grantor shall be
deemed to have assigned such security interest to the Collateral Agent. Each
Grantor agrees, at its own expense, to execute, acknowledge, deliver and cause
to be duly filed all such further instruments and documents and take all such
actions as the Collateral Agent may from time to time reasonably request to
better assure, preserve, protect and perfect the security interest granted
pursuant to the foregoing sentence.
 
SECTION 4.07. Continuing Obligations of the Grantors. Each Grantor shall remain
liable to observe and perform all the conditions and obligations to be observed
and performed by it under each contract, agreement or instrument relating to the
Collateral, all in accordance with the terms and conditions thereof, and each
Grantor jointly and severally agrees to indemnify and hold harmless the
Collateral Agent and the Secured Parties from and against any and all liability
for such performance.
 
SECTION 4.08. Use and Disposition of Collateral. None of the Grantors shall make
or permit to be made an assignment for security, pledge or hypothecation of the
Collateral or shall grant any other Lien in respect of the Collateral other than
those permitted hereunder and pursuant to the Credit Agreement. None of the
Grantors shall make or permit to be made any transfer of the Collateral and each
Grantor shall remain at all times in possession of the Collateral owned by it,
except that (a) Inventory may be sold in the ordinary course of business and (b)
unless and until the Collateral Agent shall notify the Grantors that an Event of
Default shall have occurred and be continuing and that during the continuance
thereof the Grantors shall not sell, convey, lease, assign, transfer or
otherwise dispose of any Collateral (which notice may be given by telephone if
promptly confirmed in writing), the Grantors may use and dispose of the
Collateral in any lawful manner not inconsistent with the provisions of this
Agreement, the Credit Agreement or any other Loan Document.
 
SECTION 4.09. Limitation on Modification of Accounts. None of the Grantors will,
without the Collateral Agent’s prior written consent which consent shall not be
unreasonably withheld, grant any extension of the time of payment of any of the
Accounts Receivable, compromise, compound or settle the same for less than the
full amount thereof, release, wholly or

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-22-
 
partly, any Person liable for the payment thereof or allow any credit or
discount whatsoever thereon, other than extensions, credits, discounts,
compromises or settlements granted or made in the ordinary course of business
and consistent with its current practices and in accordance with such prudent
and standard practices used in industries that are the same as or similar to
those in which such Grantor is engaged.
 
SECTION 4.10. Insurance. The Grantors, at their own expense, shall maintain or
cause to be maintained insurance covering physical loss or damage to the
Inventory and Equipment in accordance with Section 5.04 of the Credit Agreement,
which insurance shall be reasonably satisfactory in all other respects to the
Collateral Agent. Each Grantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Grantor’s true and lawful agent (and attorney-in-fact)
for the purpose, during the continuance of an Event of Default, of making,
settling and adjusting claims in respect of Collateral under policies of
insurance, endorsing the name of such Grantor on any check, draft, instrument or
other item of payment for the proceeds of such policies of insurance and for
making all determinations and decisions with respect thereto. In the event that
any Grantor at any time or times shall fail to obtain or maintain any of the
policies of insurance required hereby or to pay any premium in whole or part
relating thereto, the Collateral Agent may, without waiving or releasing any
obligation or liability of the Grantors hereunder or any Event of Default, in
its sole discretion, obtain and maintain such policies of insurance and pay such
premium and take any other actions with respect thereto as the Collateral Agent
deems advisable. All sums disbursed by the Collateral Agent in connection with
this Section 4.10, including reasonable attorneys’ fees, court costs, expenses
and other charges relating thereto, shall be payable, upon demand, by the
Grantors to the Collateral Agent and shall be additional Obligations secured
hereby ratably and in the same priority as the original Obligations. So long as
no Event of Default has occurred and is continuing, all actions to be taken with
respect to the making, settling and adjusting of claims under insurance policies
may be taken by the Grantors without any requirement of participation or consent
from the Collateral Agent and all proceeds received from any insurance with
respect to any claim may be paid directly to the applicable Grantor to be
applied in accordance with the provisions of Section 6.02 hereof.
 
SECTION 4.11. Legend. Upon the request of the Collateral Agent, each Grantor
shall legend, in form and manner satisfactory to the Collateral Agent, its
Accounts Receivable and its books, records and documents evidencing or
pertaining thereto with an appropriate reference to the fact that such Accounts
Receivable have been assigned to the Collateral Agent for the benefit of the
Secured Parties and that the Collateral Agent has a security interest therein.
 
SECTION 4.12. Certain Covenants and Provisions Regarding Patent, Trademark and
Copyright Collateral. (a) Each Grantor agrees that it will not, nor will it
permit any of its licensees to, do any act, or omit to do any act, whereby any
Patent which is material to the con-

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duct of such Grantor’s business may become invalidated or dedicated to the
public, and agrees that it shall continue to mark any products covered by a
Patent with the relevant patent number as necessary and sufficient to establish
and preserve its maximum rights under applicable patent laws.
 
(b) Each Grantor (either itself or through its licensees or its sublicenses)
will, for each Trademark material to the conduct of such Grantor’s business, use
its commercially reasonable efforts to (i) maintain such Trademark in full force
free from any claim of abandonment or invalidity for non-use, (ii) maintain the
quality of products and services offered under such Trademark, (iii) display
such Trademark with notice of Federal or foreign registration to the extent
necessary and sufficient to establish and preserve its rights under applicable
law and (iv) not knowingly use or knowingly permit the use of such Trademark in
violation of any third party rights.
 
(c) Each Grantor (either itself or through licensees) will, for each work
covered by a material Copyright, publish, reproduce, display, adopt and
distribute such work with such appropriate copyright notice as necessary and
sufficient to establish and preserve its maximum rights under applicable
copyright laws.
 
(d) Each Grantor shall notify the Collateral Agent as soon as practicable if it
knows or has reason to know that any Patent, Trademark or Copyright material to
the conduct of its business may become abandoned, lost or dedicated to the
public, or of any adverse determination or development including the institution
of, or any such determination or development in, any proceeding in the United
States Patent and Trademark Office, United States Copyright Office or any court
or similar office of any country regarding such Grantor’s ownership of any
Patent, Trademark or Copyright, its right to register the same, or to keep and
maintain the same. Notwithstanding the foregoing, the Grantors shall not be
obligated to notify the Collateral Agent of any determinations or developments
regarding any Patent, Trademark or Copyright in any ex-parte proceeding with
respect to the prosecution of any application in the United States Patent and
Trademark Office, United States Copyright Office or similar office in any other
jurisdiction.
 
(e) At the end of each fiscal quarter, each Grantor shall promptly provide the
Collateral Agent with a document listing any new application or registration for
any Patent, Trademark or Copyright that was filed by or on behalf of such
Grantor since the last such document was provided to the Collateral Agent by
such Grantor, and, shall execute and deliver any and all agreements,
instruments, documents and papers as the Collateral Agent may reasonably request
to evidence the Collateral Agent’s security interest in such Patent, Trademark
or Copyright, and each Grantor hereby appoints the Collateral Agent as its
attorney-in-fact to execute and file such writings solely for the foregoing
purposes, all acts of such attor-

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ney being hereby ratified and confirmed; such power, being coupled with an
interest, is irrevocable.
 
(f) Each Grantor will take all necessary steps that are consistent with its
reasonable business judgment and the practice in any proceeding before the
United States Patent and Trademark Office, United States Copyright Office or any
office or agency in any political subdivision of the United States or in any
other country or any political subdivision thereof, to maintain and pursue each
material application relating to the Patents, Trademarks and/or Copyrights (and
to obtain the relevant grant or registration) and to maintain each issued Patent
and each registration of the Trademarks and Copyrights that is material to the
conduct of any Grantor’s business, including timely filings of applications for
renewal, affidavits of use, affidavits of incontestability and payment of
maintenance fees, and, if consistent with its reasonable business judgment, to
initiate opposition, interference and cancellation proceedings against third
parties.
 
(g) In the event that any Grantor has reason to believe that any Collateral
consisting of a Patent, Trademark or Copyright has been or is about to be
infringed, misappropriated or diluted by a third party, and such infringement,
misappropriation or dilution is expected to have a material adverse effect on
such Grantor’s business, such Grantor promptly shall notify the Collateral Agent
and shall, if consistent with its reasonable business judgment, promptly sue for
infringement, misappropriation or dilution and to recover any and all damages
for such infringement, misappropriation or dilution, and take such other actions
as are appropriate and consistent with its reasonable business judgment under
the circumstances to protect such Collateral.
 
(h) To each Grantor’s knowledge, on and as of the date hereof, (i) except as set
forth in Schedule V annexed hereto, there is no material violation by others of
any right of such Grantor with respect to any Copyright, Patent or Trademark
listed in Schedules 15(a) and 15(b) of the Perfection Certificate, respectively,
pledged by it under the name of such Grantor, (ii) such Grantor is not
infringing upon any Copyright, Patent or Trademark of any other Person other
than such infringement that would not (or could not reasonably be expected to)
result in a Collateral Material Adverse Effect with respect to the Intellectual
Property and (iii) no proceedings are currently pending against such Grantor,
alleging any such violation, except as may be set forth in Schedule V.
 
(i) Upon and during the continuance of an Event of Default, each Grantor shall
use its commercially reasonable efforts to obtain all requisite consents or
approvals by the licensor of each Copyright License, Patent License or Trademark
License to effect the assignment of all of such Grantor’s right, title and
interest thereunder to the Collateral Agent or its designee.

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ARTICLE V
 
REMEDIES
 
SECTION 5.01. Remedies upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Grantor agrees to deliver each item of
Collateral to the Collateral Agent on demand, and it is agreed that the
Collateral Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with respect to any Collateral
consisting of Intellectual Property, on demand, to cause the Security Interest
to become an assignment, transfer and conveyance of any of or all such
Collateral by the applicable Grantors to the Collateral Agent, or to license or
sublicense, whether general, special or otherwise, and whether on an exclusive
or non-exclusive basis, any such Collateral throughout the world on such terms
and conditions and in such manner as the Collateral Agent shall determine (other
than in violation of any then existing licensing arrangements to the extent that
waivers cannot be obtained), and (b) with or without legal process and with or
without prior notice or demand for performance, to take possession of the
Collateral and without liability for trespass to enter any premises where the
Collateral may be located for the purpose of taking possession of or removing
the Collateral and, generally, to exercise any and all rights afforded to a
secured party under the UCC or other applicable law. Without limiting the
generality of the foregoing, each Grantor agrees that the Collateral Agent shall
have the right, subject to the mandatory requirements of applicable law, to sell
or otherwise dispose of all or any part of the Collateral, at public or private
sale or at any broker’s board or on any securities exchange, for cash, upon
credit or for future delivery as the Collateral Agent shall deem appropriate.
The Collateral Agent shall be authorized at any such sale (if it deems it
advisable to do so) to restrict the prospective bidders or purchasers to Persons
who will represent and agree that they are purchasing the Collateral for their
own account for investment and not with a view to the distribution or sale
thereof, and upon consummation of any such sale the Collateral Agent shall have
the right to assign, transfer and deliver to the purchaser or purchasers thereof
the Collateral so sold. Each such purchaser at any such sale shall hold the
property sold absolutely, free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by law) all
rights of redemption, stay and appraisal which such Grantor now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted.
 
The Collateral Agent shall give a Grantor ten (10) days’ prior written notice
(which each Grantor agrees is reasonable notice within the meaning of Section
9-611 of the UCC) of the Collateral Agent’s intention to make any sale of such
Grantor’s Collateral. Such notice, in the case of a public sale, shall state the
time and place for such sale and, in the case of a sale at a broker’s board or
on a securities exchange, shall state the board or exchange at which such sale
is to be made and the day on which the Collateral, or portion thereof, will
first be offered

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for sale at such board or exchange. Any such public sale shall be held at such
time or times within ordinary business hours and at such place or places as the
Collateral Agent may fix and state in the notice of such sale. At any such sale,
the Collateral, or portion thereof, to be sold may be sold in one lot as an
entirety or in separate parcels, as the Collateral Agent may (in its sole and
absolute discretion) determine. The Collateral Agent shall not be obligated to
make any sale of any Collateral if it shall determine not to do so, regardless
of the fact that notice of sale of such Collateral shall have been given. The
Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for sale, and such sale may, without further notice,
be made at the time and place to which the same was so adjourned. In case any
sale of all or any part of the Collateral is made on credit or for future
delivery, the Collateral so sold may be retained by the Collateral Agent until
the sale price is paid by the purchaser or purchasers thereof, but the
Collateral Agent shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral so sold and, in case
of any such failure, such Collateral may be sold again upon like notice. At any
public (or, to the extent permitted by law, private) sale made pursuant to this
Section, any Secured Party may bid for or purchase, free (to the extent
permitted by law) from any right of redemption, stay, valuation or appraisal on
the part of any Grantor (all said rights being also hereby waived and released),
the Collateral or any part thereof offered for sale and may make payment on
account thereof by using any Obligation then due and payable to such Secured
Party from any Grantor as a credit against the purchase price, and such Secured
Party may, upon compliance with the terms of sale, hold, retain and dispose of
such property without further accountability to any Grantor therefor. For
purposes hereof, a written agreement to purchase the Collateral or any portion
thereof shall be treated as a sale thereof; the Collateral Agent shall be free
to carry out such sale pursuant to such agreement and no Grantor shall be
entitled to the return of the Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Collateral Agent shall have entered into
such an agreement all Events of Default shall have been remedied and the
Obligations paid in full. As an alternative to exercising the power of sale
herein conferred upon it, the Collateral Agent may proceed by a suit or suits at
law or in equity to foreclose this Agreement and to sell the Collateral or any
portion thereof pursuant to a judgment or decree of a court or courts having
competent jurisdiction or pursuant to a proceeding by a court-appointed
receiver. Any sale pursuant to the provisions of this Section shall be deemed to
conform to the commercially reasonable standards as provided in Section 9-611 of
the UCC.
 
SECTION 5.02. Application of Proceeds. At such intervals as may be agreed upon
by Borrower and the Collateral Agent, or, if an Event of Default shall have
occurred and be continuing, at any time at the Collateral Agent’s election, the
Collateral Agent may apply all or any part of Proceeds constituting Collateral,
whether or not held in any Collateral Account, in payment of the Obligations in
the order and in the amounts specified in the Collateral Sharing Agreement.

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SECTION 5.03. Grant of License to Use Intellectual Property. For the purpose of
enabling the Collateral Agent to exercise rights and remedies under this Article
at such time as the Collateral Agent shall be lawfully entitled to exercise such
rights and remedies, each Grantor hereby grants to the Collateral Agent an
irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to the Grantors) to use, license or sub-license any of the
Collateral consisting of Intellectual Property now owned or hereafter acquired
by such Grantor, and wherever the same may be located, and including in such
license reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Collateral Agent
shall be exercised, at the option of the Collateral Agent, upon the occurrence
and during the continuation of an Event of Default; provided that any license,
sub-license or other transaction entered into by the Collateral Agent in
accordance herewith shall be binding upon the Grantors notwithstanding any
subsequent cure of an Event of Default.
 
ARTICLE VI
 
COLLATERAL ACCOUNT
 
SECTION 6.01. Establishment Of Collateral Account. (a) The Collateral Agent is
hereby authorized to establish and maintain at its office at 390 Greenwich
Street, New York, New York 10013, in the name of the Collateral Agent and
pursuant to a Control Agreement, a restricted deposit account designated
“Constar International, Inc. Collateral Account”. Each Grantor shall to the
extent contemplated by this Agreement, the Credit Agreement, the Collateral
Sharing Agreement or in any other Loan Document, deposit into the Collateral
Account from time to time (A) the Net Proceeds of any of the Collateral (as
defined in the Credit Agreement for the purposes of this Article VI), including
pursuant to any disposition thereof, (B) the Net Proceeds of any Taking or
Destruction with respect to Collateral, (C) any cash in respect of any
Collateral to which the Collateral Agent is entitled pursuant to any Loan
Documents and (D) any cash such Grantor is required to pledge as additional
collateral security pursuant to any Loan Documents.
 
(b) The balance from time to time in the Collateral Account shall constitute
part of the Collateral and shall not constitute payment of the Obligations until
applied as hereinafter provided. So long as no Event of Default has occurred and
is continuing or will result therefrom and to the extent Grantor is not required
to repay debt under the Credit Agreement or any other Loan Documents, the
Collateral Agent shall within three (3) Business Days of receiving a request of
the applicable Grantor for release of cash proceeds on deposit in the Collateral
Account constituting (A) the Net Proceeds of any of the Collateral, including
pursuant to any disposition thereof, (B) the Net Proceeds of any Taking or
Destruction with respect to Collat-

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eral and (C) any cash in respect of any Collateral to which the Collateral Agent
is entitled pursuant to any Loan Documents, remit such cash proceeds on deposit
in the Collateral Account to or upon the order of such Grantor, so long as such
Grantor has satisfied the conditions relating thereto set forth in subsection
6.02. At any time following the occurrence and during the continuance of an
Event of Default, the Collateral Agent may (and, if instructed by the Requisite
Obligees as specified in the Collateral Sharing Agreement, shall) in its (or
their) discretion apply or cause to be applied (subject to collection) the
balance from time to time outstanding to the credit of the Collateral Account to
the payment of the Obligations in the manner specified in the Collateral Sharing
Agreement.
 
(c) Amounts on deposit in the Collateral Account shall be invested from time to
time in Permitted Investments as the applicable Grantor (or, after the
occurrence and during the continuance of an Event of Default, the Collateral
Agent) shall determine, which Permitted Investments shall be held in the name
and be under the control of the Collateral Agent (or any sub-agent); provided,
that at any time after the occurrence and during the continuance of an Event of
Default, the Collateral Agent may (and, if instructed by the Requisite Obligees
as specified in the Collateral Sharing Agreement, shall) in its (or their)
discretion at any time and from time to time elect to liquidate any such
Permitted Investments and to apply or cause to be applied the proceeds thereof
to the payment of the Obligations in the manner specified in the Collateral
Sharing Agreement.
 
SECTION 6.02. Proceeds of Destruction, Taking and Collateral Dispositions. (a)
So long as no Event of Default shall have occurred and be continuing, and to the
extent the applicable Grantor is permitted by the Loan Documents to reinvest any
Net Proceeds as contemplated herein, in the event there shall be any Net
Proceeds in respect of any Taking or Destruction of Collateral or Net Proceeds
from any sale or disposition of Collateral, the applicable Grantor shall have
the right, at such Grantor’s option, to apply such Net Proceeds within two
hundred seventy (270) days after the receipt of such Net Proceeds (or, in the
case of such disposition, to apply such Net Proceeds within two hundred seventy
(270) days from the date of such disposition) to reinvest in new or existing
properties or assets having a fair market value at least equal to the amount of
such net insurance proceeds or net awards or net cash proceeds, as the case may
be, in accordance with the applicable provisions of this Agreement. In the event
such Grantor elects to reinvest such Net Proceeds, such Grantor shall deliver to
the Collateral Agent (A) a written notice of such election and (B) an Officers’
Certificate stating that (1) the applicable Net Proceeds shall be utilized to
reinvest in Collateral in the manner and to the extent contemplated by the
applicable provisions of the Loan Documents, and (2) no Event of Default has
occurred and is continuing (the items described in clauses (A) and (B) of this
sentence, collectively, the “Investment Election Notice”). In the event such Net
Proceeds shall be in an amount less than (i) $500,000 or (ii) when taken
together with all other awards or proceeds in any fiscal year, less than
$1,000,000, upon receipt of an Investment

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Election Notice, the Collateral Agent shall release such Net Proceeds to such
Grantor in accordance with the provisions of subsection 6.01(b) hereof.
 
(b) In the event there shall be any Net Proceeds, with respect to Collateral, in
an amount equal to or greater than (i) $500,000 or (ii) when taken together with
all other awards or proceeds in any fiscal year, greater than $1,000,000, the
Collateral Agent shall not release any part of such Net Proceeds until the
applicable Grantor has furnished to the Collateral Agent (A) an Officers’
Certificate setting forth: (1) a brief description of the reinvestment to be
made, (2) the dollar amount of the expenditures to be made, or costs incurred by
such Grantor in connection with such reinvestment and (3) each request for
payment shall be made on at least ten (10) days’ prior notice to the Collateral
Agent and such request shall state that the properties or assets acquired in
connection with such reinvestment have a fair market value at least equal to the
amount of such net awards or net insurance proceeds or net cash proceeds, as the
case may be, requested to be released from the Collateral Account and (B) all
security agreements and mortgages and other items required to subject such
reinvestment properties or assets to the Lien of the this Agreement in favor of
the Collateral Agent, for its benefit and for the benefit of the other Secured
Parties.
 
SECTION 6.03. Application of Proceeds. The proceeds received by the Collateral
Agent in respect of any sale of, collection from or other realization upon all
or any part of the Collateral pursuant to the exercise by the Collateral Agent
of its remedies shall be applied, together with any other sums then held by the
Collateral Agent pursuant to this Agreement, promptly by the Collateral Agent as
provided in the Collateral Sharing Agreement.
 
ARTICLE VII
 
MISCELLANEOUS
 
SECTION 7.01. Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in
Section 9.01 of the Credit Agreement. All communications and notices hereunder
to any Subsidiary Guarantor shall be given to it at its address or telecopy
number set forth on Schedule 1, with a copy to Borrower.
 
SECTION 7.02. Security Interest Absolute. All rights of the Collateral Agent
hereunder, the Security Interest and all obligations of the Grantors hereunder
shall be absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Credit Agreement, the Collateral Sharing Agreement, any
other Loan Document, any agreement with respect to any of the Obligations or any
other agreement or instrument relating to any of the foregoing, (b) any change
in the time, manner or place of payment of, or in any other term of,

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all or any of the Obligations, or any other amendment or waiver of or any
consent to any departure from the Credit Agreement, any other Loan Document or
any other agreement or instrument, (c) any exchange, release or non-perfection
of any Lien on other collateral, or any release or amendment or waiver of or
consent under or departure from any guarantee, securing or guaranteeing all or
any of the Obligations, or (d) any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any Grantor in respect of
the Obligations or this Agreement.
 
SECTION 7.03. Survival of Agreement. All covenants, agreements, representations
and warranties made by any Grantor herein and in the certificates or other
instruments prepared or delivered in connection with or pursuant to this
Agreement or any other Loan Document shall be considered to have been relied
upon by the Collateral Agent and the other Secured Parties and shall survive the
making by the Lenders of the Loans and the Lenders’ issuance of and
participations in Letters of Credit, regardless of any investigation made by the
Secured Parties or on their behalf, and shall continue in full force and effect
until this Agreement shall terminate.
 
SECTION 7.04. Binding Effect. This Agreement shall become effective as to any
Grantor when a counterpart hereof executed on behalf of such Grantor shall have
been delivered to the Collateral Agent and a counterpart hereof shall have been
executed on behalf of the Collateral Agent, and thereafter shall be binding upon
such Grantor and the Collateral Agent and their respective successors and
assigns, and shall inure to the benefit of such Grantor, the Collateral Agent
and the other Secured Parties and their respective successors and assigns,
except that no Grantor shall have the right to assign or transfer its rights or
obligations hereunder or any interest herein or in the Collateral (and any such
assignment or transfer shall be void) except as expressly permitted by each of
the other Loan Documents.
 
SECTION 7.05. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of any Grantor or the Collateral Agent that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns.
 
SECTION 7.06. Collateral Sharing Agreement. By becoming a party to this
Agreement, each Grantor agrees to be bound by the terms of the Collateral
Sharing Agreement and, without limiting the generality of the foregoing,
expressly agrees that all obligations and liabilities of a Grantor thereunder
apply to such Grantor with the same force and effect as if such Grantor were a
signatory thereto.
 
SECTION 7.07. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

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SECTION 7.08. Waivers; Amendment; Several Agreement. (a) No failure or delay of
the Collateral Agent in exercising any power or right hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a fight or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the other Secured Parties under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provisions of this Agreement or any other Loan Document or
consent to any departure by any Grantor therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice to or demand on any Grantor in any case
shall entitle such Grantor or any other Grantor to any other or further notice
or demand in similar or other circumstances.
 
(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Collateral Agent and the Grantor or Grantors with respect to which such
waiver, amendment or modification is to apply.
 
(c) This Agreement shall be construed as a separate agreement with respect to
each Grantor and may be amended, modified, supplemented, waived or released with
respect to any Grantor without the approval of any other Grantor and without
affecting the obligations of any other Grantor hereunder.
 
SECTION 7.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.09.
 
SECTION 7.10. Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired thereby
(it being understood that the invalidity of a particular

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provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions. It is understood and agreed among the parties that this Agreement
shall create separate security interests in the Collateral securing the
Obligations as provided in Section 2.01, and that any determination by any court
with jurisdiction that the security interest securing any Obligation or class of
Obligations is invalid for any reason shall not in and of itself invalidate the
Security Interest securing any other Obligations hereunder.
 
SECTION 7.11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute a single contract and shall become effective as
provided in Section 7.04. Delivery of an executed signature page to this
Agreement by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof.
 
SECTION 7.12. Headings. Article and Section headings used herein are for the
purpose of reference only, are not part of this Agreement and are not to affect
the construction of, or to be taken into consideration in interpreting, this
Agreement.
 
SECTION 7.13. Jurisdiction; Consent to Service of Process. (a) Each Grantor
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or Federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Loan Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Collateral Agent or
any other Secured Party may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against any Grantor or
its properties in the courts of any jurisdiction.
 
(b) Each Grantor hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or the other Loan Documents in any New York
State or Federal court referred to in paragraph (c) of this Section. Each of the
parties hereto hereby irrevocably waives, to the

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fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
 
(c) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 7.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.
 
SECTION 7.14. Termination. (a) This Agreement and the Security Interest (i)
shall terminate when all the Obligations have been indefeasibly paid in full,
the Lenders have no further commitment to lend under the Credit Agreement or to
issue or participate in Letters of Credit and the LC Exposure has reduced to
zero and (ii) shall continue to be effective or be reinstated, as the case may
be, if at any time payment, or any part thereof, of any Obligation is rescinded
or must otherwise be restored by any Secured Party or any Grantor upon the
bankruptcy or reorganization of the Borrower, any Grantor or otherwise. If the
Equity Interests of a Grantor are sold, transferred or otherwise disposed of to
a Person that is not an Affiliate pursuant to a transaction permitted by Section
6.05 of the Credit Agreement that results in such Grantor ceasing to be a
Subsidiary, or upon the effectiveness of any written consent pursuant to Section
9.08 of the Credit Agreement to the release of the security interest granted by
such Grantor hereby, such Grantor shall be released from its obligations under
this Agreement without further action. In connection with any release pursuant
to this Section 7.14(a), the Collateral Agent shall execute and deliver to any
Grantor, at such Grantor’s expense, all UCC termination statements and similar
documents that such Grantor shall reasonably request to evidence such
termination or release. Any execution and delivery of such UCC termination
statements or other documents pursuant to this Section 7.14(a) shall be without
recourse to or warranty by the Collateral Agent.
 
(b) Upon any sale or other transfer by any Grantor of any Collateral that is
permitted under the Credit Agreement and this Agreement to any Person that is
not a Grantor or, upon the effectiveness of any written consent to the release
of the security interest granted hereby in any Collateral pursuant to Section
9.08 of the Credit Agreement, that security interest in such Collateral shall be
automatically released. In connection with any release pursuant to this Section
7.14(b), the Collateral Agent shall execute and deliver to any Grantor, at such
Grantor’s expense, all UCC termination statements and similar documents that
such Grantor shall reasonably request to evidence such termination or release.
Any execution and delivery of such UCC termination statements or other documents
pursuant to this Section 7.14(b) shall be without recourse to or warranty by the
Collateral Agent.
 
SECTION 7.15. Additional Grantors. To the extent any Domestic Subsidiary shall
be required to become a Grantor pursuant to any Loan Document, upon execution
and delivery by the Collateral Agent and a Subsidiary of an instrument in the
form of Annex I hereto, such Subsidiary shall become a Grantor hereunder with
the same force and effect as if originally named as a Grantor herein. The
execution and delivery of any such instrument shall not re-

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

 
-34-
 
quire the consent of any Grantor hereunder. The rights and obligations of each
Grantor thereunder shall remain in full force and effect notwithstanding the
addition of any new Grantor as a party to this Agreement.

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

 
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
 
CONSTAR INTERNATIONAL INC.,
By:
 
/s/    JAMES C. COOK
   

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

Name: James C. Cook
Title: Executive Vice President, Chief
Financial Officer and Secretary

 
 
EACH OF THE DOMESTIC SUBSIDIARIES LISTED ON SCHEDULE I HERETO,

 
By:
 
/s/    JAMES C. COOK
   

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

Name: James C. Cook
Title: Executive Vice President

 
 
CITICORP NORTH AMERICA, INC., as
Collateral Agent,
By:
 
/s/    MYLES KASSIN
   

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Name: Myles Kassin
Title: Vice President

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SCHEDULE I

Security Agreement
 
DOMESTIC SUBSIDIARIES
 
Domestic Subsidiaries of Constar International Inc.:
 
Name

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

  
Address

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

Constar, Inc.
  
One Crown Way, Philadelphia, PA 19154
Attention: James Cook
Telecopy: (215) 552-3700
BFF Inc.
  
One Crown Way, Philadelphia, PA 19154
Attention: James Cook
Telecopy: (215) 552-3700
DT, Inc.
  
One Crown Way, Philadelphia, PA 19154
Attention: James Cook
Telecopy: (215) 552-3700
Constar Plastics, LLC
  
919 Market Street, Suite 406, Wilmington, DE 19801
Constar Foreign Holdings, Inc.
  
One Crown Way, Philadelphia, PA 19154
Attention: James Cook
Telecopy: (215) 552-3700

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SCHEDULE II
Security Agreement
 
COMMERCIAL TORT CLAIMS
 
None.

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SCHEDULE III
 
Prior Liens
 
[To be completed]
 
DEBTOR

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JURISDICTION

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

    
SECURED PARTY

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

    
FILE
NUMBER/DATE

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COLLATERAL

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

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

SCHEDULE IV
 
Required Consents
 
None.
 

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

SCHEDULE V
 
Violations or Proceedings
 
1.
 
Crown Cork & Seal Technologies Corporation v. Continental PET Technologies,
Inc., et al., C.A. No. 99-234-JJF (D. Del.), filed April 8, 1999.

 
The complaint seeks unspecified monetary damages and alleges infringement of
Crown Cork & Seal Technologies Corporation’s (“CCK Technologies”) U.S. Patent
5,021,515 relating to oxygen scavenging plastic containers. Chevron Phillips
Chemical Company LP and Chevron Research and Technology Company (together,
“Chevron”) intervened on May 31, 2000 to assert cross-claims seeking a
declaratory judgment that its rights under a license from CCK Technologies
include exclusive rights to the particular application of the technology in the
product used by Continental PET Technologies, Inc. (“Continental PET”), and
certain other rights. CCK Technologies contends that the Chevron license is not
as broad as is claimed by Chevron, and that it does not include, among other
rights in dispute, the patent in question, but Continental PET also purports to
hold a sublicense from Chevron under the patent that would cover Continental
PET’s allegedly infringing products. CCK Technologies contends that Chevron does
not have the rights necessary to grant such a sublicense. The case against
Continental PET has been stayed pending resolution of the Chevron claims.
 
2.
 
North American Container, Inc. v. Plastipak Packaging Inc., et al. (including
Constar, Inc.), C.A. No. 3:99-CV-1749-L (N.D. Tex.), filed August 3, 1999.

 
The complaint (against 42 defendants) alleges infringement of North American
Container, Inc.’s patent for a certain plastic container design. The other
defendants include many of the principal plastic container manufacturers,
various food and beverage companies, and three grocery store chains. The
defendants filed motions for summary judgments that were referred to a Special
Master appointed by the court. The Special Master recommended that those motions
be granted in major part and that the defendants be permitted to file a renewed
motion for summary judgment as to other types of allegedly infringing
containers. The plaintiff and several of the defendants filed objections to the
Special Master’s recommendations. The District Court has not yet ruled on the
Special Master’s recommendations. In the meantime, the court is going forward
with a “bellwether” proceeding with respect to certain containers of certain of
the defendants. No Constar containers are included among the bellwether bottles,
and the case is stayed as to all parties not included in the bellwether
proceeding.

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

 
-6-
 
3.
 
Lemelson Medical, Education & Research Foundation, Limited Partnership v. Butler
Manufacturing Company, et al. (including Crown, Cork & Seal Company, Inc.
“Crown”), No. CIV 00-662-PHX-SMM (D. Ariz.), filed June 30, 2000.

 
Crown, like may other large companies, has been named in one of a series of
patent infringement actions brought by Lemelson Medical, Education & Research
Foundation LP. The complaint seeks unspecified damages and alleges infringement
of a patent involving bar code reader technology. The case has been stayed
pending resolution of a similar case in the District of Nevada in which the
defendants have asserted a defense of patent prosecution laches. Constar has not
been named as a party to this litigation, but may be responsible for a portion
of any liability that may eventually be assessed against Crown.

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

SCHEDULE VI
 
Separation Agreements
 
1.
 
Transition Services Agreement between Crown Cork & Seal Company, Inc. and
Constar International Inc., dated as of November [    ], 2002.

 
2.
 
Corporate Agreement between Crown Cork & Seal Company, Inc. and Constar
International Inc., dated as of November [    ], 2002.

 
3.
 
Non-Competition Agreement between Crown Cork & Seal Company, Inc. and Constar
International Inc., dated as of November [    ], 2002.

 
4.
 
Technical Services Agreement between Crown Cork & Seal Company, Inc. and Constar
International Inc., dated as of November [    ], 2002.

 
5.
 
Salt Lake City PET Products Supply and Lease of Related Assets Agreement between
Crown Cork & Seal Company (USA), Inc. and Constar, Inc., dated as of November
[    ], 2002.

 
6.
 
Newark Component Supply and Lease of Related Assets Agreement between Crown Cork
& Seal Company (USA), Inc. and Constar, Inc., dated as of November [    ], 2002.

 
7.
 
Research and Development Agreement between Crown Cork & Seal Technologies
Corporation, CarnaudMetalbox plc and Constar International Inc., dated as of
November [    ], 2002.

 
8.
 
Patent License Agreement between Crown Cork & Seal Technologies Corporation and
Constar International Inc., dated as of November [    ], 2002.

 
9.
 
Benefits Allocation Agreement between Crown Cork & Seal Company, Inc. and
Constar International Inc., dated as of November [    ], 2002.

 
10.
 
Voghera PET Preform Supply and Lease of Related Assets Agreement between Crown
Cork Italy S.p.A. and Constar Plastics of Italy S.R.L., dated as of November
[    ], 2002.

 
11.
 
Faba Supply Agreement between Faba Sirma S.p.A. and Constar Plastics of Italy
S.R.L., dated as of November [    ], 2002.

 
12.
 
Tax Sharing and Indemnification Agreement between Crown Cork & Seal Company,
Inc. and Constar International Inc., dated as of November [    ], 2002.

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

 
-8-
 
13.
 
Philadelphia Lease Agreement between Crown Cork & Seal Company, Inc. and
Constar, Inc., dated as of November [    ], 2002.

 
14.
 
Alsip Lease Agreement between Crown Cork & Seal Technologies Corporation and
Constar, Inc., dated as of November [    ], 2002.

 
15.
 
Closures Patent License Agreement between Crown Cork & Seal Technologies
Corporation and Constar International UK Limited, dated as of November [    ],
2002.

 
16.
 
License and Royalty Sharing Agreement between Crown Cork & Seal Technologies
Corporation and Constar International Inc., dated as of November [    ], 2002.

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

Annex I to the
Security Agreement
 
Form of Joinder Agreement
 
SUPPLEMENT NO. [    ] dated as of [                ], to the Security Agreement
(the “Security Agreement”) dated as of November     , 2002, among CONSTAR
INTERNATIONAL INC., a Delaware corporation (“Borrower”), each Domestic
Subsidiary of Borrower listed on Schedule I hereto (Borrower and such Domestic
Subsidiaries are referred to collectively herein as the “Grantors”) and CITICORP
NORTH AMERICA, INC., as collateral agent (in such capacity, the “Collateral
Agent”) for the Secured Parties (as defined herein).
 
A. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Security Agreement.
 
B. Pursuant to Sections 5.11 and 5.12 of the Credit Agreement, each Domestic
Subsidiary of Borrower that was not in existence or not a Domestic Subsidiary on
the date of the Credit Agreement is required to enter into the Security
Agreement as a Grantor upon becoming a Domestic Subsidiary if such Domestic
Subsidiary owns or possesses property of a type that would be considered
Collateral under the Security Agreement. Section 7.15 of the Security Agreement
provides that additional Subsidiaries of Borrower may become the Grantors under
the Security Agreement by execution and delivery of an instrument in the form of
this Supplement. The undersigned Subsidiary (the “New Grantor”) is executing
this Supplement in accordance with the requirements of the Credit Agreement to
become a Grantor under the Security Agreement.
 
Accordingly, the Collateral Agent and the New Grantor agree follows:
 
SECTION 1. In accordance with Section 7.15 of the Security Agreement, the New
Grantor by its signature below becomes a Grantor under the Security Agreement
with the same force and effect as if originally named therein as a Grantor and
the New Grantor hereby (a) agrees to all terms and provisions of the Security
Agreement applicable to it as Grantor thereunder and (b) represents and warrants
that the representations and warranties made by it as Grantor thereunder are
true and correct on and as of the date hereof. In furtherance of the foregoing,
the New Grantor, as security for the payment and performance in full of the
Obligations (as defined in the Security Agreement), does hereby created and
grant to the Collateral Agent, its successors and assigns, for the benefit of
the Secured Parties, their successors and assigns, a security interest in and
lien on all of the New Grantor’s right, title and interest in and to the
Collateral (as defined in the Security Agreement) of the New Grantor. Each
reference to a “Grantor” in the Security Agreement shall be deemed to include
the New Grantor.

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

 
-2-
 
The Security Agreement is hereby incorporated herein by reference. In addition,
by signing this Agreement, the New Grantor acknowledges that it has become a
party to the Collateral Sharing Agreement and agrees to be bound by all of the
terms and provisions thereof.
 
SECTION 2. The New Grantor represents and warrants to the Collateral Agent and
the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.
 
SECTION 3. This Supplement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Supplement shall become effective when the Collateral Agent shall
have received counterparts of this Supplement that, when taken together, bear
the signatures of the New Grantor and the Collateral Agent. Delivery of executed
signature page to this Supplement by facsimile transmission shall be as
effective as delivery of a manually signed counterpart of this Supplement.
 
SECTION 4. The New Grantor hereby represents and warrants that (a) set forth on
Schedule I attached hereto is a true and correct schedule of the location of any
and all Collateral of the New Grantor and (b) set forth under its signature
hereto, is the true and correct location of the chief executive office of the
New Grantor.
 
SECTION 5. Except as expressly supplemented thereby, the Security Agreement
shall remain in full force and effect.
 
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
 
SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity a particular provision
in a particular jurisdiction shall not in and of itself affect the validity of
such provision in any other jurisdiction). The parties hereto shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
 
SECTION 8. All communications and notices hereunder shall be in writing and
given as provided in Section 7.01 of the Security Agreement. All communications
and

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

 
-3-
 
notices hereunder of the New Grantor shall be given to it at the address set
forth under its signature below.
 
SECTION 9.    The New Grantor agrees to reimburse the Collateral Agent of its
reasonable out-of-pocket expenses in connection with this Supplement, including
the reasonable fees, other charges and disbursements of counsel for the
Collateral Agent.
 
IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly executed
this Supplement to the Security Agreement as of the day and year first above
written.
 
 
[Name Of New Grantor],
By:
       

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

Name:
Title:
Address:

 
 
CITICORP NORTH AMERICA, INC., as
    Collateral Agent,
By:
       

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

Name:
Title:

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

SCHEDULE I
to Supplement No. [    ]
to the Security Agreement
 
LOCATION OF COLLATERAL
 
Description

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

    
Location

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

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

Annex II to the
Security Agreement
 
 
 
Perfection Certificate