SECURITY AGREEMENT

         SECURITY AGREEMENT,  dated as of May 21, 1997 (as amended, modified, or
supplemented from time to time, "this Agreement"), among each of the undersigned
(each, together with its successors and assigns, an "Assignor" and collectively,
the  "Assignors"),   and  KEYBANK  NATIONAL  ASSOCIATION,   a  national  banking
association,  as collateral  agent  (herein,  together with its  successors  and
assigns  in such  capacity,  the  "Collateral  Agent"),  for the  benefit of the
Secured Creditors (as defined below):

         PRELIMINARY STATEMENTS:

         (1) Except as otherwise  defined herein,  terms used herein and defined
in the Credit  Agreement  (as  defined  below)  shall be used  herein as therein
defined.

         (2) This Agreement is made pursuant to the Credit  Agreement,  dated as
of the date hereof (herein,  as amended or otherwise modified from time to time,
the "Credit Agreement"), among Safety Components International, Inc., a Delaware
corporation  (herein,  together with its successors and assigns, the "Company"),
the other Borrowers named therein,  the financial  institutions named as lenders
therein, and KeyBank National  Association,  as the Administrative Agent for the
Lenders (as defined in the Credit Agreement), providing, among other things, for
loans or  advances  or other  extensions  of credit to or for the benefit of the
Borrowers of up to  $27,000,000,  with such loans or advances being evidenced by
promissory  notes  (the  "Notes",  such  term to  include  all  notes  and other
securities issued in exchange therefor or in replacement thereof).

         (3) The  Company  or any of its  Subsidiaries  may from time to time be
party to one or more  Designated  Hedge  Agreements  (as  defined  in the Credit
Agreement). Any institution that participates, and in each case their subsequent
assigns, as a counterparty to any Designated Hedge Agreement (collectively,  the
"Hedge   Creditors,"  and  the  Hedge  Creditors   together  with  the  Lenders,
collectively  the  "Secured  Creditors"  ), shall  benefit  hereunder  as herein
provided.

         (4) Pursuant to the Subsidiary Guaranty,  each Subsidiary Guarantor has
jointly and severally  guaranteed to the Secured  Creditors the payment when due
of the Guaranteed Obligations (as defined in the Subsidiary Guaranty).

         (5) It is a condition precedent to the making of Loans and the issuance
of, and participation in, Letters of Credit under the Credit Agreement that each
Assignor  shall  have  executed  and  delivered  to the  Collateral  Agent  this
Agreement.

     (6) Each  Assignor  desires  to  execute  this  Agreement  to  satisfy  the
conditions described in the preceding paragraph.


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         NOW,  THEREFORE,  in  consideration  of the  benefit  accruing  to each
Assignor,  the receipt and  sufficiency of which are hereby  acknowledged,  each
Assignor  hereby makes the following  representations  and warranties and hereby
covenants and agrees as follows:

         1.       SECURITY INTERESTS.

         1.1.  Grant of Security  Interests.  (a) As security for the prompt and
complete  payment  and  performance  when  due of all of the  Obligations,  each
Assignor does hereby sell,  assign and transfer unto the Collateral  Agent,  and
does  hereby  grant to the  Collateral  Agent,  for the  benefit of the  Secured
Creditors,  a  continuing  security  interest of first  priority  in, all of the
right,  title  and  interest  of  such  Assignor  in,  to and  under  all of the
following,  whether  now  existing  or  hereafter  from  time to  time  acquired
(collectively, the "Collateral"):

                  (i)      each and every Receivable,

                  (ii) all Contracts,  together with all Contract Rights arising
thereunder,

                  (iii)    all Inventory,

                  (iv)     all Equipment,

                  (v) all Marks,  together with the  registrations  and right to
all  renewals  thereof,  and the  goodwill  of the  business  of  such  Assignor
symbolized by the Marks,

                  (vi)     all Patents and Copyrights,

                  (vii)  all  computer   programs  of  such   Assignor  and  all
intellectual  property rights therein and all other  Proprietary  Information of
such Assignor, including, but not limited to, Trade Secrets,

                  (viii)   all Permits,

                  (ix) the Cash  Collateral  Account and all monies,  securities
and  instruments  deposited or required to be deposited in such Cash  Collateral
Account,

                  (x) all  other  Goods,  General  Intangibles,  Chattel  Paper,
Documents and Instruments  (other than the Securities and Equity  Interests,  as
defined in, and which are pledged,  or not  required to be pledged,  pursuant to
the Pledge Agreement), and

                  (xi)  all  Proceeds  and  products  of  any  and  all  of  the
foregoing.

         (b) The security  interest of the Collateral Agent under this Agreement
extends to all  Collateral  of the kind which is the  subject of this  Agreement
which any Assignor may acquire at any

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time  during the  continuation  of this  Agreement,  provided  that no  security
interest is granted under this Agreement  with respect to any Equipment  subject
on the date hereof to any secured  installment  purchase  agreement  that by its
terms  prohibits  the  creation of  additional  liens on such  Equipment  unless
consent has been  obtained and provided  further that the Company  shall use its
commercially reasonable efforts to obtain such consent, it being understood that
the  Company  shall not be  required  to pay more than the  nominal fee for such
consent.  Upon the payment of all amounts owing under such installment  purchase
agreement  or the removal of any  prohibition  on the  creation of a lien on the
Equipment subject thereto, such Equipment shall constitute collateral hereunder.

         1.2. Power of Attorney.  Each Assignor hereby  constitutes and appoints
the Collateral Agent its true and lawful attorney,  irrevocably, with full power
after the  occurrence of and during the  continuance  of an Event of Default (in
the name of such  Assignor  or  otherwise)  to act,  require,  demand,  receive,
compound and give  acquittance  for any and all monies and claims for monies due
or to become due to the  Assignor  under or  arising  out of the  Collateral  to
endorse any checks or other instruments or orders in connection therewith and to
file any  claims  or take any  action or  institute  any  proceedings  which the
Collateral  Agent may deem to be necessary or advisable in the  premises,  which
appointment as attorney is coupled with an interest.

         2.       GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS.

         Each   Assignor    represents,    warrants   and    covenants,    which
representations,  warranties and covenants shall survive  execution and delivery
of this Agreement, as follows:

         2.1. Necessary  Filings.  Assuming the filing in the appropriate filing
offices of those UCC-1 financing  statements  delivered to the Collateral  Agent
pursuant  to  section  6.1(d) of the  Credit  Agreement  and the  filings of the
patent,  trademark  and  copyright  security  agreements  with the United States
Patent and Trademark Office and the United States Copyright Office, all filings,
registrations  and  recordings  necessary or  appropriate  to create,  preserve,
protect  and  perfect  the  security  interest  granted by such  Assignor to the
Collateral Agent hereby in respect of the Collateral have been  accomplished and
the security interest granted to the Collateral Agent pursuant to this Agreement
in and to the  Collateral  constitutes  a perfected  security  interest  therein
superior and prior to the rights of all other persons  therein  (except that the
Collateral may be subject to the security  interests  evidenced by the financing
statements disclosed on Annex A hereto (the "Permitted Filings")) and subject to
no other  Liens  (except  Permitted  Liens) and is  entitled  to all the rights,
priorities  and  benefits  afforded  by the  Uniform  Commercial  Code or  other
relevant  law as enacted in any  relevant  jurisdiction  to  perfected  security
interests,  subject to compliance  with the Assignment of Claims Act of 1940, as
amended,  and subject to the limitations on assignments of payments  pursuant to
42 C.F.R. ss. 447.10 (Medicaid),  or other applicable legal requirements related
to  directed   payments  to  assignees   under  federal  and  state  payment  or
reimbursement programs.


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         2.2. No Liens.  Each Assignor is, and as to  Collateral  acquired by it
from time to time after the date hereof such  Assignor will be, the owner of all
Collateral free from any Lien,  security  interest,  encumbrance or other right,
title or interest of any person (other than  evidenced by the Permitted  Filings
and Liens permitted under the Credit Agreement),  and such Assignor shall defend
the  Collateral  against  all  claims  and  demands  of all  persons at any time
claiming the same or any interest therein adverse to the Collateral Agent.

         2.3. Other Financing  Statements.  There is no financing  statement (or
similar   statement  or  instrument  of  registration   under  the  law  of  any
jurisdiction)  covering or  purporting  to cover any interest of any kind in the
Collateral  except  as  disclosed  in  Annex A hereto  and so long as the  Total
Commitment has not been  terminated or any Letter of Credit remains  outstanding
or any of the  Obligations  remain  unpaid  or any  Designated  Hedge  Agreement
remains in effect,  no Assignor  will  execute or  authorize  to be filed in any
public  office any financing  statement  (or similar  statement or instrument of
registration  under the law of any  jurisdiction) or statements  relating to the
Collateral,  except financing  statements filed or to be filed in respect of and
covering the security  interests  granted  hereby such  Assignor or as otherwise
permitted by the Credit Agreement.

         2.4. Chief Executive Office,  etc; Records.  The chief executive office
(and the  registered  office of each Assignor  which is a  corporation)  of each
Assignor is located at the address indicated on Annex B hereto. No Assignor will
move its chief executive office (or registered office in the case of an Assignor
which  is a  corporation)  except  to such new  location  as such  Assignor  may
establish  in  accordance  with the  last  sentence  of this  section  2.4.  The
originals of all documents  evidencing all  Receivables  and Contract  Rights of
such  Assignor  and the only  original  books of  account  and  records  of such
Assignor  relating  thereto  are,  and will  continue  to be, kept at such chief
executive  office,  or at such new  locations as such  Assignor may establish in
accordance  with the last  sentence of this  section 2.4.  All  Receivables  and
Contract  Rights of such Assignor are, and will continue to be,  maintained  at,
and  controlled  and  directed  (including,   without  limitation,  for  general
accounting  purposes) from, the office  locations  described  above, or such new
locations as such Assignor may establish in accordance with the last sentence of
this section 2.4. No Assignor  shall  establish  new  locations for such offices
until (i) it shall  have  given to the  Collateral  Agent not less than 30 days'
prior  written  notice  (or such  lesser  notice as shall be  acceptable  to the
Collateral  Agent in the case of a new  record  location  to be  established  in
connection  with newly  acquired  Contracts) of its intention so to do,  clearly
describing such new location and providing such other  information in connection
therewith as the Collateral Agent may reasonably request,  and (ii) with respect
to such new  location,  it shall  have  taken all  action,  satisfactory  to the
Collateral  Agent, to maintain the security  interest of the Collateral Agent in
the Collateral intended to be granted hereby at all times fully perfected and in
full force and effect.

         2.5.  Location of Inventory and Equipment.  All Inventory and Equipment
held on the date  hereof by each  Assignor  is located  at one of the  locations
shown on Annex C attached  hereto.  Each Assignor  agrees that all Inventory and
Equipment now held or subsequently  acquired by it shall be kept at (or shall be
in transport to or from) any one of the  locations  shown on Annex C hereto,  or
such new location as such  Assignor may  establish in  accordance  with the last
sentence of this

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section  2.5. An  Assignor  may  establish  a new  location  for  Inventory  and
Equipment only if (i) it shall have given to the Collateral  Agent not less than
30 days' prior written notice of its intention so to do, clearly describing such
new location and providing such other information in connection therewith as the
Collateral  Agent may  reasonably  request,  and (ii) with  respect  to such new
location,  it  shall  have  taken  all  action  reasonably  satisfactory  to the
Collateral  Agent to maintain the security  interest of the Collateral  Agent in
the Collateral intended to be granted hereby at all times in fully perfected and
in full force and effect.

         2.6.  Trade Names;  Change of Name.  No Assignor has or operates in any
jurisdiction  under,  or in the preceding  five years has had or has operated in
any  jurisdiction  under,  any  trade  names,  fictitious  names or other  names
(including, without limitation, any names of divisions or operations) except its
legal  name and such other  trade,  fictitious  or other  names as are listed on
Annex D hereto.  Each  Assignor has only  operated  under each name set forth in
Annex D in the jurisdiction or  jurisdictions  set forth opposite each such name
on Annex D. No Assignor  shall change its legal name or assume or operate in any
jurisdiction under any trade, fictitious or other name except those names listed
on Annex D hereto in the jurisdictions listed with respect to such names and new
names  (including,  without  limitation,  any names of divisions or  operations)
and/or  jurisdictions  established in accordance  with the last sentence of this
section 2.6. No Assignor shall assume or operate in any  jurisdiction  under any
new trade,  fictitious  or other name or operate  under any existing name in any
additional  jurisdiction  until (i) it shall have given to the Collateral  Agent
not less than 30 days' prior written  notice of its intention so to do,  clearly
describing in such new name and/or  jurisdiction and, in the case of a new name,
the  jurisdictions in which such new name shall be used and providing such other
information  in  connection  therewith as the  Collateral  Agent may  reasonably
request,  and (ii) with  respect to such new name  and/or new  jurisdiction,  it
shall have taken all action to maintain the security  interest of the Collateral
Agent in the  Collateral  intended  to be  granted  hereby  at all  times  fully
perfected and in full force and effect.

         2.7.  Recourse.  This  Agreement  is made  with  full  recourse  to the
relevant Assignor and pursuant to and upon all the warranties,  representations,
covenants,  and agreements on the part of such Assignor contained herein, in the
Designated Hedge  Agreements and otherwise in writing in connection  herewith or
therewith.

         3.       SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT
                  RIGHTS; INSTRUMENTS.

         3.1.  Additional  Representations  and Warranties.  As of the time when
each of its accounts  receivable  arises,  each Assignor shall be deemed to have
represented and warranted that,  except in such respects as do not impair in any
material respect the value or collectibility of its accounts receivable taken as
a whole, and except in such other respects as may from time be disclosed by such
Assignor  to the  Administrative  Agent in  writing:  such  receivable,  and all
records,  papers  and  documents  relating  thereto  (if any)  are,  to the best
knowledge of the Assignor  after due inquiry,  genuine and in all respects  what
they purport to be, and that all papers and documents (if any) relating thereto,
to the best knowledge of the Assignor after due inquiry,  (i) will represent the
genuine, legal,

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valid and binding  obligation  of the  account  debtor,  subject to  adjustments
customary in the business of such Assignor,  and evidencing  indebtedness unpaid
and owed by the  respective  account  debtor  arising out of the  performance of
labor or services or the sale or lease and  delivery of the  merchandise  listed
therein,  or  both,  (ii)  will be the only  original  writings  evidencing  and
embodying such obligation of the account debtor named therein (other than copies
created for general  accounting  purposes),  (iii) will  evidence true and valid
obligations,  enforceable in accordance with their respective terms,  subject to
adjustments  customary  in the  business  of such  Assignor  and (iv) will be in
compliance  and Will conform with all applicable  federal,  state and local laws
and applicable laws of any relevant foreign jurisdiction.

         3.2.  Maintenance  of Records.  Each Assignor Will keep and maintain at
its own cost and expense  satisfactory  and complete  records of its Receivables
and Contracts, including, but not limited to, the originals of all documentation
(including  each  Contract)  with  respect  thereto,  records  of  all  payments
received,  all credits granted thereon,  all merchandise  returned and all other
dealings  therewith,  and such  Assignor  will  make the same  available  to the
Collateral Agent for inspection, at such Assignor's own cost and expense, at any
and all reasonable  times upon demand and upon reasonable  advance notice.  Each
Assignor  shall, at its own cost and expense,  deliver all tangible  evidence of
its Receivables and Contract Rights (including,  without  limitation,  copies of
all documents  evidencing the  Receivables  and all Contracts,  such copies,  if
requested by the Collateral Agent while an Event of Default is in existence,  to
be certified as true and complete by an  appropriate  officer of such  Assignor)
and such books and  records to the  Collateral  Agent or to its  representatives
(copies  of which  evidence  and  books  and  records  may be  retained  by such
Assignor) at any time upon its demand. If the Collateral Agent so directs,  each
Assignor  shall  legend,  in form  and  manner  reasonably  satisfactory  to the
Collateral Agent, the Receivables and Contracts,  as well as books,  records and
documents of such Assignor  evidencing or pertaining to the Receivables  with an
appropriate  reference to the fact that the  Receivables and Contracts have been
assigned to the Collateral  Agent and that the  Collateral  Agent has a security
interest therein.

         3.3.  Modification  of Terms;  etc. No Assignor shall rescind or cancel
any  indebtedness  evidenced by any Receivable or under any Contract,  or modify
any term thereof or make any adjustment with respect thereto, or extend or renew
the same,  or compromise or settle any material  dispute,  claim,  suit or legal
proceeding  relating  thereto,  or sell any Receivable or Contract,  or interest
therein,  without the prior written consent of the Collateral Agent,  except (i)
as  permitted  by section  3.4 hereof and (ii) so long as no Event of Default is
then in existence in respect of which the Collateral Agent has given notice that
this  exception is no longer  applicable,  the  Assignor  may  rescind,  cancel,
modify,  make  adjustments  with  respect to,  extend or renew any  Contracts or
indebtedness  evidenced  by any  Receivable,  or  compromise  or settle any such
dispute, claim, suit, or legal proceeding, or sell any Receivable or Contract or
interest  therein,  in the ordinary course of business.  Each Assignor will duly
fulfill all  obligations on its part to be fulfilled under or in connection with
the  Receivables  and  Contracts  and will do nothing to  materially  impair the
rights of the Collateral Agent in the Receivables or Contracts.

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         3.4. Collection.  Each Assignor shall endeavor to cause to be collected
from the account  debtor named in each of its  Receivables  or obligor under any
Contract,  as and when due  (including,  without  limitation,  amounts which are
delinquent,  such amounts to be collected in accordance with generally  accepted
lawful  collection  procedures) any and all amounts owing under or on account of
such  Receivable or Contract,  and apply forthwith upon receipt thereof all such
amounts as are so collected to the  outstanding  balance of such  Receivable  or
under  such  Contract,  except  that,  so long as no Event of Default is then in
existence  in respect of which the  Collateral  Agent has given notice that this
exception  is no longer  applicable,  such  Assignor  may allow in the  ordinary
course of business as  adjustments  to amounts owing under its  Receivables  and
Contracts  (i) an  extension  or  renewal  of the time or times of  payment,  or
settlement  for less than the total unpaid  balance,  which such Assignor  finds
appropriate  in  accordance  with sound  business  judgment and (ii) a refund or
credit  due as a  result  of  returned  or  damaged  merchandise  or  improperly
performed services. The reasonable  out-of-pocket costs and expenses (including,
without  limitation,  attorneys'  fees) of collection,  whether incurred by such
Assignor or the Collateral Agent, shall be borne by such Assignor.

         3.5. Direction to Account Debtors,  etc. Upon the occurrence and during
the continuance of an Event of Default,  and if the Collateral  Agent so directs
the relevant Assignor,  to the extent permitted by applicable law, such Assignor
agrees  (x) to cause all  payments  on  account  of the  Receivables  to be made
directly to the Cash Collateral  Account,  (y) that the Collateral Agent may, at
its option, directly notify the obligors with respect to any Receivables to make
payments with respect thereto as provided in preceding  clause (x), and (z) that
the  Collateral  Agent may enforce  collection of any such  Receivables  and may
adjust, settle or compromise the amount of payment thereof. The Collateral Agent
may apply any or all  amounts  then in, or  thereafter  deposited  in,  the Cash
Collateral Account in the manner provided in section 7.4 of this Agreement.  The
reasonable  out-of-pocket  costs and  expenses  (including  attorneys'  fees) of
collection,  whether incurred by such Assignor or the Collateral Agent, shall be
borne by such Assignor.

         3.6. Instruments. If any Assignor owns or acquires any Instrument, such
Assignor  will  within 10 days notify the  Collateral  Agent  thereof,  and upon
request  by  the  Collateral  Agent  promptly  deliver  such  statement  to  the
Collateral Agent appropriately  endorsed to the order of the Collateral Agent as
further security hereunder.

         3.7.  Further  Actions.  Each Assignor will, at its own expense,  make,
execute, endorse,  acknowledge, file and/or deliver to the Collateral Agent from
time to time  such  vouchers,  invoices,  schedules,  confirmatory  assignments,
conveyances,  financing statements,  transfer endorsements,  powers of attorney,
certificates,  reports and other assurances or instruments and take such further
steps relating to its Receivables,  Contracts, Instruments and other property or
rights covered by the security interest hereby granted,  as the Collateral Agent
may reasonably require to give effect to the purposes of this Agreement.


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         4.        SPECIAL PROVISIONS CONCERNING TRADEMARKS.

         4.1.   Additional   Representations   and  Warranties.   Each  Assignor
represents  and warrants that it is the true and lawful owner or licensee of the
Marks listed in Annex E attached  hereto and that said listed  Marks  constitute
all the marks  registered in the United States Patent and Trademark  Office that
such  Assignor now owns or uses in connection  with its business.  Each Assignor
represents  and  warrants  that it owns or is  licensed to use all Marks that it
uses, and that it owns all of the registrations listed on Annex E. Each Assignor
further  warrants  that it is aware of no third  party  claim that any aspect of
such Assignor's present or contemplated  business  operations  infringes or will
infringe  any  trademark or service mark in a manner which could have a material
effect on the financial condition, business or property of such Assignor.

         4.2.  Licenses and  Assignments.  Each  Assignor  hereby  agrees not to
divest  itself of any right  under a Mark other than in the  ordinary  course of
business absent prior written approval of the Collateral Agent.

         4.3.  Infringements.  Each  Assignor  agrees,  promptly  upon  learning
thereof,  to notify the Collateral  Agent in writing of the name and address of,
and to furnish such pertinent information that may be available with respect to,
any party who may be  infringing or otherwise  violating any of such  Assignor's
rights in and to any Mark that has a material effect on the financial condition,
business  or  property  of such  Assignor  taken as a whole  (each such Mark,  a
"Significant  Mark"), or with respect to any party claiming that such Assignor's
use of any  Significant  Mark violates any property right of that party,  to the
extent that such  infringement  or violation could have a material effect on the
financial  condition,  business  or  property of such  Assignor.  Each  Assignor
further agrees, unless otherwise directed by the Collateral Agent, diligently to
prosecute any person infringing any Significant Mark in a manner consistent with
its past practice and in the ordinary course of business.

         4.4.  Preservation of Marks. Each Assignor agrees to use or license the
use of its  Significant  Marks in interstate  commerce  during the time in which
this Agreement is in effect,  sufficiently  to preserve such Marks as trademarks
or service marks registered under the laws of the United States.

         4.5.  Maintenance  of  Registration.  Each Assignor  shall,  at its own
expense, diligently process all documents required by the Trademark Act of 1946,
15 U.S.C.  ss.ss.1051  et seq. to maintain  trademark  registration  which would
reasonably  be expected to have a Material  Adverse  Effect,  including  but not
limited to affidavits of use and  applications  for renewals of  registration in
the United States Patent and Trademark  Office for all of its Marks  pursuant to
15 U.S.C. ss.ss.1058(a), 1059 and 1065, and shall pay all fees and disbursements
in connection  therewith,  and shall not abandon any such filing of affidavit of
use  or  any  such  application  of  renewal  prior  to  the  exhaustion  of all
administrative  and  judicial  remedies  without  prior  written  consent of the
Collateral Agent, which consent shall not be unreasonably withheld.


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         4.6. Future Registered Marks. If any mark registration issues hereafter
to an Assignor as a result of any  application  now or hereafter  pending before
the United States Patent and Trademark Office, within 30 days of receipt of such
certificate such Assignor shall deliver a copy of such certificate,  and a grant
of security in such mark to the Collateral  Agent,  confirming the grant thereof
hereunder,  the form of such confirmatory  grant to be substantially the same as
the form hereof.

         4.7.  Remedies.  If an Event of Default shall occur and be  continuing,
the Collateral Agent may, by written notice to the relevant  Assignor,  take any
or all of the  following  actions:  (i)  declare  the  entire  right,  title and
interest  of such  Assignor  in and to  each of the  Marks,  together  with  all
trademark  rights and rights of protection to the same,  vested,  in which event
such rights,  title and interest shall immediately vest, in the Collateral Agent
for the benefit of the Secured Creditors,  in which case such Assignor agrees to
execute an  assignment  in form and  substance  reasonably  satisfactory  to the
Collateral  Agent, of all its rights,  title and interest in and to the Marks to
the Collateral Agent for the benefit of the Secured Creditors; (ii) take and use
or sell the Marks and the goodwill of such Assignor's business symbolized by the
Marks and the right to carry on the  business and use the assets of the Assignor
in  connection  with  which the Marks  have been  used;  and (iii)  direct  such
Assignor to refrain, in which event such Assignor shall refrain,  from using the
Marks in any manner whatsoever, directly or indirectly, and, if requested by the
Collateral Agent,  change such Assignor's  corporate name to eliminate therefrom
any use of any Mark and  execute  such  other  and  further  documents  that the
Collateral  Agent may request to further confirm this and to transfer  ownership
of the Marks and  registrations  and any pending  trademark  application  in the
United States Patent and Trademark Office to the Collateral Agent.

         5.       SPECIAL PROVISIONS CONCERNING PATENTS AND COPYRIGHTS.

         5.1.   Additional   Representations   and  Warranties.   Each  Assignor
represents  and warrants that it is the true and lawful owner or licensee of all
rights in the  Patents  listed in Annex F attached  hereto and in the  Copyright
registrations  listed in Annex G attached hereto,  that said Patents  constitute
all the United States  patents and  applications  for United States patents that
such Assignor now owns and that said  Copyrights  constitute  all the registered
United States  copyrights that such Assignor now owns. Each Assignor  represents
and  warrants  that it owns or is  licensed  to  practice  under all Patents and
Copyright registrations that it now owns, uses or practices under. Each Assignor
further  warrants  that it is aware of no third  party  claim that any aspect of
such Assignor's present or contemplated  business  operations  infringes or will
infringe  any patent or any  copyright  in a manner  which could have a material
effect on the financial condition, business or property of such Assignor.

         5.2.  Licenses and  Assignments.  Each  Assignor  hereby  agrees not to
divest  itself  of any  right  under a Patent  or  Copyright  other  than in the
ordinary  course of business  absent prior  written  approval of the  Collateral
Agent, which such approval shall not be unreasonably withheld.

                                                         9

<PAGE>



         5.3.  Infringements.  Each  Assignor  agrees,  promptly  upon  learning
thereof,  to  furnish  the  Collateral  Agent  in  writing  with  all  pertinent
information available to such Assignor with respect to any infringement or other
violation of such Assignor's  rights in any Patent that has a material effect on
the financial condition,  business or property of such Assignor taken as a whole
(each such Patent, a "Significant Patent') or Copyright,  or with respect to any
claim that practice of any Significant Patent or Copyright violates any property
right of that party,  to the extent that such  infringement  or violation  could
have a material effect on the financial condition,  business or property of such
Assignor. Each Assignor further agrees, absent direction of the Collateral Agent
to the contrary,  diligently to prosecute any person  infringing any Significant
Patent or Copyright about which it has knowledge in a manner consistent with its
past practice and in the ordinary course of business.

         5.4.  Maintenance of Patents.  At its own expense,  each Assignor shall
make timely payment of all post issuance fees required pursuant to 35 U.S.C. ss.
41 to maintain in force rights under each Patent.

         5.5.  Prosecution  of Patent  Applications.  At its own  expense,  each
Assignor shall  diligently  prosecute all applications for United States patents
listed on Annex F hereto, and shall not abandon any such application,  except in
favor  of a  continuation  application  based  on  such  application,  prior  to
exhaustion of all administrative  and judicial remedies,  absent written consent
of the Collateral Agent, which such consent shall not be unreasonably withheld.

         5.6. Other Patents and  Copyrights.  Within 30 days of acquisition of a
United States Patent or Copyright,  or of filing of an application  for a United
States  Patent  or  Copyright,  the  relevant  Assignor  shall  deliver  to  the
Collateral Agent a copy of said Patent or Copyright,  as the case may be, with a
grant of security as to such Patent or Copyright, as the case may be, confirming
the  grant  thereof  hereunder,  the  form  of  such  confirmatory  grant  to be
substantially the same as the form hereof.

         5.7.  Remedies.  If an Event of Default shall occur and be  continuing,
the Collateral Agent may by written notice to the relevant  Assignor take any or
all of the following  actions:  (i) declare the entire right, title and interest
of such Assignor in each of the Patents and  Copyrights  vested,  in which event
such right,  title and interest shall  immediately  vest in the Collateral Agent
for the benefit of the Secured Creditors,  in which case such Assignor agrees to
execute an  assignment  in form and  substance  reasonably  satisfactory  to the
Collateral  Agent of all its right,  title,  and  interest  to such  Patents and
Copyrights  to the  Collateral  Agent for the benefit of the Secured  Creditors;
(ii) take and  practice or sell the Patents and  Copyrights;  (iii)  direct such
Assignor to refrain in which event such Assignor shall refrain,  from practicing
the Patents and  Copyrights  directly or  indirectly,  and such  Assignor  shall
execute  such other and further  documents as the  Collateral  Agent may request
further to confirm this and to transfer  ownership of the Patents and Copyrights
to the Collateral Agent for the benefit of the Secured Creditors.


                                                        10

<PAGE>



         6.       PROVISIONS CONCERNING ALL COLLATERAL.

         6.1.  Protection of Collateral Agent's Security.  Each Assignor will do
nothing to impair the rights of the  Collateral  Agent in the  Collateral.  Each
Assignor will at all times keep its  Inventory and Equipment  insurance in favor
of the  Collateral  Agent,  at its own  expense,  to the extent  required by the
Credit Agreement against fee, theft and all other risks to which such Collateral
may be subject;  all policies or  certificates  with  respect to such  insurance
shall be endorsed to the Collateral Agent's  satisfaction for the benefit of the
Collateral Agent (including,  without limitation, by naming the Collateral Agent
as an additional  insured and loss payee) and copies  thereof shall be delivered
upon request to the Collateral  Agent.  If an Assignor shall fail to insure such
Inventory and/or Equipment to the extent required by the Credit Agreement, or if
such Assignor shall fail to so endorse all policies or certificates with respect
thereto,  the  Collateral  Agent  shall  have the right  (but  shall be under no
obligation) to procure such insurance and such Assignor  agrees to reimburse the
Collateral  Agent for all costs and expenses of procuring  such  insurance.  The
Collateral  Agent may apply any proceeds of such  insurance in  accordance  with
section 7.4, it being understood and agreed that the Assignor shall be permitted
to first use any such proceeds to repair and/or replace the relevant Collateral.
Each Assignor  assumes all Ability and  responsibility  in  connection  with the
Collateral  acquired  by it and  the  liability  of  such  Assignor  to pay  its
Obligations shall in no way be affected or diminished by reason of the fact that
such  Collateral  may be lost,  destroyed,  stolen,  damaged  or for any  reason
whatsoever unavailable to such Assignor.

         6.2.  Warehouse Receipts  Non-negotiable.  Each Assignor agrees that if
any warehouse  receipt or receipt in the nature of a warehouse receipt is issued
with respect to any of its Inventory,  such warehouse  receipt or receipt in the
nature thereof shall not be "negotiable"  (as such term is used in section 7-104
of the Uniform  Commercial  Code as in effect in any  relevant  jurisdiction  or
under other relevant law).

         6.3.  Further  Actions.  Each Assignor will, at its own expense,  make,
execute, endorse,  acknowledge, file and/or deliver to the Collateral Agent from
time to time  such  lists,  descriptions  and  designations  of its  Collateral,
warehouse  receipts,  receipts  in the nature of  warehouse  receipts,  bills of
lading,  documents  of  title,  vouchers,  invoices,   schedules,   confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney,  certificates,  reports and other  assurances or instruments  and take
such  further  steps  relating to the  Collateral  and other  property or rights
covered by the security  interest  hereby  granted,  which tie Collateral  Agent
reasonably  deems  appropriate or advisable to perfect,  preserve or protect its
security interest in the Collateral.

         6.4. Financing Statements.  Each Assignor agrees to sign and deliver to
the  Collateral  Agent such  financing  statements,  in form  acceptable  to the
Collateral  Agent,  as the  Collateral  Agent may from  time to time  reasonably
request or as are necessary or desirable in the opinion of the Collateral  Agent
to establish and maintain a valid, enforceable, first priority security interest
in the  Collateral  as  provided  herein  and  the  other  rights  ant  security
contemplated  hereby  all in  accordance  with the  Uniform  Commercial  Code as
enacted in any and all relevant  jurisdictions  or any other  relevant law. Each
Assignor will pay any applicable filing fees and elated expenses. Each Assignor

                                                        11

<PAGE>



authorizes the Collateral Agent to file any such financing statements without he
signature of such Assignor.

         7.       REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT.

         7.1.  Remedies;  Obtaining the Collateral  Upon Default.  Each Assignor
agrees that, if any Event of Default shall have occurred and be continuing, then
and in every such case, subject to any mandatory  requirements of applicable law
then in effect, the Collateral Agent, in addition to any rights now or hereafter
existing under applicable law, shall have all rights as a secured creditor under
the Uniform Commercial Code in all relevant jurisdictions and may

                  (i) personally, or by agents or attorneys,  immediately retake
         possession of the Collateral or any part thereof, from such Assignor or
         any other  person who then has  possession  of any part thereof with or
         without  notice or process of law,  and for that purpose may enter upon
         such  Assignor's  premises  where any of the  Collateral is located and
         remove the same and use in  connection  with such  removal  any and all
         services, supplies, aids and other facilities of such Assignor;

                  (ii)  instruct  the  obligor  or  obligors  on any  agreement,
         instrument or other  obligation  (including,  without  limitation,  the
         Receivables)  constituting  the Collateral to make any payment required
         by the terms of such instrument or agreement directly to the Collateral
         Agent;

                  (iii)  sell,  assign or  otherwise  liquidate,  or direct such
         Assignor  to sell,  assign or  otherwise  liquidate,  any or all of the
         Collateral or any part thereof,  and take possession of the proceeds of
         any such sale or liquidation;

                  (iv) withdraw any or all monies, securities and/or instruments
         in the Cash  Collateral  Account for  application to the Obligations in
         accordance with section 7.4 hereof; and

                  (v) take possession of the Collateral or any part thereof,  by
         directing  such  Assignor  in  writing  to  deliver  the  same  to  the
         Collateral  Agent at any place or places  designated by the  Collateral
         Agent, in which event such Assignor shall at its own expense;

                           (A) forthwith cause the same to be moved to the place
                  or  places so  designated  by the  Collateral  Agent and there
                  delivered to the Collateral Agent,

                           (B) store and keep any Collateral so delivered to the
                  Collateral  Agent at such  place  or  places  pending  further
                  action by the Collateral Agent as provided in section 7.2, and

                                                        12

<PAGE>



                           (C) while the Collateral shall be so stored and kept,
                  provide  such  guards  and  maintenance  services  as shall be
                  necessary  to protect  the same and to preserve  and  maintain
                  them in good condition;

it being understood that such Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by the Assignor of said obligation.

         7.2. Remedies;  Disposition of the Collateral.  Upon the occurrence and
continuance of an Event of Default, any Collateral repossessed by the Collateral
Agent under or pursuant to section 7.1 and any other  Collateral  whether or not
so  repossessed  by the  Collateral  Agent,  may be sold,  assigned,  leased  or
otherwise disposed of under one or more contracts or as an entirety, and without
the necessity of gathering at the place of sale of the property to be sold,  and
in general in such manner, at such time or times, at such place or places and on
such  terms as the  Collateral  Agent  may,  in  compliance  with any  mandatory
requirements  of applicable able how,  determine to be commercially  reasonable.
Any of the Collateral may be sold, leased or otherwise  disposed of in condition
in which  the same  existed  when  taken by the  Collateral  Agent or after  any
overhaul or repair which the Collateral Agent shall determine to be commercially
reasonable.  Any such disposition which shall be a private sale or other private
proceedings  permitted by such requirements  shall be made upon not less than 10
days'  written  notice  to such  Assignor  specifying  the  time at  which  such
disposition  is to be made and the  intended  sale price or other  consideration
therefor, and shall be subject, for the 10 days after the giving of such notice,
to the right of the relevant Assignor or any nominee of the relevant Assignor to
acquire the Collateral  involved at a price or for such other  consideration  at
least equal to the intended sale price or other consideration so specified.  Any
such  disposition  which shall be a public sale  permitted by such  requirements
shall be made  upon  not  less  than 10 days'  written  notice  to the  relevant
Assignor  specifying  the time and  place of such sale and,  in the  absence  of
applicable  requirements  of law,  shall be by public auction (which may, at the
Collateral  Agent's option, be subject to reserve),  after publication of notice
of such auction not less than 10 days prior thereto in two newspapers in general
circulation  in the  city  where  such  Collateral  is  located.  To the  extent
permitted by any such  requirement of law, the Collateral Agent on behalf of the
Secured  Creditors (or certain of them) may bid for and become the purchaser (by
bidding in  Obligations  or  otherwise)  of the  Collateral or any item thereof,
offered for sale in accordance with this section without  accountability  to the
relevant Assignor (except to the extent of surplus money received as provided in
section 7.4). If, under mandatory requirements of applicable law, the Collateral
Agent shall be required to make disposition of the Collateral within a period of
time which does not permit the giving of notice to the  Assignor as  hereinabove
specified, the Collateral Agent need give the relevant Assignor only such notice
of  disposition  as shall be reasonably  practicable  in view of such  mandatory
requirements of applicable law.

                                                        13

<PAGE>



         7.3. Waiver, or Claims. Except as otherwise provided in this Agreement,
EACH ASSIGNOR HEREBY WAIVES,  TO THE EXTENT  PERMITTED BY APPLICABLE LAW, NOTICE
AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S TAKING POSSESSION
OR THE  COLLATERAL  AGENT'S  DISPOSITION  OF ANY OF THE  COLLATERAL,  INCLUDING,
WITHOUT  LIMITATION,  ANY AND ALL PRIOR  NOTICE AND HEARING FOR ANY  PREJUDGMENT
REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH THE ASSIGNOR  WOULD  OTHERWISE  HAVE
UNDER THE  CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and
each Assignor hereby further waives, to the extent permitted by law:

                  (i) all damages occasioned by such taking of possession except
         any damages which are the direct result of the Collateral Agent's gross
         negligence or wilful misconduct;

                  (ii) all other requirements as to the time, place and terms of
         sale or other  requirements  with  respect  to the  enforcement  of the
         Collateral Agent's rights here-under; and

                  (iii) all rights of redemption, appraisement, valuation, stay,
         extension or moratorium  now or hereafter in force under any applicable
         law in order to prevent or delay the  enforcement  of this Agreement or
         the absolute sale of the  Collateral or any portion  thereof,  and each
         Assignor,  for itself and all who may claim under it,  insofar as it or
         they now or hereafter  lawfully  may,  hereby waives the benefit of all
         such laws.

Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral  shall operate to divest all right,  title,  interest,  claim and
demand,  either  at law or in  equity,  of the  relevant  Assignor  therein  and
thereto,  and shall be a  perpetual  bar both at law and in equity  against  the
relevant  Assignor  and against any and all persons  claiming or  attempting  to
claim the  Collateral so sold,  optioned or realized  upon, or any part thereof,
from through and under the relevant Assignor.

         7.4.  Application  or  Proceeds.  (a) The  proceeds  of any  Collateral
obtained pursuant to section 7.1 or disposed of pursuant to section 7.2 shall be
applied as follows:

                  (i) first, to the payment of all Obligations to the Collateral
         Agent of the type described in clauses (iii) and (iv) of the definition
         of "Obligations" contained in section 9 hereof

                  (ii)  second,   to  the  extent   proceeds  remain  after  the
         application  pursuant to  preceding  clause (i), an amount equal to the
         outstanding  Obligations to the Secured  Creditors shall be paid to the
         Secured  Creditors  as  provided in section  7.4(c)  with each  Secured
         Creditor  receiving an amount equal to its outstanding  Obligations or,
         if the proceeds are  insufficient to pay in full all such  Obligations,
         its Pro Rata Share of the amount remaining to be distributed; and


                                                        14

<PAGE>



                  (iii) third,  to the extent  remaining  after the  application
         pursuant  to the  preceding  clauses  (i)  and  (ii) or  following  the
         termination of this Agreement  pursuant to section 10.9 hereof,  to the
         relevant  Assignor or to whomever  may be lawfully  entitled to receive
         such payment.

         (b) For purposes of this  Agreement,  "Pro Rata Share" shall mean, when
calculating a Secured  Creditor's  portion of any  distribution  or amount,  the
amount (expressed as a percentage) equal to a fraction the numerator of which is
the then  outstanding  amount of the  relevant  Obligations  owed  such  Secured
Creditor  and the  denominator  of which is the then  outstanding  amount of all
Obligations.

         (c) All payments required to be made to the (i) Lenders hereunder shall
be made to the  Administrative  Agent for the account of the respective  Lenders
and (ii) Hedge  Creditors  hereunder shall be made to the paying agent under the
applicable  Designated  Hedge  Agreement  or,  in the case of  Designated  Hedge
Agreements without a paying agent, directly to the applicable Hedge Creditor.

         (d) For purposes of applying  payments received in accordance with this
section  7.4,  the  Collateral  Agent  shall be  entitled  to rely  upon (i) the
Administrative  Agent for a determination (which the Administrative Agent agrees
to provide  upon  request to the  Collateral  Agent) of the  outstanding  Credit
Document  Obligations and (ii) upon any Hedge Creditor for determination  (which
each Hedge) Creditor agrees to provide upon request to the Collateral  Agent) of
the outstanding  Hedge  Obligations  owed to such Hedge Creditor.  Unless it has
actual knowledge (including by way of written notice from a Secured Creditor) to
the contrary, the Administrative Agent under the Credit Agreement, in furnishing
information  pursuant to the preceding  sentence,  and the Collateral  Agent, in
acting  hereunder,  shall be  entitled  to assume  that (x) no  Credit  Document
Obligations other than principal, interest and regularly accruing fees are owing
to any Lender and (y) no Designated  Hedge  Agreements or any Hedge  Obligations
with respect thereto are in existence.

         (e) It is  understood  that the  Assignors  shall  remain  jointly  and
severally  liable to the extent of any deficiency  between (x) the amount of the
proceeds  of the  Collateral  and the  amount of the sum  referred  to in clause
(a)(i) and (ii) of this section 7.4 and (y) the aggregate  outstanding amount of
the Obligations.

         7.5. Remedies Cumulative. Each and every right, power and remedy hereby
specifically  given to the Collateral  Agent shall be in addition to every other
right, power and remedy specifically given under this Agreement,  any Designated
Hedge Agreement or the other Credit  Documents or now or thereafter  existing at
law or in  equity,  or by  statute  and each and every  right,  power and remedy
whether  specifically  herein given or otherwise  existing may be exercised from
time to time or  simultaneously  and as often and in such order as may be deemed
expedient by the Collateral Agent. All such rights, powers and remedies shall be
cumulative  and the  exercise or the  beginning  of exercise of one shall not be
deemed a waiver of the right to  exercise  of any other or  others.  No delay or
omission of the  Collateral  Agent in the  exercise of any such right,  power or
remedy and no renewal or  extension of any of the  Obligations  shall impair any
such right, power or remedy or shall be

                                                        15

<PAGE>



construed  to be a waiver of any Default or Event of Default or an  acquiescence
therein.  In the event that the Collateral Agent shall bring any suit to enforce
any of its rights hereunder and shall be entitled to judgment, then in such suit
the Collateral Agent may recover reasonable expenses, including attorneys' fees,
and the amounts thereof shall be included in such judgment.

         7.6. Discontinuance of Proceedings.  In case the Collateral Agent shall
have instituted any proceeding to enforce any right,  power or remedy under this
Agreement by foreclosure,  sale,  entry or otherwise,  and such proceeding shall
have been discontinued or abandoned for any reason or shall have been determined
adversely  to the  Collateral  Agent,  then and in every such case the  relevant
Assignor,  the Collateral Agent and each holder of any of the Obligations  shall
be restored to their former  positions and rights  hereunder with respect to the
Collateral  subject to the security  interest created under this Agreement,  and
all rights,  remedies and powers of the Collateral Agent shall continue as if no
such proceeding had been instituted.

         7.7.  Collateral  Agent to Act on  Behalf  of  Secured  Creditors.  The
Secured  Creditors  agree by their  acceptance of the benefits  hereof that this
Agreement  may be enforced on their behalf only by the action of the  Collateral
Agent,  acting upon the  instructions  of the Required  Lenders  (or,  after all
Credit Document Obligations have been paid in full,  instructions of the holders
of at least the majority of the outstanding Hedge Obligations) and that no other
Secured  Creditor  shall  have any right  individually  to seek to enforce or to
enforce this Agreement or to realize upon the security to be granted hereby,  it
being  understood  and agreed that such rights and  remedies may be exercised by
the Collateral Agent, for the benefit of the Secured  Creditors,  upon the terms
of this Agreement.

         8.       INDEMNITY.

         8.1.  Indemnity.  (a) The  Assignors  jointly  and  severally  agree to
indemnify,  reimburse and hold the Collateral  Agent,  each Secured Creditor and
its respective successors,  assigns, employees, agents and servants (hereinafter
in this section 8.1 referred to individually as  "Indemnitee,"  and collectively
as  "Indemnitees"  harmless from any and all liabilities,  obligations,  losses,
damages,  penalties,  claims, demands, actions, suits, judgments and any and all
reasonable  out-of-pocket  costs and expenses (including  reasonable  attorneys'
fees and  expenses)  (for the  purposes of this section 8. 1 the  foregoing  are
collectively  called  "expenses")  of  whatsoever  kind and nature  imposed  on,
asserted against or incurred by any of the Indemnities in any way relating to or
arising out of this Agreement,  any Designated Hedge Agreement, any other Credit
Document or the documents  executed in  connection  herewith and therewith or in
any  other way  connected  with the  enforcement  of any of the terms of, or the
preservation  of any rights  under any  thereof,  or in any way  relating  to or
arising  out  of  the  manufacture,  ownership,  ordering,  purchase,  delivery,
control, acceptance, lease, financing,  possession,  operation, condition, sale,
return  or  other  disposition,  or use of the  Collateral  (including,  without
limitation, latent or other defects, whether or not discoverable), the violation
of the laws of any country,  state or other  governmental body or unit, any tort
(including,  without limitation, claims arising or imposed under the doctrine of
strict  liability,  or for or on account of injury to or the death of any person
(including any Indemnitee),  or property  damage),  or contract claim;  provided
that no  Indemnitee  shall be  indemnified  pursuant to this section  8.1(a) for
losses,

                                                        16

<PAGE>



damages or  liabilities  to the extent caused by the gross  negligence or wilful
misconduct of such person to be  indemnified  or of any other  Indemnitee who is
such person or an affiliate of such person. If any claim is asserted against any
Indemnitee,  such  Indemnitee  shall  promptly  notify  the  Assignor  and  each
Indemnitee may, and if requested by the Assignor  shall, in good faith,  contest
the validity,  applicability  and amount of such claim with counsel  selected by
such  Indemnitee,  and shall permit the Assignor to participate in such contest.
In addition,  in  connection  with any claim covered by this section 8.1 against
more than one Indemnitee,  all such Indemnitees shall be represented by the same
legal counsel  selected by such  Indemnitees;  provided,  however,  that if such
legal counsel  determines in good faith that  representing  all such Indemnitees
would or could  result in a  conflict  of  interest  ,under  the laws or ethical
principles applicable to such legal counsel or that a defense or counterclaim is
available to an Indemnitee that is not available to all such  Indemnitees,  then
to the extent  reasonably  necessary  to avoid such a conflict of interest or to
permit  unqualified  assertion of such defense or counterclaim,  each Indemnitee
shall be entitled to separate representation by a legal counsel selected by that
Indemnitee.  Each Assignor  agrees that upon written notice by any Indemnitee of
the assertion of such a liability,  obligation,  loss, damage,  penalty,  claim,
demand, action, judgment or suit, such Assignor shall assume full responsibility
for the  defense  thereof.  Each  Indemnitee  agrees to use its best  efforts to
promptly  notify  the  relevant  Assignor  of any such  assertion  of which such
Indemnitee has knowledge.

         (b) Without  limiting the application of section 8.1(a),  the Assignors
jointly and severally  agree to pay, or reimburse the  Collateral  Agent for (if
the  Collateral  Agent shall have incurred  fees,  costs or expenses  because an
Assignor shall have failed to comply with its  obligations  under this Agreement
or any Credit Document),  any and all out-of-pocket  fees, costs and expenses of
whatever kind or nature incurred in connection  with the creation,  preservation
or protection of the Collateral  Agent's Liens on, and security interest in, the
Collateral, including, without limitation, all fees and taxes in connection with
the recording or filing of instruments and documents in public offices,  payment
or  discharge  of any  taxes  or Liens  upon or in  respect  of the  Collateral,
premiums for insurance with respect to the Collateral and all other fees,  costs
and expenses in  connection  with  protecting,  maintaining  or  preserving  the
Collateral and the Collateral Agent's interest therein, whether through judicial
proceedings or otherwise,  or in defending or prosecuting any actions,  suits or
proceedings arising out of or relating to the Collateral.

         (c) Without  limiting  the  application  of section  8.1(a) or (b), the
Assignors jointly and severally agree to pay, indemnify and hold each Indemnitee
harmless  from and against any loss,  costs,  damages  and  expenses  which such
Indemnitee  may suffer,  expend or incur in consequence of or growing out of any
material misrepresentation by an Assignor in this Agreement, or in any statement
or writing  contemplated  by or made or delivered  pursuant to or in  connection
with this Agreement.

         (d) If and to the extent that the  obligations  of any  Assignor  under
this section 8.1 are unenforceable  for any reason,  each Assignor hereby agrees
to make  the  maximum  contribution  to the  payment  and  satisfaction  of such
obligations which is permissible under applicable law.

                                                        17

<PAGE>



         8.2. Indemnity Obligations Secured by Collateral; Survival. Any amounts
paid  by  any  Indemnitee  as  to  which  such   Indemnitee  has  the  right  to
reimbursement  shall  constitute  Obligations  secured  by the  Collateral.  The
indemnity  obligations  of the  Assignors  contained  in  this  section  8 shall
continue in full force and effect  notwithstanding  the full  payment of all the
Notes issued under the Credit  Agreement  and all of the other  Obligations  and
notwithstanding the discharge thereof.

         9.       DEFINITIONS.

         The following terms shall have the meanings herein specified unless the
context otherwise requires.  Such definitions shall be equally applicable to the
singular and plural forms of the terms defined.

         "Agreement"  shall  mean  this  Security  Agreement  as the same may be
modified,  supplemented  or  amended  from time to time in  accordance  with its
terms.

         "Assignor"  shall have the meaning  specified in the first paragraph of
this Agreement.

         "Business  Day" means any day  excluding  Saturday,  Sunday and any day
which shall be in New York,  New York a legal  holiday or a day on which banking
institutions are authorized by law to close.

         "Cash  Collateral   Account"  shall  mean  a  cash  collateral  account
maintained  with, and in the sole dominion and control of, the Collateral  Agent
for the benefit of the Secured Creditors (such cash collateral  account shall be
interest  bearing  if it is the  general  policy  of  the  Collateral  Agent  in
syndicated  credit  agreements in which it acts as collateral agent to establish
such cash collateral accounts as interest bearing accounts;  otherwise such cash
collateral account shall be non-interest bearing).

         "Chattel  Paper"  shall have the meaning  assigned  that term under the
Uniform  Commercial  Code as in  effect  on the date  hereof in the State of New
York.

         "Collateral" shall have the meaning provided in section 1.1(a).

         "Collateral  Agent"  shall  have the  meaning  specified  in the  first
paragraph of this Agreement.

         "Contract  Rights"  shall  mean all rights of an  Assignor  (including,
without limitation, all rights to payment) under each Contract.

         "Contracts"  shall mean all  contracts  between an Assignor  and one or
more additional parties (but shall include Cash Equivalents).

                                                        18

<PAGE>



         "Copyrights"  shall mean any U.S. copyright to which an Assignor now or
hereafter has title, as well as any application for a U.S.  copyright  hereafter
made by such Assignor.

         "Credit  Agreement"  shall have the meaning provided in the Preliminary
Statements of this Agreement.

         "Documents" shall have the meaning assigned that term under the Uniform
Commercial Code as in effect on the date hereof in the State of New York.

         "Equipment"  shall mean any "equipment," as such term is defined in the
Uniform  Commercial  Code as in  effect  on the date  hereof in the State of New
York,  now or hereafter  owned by an Assignor and, in any event,  shall include,
but shall not be limited to, all machinery, equipment, furnishings, fixtures and
vehicles  now or  hereafter  owned  by an  Assignor  and any and all  additions,
substitutions  and  replacements  of  any of the  foregoing,  wherever  located,
together with all  attachments,  components,  parts,  equipment and  accessories
installed thereon or affixed thereto.

         "Event of  Default"  shall  mean any  Event of  Default  under,  and as
defined in, the Credit Agreement,  or any payment default,  after any applicable
grace period, under any Designated Hedge Agreement.

          "General  Intangibles" shall have the meaning assigned that term under
the Uniform  Commercial Code as in effect on the date hereof in the State of New
York.

         "Goods"  shall have the  meaning  assigned  that term under the Uniform
Commercial Code as in effect on the date hereof in the State of New York.

         "Hedge  Creditors"  shall have the meaning  provided in the Preliminary
Statements of this Agreement.

         "Indemnitee" shall have the meaning provided in section 8.1.

         "Instrument"  shall  have the  meaning  assigned  that  term  under the
Uniform Commercial Code as in effect on the date hereof in the State of New York
(but shall not include Cash Equivalents).

         "Inventory"  shall  mean  merchandise,  inventory  and  goods,  and all
additions,  substitutions and , replacements thereof, wherever located, together
with all goods, supplies,  incidentals,  packaging materials,  labels, materials
and any other items used or usable in  manufacturing,  processing,  packaging or
shipping  same;  in all  stages  of  production  -- from raw  materials  through
work-in-process  to finished  goods -- and all products and proceeds of whatever
sort and wherever located and

                                                        19

<PAGE>



any portion thereof which may be returned, rejected, reclaimed or repossessed by
the  Collateral  Agent  from an  Assignor's  customers,  and shall  specifically
include all  "inventory" as such term is defined in the Uniform  Commercial Code
as in effect on the date hereof in the State of New York, now or hereafter owned
by the Assignor.

         "Lender" shall have the meaning provided in the Preliminary  Statements
of this Agreement.

         "Marks"  shall  mean  any  trademarks  and  service  marks  now held or
hereafter  acquired by an Assignor,  which are  registered  in the United States
Patent  and  Trademark  Office,  as well as any  unregistered  marks  used by an
Assignor in the United States and trade dress  including logos and/or designs in
connection with which any of these registered or unregistered marks are used.

         "Obligations"  shall  mean  (i) the full and  prompt  payment  when due
(whether  at  the  stated  maturity,   by  acceleration  or  otherwise)  of  all
obligations  (including  obligations  which,  but for the  automatic  stay under
section 362(a) of the Bankruptcy Code, would become due) of each Assignor to the
Lenders,  whether now existing or hereafter incurred under, arising out of or in
connection  with the Credit  Agreement  and the other Credit  Documents to which
such Assignor is a party  (including  without  limitation (x) in the case of any
Borrower,  all such  obligations  and  indebtedness  of such Borrower  under the
Credit  Agreement  and  (y) in  the  case  of  each  other  Assignor,  all  such
obligations  and  indebtedness  under  the  Subsidiary  Guaranty  to which  such
Assignor  is a  party  which  relate  to any  of the  foregoing),  and  the  due
performance  and  compliance by each Assignor with all of the terms,  conditions
and agreements contained in the Credit Agreement and such other Credit Documents
(all such  obligations  and  liabilities  under this  clause (i),  being  herein
collectively called the "Credit Document Obligations"); (ii) the full and prompt
payment when due (whether at the stated maturity,  by acceleration or otherwise)
of all  obligations  (including  obligations  which,  but for the automatic stay
under section 362(a) of the Bankruptcy  Code,  would become due) and liabilities
of each  Assignor  or any  other  Subsidiary  of the  Company  now  existing  or
hereafter  incurred  under,  arising out of or in connection with any Designated
Hedge  Agreement  with any of the Secured  Creditors  including,  in the case of
Assignors  other than the Company,  all  obligations  of such Assignor under the
Subsidiary  Guaranty in respect of any Designated Hedge  Agreement,  and the due
performance  and  compliance by such Assignor with all of the terms,  conditions
and agreements  contained  therein (all such  obligations and liabilities  under
this clause ((ii) being  herein  collectively  called the "Hedge  Obligations");
(iii) any and all sums advanced by the Collateral Agent in order to preserve the
Collateral or preserve its security interest in the Collateral;  and (iv) in the
event of any proceeding  for the collection or enforcement of any  indebtedness,
obligations,  or liabilities of any Assignor referred to in clauses (i) and (ii)
above,  after an Event of Default  shall have  occurred and be  continuing,  the
reasonable expenses of re-taking,  holding, preparing for sale or lease, selling
or otherwise disposing of or realizing on the Collateral,  or of any exercise by
the  Collateral  Agent  of  its  rights  hereunder,   together  with  reasonable
attorneys' fees and court costs.

         "Patents"  shall  mean any U.S.  patent  to  which an  Assignor  now or
hereafter  has  title,  as  well as any  application  for a U.S.  patent  now or
hereafter made by an Assignor.


                                                        20

<PAGE>



         "Permits"  shall mean,  to the extent  permitted  to be assigned by the
terms  thereof of by  applicable  law, all licenses,  permits,  rights,  orders,
variances, franchises or authorizations of or from any governmental authority or
agency.

         "Proceeds"  shall have the meaning assigned that term under the Uniform
Commercial  Code as in effect the State of New York on the date  hereof or under
other relevant law and, in any event, shall include,  but not be limited to, (i)
any and all proceeds of any insurance,  indemnity,  warranty or guaranty payable
to the Collateral  Agent or an Assignor from time to time with respect to any of
the Collateral,  (ii) any and all payments (in any form  whatsoever) made or due
and payable to an Assignor from time to time in connection with any requisition,
confiscation,  condemnation,  seizure  or  forfeiture  of all or any part of the
Collateral  by any  governmental  authority (or any person acting under color of
governmental  authority)  and (iii) any and all other  amounts from time to time
paid or payable under or in connection with any of the Collateral.

         "Proprietary Information" means all information and know-how worldwide,
including, without limitation,  technical data; manufacturing data; research and
development  data;  data relating to  compositions,  processes and  formulations
manufacturing  and  production  know-how and  experience;  management  know-how;
training    programs;    manufacturing,    engineering   and   other   drawings;
specifications;   performance  criteria;  operating  instructions;   maintenance
manuals; technology;  technical information;  software; engineering and computer
data and databases; design and engineering specifications; catalogs; promotional
literature;  financial,  business and marketing plans;  inventions and invention
disclosures.

         "Receivables"  shall mean any  "account" as such term is defined in the
Uniform  Commercial  Code as in  effect  on the date  hereof in the State of New
York,  now or hereafter  owned by an Assignor and, in any event,  shall include,
but shall not be limited  to, all of an  Assignor's  rights to payment for goods
sold or leased or services performed by an Assignor, whether now in existence or
arising  from  time to time  hereafter,  including,  without  limitation  rights
evidenced by an account, note, contract,  security agreement,  chattel paper, or
other  evidence of  indebtedness  or  security,  together  with (a) all security
pledged, assigned,  hypothecated or granted or held by an Assignor to secure the
foregoing,  (b) all of an  Assignor's  right,  title and  interest in and to any
goods the sale of which gave rise thereto, (c) all guarantees,  endorsements and
indemnifications on, or of, any of the foregoing, (d) all powers of attorney for
the  execution of any evidence of  indebtedness  or security or other writing in
connection  therewith,  (e) all  books,  records,  ledger  cards,  and  invoices
relating  thereto,  (f) all evidences of the filing of financing  statements and
other  statements  and the  registration  of  other  instruments  in  connection
therewith and amendments thereto, notices to other creditors or secured parties,
and  certificates  from filing or other  registration  officers,  (g) all credit
information,  reports and memoranda relating thereto, and (h) all other writings
related in any way to the foregoing.

         "Secured  Creditors" shall have the meaning provided in the Preliminary
Statements of this Agreement.


                                                        21

<PAGE>



         "Significant  Mark" shall have the  meaning  provided in section 4.3 of
this Agreement.


         Significant  Patent" shall have the meaning  provided in section 5.3 of
this Agreement.

         "Trade Secrets" means any secretly held existing  engineering and other
data,  information,  production  procedures and other  know-how  relating to the
design, manufacture, assembly, installation, use, operation, marketing, sale and
servicing of any products or business of an Assignor  worldwide  whether written
or not written.

         10.      MISCELLANEOUS.

         10.1. Notices. All notices and other communications  hereunder shall be
in  writing  and  shall be  delivered  or mailed by first  class  mail,  postage
prepaid, addressed:

                  (i) if to any Assignor, at its address contained in the Credit
         Agreement or the Subsidiary Guaranty, as the case may be;

                  (ii)     if to the Collateral Agent, at:

                           KeyBank of New York,
                                    as Collateral Agent
                           2 Gannett Drive
                           White Plains, New York 10604
                           Attn.:   Brendan Sachjten
                                    Senior Market Manager
                                    Tel.  No.: (914) 696-2161
                                    Fax No.: (914) 694-8463;

                           with copies to:

                           Jones, Day, Reavis & Pogue
                           North Point
                           901 Lakeside Avenue
                           Cleveland, Ohio 44114
                           Attn.:   John W.  Sager, Esq.
                                    Te1.  No.: (216) 586-7228
                                    Fax No.: (216) 579-0212

                  (iii) if to any Lender (other than the Collateral  Agent),  at
         such  address  as  such  Lender  shall  have  specified  in the  Credit
         Agreement;

                                                        22

<PAGE>



                  (iv) if to any Hedge  Creditor,  at such address as such Hedge
         Creditor  shall have  specified  in writing  to each  Assignor  and the
         Collateral Agent;

or at such other  address as shall have been  furnished in writing by any person
described above to the party required to give notice hereunder.

         10.2. Waiver;  Amendment.  (a) None of the terms and conditions of this
Agreement may be changed,  waived,  modified or varied in any manner  whatsoever
unless in writing duly signed by each  Assignor and the  Collateral  Agent (with
the consent of the Required  Lenders or, to the extent required by section 13.12
of the Credit Agreement,  all of the Lenders),  provided,  however, that no such
change, waiver,  modification or variance shall be made to section 7.4 hereof or
this  section  10.2  without  the  consent of each  Secured  Creditor  adversely
affected  thereby,  provided  further that any change,  waiver,  modification or
variance  affecting  the  rights  and  benefits  of a single  Class  of  Secured
Creditors  (and not all Secured  Creditors  in a like or similar  manner)  shall
require the written consent of the Requisite  Creditors of such Class of Secured
Creditors.  For the purpose of this Agreement,  the term "Class" mean each class
of  Secured  Creditors,  i.e  whether  (x) the  Lenders as holders of the Credit
Document  Obligations  or (y)  the  Hedge  Creditors  as  holders  of the  Hedge
Obligations.  For the purpose of this Agreement,  the term "Requisite Creditors"
of any  Class  shall  mean  each of (x)  with  respect  to the  Credit  Document
Obligations, the Required Lenders and (y) with respect to the Hedge Obligations,
the holders of 51% of all  obligations  outstanding  from time to time under the
Designated Hedge Agreements.

         (b) No delay on the part of the  Collateral  Agent in exercising any of
its  rights,  remedies,  powers and  privileges  hereunder  or partial or single
exercise thereof,  shall constitute a waiver thereof.  No notice to or demand on
any  Assignor  in any case shall  entitle  it to any other or further  notice or
demand in similar or other  circumstances  or  constitute a waiver of any of the
rights  of  the  Collateral  Agent  to  any  other  or  further  action  in  any
circumstances without notice or demand.

         10.3. Obligations Absolute. The obligations of each Assignor under this
Agreement shall be absolute and unconditional and shall remain in full force and
effect  without  regard to, and shall not be  released,  suspended,  discharged,
terminated or otherwise affected by, any circumstance or occurrence  whatsoever,
including, without limitation:

                  (i) any renewal,  extension,  amendment or modification of, or
         addition or supplement  to or deletion  from other Credit  Documents or
         any Designated  Hedge  Agreement,  or any other instrument or agreement
         referred to therein, or any assignment or transfer of any thereof;

                  (ii)  any  waiver,  consent,  extension,  indulgence  or other
         action  or  inaction  under  or in  respect  of any such  agreement  or
         instrument  or this  Agreement  except as  expressly  provided  in such
         renewal,  extension,  amendment,  modification,  addition,  supplement,
         assignment or transfer;


                                                        23

<PAGE>



                  (iii)  any  furnishing  of  any  additional  security  to  the
         Collateral  Agent or its  assignee  or any  acceptance  thereof  or any
         release of any security by the Collateral Agent or its assignee;

                  (iv) any  limitation on any person's  liability or obligations
         under  any  such   instrument   or  agreement  or  any   invalidity  or
         unenforceability,  in  whole  or in part,  of any  such  instrument  or
         agreement or any term thereof; or

                  (v) any bankruptcy, insolvency,  reorganization,  composition,
         adjustment, dissolution,  liquidation or other like proceeding relating
         to an Assignor or any  Subsidiary  of an  Assignor,  or any action take
         with respect to this  Agreement  by any trustee or receiver,  or by any
         court,  in any such  proceeding,  whether or not an Assignor shall have
         notice or knowledge of any of the foregoing.

         10.4. Successors and Assigns. This Agreement shall be binding upon each
Assignor  and its  successors  and assigns and shall inure to the benefit of the
Collateral  Agent and its successors and assigns,  provided that no Assignor may
transfer or assign any or all of its rights or obligations hereunder without the
written  consent  of  the  Collateral   Agent.   All   agreements,   statements,
representations   and  warranties  made  by  each  Assignor  herein  or  in  any
certificate  or other  instrument  delivered  by such  Assignor or on its behalf
under this Agreement shall be considered to have been relied upon by the Secured
Creditors and shall survive the execution and delivery of this Agreement and the
other  Credit  Documents  regardless  of any  investigation  made by the Secured
Creditors on their behalf.

         10.5.  Headings  Descriptive.  The headings of the several  sections of
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.

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

         10.7.    Governing Law.  THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW
YORK.

         10.8.  Assignors'  Duties.  It is  expressly  agreed,  anything  herein
contained  to the  contrary  notwithstanding,  that each  Assignor  shall remain
liable to perform all of the obligations,  if any, assumed by it with respect to
the  Collateral  and the  Collateral  Agent  shall not have any  obligations  or
liabilities  with respect to any  Collateral by reason of or arising out of this
Agreement, nor shall the

                                                        24

<PAGE>



Collateral  Agent be required or  obligated  in any manner to perform or fulfill
any of the obligations of an Assignor under or with respect to any Collateral.

         10.9.  Termination:  Release.  (a) After the  termination  of the Total
Commitment  and all  Designated  Hedge  Agreements,  when no Note nor  Letter of
Credit is outstanding and when all Loans and other Obligations have been paid in
full, this Agreement shall terminate,  and the Collateral  Agent, at the request
and expense of the Assignors,  will execute and deliver to the relevant Assignor
a  proper  instrument  or  instruments   (including   Uniform   Commercial  Code
termination  statements  on  form  UCC-3)  acknowledging  the  satisfaction  and
termination of this Agreement, and will duly assign, transfer and deliver to the
relevant Assignor (without recourse and without any  representation or warranty)
such of the Collateral as may be in the  possession of the Collateral  Agent and
as has not theretofore  been sold or otherwise  applied or released  pursuant to
this Agreement.

         (b) So long  as no  payment  default  on any of the  Obligations  is in
existence or would exist after the  application  of proceeds as provided  below,
the Collateral Agent shall, at the request of the relevant Assignor, release any
or all of the  Collateral,  provided  that (x) such  release is permitted by the
terms of the Credit  Agreement (it being agreed for such purposes that a release
will be deemed  "permitted by the terms of the Credit Agreement" if the proposed
transaction  constitutes  an  exception  contained  in section 9.2 of the Credit
Agreement) or otherwise has been approved in writing by the Required Lenders and
(y) the proceeds of such  Collateral  are to be applied as required  pursuant to
the Credit Agreement or any consent or waiver entered into with respect thereto.

         (c) At any time that an Assignor desires that the Collateral Agent take
any action to give effect to any release of Collateral pursuant to the foregoing
section  10.9(a) or (b), it shall deliver to the Collateral  Agent a certificate
signed  by a  principal  executive  officer  stating  that  the  release  of the
respective  Collateral is permitted  pursuant to section  10.9(a) or (b). In the
event  that any part of the  Collateral  is  released  as  provided  in  section
10.9(b),  the Collateral Agent, at the request and expense of an Assignor,  will
duly release such  Collateral and assign,  transfer and deliver to such Assignor
(without  recourse and without any  representation  or warranty) such the of the
Collateral  as is  then  being  (or  has  been)  so  sold  and  as may be in the
possession  of the  Collateral  Agent  and has  not  theretofore  been  released
pursuant  to this  Agreement.  The  Collateral  Agent  shall  have no  liability
whatsoever to any Secured Creditor as the result of any release of Collateral by
it as permitted by this section 10.9. Upon any release of Collateral pursuant to
section 10.9(a) or (b), none of the Secured  Creditors shall have any continuing
right or interest in such Collateral, or the proceeds thereof.

         10.10.  Collateral  Agent. By accepting the benefits of this Agreement,
each Secured Creditor acknowledges and agrees that the rights and obligations of
the Collateral  Agent shall be as set forth in section of the Credit  Agreement.
Notwithstanding  anything  to the  contrary  contained  in section  10.2 of this
Agreement or section 13.12 of the Credit Agreement,  this section 10.10, and the
duties and obligations of the Collateral  Agent set forth in this section 10.10,
may not be amended or modified without the consent of the Collateral Agent.

                                                        25

<PAGE>


         11.      WAIVER OF JURY TRIAL.

         Each Assignor and the Collateral Agent each hereby  irrevocably  waives
all right to a trial by jury in any section,  proceeding or counterclaim arising
out of or relating to this Agreement or the transactions contemplated hereby.


                                                        26