<PAGE>
                                                                    Exhibit 10.8



                               SECURITY AGREEMENT

         This SECURITY AGREEMENT made as of April 3, 2001 is by and between
INDIGO ACQUISITION CORP., a Delaware corporation (the "Debtor") and BEAR,
STEARNS CORPORATE LENDING, INC., as Security Trustee (as defined in the
Facilities Agreement described below) or, upon its resignation, its appointed
successor Security Trustee, pursuant to the Facilities Agreement (the "Secured
Party").

         In consideration of any loans, extensions of credit, or other financial
accommodations made or to be made by the Secured Party or any of its affiliates
to the Debtor, or to any other Obligor (as defined herein) under each and every
Finance Document, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the Debtor and the Secured Party hereby agree, under seal, as follows:

1.       DEFINITIONS.

         a.       BOOKS AND RECORDS. The term "Books and Records" means all of
                  the Debtor's books and records, including, but not limited to,
                  records indicating, summarizing, or evidencing the Collateral,
                  the Secured Obligations, and the Debtor's property, business
                  operations, or financial condition; computer runs, invoices,
                  tapes, processing software, processing contracts (such as
                  contracts for computer time and services) and any computer
                  prepared information, tapes, or data of every kind and
                  description, whether in the possession of the Debtor or in the
                  possession of third parties.

         b.       COLLATERAL. The term "Collateral" means all tangible and
                  intangible property of the Debtor (other than the Excluded
                  Collateral) whether now owned or hereafter acquired,
                  including, but not limited to, the Debtor's interest now and
                  in the future in the following types or items of property:

                  i.       ACCOUNTS - All presently owned and hereafter acquired
                           accounts, accounts receivable, contract rights,
                           bills, acceptances, and other forms of obligations
                           arising out of the sale, lease or consignment of
                           goods or the rendition of services by the Debtor;
                           together with any property evidencing or relating to
                           the Accounts (such as guaranties, credit insurance,
                           Letters of Credit), any security for the Accounts,
                           all Books and Records relating thereto, and all
                           Proceeds of any of the foregoing, including returned
                           or reclaimed Inventory.

                  ii.      INVENTORY - All presently owned and hereafter
                           acquired inventory of every nature, kind and
                           description, wherever located, including, without
                           limitation, raw materials, goods, work in process,
                           finished goods, parts or supplies; all goods and
                           property held for sale or lease or to be furnished
                           under contracts of service; and all goods and
                           inventory returned, reclaimed or repossessed,
                           together with all Proceeds of any of the foregoing.

                  iii.     EQUIPMENT - All presently owned and hereafter
                           acquired equipment whether or not affixed to realty,
                           including, without limitation, trucks, trailers,
                           motors, tools, dies, parts, jigs, goods, accessories,
                           handling and delivery equipment, fixtures,
                           improvements, office machines and furniture, together
                           with all Proceeds of any of the foregoing, and all
                           accessions, accessories, replacements and the rights
                           of the Debtor under any manufacturer's warranties
                           relating to the foregoing.

                  iv.      CHATTEL PAPER - All presently owned and hereafter
                           acquired chattel paper, including, but not limited
                           to, any writing or writings which evidence both a
<PAGE>
                           monetary obligation and a security interest in or a
                           lease of specific goods, together with all Proceeds
                           of any of the foregoing.

                  v.       GENERAL INTANGIBLES - All presently owned and
                           hereafter acquired general intangibles, including,
                           without limitation, any personal property, Investment
                           Property, choses in action, causes of action,
                           designs, plans, goodwill, tax refunds, licenses,
                           franchises, trademarks, trade names, service marks,
                           copyrights, customer lists and patents, and all
                           rights under license agreements for use of the same,
                           together with all Proceeds of any of the foregoing.

                  vi.      INSTRUMENTS - All presently owned and hereafter
                           acquired instruments, including, without limitation,
                           bills of exchange, notes, and all negotiable
                           instruments, all certificated securities, all
                           certificates of deposit and any other writing which
                           evidences a right to the payment of money and is not
                           itself a security agreement or lease and is of a type
                           which is in the ordinary course of business
                           transferred by delivery with any necessary
                           endorsement or assignment, together with all Proceeds
                           of any of the foregoing.

                  vii.     DOCUMENTS - All presently owned and hereafter
                           acquired documents, including, but not limited to,
                           documents of title (as that term is defined in the
                           Uniform Commercial Code) and any and all receipts,
                           including, but not limited to, receipts of the kind
                           described in Article 7 of the Uniform Commercial
                           Code, together with all Proceeds of any of the
                           foregoing.

                  viii.    LETTERS OF CREDIT - All presently owned and hereafter
                           acquired letters of credit, including, but not
                           limited to, any written undertaking to pay money
                           conditioned upon presentation of specified documents,
                           and advices of letters of credit, together with all
                           Proceeds of any of the foregoing.

                  ix.      PROCEEDS - All presently owned and hereafter acquired
                           proceeds, as that term is defined in the Uniform
                           Commercial Code, including, without limitation,
                           whatever is received upon the use, lease, sale,
                           exchange, collection, any other utilization or any
                           disposition of any of the Collateral described in
                           this Section 1.b., whether cash or non-cash, all
                           rental or lease payments, accounts, chattel paper,
                           instruments, documents, contract rights, general
                           intangibles, equipment, inventory, substitutions,
                           additions, accessions, replacements, products, and
                           renewals of, for, or to such property and all
                           insurance therefor.

         c.       DEFAULT. The term "Default" has the meaning assigned to it in
                  the Facilities Agreement.

         d.       ENVIRONMENTAL LAWS. The term "Environmental Laws" means,
                  without limitation, all legal requirements of any governmental
                  authority pertaining to the environment, including (i) the
                  Comprehensive Environmental Response, Compensation and
                  Liability Act of 1980, as amended, 42 U.S.C. 9601 et seq.
                  ("CERCLA"); (ii) the Resource Conservation and Recovery Act of
                  1976, as amended, 42 U.S.C. 6901 et seq. ("RCRA"); and (iii)
                  any and all laws, regulations, and executive orders, federal,
                  state and local, pertaining to environmental matters, as the
                  same may be amended, replaced or supplemented from time to
                  time.

         e.       ERISA. The term "ERISA" means 29 U.S.C.Section 1001 et seq.,
                  as amended from time to time, and all rules, regulations,
                  orders and publications adopted or promulgated pursuant
                  thereto.


                                       2
<PAGE>
         f.       EXCLUDED COLLATERAL. The term "Excluded Collateral" means any
                  chattel paper and general intangibles which are now or
                  hereafter held by the Debtor as licensee, lessee or otherwise,
                  to the extent that (i) such chattel paper and general
                  intangibles are not assignable or capable of being encumbered
                  as a matter of law or under the terms of the license, lease or
                  other agreement applicable thereto (but solely to the extent
                  that any such restriction shall be enforceable under
                  applicable law), without the consent of the licensor or lessor
                  thereof or other applicable party thereto and (ii) such
                  consent has not been obtained; provided, however, that the
                  term Excluded Collateral shall not include (A) any and all
                  proceeds of such chattel paper and general intangibles to the
                  extent that the assignment or encumbering of such proceeds is
                  not so restricted and (B) upon any such licensor, lessor or
                  other applicable party consent with respect to any such
                  otherwise excluded chattel paper or general intangibles being
                  obtained, such chattel paper or general intangibles or
                  proceeds thereof that might have theretofore have constituted
                  Excluded Collateral.

         g.       FACILITIES AGREEMENT. The term "Facilities Agreement" means
                  the Facilities Agreement dated February 22, 2001 between,
                  inter alia, Inveresk Research Group Limited and Subsidiaries
                  and Bear, Stearns Corporate Lending, in certain capacities, as
                  it may be amended, replaced or supplemented from time to time.

         h.       FINANCE DOCUMENT(S). The term "Finance Document(s)" has the
                  meaning assigned to it in the Facilities Agreement.

         i.       OBLIGOR. The term "Obligor" means the Debtor and each and
                  every Borrower and Guarantor from time to time under the
                  Facilities Agreement (as each such term "Borrower" and
                  "Guarantor" is defined in the Facilities Agreement).

         j.       SECURED OBLIGATIONS. The term "Secured Obligations" means all
                  monies, liabilities and obligations whatsoever under the
                  Finance Documents (as they may be amended, modified,
                  supplemented or novated from time to time) which are now or at
                  any time hereafter may be due, owing or incurred, by the
                  Debtor to the Lender (as defined in the Facilities Agreement),
                  actually or contingently, solely, jointly and/or severally
                  with another, as principal or surety, including (but without
                  limitation) principal, interest, commission and all banking,
                  legal and other costs, charges and expenses arising from the
                  Security Trustee enforcing or attempting to enforce the pledge
                  under this Security Agreement or any other security interest
                  held by the Security Trustee from the Debtor from time to
                  time.

         k.       SECURITY AGREEMENT . The term "Security Agreement" means this
                  Security Agreement, together with all schedules and exhibits
                  hereto and all amendments and modifications as may from time
                  to time be in effect with respect hereto.

         l.       UNIFORM COMMERCIAL CODE. The term "Uniform Commercial Code"
                  means the Uniform Commercial Code, in effect from time to time
                  in the State of New York.

         Unless the context otherwise requires, all capitalized terms not
         specifically defined herein which are defined in the Uniform Commercial
         Code shall have the meanings stated therein.

2.       SECURITY INTEREST. In order to secure the due and punctual payment and
         performance of the Secured Obligations, the Debtor hereby grants to the
         Secured Party, for the benefit of the Lenders, a continuing security
         interest in and general lien upon its right, title and interest in: (i)
         the Collateral, and (ii) all property of the Debtor now or hereafter in
         the actual or constructive possession of the Secured Party and/or any
         affiliate thereof in any capacity whatsoever, including but not limited
         to, any balance or share of any deposit, trust or agency account. The
         security


                                       3
<PAGE>
         interests granted herein are granted as security only and shall not
         subject the Secured Party to, or in any way affect or modify, any
         obligation or liability of the Debtor or any other Obligor with respect
         to any of the Collateral or any transaction which gave rise thereto.

3.       FURTHER ASSURANCES; FILING.

         a.       DELIVERY OF DOCUMENTS; INSPECTION OF COLLATERAL. At any time
                  and from time to time, upon the demand of the Secured Party,
                  the Debtor will, at the Debtor's expense: (i) immediately
                  deliver and pledge to the Secured Party, properly endorsed to
                  the Secured Party and/or accompanied by such instruments of
                  assignment and transfer in such form and substance as the
                  Secured Party may reasonably request, any and all instruments,
                  documents, and/or chattel paper owned by Debtor as the Secured
                  Party may specify in its demand; (ii) give, execute, deliver,
                  file, and/or record any notice, statement, instrument,
                  document, agreement or other papers that may be necessary, or
                  that the Secured Party may reasonably request, in order to
                  create, preserve, perfect or validate any security interest
                  granted pursuant hereto or intended to be granted hereunder or
                  to enable the Secured Party to exercise or enforce its rights
                  hereunder or with respect to such security interest; (iii)
                  keep, stamp or otherwise mark any and all documents,
                  instruments, chattel paper and its Books and Records relating
                  to the Collateral in such manner as the Secured Party may
                  reasonably require; and/or (iv) permit representatives and
                  agents of the Secured Party access to its premises at any
                  reasonable time requested by the Secured Party to inspect the
                  Collateral and the Books and Records and to audit and make
                  abstracts from the Books and Records.

         b.       FILING OF FINANCING STATEMENT. At the Secured Party's sole
                  option, and without the Debtor's consent, the Secured Party
                  may file a carbon, photographic or other reproduction of this
                  Security Agreement or any financing statement executed
                  pursuant hereto as a financing statement in any jurisdiction
                  so permitting. Except as may be otherwise permitted under the
                  Facilities Agreement, without the prior written consent of the
                  Secured Party, the Debtor will not file or authorize or permit
                  to be filed in any jurisdiction any such financing or like
                  statement in which the Secured Party is not named as the sole
                  secured party.

         c.       SECURED PARTY'S RIGHTS IN COLLATERAL. With respect to the
                  Collateral, or any part thereof, which at any time may come
                  into the possession, custody or under the control of the
                  Secured Party or any of its affiliates, for any purpose, the
                  right is expressly granted to the Secured Party, at its sole
                  discretion: (i) upon and after the occurrence of an Event of
                  Default, to transfer or register in the name of itself or its
                  nominee any of the Collateral, and whether or not so
                  transferred or registered, to receive the income and dividends
                  thereon, including stock dividends and rights to subscribe,
                  and to hold the same as a part of the Collateral and/or apply
                  the same as hereafter provided; (ii) upon and after the
                  occurrence of an Event of Default, to exchange any of the
                  Collateral for other property upon the reorganization,
                  recapitalization or other readjustment of the Debtor and in
                  connection therewith, to deposit the Collateral or any part
                  thereof with any nominee or depository upon such terms as it
                  may determine in its sole discretion; and (iii) upon and after
                  the occurrence of an Event of Default hereunder, to vote the
                  Collateral so transferred or registered and to exercise, or
                  cause its nominee to exercise, all or any powers or rights
                  with respect thereto with the same force and effect as an
                  absolute owner thereof, all without notice to any Obligor and
                  without liability, except to account for property actually
                  received by the Secured Party. The Secured Party shall be
                  deemed to have possession of any of the Collateral in transit
                  to, or set apart for, it or any of its agents, affiliates,
                  associates or correspondents.


                                       4
<PAGE>
         d.       SECURED PARTY'S COLLATERAL CUSTODY DUTIES. With respect to the
                  Collateral, or any part thereof, which at any time may come
                  into the possession, custody or under the control of the
                  Secured Party or any of its affiliates, agents, associates or
                  correspondents, the Debtor hereby acknowledges and agrees that
                  the Secured Party's sole duty with respect to the custody,
                  safekeeping and physical preservation of such Collateral,
                  whether pursuant to Section 9-207 of the Uniform Commercial
                  Code or otherwise, shall be to deal with it in the same manner
                  as it deals with similar property for its own account. Neither
                  the Secured Party, nor any of its directors, officers,
                  employees, affiliates, agents, associates or correspondents
                  shall be liable for failure to demand, collect or realize upon
                  any of the Collateral or for any delay in doing so.

4.       REPRESENTATIONS AND WARRANTIES. The Debtor represents and warrants to
         the Secured Party, which representations and warranties shall be
         continuing representations and warranties until all of the Secured
         Obligations are satisfied in full, as follows:

         a.       SECURITY AGREEMENT QUESTIONNAIRE. All information provided by
                  the Debtor to the Secured Party and set forth on the Security
                  Agreement Questionnaire attached hereto as Schedule A and made
                  a part hereof, is true and correct as of the date hereof.

         b.       LOCATION OF DEBTOR, COLLATERAL. The Debtor is located at 1209
                  Orange Street, Wilmington, DE 19801 and does business in New
                  York, New York. All other places of business of the Debtor,
                  locations of Collateral, or addresses from which invoices are
                  sent, if any, are listed on Schedule A attached hereto.

         c.       LOCATION OF BOOKS AND RECORDS. The Debtor maintains its Books
                  and Records at the location of Debtor set forth in Section
                  4.b. above.

         d.       AUTHORITY. Debtor has the power and authority to enter into
                  and perform this Agreement and any documents or instruments
                  executed in connection herewith, including without limitation
                  all financing statements.

         e.       DEBTOR IS SOLE OWNER OF COLLATERAL. The Debtor is, or, to the
                  extent that any Collateral will be acquired after the date
                  hereof, will be, the sole owner of the Collateral, holding
                  good and valid title thereto, free from any lien, security
                  interest, encumbrance or claim (other than the liens and
                  encumbrances in favor of the Secured Party or otherwise
                  permitted under the Facilities Agreement) and has the right to
                  grant the security interests created by this Security
                  Agreement.

         f.       MATERIALLY MISLEADING STATEMENTS. No representation, warranty,
                  or statement made herein, on any schedule or exhibit hereto or
                  in any certificate or document furnished or to be furnished
                  pursuant hereto contains or will contain any untrue statement
                  of a material fact or omits or will omit any material fact
                  necessary to make it not misleading.

         g.       NO FICTITIOUS NAMES. The Debtor does not operate or issue
                  invoices under any name other than the name(s) set forth on
                  the signature page hereof or on the Security Agreement
                  Questionnaire attached hereto as Exhibit A.

         h.       COLLATERAL NOT SUBJECT TO AGREEMENTS OR LICENSES. The
                  Collateral is not subject to or restricted by any agreement or
                  license relating to patents, trademarks, trade secrets or
                  copyrights.


                                       5
<PAGE>
5.       COVENANTS. The Debtor hereby covenants and agrees that for as long as
         any Secured Obligations are outstanding:

         a.       DEFENSE OF COLLATERAL. The Debtor shall defend the Collateral
                  against all claims and demands of all persons or entities at
                  any time claiming any interest therein other than the Secured
                  Party.

         b.       NOTICE OF CHANGES IN LOCATION OF DEBTOR, BOOKS AND RECORDS,
                  COLLATERAL. The Debtor shall provide the Secured Party with
                  prompt written notice of: (i) any intended change in the
                  location of the Debtor and/or the office where the Debtor
                  maintains its Books and Records; and (ii) the location or
                  movement of any Collateral to or at an address other than the
                  addresses set forth on the signature page hereof or on the
                  Security Questionnaire, all such notices to be received by the
                  Secured Party at least 30 days prior to the effective date of
                  any such change. If any such new location as set forth in
                  subsections (i) and (ii) hereof is on leased or mortgaged
                  premises, the Debtor will furnish the Secured Party, prior to
                  the effective date of any such change, with landlord's or
                  mortgagee's waivers pertaining to such premises in form and
                  substance reasonably satisfactory to the Secured Party.

         c.       DELIVERY OF INSTRUMENTS, CHATTEL PAPER AND DOCUMENTS OF TITLE.
                  At the request of Secured Party, immediately upon receipt of
                  any instrument, Chattel Paper, and/or document of title
                  (including bills of lading and warehouse receipts), the Debtor
                  shall deliver such Collateral to the Secured Party and shall
                  execute any form of assignment or endorsement reasonably
                  requested by the Secured Party with respect thereto.

         d.       NOTICE OF ADVERSE CHANGES, EVENTS OF DEFAULT, SEIZURES AND
                  INSTITUTION OF LITIGATION. The Debtor shall immediately notify
                  the Secured Party of: (i) any material adverse changes in its
                  business, property or financial condition, including, without
                  limitation, any loss of or damage to any Collateral; (ii) any
                  seizure of the Collateral or any claims or alleged claims of
                  third parties to the Collateral; and (iii) to the extent not
                  otherwise required by the Facilities Agreement, the
                  institution of any litigation, arbitration, administrative
                  proceedings or claims against the Debtor, in which the Debtor
                  is a party or in which any of the Collateral is concerned,
                  involving a sum in excess of $100,000.

         e.       INSURANCE. To the extent not otherwise required by the
                  Facilities Agreement, Debtor shall effect and maintain such
                  insurance over the Collateral in such manner and to such
                  extent as is reasonable and customary for a business engaged
                  in the same or a similar activity and the same or similar
                  localities to it (subject to the terms set forth below) and
                  shall maintain such policies of insurance in full force and
                  comply with all its obligations relating thereto. All such
                  policies of insurance shall provide for not less than thirty
                  (30) days' prior written notice to the Secured Party of
                  intended cancellation or reduction coverage. The Debtor shall
                  furnish the Secured Party with certificates or other evidence
                  satisfactory to the Secured Party of compliance with the
                  foregoing insurance provisions. The Secured Party shall have
                  the right (but shall be under no obligation) to pay any of the
                  premiums on such insurance and all such payments shall become
                  part of the Secured Obligations and be considered an advance
                  at the highest rate of interest provided for in the Facilities
                  Agreement. After the occurrence of an Event of Default, the
                  Debtor expressly authorizes its insurance carriers to pay
                  proceeds of all insurance policies covering all or any part of
                  the Collateral directly to the Secured Party.

         f.       DISPOSITION OF COLLATERAL. Except as may be otherwise
                  permitted under the Facilities Agreement, the Debtor shall not
                  sell, offer to sell, otherwise assign, or permit the
                  involuntary transfer of, or disposition of the Collateral or
                  any interest therein, without the


                                       6
<PAGE>
                  prior written consent of the Secured Party; provided, however,
                  that unless the Secured Party notifies the Debtor otherwise,
                  the Debtor may sell its inventory in the ordinary course of
                  its business.

         g.       SECURITY INTERESTS IN COLLATERAL. Except as may be otherwise
                  permitted under the Facilities Agreement, the Debtor shall
                  keep the Collateral free from any lien, security interest or
                  encumbrance except those in favor of the Secured Party, in
                  good order and repair, reasonable wear and tear excepted, and
                  will not waste or destroy the Collateral or any part thereof,
                  used or useful in its business or having any material value.
                  If requested by the Secured Party, the Debtor shall give
                  notice of the Secured Party's security interests in the
                  Collateral to any third person with whom the Debtor has any
                  actual or prospective contractual relationship or other
                  business dealings.

         h.       MAINTENANCE, INSPECTION OF BOOKS AND RECORDS. The Debtor shall
                  maintain complete and accurate Books and Records in accordance
                  with generally accepted accounting principles ("GAAP") in
                  effect in the United States from time to time, and shall make
                  all necessary entries therein to reflect the costs, values and
                  locations of its Inventory and Equipment and the transactions
                  giving rise to its Accounts and all payments, credits and
                  adjustments thereto. The Debtor shall keep the Secured Party
                  fully informed as to the location of all such Books and
                  Records and shall permit the Secured Party and its authorized
                  agents to have full, complete and unrestricted access thereto
                  at all reasonable times to inspect, audit and make copies of
                  any and all such Books and Records. Upon submission to the
                  Debtor of an invoice therefore, the Debtor will reimburse the
                  Secured Party for any and all reasonable fees and costs
                  related to any inspection and/or audit by the Secured Party
                  and its authorized agents of the Books and Records. The
                  Secured Party's rights hereunder shall be enforceable at law
                  or in equity, and the Debtor consents to the entry of judicial
                  orders or injunctions enforcing specific performance of such
                  obligations hereunder.

         i.       ASSIGNMENT OF UNITED STATES ACCOUNTS. If any of the Accounts
                  arise out of contracts with the United States or any of its
                  departments, agencies or instrumentalities, the Debtor shall
                  immediately notify and identify same to the Secured Party, and
                  shall promptly execute and deliver to the Secured Party an
                  assignment of claims for such Accounts in form acceptable to
                  the Secured Party, and shall take all steps deemed reasonably
                  necessary to protect the Secured Party's interest therein
                  under the Federal Assignment of Claims Act or any similar law
                  or regulation.

         j.       MAINTENANCE AND INSPECTION OF EQUIPMENT AND INVENTORY. With
                  respect to Equipment and Inventory, the Debtor shall: (i) keep
                  accurate books and records with respect thereto, including,
                  without limitation, maintenance records and current stock, and
                  cost and sales records accurately itemizing the types and
                  quantities thereof; (ii) upon request, deliver to the Secured
                  Party all evidence of ownership in such Collateral, including
                  certificates of title with the Secured Party's interest
                  appropriately noted on the certificate; (iii) permit the
                  Secured Party and its authorized agents to inspect any or all
                  of the Inventory and Equipment at all reasonable times; (iv)
                  preserve the Inventory and Equipment in good condition and
                  repair, and pay the cost of all necessary replacement parts,
                  repairs to and maintenance of the Inventory and Equipment; and
                  (v) if any of the Collateral is located upon land which is the
                  subject of a lease or mortgage, deliver an agreement of
                  subordination from the lessor or mortgagee providing that any
                  lien of such party shall be subordinate to the security
                  interest of the Secured Party granted herein.

         k.       ASSIGNMENT OF ACCOUNTS. With respect to Accounts, the Debtor
                  shall, upon request, immediately give the Secured Party
                  assignments, in a form acceptable to the Secured


                                       7
<PAGE>
                  Party, of all Accounts, all original and other documents
                  evidencing a right to payment of Accounts, financial
                  statements, agings, reports, lists of account debtors, copies
                  of purchase orders, invoices, contracts, shipping and delivery
                  receipts, and such other data concerning the Accounts as the
                  Secured Party may reasonably request. The Debtor agrees that
                  the Secured Party and its authorized agents shall at all times
                  have the right to confirm orders and to verify any or all of
                  the Accounts in the Secured Party's name, or in any fictitious
                  name used by the Secured Party for verifications.

         l.       CONTINUING OF PERFECTED STATUS OF COLLATERAL. The Debtor
                  agrees to cooperate and join with the Secured Party, at
                  Debtor's expense, in taking such steps as are necessary to
                  perfect or continue the perfected status of the security
                  interests granted herein, including, without limitation, the
                  execution and delivery of any financing statements, amendments
                  thereto and continuation statements, the delivery of Chattel
                  Paper, Documents or Instruments to the Secured Party, the
                  obtaining of landlords' and mortgagees' waivers required by
                  the Secured Party, the notation of encumbrances in favor of
                  the Secured Party on certificates of title, and the execution
                  and filing or any collateral assignments and any other
                  instruments or required to perfect the Secured Party's
                  security interest in any and all of the Debtor's patents,
                  trademarks, service marks, trade names, copyrights, other
                  General Intangibles and other assets of any nature. The
                  Secured Party is expressly authorized to file financing
                  statements without the Debtor's signature.

6.       GENERAL AUTHORITY.

         a.       SECURED PARTY AS ATTORNEY-IN-FACT. The Debtor hereby
                  irrevocably appoints the Secured Party (and any of its
                  attorneys, officers, employees or agents) as its true and
                  lawful attorney-in-fact, said appointment being coupled with
                  an interest, with full power of substitution, in the name of
                  the Debtor, the Secured Party, or otherwise, for the sole use
                  and benefit of the Secured Party in its sole discretion, but
                  at the Debtor's expense, to exercise, to the extent permitted
                  by law, in its name or in the name of the Debtor or otherwise,
                  the powers set forth herein, such powers, including, but not
                  limited to, the power at any time: (i) upon and after the
                  occurrence of a Default, to endorse the name of the Debtor
                  upon any instruments of payment, invoice, freight, or express
                  bill, bill of lading, storage, or warehouse receipt relating
                  to the Collateral; (ii) upon and after the occurrence of a
                  Default, to demand, collect, receive payment of, settle,
                  compromise, or adjust all or any of the Collateral; (iii) to
                  sign and file one or more financing statements naming the
                  Debtor as debtor and the Secured Party as secured party and
                  indicating therein the types or describing the items of
                  Collateral herein specified; (iv) upon and after the
                  occurrence of a Default, to correspond and negotiate directly
                  with insurance carriers; and (v) to execute any notice,
                  statement, instrument, agreement, or other paper that the
                  Secured Party may require to create, preserve, perfect or
                  validate any security interest granted pursuant hereto or to
                  enable the Secured Party to exercise or enforce its rights
                  hereunder or with respect to such security interest.

         b.       LIABILITY OF SECURED PARTY AS ATTORNEY-IN-FACT. Neither the
                  Secured Party nor its attorneys, officers, employees or agents
                  shall be liable for acts, omissions, any error in judgment or
                  mistake in fact in its/their capacity as attorney-in-fact,
                  except those arising from its gross negligence or willful
                  misconduct. The Debtor hereby ratifies all acts of the Secured
                  Party as its attorney-in-fact. This power, being coupled with
                  an interest is irrevocable until the Secured Obligations have
                  been fully satisfied. The Secured Party shall not be required
                  to take any steps necessary to preserve any rights against
                  prior parties with respect to any of the Collateral.


                                       8
<PAGE>
         c.       EFFECT OF EXTENSIONS AND MODIFICATIONS. The Secured Party may,
                  after the occurrence of an Event of Default, extend the time
                  of payment, arrange for payment in installments, or otherwise
                  modify the terms of, or release, any of the Collateral,
                  without thereby incurring responsibility to, or discharging or
                  otherwise affecting any liability of, the Debtor or any other
                  Obligor.

7.       EVENTS OF DEFAULT. The occurrence of an Event of Default as defined in
         the Facilities Agreement shall be an Event of Default under this
         Security Agreement.

8.       REMEDIES.

         a.       ACCELERATION OF SECURED OBLIGATIONS; GENERAL RIGHTS OF SECURED
                  PARTY. Upon the occurrence and during the continuance of an
                  Event of Default described in Section 7 hereof, the Secured
                  Party may, at its option, exercise any and all rights and
                  remedies it has under this Security Agreement and/or
                  applicable law.

         b.       RIGHT OF SETOFF. Upon and after the occurrence of a Default,
                  the Secured Party shall have the right, without notice to the
                  Debtor or to any other Obligor and regardless of the adequacy
                  of the Collateral for the Secured Obligations or other means
                  of obtaining repayment of the Secured Obligations, and is
                  specifically authorized hereby to apply toward and set-off
                  against and apply to the then unpaid balance of the Secured
                  Obligations which are due and payable, any items or funds of
                  any Obligor held by the Secured Party or any affiliate
                  thereof, any and all deposits (whether general or special,
                  time or demand, matured or unmatured) or any other property of
                  the Debtor, including, without limitation, securities, now or
                  hereafter maintained by the Debtor for its own account with
                  the Secured Party or any affiliate thereof, and any other
                  indebtedness at any at any time held or owing by the Secured
                  Party or any affiliate thereof to or for the credit or the
                  account of any Obligor, even if effecting such set-off results
                  in a loss or reduction of interest or the imposition of a
                  penalty applicable to the early withdrawal of time deposits.
                  For such purpose, the Secured Party shall have, and the Debtor
                  hereby grants to the Secured Party, a first lien on and
                  security interest in such deposits, property, funds and
                  accounts and the proceeds thereof.

         c.       TURNOVER OF PROPERTY HELD BY AFFILIATES. The Debtor authorizes
                  any affiliate of the Secured Party, upon and following the
                  occurrence of an Event of Default, at the request of the
                  Secured Party, and without notice to the Debtor, to turn over
                  to the Secured Party any property of the Debtor held by such
                  affiliate for the Debtor's account and to debit any deposit
                  account maintained by the Debtor with such affiliate (even if
                  such deposit account is not then due or there results a loss
                  or reduction of interest or the imposition of a penalty in
                  accordance with law applicable to the early withdrawal of time
                  deposits), in the amount requested by the Secured Party up to
                  the amount of the Secured Obligations, and to pay or transfer
                  such amount or property to the Secured Party for application
                  to the Secured Obligations.

         d.       ADDITIONAL RIGHTS AND REMEDIES. In addition to the rights and
                  remedies available to the Secured Party as set forth above,
                  upon the occurrence of an Event of Default hereunder, or at
                  any time thereafter, the Secured Party may at its option,
                  immediately and without notice, do any or all of the
                  following, which rights and remedies are cumulative, may be
                  exercised from time to time, and are in addition to any rights
                  and remedies available to the Secured Party under any other
                  agreement or instrument by and between any Obligor and the
                  Secured Party:


                                       9
<PAGE>
                  i.       Exercise any and all of the rights and remedies of a
                           secured party under the Uniform Commercial Code,
                           including, without limitation, the right to require
                           the Debtor to assemble the Collateral and make it
                           available to the Secured Party at a place reasonably
                           convenient to the parties;

                  ii.      Operate, utilize, recondition and/or refurbish any of
                           the Collateral for the purpose of enhancing or
                           preserving the value thereof by any means deemed
                           appropriate by the Secured Party, in its sole
                           discretion, including, without limitation, converting
                           raw materials and/or work-in-progress into finished
                           goods;

                  iii.     Notify the account debtors for any of the Accounts to
                           make payment directly to the Secured Party, or to
                           such post office box as the Secured Party may direct;

                  iv.      Demand, sue for, collect, or retrieve any money or
                           property at any time payable, receivable on account
                           of, or in exchange for, or make any compromise, or
                           settlement deemed desirable with respect to any of
                           the Collateral;

                  v.       Notify the post office authorities to change the
                           address for delivery of the Debtor's mail to an
                           address designated by the Secured Party and to
                           receive, open, and distribute all mail addressed to
                           the Debtor, retaining all mail relating to the
                           Collateral and forwarding all other mail to the
                           Debtor; and/or

                  vi.      Upon ten (10) calendar days' prior written notice to
                           the Debtor (or one (1) day notice by telephone with
                           respect to Collateral that is perishable or threatens
                           to decline rapidly in value), which the Debtor hereby
                           acknowledges to be sufficient, commercially
                           reasonable and proper, the Secured Party may sell,
                           lease or otherwise dispose of any or all of the
                           Collateral at any time and from time to time at
                           public or private sale, with or without advertisement
                           thereof, and apply the proceeds of any such sale
                           first to the Secured Party's expenses in preparing
                           the Collateral for sale (including reasonable
                           attorneys' fees) and second to the complete
                           satisfaction of the Secured Obligations in any order
                           deemed appropriate by the Secured Party in its sole
                           discretion. The Debtor waives the benefit of any
                           marshalling doctrine with respect to the Secured
                           Party's exercise of its rights hereunder. The Debtor
                           grants a royalty-free license to the Secured Party
                           for all patents, service marks, trademarks, trade
                           names, copyrights, computer programs and other
                           intellectual property and proprietary rights
                           sufficient to permit the Secured Party to exercise
                           all rights granted to the Secured Party under this
                           Section. To the extent lawfully permitted, Secured
                           Party or anyone else may be the purchaser of any or
                           all of the Collateral so sold and thereafter hold
                           such Collateral absolutely, free from any claim or
                           right of whatsoever kind, including any equity of
                           redemption of the Debtor or any other Obligor, any
                           such notice, right and/or equity of redemption being
                           hereby expressly waived and released.

9.       MISCELLANEOUS.

         a.       REMEDIES CUMULATIVE; NO WAIVER. The rights, powers and
                  remedies of the Secured Party provided in this Security
                  Agreement and any of the other Finance Documents are
                  cumulative and not exclusive of any right, power or remedy
                  provided by law or equity. No failure or delay on the part of
                  the Secured Party in the exercise of any right, power or
                  remedy shall operate as a waiver thereof, nor shall any single
                  or partial exercise of any right, power or remedy preclude any
                  other or further exercise thereof, or the exercise of any
                  other right, power or remedy.


                                       10
<PAGE>
         b.       NOTICES. All notices shall be delivered in accordance with the
                  terms of Section 32 of the Facilities Agreement.

         c.       COSTS AND EXPENSES. Whether or not the transactions
                  contemplated by this Security Agreement and the other Finance
                  Documents are fully consummated, the Debtor shall promptly pay
                  (or reimburse, as the Secured Party may elect) all costs and
                  expenses which the Secured Party has incurred or may hereafter
                  incur in connection with the negotiation, preparation,
                  reproduction, interpretation, perfection, monitoring,
                  administration and enforcement of the Finance Documents, the
                  collection of all amounts due under the Finance Documents, and
                  all amendments, modifications, consents or waivers, if any, to
                  the Finance Documents. Such costs and expenses shall include,
                  without limitation, the reasonable fees and disbursements of
                  counsel to the Secured Party (including the Secured Party's
                  in-house counsel), the costs of appraisals, searches of public
                  records, costs of filing and recording documents with public
                  offices, internal and/or external audit and/or examination
                  fees and costs, stamp, excise and other taxes, the fees of the
                  Secured Party's accountants, consultants or other
                  professionals, costs and expenses from any actual or attempted
                  sale at all or any part of the Collateral, or any exchange,
                  enforcement, collection, compromise or settlement of any of
                  the Collateral or receipt of the proceeds thereof, and for the
                  care and preparation for sale of the Collateral (including
                  insurance costs) and defending and asserting the rights and
                  claims of the Secured Party in respect thereof, by litigation
                  or otherwise. The Debtor's reimbursement obligations under
                  this Section shall survive any termination of the Finance
                  Documents.

         d.       GOVERNING LAW. This Security Agreement shall be construed in
                  accordance with and governed by the substantive laws of the
                  State of New York without reference to conflict of laws
                  principles.

         e.       INTEGRATION. This Security Agreement and the other Finance
                  Documents constitute the solo agreement of the parties with
                  respect to the subject matter hereof and thereof and supersede
                  all oral negotiations and prior writings with respect to the
                  subject matter hereof and thereof.

         f.       AMENDMENT; WAIVER. No amendment of this Security Agreement,
                  and no waiver of any one or more of the provisions hereof
                  shall be effective unless set forth in writing and signed by
                  the parties hereto.

         g.       SUCCESSORS AND ASSIGNS. This Security Agreement (i) shall be
                  binding upon the Debtor and the Secured Party and, where
                  applicable, their respective successors and permitted assigns,
                  and (ii) shall inure to the benefit of the Debtor and the
                  Secured Party and, where applicable, their respective
                  successors and permitted assigns; provided, however, that the
                  Debtor may not assign its rights hereunder or any interest
                  herein without the prior written consent of the Secured Party,
                  and any such assignment or attempted assignment by the Debtor
                  shall be void and of no effect with respect to the Secured
                  Party.

         h.       SALE, ASSIGNMENT OR PARTICIPATIONS. The Secured Party may from
                  time to time sell or assign, in whole or in part, or grant
                  participations in some or all of the Documents and/or the
                  obligations evidenced thereby. The holder of any such sale,
                  assignment or participation, if the applicable agreement
                  between the Secured Party and such holder so provides, (i)
                  shall be entitled to all of the rights, obligations and
                  benefits of the Secured Party, and (ii) shall be deemed to
                  hold and may exercise the rights of setoff or Secured Party's
                  lien with respect to any and all obligations of such holder to
                  the Debtor, in each case as fully as though the Debtor were
                  directly indebted to such holder. The Secured Party may in its
                  discretion, give notice to the Debtor of such sale, assignment
                  or


                                       11
<PAGE>
                  participation; however, the failure to give such notice shall
                  not affect any of the Secured Party's or such holder's rights
                  hereunder. In accordance with and in a manner consistent with
                  the confidentiality provisions of Facilities Agreement, the
                  Debtor authorizes the Secured Party to provide information
                  concerning the Debtor to any prospective purchaser, assignee
                  or participant. The information provided may include, but is
                  not limited to, amounts, terms, balances, payment history,
                  return item history and any financial or other information
                  about the Debtor. The Debtor agrees to indemnify, defend,
                  release the Secured Party, and hold the Secured Party
                  harmless, at the Debtor's cost and expense, from and against
                  any and all lawsuits, claims, actions, proceedings or suits
                  against the Secured Party or against the Debtor and the
                  Secured Party, arising out of or relating to the Secured
                  Party's reporting or disclosure of such information, except
                  any of the foregoing resulting from the Secured Party's gross
                  negligence or willful misconduct.

         i.       SEVERABILITY. The illegality or unenforceability of any
                  provision of this Security Agreement or any instrument or
                  agreement required hereunder shall not in any way affect or
                  impair the legality or enforceability of the remaining
                  provisions of this Security Agreement or any instrument or
                  agreement required hereunder. In lieu of any illegal or
                  unenforceable provision in this Security Agreement, there
                  shall be added automatically as a part of this Security
                  Agreement a legal and enforceable provision as similar in
                  terms to such illegal or unenforceable provision as may be
                  possible.

         j.       CONSENT TO JURISDICTION AND SERVICE OF PROCESS. The Debtor
                  irrevocably appoints each and every officer of the Debtor as
                  its attorneys upon whom may be served, by regular or certified
                  mail at the address set forth in Section 4.b. of this Security
                  Agreement, any notice, process or pleading in any action or
                  proceeding against it arising out of or in connection with
                  this Security Agreement or any of the other Finance Documents.
                  The Debtor hereby consents that any action or proceeding
                  against it may be commenced and maintained in any court within
                  the State of New York or in the United States District Court
                  for the Southern District of New York by service of the
                  process on any such owner, partner and/or officer. The Debtor
                  further agrees that such courts of the State of New York and
                  the United States District Court for the Southern District of
                  New York shall have jurisdiction with respect to the subject
                  matter hereof and the person of the Debtor and all Collateral
                  for the Secured Obligations.

         k.       INDEMNIFICATION.

                  i.       If, after receipt of any payment of all or any part
                           of the Secured Obligations, the Secured Party is
                           compelled or agrees, for settlement purposes, to
                           surrender such payment to any person or entity for
                           any reason (including, without limitation, a
                           determination that such payment is void or voidable
                           as a preference or fraudulent conveyance, an
                           impermissible setoff, or a diversion of trust funds),
                           then this Security Agreement and the other Finance
                           Documents shall continue in full force and effect,
                           and the Debtor shall be liable for, and shall
                           indemnify, defend and hold harmless the Secured Party
                           with respect to the full amount so surrendered.

                  ii.      The Debtor shall indemnify, defend and hold harmless
                           the Secured Party with respect to any and all claims,
                           expenses, demands, losses, costs, fines or
                           liabilities of any kind (including, without
                           limitation, those involving death, personal injury or
                           property damage and including reasonable attorneys'
                           fees and costs) arising from or in any way related to
                           any hazardous materials or dangerous environmental
                           condition within, on, from, related to or affecting
                           any real property owned or occupied by the Debtor,
                           other than those resulting from the gross negligence
                           or willful misconduct of the Secured Party.


                                       12
<PAGE>
                  iii.     The provisions of this Section shall survive the
                           termination of this Security Agreement and the other
                           Finance Documents and shall be and remain effective
                           notwithstanding the payment of the Secured
                           Obligations, the release of any security interest,
                           lien or encumbrance securing the Secured Obligations
                           or any other action which the Secured Party may have
                           taken in reliance upon its receipt of such payment.
                           Any action by the Secured Party shall be deemed to
                           have been conditioned upon any payment of the Secured
                           Obligations having become final and irrevocable.

         l.       INCONSISTENCIES. The Finance Documents are intended to be
                  consistent. However, in the event of any inconsistencies among
                  any of the Finance Documents, such inconsistency shall not
                  affect the validity or enforceability of any Finance Document.
                  In the event of any inconsistency or ambiguity in any of the
                  Finance Documents, the Finance Documents shall not be
                  construed against any one party but shall be interpreted
                  consistent with the Secured Party's policies and procedures.

         m.       HEADINGS. The headings of sections and paragraphs have been
                  included herein for convenience only and shall not be
                  considered in interpreting this Security Agreement.

         n.       SCHEDULES. If a schedule and/or an exhibit is attached hereto,
                  the provisions thereof are incorporated herein.

         o.       JUDICIAL PROCEEDING; WAIVERS.

                  i.       EACH PARTY TO THIS SECURITY AGREEMENT AGREES THAT ANY
                           SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR
                           COUNTERCLAIM, BROUGHT OR INSTITUTED BY ANY PARTY
                           HERETO OR ANY SUCCESSOR OR ASSIGN OF ANY PARTY, ON OR
                           WITH RESPECT TO THIS SECURITY AGREEMENT, ANY OF THE
                           OTHER FINANCE DOCUMENTS, THE COLLATERAL OR THE
                           DEALINGS OF THE PARTIES WITH RESPECT HERETO OR
                           THERETO SHALL BE TRIED ONLY BY A COURT AND NOT BY A
                           JURY.

                  ii.      THE DEBTOR AND THE SECURED PARTY HEREBY KNOWINGLY,
                           VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO A
                           TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR
                           PROCEEDINGS. FURTHER, EACH PARTY WAIVES ANY RIGHT IT
                           MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT,
                           ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY,
                           PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES
                           OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES.

                  iii.     THE DEBTOR ACKNOWLEDGES AND AGREES THAT THIS SECTION
                           IS A SPECIFIC AND MATERIAL ASPECT OF THIS SECURITY
                           AGREEMENT AND THAT THE SECURED PARTY WOULD NOT EXTEND
                           CREDIT IF THE WAIVERS SET FORTH IN THIS SECTION WERE
                           NOT A PART OF THE SECURITY AGREEMENT.




                                       13
<PAGE>
IN WITNESS WHEREOF, the authorized officers of the parties hereto have caused
this Security Agreement to be signed, sealed and delivered on the date above
first written.

                                  DEBTOR:

Attest:                           INDIGO ACQUISITION CORP.


By: /s/                           By: /s/ Walter Nimmo                    (SEAL)
   --------------------------        -------------------------------------
    Name:                            Name: Walter Nimmo
    Title:                           Title:



                                  SECURED PARTY:

                                  BEAR, STEARNS CORPORATE LENDING, INC., as
                                      Security Trustee

                                  By:  /s/
                                     -------------------------------------------
                                     Name:
                                     Title:




                                       14