**EXHIBIT F-2**

**SECURITY AGREEMENT (LTD.)**

          **THISSECURITY AGREEMENT (LTD.)**, dated as of December 29, 2004 (as amended, modifiedor supplemented from time to time in accordance with the terms hereof, this"**Security Agreement**") is made by **INTERPOOL LIMITED**, a company organized underthe laws of Barbados, as grantor hereunder (together with its successors andassigns, "**Grantor**"), in favor of **DVB BANK N.V.**, in its capacity as agent (DVBBank N.V., in such capacity, together with its successors and permitted assigns,the "**Agent**") on behalf of various financial institutions that are lenderspursuant to the terms of the Credit Agreement (each, a "**Lender**" andcollectively, the "**Lenders**"). 

**RECITALS**

          **WHEREAS,**prior to the execution of this Security Agreement, the Grantor and InterpoolInc., as borrowers thereunder ("**Borrowers**"), Interpool, Inc., as parentguarantor, the Agent and the Lenders entered into a Revolving Credit Agreement,dated as of December 29, 2004 (as amended, restated or supplemented from time totime in accordance with its terms, the "**Credit Agreement**"), pursuant to whichthe Borrowers obtained from the Lenders a Commitment to fund revolving creditloans in an aggregate principal amount of up to $150,000,000; 

          **WHEREAS,** pursuant to the terms of the Credit Agreement, the Grantor isrequired to deliver to the Agent an agreement pursuant to which the Grantorgrants to the Agent, on behalf of the Lenders, a first priority securityinterest in specified items of collateral to adequately secure the Grantor'sobligations under the Credit Agreement; 

          **NOW, THEREFORE,** in satisfaction of such condition and for other good andvaluable consideration, the receipt and adequacy of which are herebyacknowledged, and intending to be legally bound, Grantor hereby represents,warrants, covenants and agrees as follows: 

**AGREEMENT**

          **Section 1.**Defined Terms. Capitalized terms used herein and nototherwise defined shall have the meaning ascribed to such term in the CreditAgreement. In addition, unless otherwise defined herein, the following termsshall have the following meanings (such meanings being equally applicable toboth the singular and plural forms of the terms defined):

          "**Account Debtor**" means any "account debtor", as such term isdefined in Section 9-102(a)(3) of the UCC as in effect in the State of NewYork on the date hereof. 

          "**Accounts**" means any "account", as such term is defined inSection 9-102(a)(2) of the UCC as in effect in the State of New York on thedate hereof. 

          "**Bankruptcy Code**" means either or both, as the context mayrequire, of (i) The Bankruptcy Reform Act of 1978, and (ii) BankruptcyAct of Barbados, in each case, as amended from time to time. 

          "**Chattel Paper**" means any "chattel paper", as such term is definedin Section 9-102(a)(11) of the UCC as in effect in the State of New York onthe date hereof. 

          "**Collateral**" shall have the meaning assigned to such term inSection 2 of this Security Agreement. 

          "**Collateral Date**" means the date the Borrower has delivered (orshall have been required to deliver) its Borrowing Base Certificate to theAgent.

          "**Collections**" shall have the meaning assigned to such term inSection 3(b) of this Security Agreement. 

          "**Contracts**" means all contracts, undertakings or other agreementsarising out of or in any way related to any item of Equipment Collateral (in sofar as it relates to the item of Equipment), in or under which Grantor may nowor hereafter have any right, title or interest. 

          "**Documents**" means any "documents", as such term is defined inSection 9-102(a)(30) of the UCC as in effect in the State of New York onthe date hereof. 

          "**Equipment**" means any "equipment", as such term is defined inSection 9-102(a)(33) of the UCC as in effect in the State of New York onthe date hereof. 

          "**Equipment Collateral**" means all of the containers owned by theGrantor that are set forth on Schedule 1 to each Security AgreementSupplement.

          "**General Intangibles**" means any "general intangibles", as suchterm is defined in Section 9-102(a)(42) of the UCC as in effect in theState of New York on the date hereof. 

          "**Instruments**" means any "instrument", as such term is defined inSection 9-102(a)(47) of the UCC as in effect in the State of New York onthe date hereof. 

          "**Inventory**" means any "inventory", as such term is defined inSection 9-102(a)(48) of the UCC as in effect in the State of New York onthe date hereof. 

          "**Lease**" means all lease agreements or contracts for use orhire of the Equipment (in so far as it relates to the item of Equipment) bythird parties as lessees and Grantor (or one of its Affiliates, acting as agentfor Grantor) as lessor. 

          "**Letter-of-Credit Rights**" shall have the meaning set forth inSection 9-102(a)(51) of the UCC as in effect in the State of New York onthe date hereof. 

          "**Pledge Expiration Date**" shall be the date on which all of theSecured Obligations have been indefeasibly paid in full. 

          "**Proceeds**" shall have the meaning set forth inSection 9-102(a)(64) of the UCC as in effect in the State of New York onthe date thereof. 

          "**Secured Obligations**" means the loans, advances, debts,liabilities and obligations for monetary amounts owed by (i) the Grantorpursuant to the terms of the Credit Agreement or any other Loan Document,whether due or to become due, matured or unmatured, liquidated or unliquidated,contingent or non-contingent, and all covenants and duties regarding suchamounts, of any kind or nature, present or future, whether or not evidenced byany note, agreement or other instrument, arising under the Credit Agreement orany other Loan Document. This term includes, without limitation, all principal,interest (including interest that accrues after the commencement of a caseagainst Grantor or any affiliate of Grantor under the Bankruptcy Code orotherwise), fees, including, without limitation, any and all closing fees,prepayment fees, commitment fees, advisory fees, agent fees and attorneys' feesand any and all other fees, expenses, costs or other sums chargeable to Grantorunder any of the related Loan Documents. 

          "**Security Agreement**" means this Security Agreement (LTD.), assupplemented by each Security Agent Supplement, and all Schedules hereto andthereto, as the same may from time to time be amended, modified or supplementedfrom time to time in accordance with the terms hereof. 

          "**Supporting Obligations**" shall have the meaning set forth inSection 9-102(a)(77) of the UCC as in effect in the State of New York onthe date hereof. 

          "**UCC**" or "**Uniform Commercial Code**" means the UniformCommercial Code as the same may, as indicated in the Loan Documents, be ineffect in the State of New York on the date hereof; *provided, however,* inthe event that by reason of mandatory provisions of law, any or all of theattachment, perfection or priority of Agent's security interest in anyCollateral is governed by the Uniform Commercial Code as in effect in ajurisdiction other than the State of New York, the term UCC shall mean theUniform Commercial Code as in effect in such other jurisdiction for purposes ofthe provisions hereof relating to such attachment, perfection of priority andfor purposes of definitions related to such provisions. 

          **Section 2.**Grant of Security Interest; Authority to File FinancingStatements.

                    (a)Grant of Security Interest. As collateral security for (x) the prompt andcomplete payment and performance when due (whether at stated maturity, byacceleration or otherwise) of all of the Secured Obligations and (y) the paymentand performance of all of the Grantor's covenants and agreements in thisSecurity Agreement, the Credit Agreement and the other Loan Documents, Grantorhereby assigns, conveys, mortgages, charges, pledges, hypothecates and transfersto Agent, on behalf of the Lenders, and hereby grants to Agent, on behalf of theLenders, a security interest in and to all of Grantor's right, title andinterest in, to and under, whether now owned or hereafter existing: (i) theEquipment Collateral, and all substitutions and replacements therefor, and anyand all Accounts, Chattel Paper, Contracts, Documents, Instruments, Letter ofCredit Rights and Supporting Obligations relating to such Equipment Collateral,including any bill of sale and any certificate of title to the extent relatedthereto; (ii) all Leases (including all rental, termination and casualtypayments owing by the Lessees thereunder) to which the Equipment Collateral maybecome subject to from time to time (to the extent, but only to the extent, thatsuch Leases relate to the Equipment Collateral and any Supporting Obligationsfor such Leases); (iii) all insurance proceeds of the Equipment Collateral andany other collateral and all proceeds of the voluntary or involuntarydisposition of the Equipment Collateral and any other collateral; (iv) allpayments made or due to Grantor in connection with any requisition,confiscation, condemnation, seizure or forfeiture of all or any part of theEquipment Collateral and any other collateral by any Governmental Authority, andany other cash or non-cash receipts from the sale, the exchange, collection orother disposition of the Equipment Collateral and any other collateral; (v) allwarranties issued in respect of any Equipment Collateral by the manufacturerthereof; (vi) the Collateral Account, and all monies and investments therein orstanding to the credit thereof; and (vii) all income, payments and Proceeds ofthe foregoing (all of the items described in clauses (i) through and including(vii) collectively, the "**Collateral**").

                    (b)Authority to File Financing Statements. Grantor hereby irrevocablyauthorizes the Agent at any time, and from time to time, to file in any filingoffice in any jurisdiction any initial financing statements, any amendmentsthereto and certifications thereof that (i) indicate the Collateral, regardlessof whether any particular asset comprised in the Collateral falls within thescope of Article 9 of the Uniform Commercial Code, is mortgaged and collaterallyassigned to the Agent, on behalf of the Lenders, and (ii) provide any otherinformation required for the sufficiency or filing office acceptance of any suchfinancing statement or amendment. Grantor agrees to furnish any such informationto the Agent and/or any Lender promptly upon request. Grantor also ratifies itsauthorization for the Agent or any Lender to have filed in any jurisdiction anysuch UCC Financing Statement or amendments thereto if filed prior to the datehereof.

          **Section 3.**Rights of Agent and Banks; Collection of Accounts; Release ofCollateral.

                    (a) Grantor to Remain Liable. Notwithstanding anything contained in thisSecurity Agreement to the contrary, Grantor expressly agrees that it shallremain liable under each of the Leases to which it is a party and otheragreements included in the Collateral to observe and perform all the conditionsand obligations to be observed and performed by Grantor thereunder and thatGrantor shall perform all of its duties and obligations thereunder, all inaccordance with and pursuant to the terms and provisions of each such agreement.None of the Agent nor any Lender shall have any obligation or liability underany Lease, Contract, license or other agreement by reason of, or arising out of,this Security Agreement or the granting to the Agent of a Lien therein or thereceipt by the Agent of any payment relating to any such agreement, Lease orContract pursuant hereto, nor shall the Agent be required or obligated in anymanner to perform or fulfill any of the obligations of Grantor under or pursuantto any such agreement, Lease, Contract or license, or to make any payment, or tomake any inquiry as to the nature or the sufficiency of any payment received byit or the sufficiency of any performance by any party thereunder, or to presentor file any claim, or to take any action to collect or enforce any performanceor the payment of any amounts which may have been assigned to it or to which itmay be entitled at any time or times.

                    (b) Administration of Collections. (i) There is hereby established withthe Agent a cash collateral account (the "**Collateral Account**") in the name ofthe Borrower and under the control of the Agent into which there shall bedeposited from time to time (x) the Collections to the extent required to bedelivered to the Agent pursuant hereto and (y) funds ("**Borrowing Base Funds**")provided by the Borrower as contemplated by the definition of Borrowing Base inSection 1.1 of the Credit Agreement. The balance from time to time in theCollateral Account shall constitute part of the Collateral hereunder and shallnot constitute payment of the Secured Obligations until applied as hereinafterprovided. The balance from time to time in the Collateral Account shall besubject to withdrawal only as provided herein.

                    (ii)So long as no Event of Default shall have occurred and be continuing, Grantorshall receive payment of rent, termination and casualty payments and otheramounts payable by the relevant Lessee under the related Lease and the cashproceeds of any of the other Collateral (including proceeds of insurancethereon) ("Collections"). If an Event of Default shall have occurred and iscontinuing, and the Agent has delivered the Notice of Assignment to the Lessees,all Collections shall be paid directly into the Collateral Account.

                    (iii) If an Event of Default shall have occurred and is continuing, and theAgent has delivered the Notice of Assignment to the Lessees, Grantor agrees todeposit such Collections (if practicable, in precisely the form received), withall necessary endorsements, in the Collateral Account. Until such Collectionsare turned over to the Agent, such Collections shall be deemed to be held intrust by the relevant Grantor for and as the Agent's property and shall not becommingled with Grantor's other funds or properties. Such Collections, whendeposited, shall continue to be collateral security for all of the Obligationsand shall not constitute payment thereof until applied as hereinafterprovided.

                    (iv) The Agent may, in its sole discretion, apply all or a part of the funds ondeposit in the Collateral Account to the principal of, or interest on, the Notesor any other amounts owing in respect of any of the Secured Obligations inaccordance with the provisions of Section 7.4 hereof. If a Default or an Eventof Default has occurred, Grantor shall, at the request of Agent, deliver toAgent all original and other documents evidencing, and relating to, the Leases(other than Stamping Leases) relating to the Equipment Collateral.

                    (v)If no Default or Event of Default shall be continuing, the Borrower may directthe Agent to release to the Borrower Borrowing Base Funds if and to the extentthat the Borrower shows that, after giving effect to such release, the CreditLoans borrowed by it shall not exceed its Borrowing Base.

                    (c)Delivery of Notices of Assignment. If an Event of Default has occurred, theAgent may, in its sole discretion, deliver the Notices of Assignment to theLessees (which notices, if originally delivered in blank by the Grantor, may becompleted by the Agent by inserting the name of the Lessee and relevant Leasedetails).

                    (d) Right of Quiet Enjoyment. The security interest hereby granted to Agent bythe Grantor is subject to the right of any Lessee to the quiet enjoyment of therelated Equipment Collateral so long as such Lessee is not in default under suchLease and the relevant Grantor continues to receive all amounts payable underthe related Lease.

          **Section 4.**Representations and Warranties. Grantor herebyrepresents and warrants to the Agent and each Lender on each Collateral Date (asto the Collateral being subject to the Lien of the Security Agreement Supplementdated such date) that:

          4.1 Perfected First Priority Lien. The security interestsgranted pursuant to this Security Agreement, upon completion of the filings andother actions specified on Schedule 1 hereto (which, in the case of allfilings and other documents referred to on said Schedule, have been delivered tothe Agent, on behalf of the Lenders, in completed and duly executed form), willconstitute valid first priority perfected security interests in all of theCollateral, as collateral security for the Secured Obligations, enforceable inaccordance with the terms hereof, and no other Liens exist on the Collateralexcept Permitted Liens. 

          4.2 Jurisdiction of Organization; Chief Executive Office. On thedate hereof, Grantor's jurisdiction of organization, identification number fromthe jurisdiction of organization (if any), and the location of Grantor's chiefexecutive office or sole place of business or principal residence, as the casemay be, are specified on Schedule 2. Grantor has furnished to the Agent, onbehalf of the Lenders, a certified organization document and long-form goodstanding certificate as of a date which is recent to the date hereof.

          4.3 Title to Collateral.Grantor has good title to the relevant Collateral, free of all Liens other thanPermitted Liens not of record. 

          4.4 No Default under Leases. No Lease is a Defaulted Lease or aDelinquent Lease.

          4.5 Consents. Grantor hasreceived all necessary consents and approvals required by the terms of theCollateral to the pledge to the Agent, on behalf of the Lenders, of its interestand rights in such Collateral hereunder. 

          4.6Possession of Collateral. No creditor of Grantor has in its possessionany portion of the Collateral.

          4.7Location of Stamping Leases; Stamping of Stamping Leases. If any Leaseshall have only a portion of the Containers subject thereto subject to thisSecurity Agreement, such Lease shall be a "Stamping Lease". The Stamping Leasesare maintained at the offices of the Grantor at 211 College Road East,Princeton, New Jersey 08540. None of the Leases have any marks or notationsindicating that they have been pledged, assigned or otherwise conveyed to anyPerson except that each counterpart of each Stamping Lease that constitutesChattel Paper has been stamped with the following legend (or the substantiveequivalent): "THIS LEASE IS SUBJECT TO A SECURITY INTEREST IN FAVOR OF DVB BANKNV, AS AGENT FOR ITSELF AND OTHER FINANCIAL INSTITUTIONS, AND CERTAIN OTHERSECURED PARTIES TO THE EXTENT THAT THIS LEASE RELATES TO, AND COVERS EQUIPMENTAND INVENTORY WHICH IS ALSO SUBJECT TO SECURITY INTERESTS IN FAVOR OF DVB BANKNV, AS AGENT FOR ITSELF AND OTHER FINANCIAL INSTITUTIONS, AND SUCH OTHER SECUREDPARTIES".

          **Section 5.**Covenants. Grantor covenants and agrees with the Agentand each Lender that from and after the date of this Security Agreement anduntil the Secured Obligations have been performed and paid in full:

          5.1Further Assurances; Pledge of Instruments. At any time and from time totime, upon the written request of Agent and at the sole expense of Grantor,Grantor shall promptly and duly execute and deliver any and all such furtherinstruments and documents and take such further action as the Agent mayreasonably deem desirable to obtain the full benefits of this Security Agreementand of the rights and powers herein granted, including, without limitation,(i) using its reasonable commercial efforts to secure all consents andapprovals necessary or appropriate for the assignment to Agent of any agreementsor license held by Grantor or in which Grantor has any rights not heretoforeassigned, (ii) filing any financing or continuation statements under theUCC or other notices appropriate under applicable law with respect to thesecurity interests granted hereby, (iii) filing or cooperating with Agentin filing any forms or other documents required to be filed in any foreignjurisdiction or under any international treaty, required to secure or protectAgent's interest in the Collateral, and (iv) without limiting thegenerality of the foregoing, Grantor shall, at Grantor's expense, take and causeto be taken all such actions as Agent may reasonably request in order to perfectand continue the perfection of the liens and security interests granted to Agentin the relevant Collateral. If any amount payable under or in connection withany of the relevant Collateral is or shall become evidenced by any Instrument,such Instrument, other than checks and notes received in the ordinary course ofbusiness, shall be duly endorsed in a manner satisfactory to Agent and deliveredto Agent immediately upon Grantor's receipt thereof. 

          5.2Schedules. Grantor shall furnish Agent from time to time, at Agent'srequest, with written statements and schedules further identifying anddescribing the relevant Collateral in such detail as the Agent may reasonablyrequire. 

          5.3Limitations on Disposition; Use of Proceeds from Dispositions. Grantorshall not sell, lease, transfer or otherwise dispose of any or all of theEquipment Collateral except for (i) any lease of the Equipment Collateralentered into in the ordinary course of Grantor's business, and (ii) sales,transfers or dispositions of the Equipment Collateral made in accordance withthe provisions of Section 7.12 of the Credit Agreement. 

          5.4Further Identification of Collateral. Grantor shall, if so requested bythe Agent, furnish to the Agent, as often as the Agent shall reasonably request,statements and schedules further identifying and describing the relevantCollateral and such other reports in connection with the relevant Collateral asthe Agent may reasonably request, all in reasonable detail.

          5.5 Grantor's Legal Status. Grantor (i) without providing at least30 days prior written notice to the Agent and each Lender, will not change itsname, its place of business or, if more than one, chief executive office, or itsmailing address or organizational identification number if it has one,(ii) if Grantor does not have an organizational identification number andlater obtains one, forthwith notify the Agent and each Lender of suchorganizational identification number, and (iii) will not change its type oforganization, jurisdiction of organization or other legal structure. 

          5.6 Other Actions as to Any and All Collateral. Grantor further agrees,upon request of the Agent or any Lender, to take any and all other actions assuch Person may determine to be necessary or useful for the attachment,perfection and first priority of, and the ability to enforce, the securityinterest of the Agent, on behalf of the Lenders, in any and all of theCollateral. 

          5.7 Lease Obligations. Grantor shall cause to be performed when due allof the material obligations of the lessor under each Lease to which anyEquipment Collateral may become subject. 

          5.8 Limitation on Actions Regarding Leases. Notwithstanding any otherprovision of this Security Agreement or any other Loan Document, Grantor shallnot without the prior written consent of the Majority Lenders in each instance,amend, modify or waive any provision of any Finance Lease: (i) to changethe provisions of such Lease regarding the frequency, amount or calculation ofthe amount of rent, termination amounts, casualty amounts or indemnificationspayable pursuant thereof, (ii) waive any event of default under such Lease,(iii) in any other manner which could materially and adversely affect theinterest of Agent granted hereunder. 

          **Section 6.**Agent's Appointment as Attorney-in-Fact.

          6.1 Appointment of Agent and Scope of Power of Attorney. Grantor herebyirrevocably constitutes and appoints the Agent, and any officer or agentthereof, with full power of substitution, as its true and lawfulattorney-in-fact with full irrevocable power and authority in the place andstead of Grantor and in the name of Grantor or in its own name, from time totime at the Agent's discretion, for the purpose of carrying out the terms ofthis Security Agreement, to take any and all appropriate action and to executeand deliver any and all documents and instruments which may be necessary ordesirable to accomplish the purposes of this Security Agreement and, withoutlimiting the generality of the foregoing, hereby gives the Agent the power andright, on behalf of Grantor, without notice to or assent by Grantor, to do thefollowing: 

                     (a) to ask, demand,collect, receive and give acquittances and receipts for any and all monies dueor to become due under any relevant Collateral and, in the name of Grantor inits own name or otherwise to take possession of, endorse and collect any checks,drafts, note, acceptances or other Instruments for the payment of monies dueunder any relevant Collateral and to file any claim or to take or commence anyother action or proceeding in any court of law or equity or otherwise deemedappropriate by the Agent for the purpose of collecting any and all such moniesdue under any relevant Collateral whenever payable;

                     (b) to pay ordischarge any Liens, including, without limitation, any tax lien, levied orplaced on or threatened against the relevant Collateral to effect any repairs orany insurance called for by the terms of this Security Agreement and to pay allor any part of the premiums therefor and the costs thereof; and

                     (c) to (i) directany person liable for any payment under or in respect of any of the relevantCollateral to make payment of any and all monies due or to become due thereunderdirectly to the Agent or as the Agent shall direct, (ii) receive payment of anyand all monies, claims and other amounts due or to become due at any timearising out of or in respect of any relevant Collateral, (iii) sign and endorseany invoices, freight or express bills, bills of lading, storage or warehousereceipts, certificates of title, drafts against debtors, assignments,verifications and notices in connection with Accounts and other Instruments andDocuments constituting or relating to the relevant Collateral, (iv) commence andprosecute any suits, actions or proceedings at law or in equity in any court ofcompetent jurisdiction to collect the relevant Collateral or any part thereofand to enforce any other right in respect of any relevant Collateral, (v) defendany suit, action or proceeding brought against Grantor with respect to anyrelevant Collateral, (vi) settle, compromise or adjust any suit, action orproceeding described above and, in connection therewith, give such discharges orreleases as the Agent may deem appropriate, (vii) sell, transfer, pledge, makeany agreement with respect to or otherwise deal with any of the relevantCollateral as fully and completely as though the Agent were the absolute ownerthereof for all purposes, and (viii) to do, at the Agent's option and Grantor'sexpense, at any time, or from time to time, all acts and things which the Agentmay reasonably deem necessary to protect, preserve or realize upon the relevantCollateral and the Agent's Lien therein in order to effect the intent of thisSecurity Agreement, all as fully and effectively as Grantor might do.

          6.2 Exercise of Power ofAttorney; Coupled with an Interest. The Agent agrees that, except upon theoccurrence of a Default or an Event of Default, it shall not exercise the powerof attorney or any rights granted to the Agent pursuant to this Section 6.Grantor hereby ratifies, to the extent permitted by law, all that said attorneyshall lawfully do or cause to be done by virtue hereof. The power of attorneygranted pursuant to this Section 6 is a power coupled with an interest andshall be irrevocable until the Secured Obligations are paid and performed infull. 

          6.3 No Duty on Agent. Thepowers conferred on the Agent hereunder are solely to protect the Agent'sinterests in the Collateral and shall not impose any duty upon it to exerciseany such powers. The Agent shall be accountable only for amounts that itactually receives as a result of the exercise of such powers and neither it norany of its officers, directors, employees, agents or representatives shall beresponsible to Grantor for any act or failure to act, except for its own grossnegligence or willful misconduct. 

          6.4 Agent May Perform.If Grantor fails to perform or comply with any of its agreements containedherein and the Agent, as provided for by the terms of this Security Agreement,shall perform or comply, or otherwise cause performance or compliance, with suchagreement, the reasonable expenses, including attorneys' fees, of the Agentincurred in connection with such performance or compliance together withinterest thereon at the rate then in effect in respect of the Loans, shall bepayable by Grantor to the Agent on demand and shall constitute SecuredObligations secured hereby. 

          **Section 7.**Rights and Remedies; Standard forExercising.

           7.1Rights and Remedies of Agent. If an Event of Default shall have occurredand be continuing, the Agent, without any other notice to or demand upon therelevant Grantor, shall have in any jurisdiction in which enforcement hereof issought, in addition to all other rights and remedies, the rights and remedies ofa secured party under the Uniform Commercial Code and any additional rights andremedies as may be provided to a secured party in any jurisdiction in which theCollateral is located, including, without limitation, the right to takepossession of the Collateral, and for that purpose the Agent may, so far asGrantor can give authority therefor, enter upon any premises on which theCollateral may be situated and remove the same therefrom. The Agent may, in itsdiscretion, require Grantor to assemble all or any part of the Collateral atsuch location or locations as the Agent may reasonably designate. Unless theCollateral is perishable or threatens to decline speedily in value or is of atype customarily sold on a recognized market, the Lender shall give to Grantorat least ten (10) Business Days prior written notice of the time and place ofany public sale of Collateral or of the time after which any private sale or anyother intended disposition is to be made. Grantor hereby acknowledges that ten(10) Business Days prior written notice of such sale or sales shall bereasonable notice. In addition, Grantor waives any and all rights that it mayhave to a judicial hearing in advance of the enforcement of any of the Agent'srights and remedies hereunder, including, without limitation, its rightfollowing an Event of Default to deliver the Notices of Assignment to theLessees, to take immediate possession of the Collateral and to exercise itsrights and remedies with respect thereto. 

          7.2 Standards for Exercising Rights and Remedies. To the extent thatapplicable law imposes duties on the Agent to exercise remedies in acommercially reasonable manner, Grantor acknowledges and agrees that it is notcommercially unreasonable for the Agent or any Lender (i) to fail to incurexpenses reasonably deemed significant by the Agent to prepare Collateral fordisposition, (ii) to fail to obtain third party consents for access toCollateral to be disposed of, or to obtain or, if not required by other law, tofail to obtain governmental or third party consents for the collection ordisposition of Collateral to be collected or disposed of, (iii) to fail toexercise collection remedies against Account Debtors or other persons obligatedon Collateral or to fail to remove liens or encumbrances on or any adverseclaims against Collateral, (iv) to exercise collection remedies againstaccount debtors and other persons obligated on Collateral directly or throughthe use of collection agencies and other collection specialists, (v) toadvertise dispositions of Collateral through publications or media of generalcirculation, whether or not the Collateral is of a specialized nature,(vi) to contact other persons, whether or not in the same business asGrantor, for expressions of interest in acquiring all or any portion of theCollateral, (vii) to hire one or more professional auctioneers to assist inthe disposition of Collateral, whether or not the collateral is of a specializednature, (viii) to dispose of Collateral by utilizing Internet sites thatprovide for the auction of assets of the types included in the Collateral orthat have the reasonable capability of doing so, or that match buyers andsellers of assets, (ix) to dispose of assets in wholesale rather thanretail markets, (x) to disclaim disposition warranties, (xi) topurchase insurance or credit enhancements to insure the Agent and each Lenderagainst risks of loss, collection or disposition of Collateral or to provide toeach Lender a guaranteed return from the collection or disposition ofCollateral, or (xii) to the extent deemed appropriate by the Agent, toobtain the services of other brokers, investment bankers, consultants and otherprofessionals to assist the Agent in the collection or disposition of any of theCollateral. Grantor acknowledges that the purpose of this Section 7.2 is toprovide non-exhaustive indications of what actions or omissions by the Agentwould fulfill the Agent's duties under the Uniform Commercial Code or any otherrelevant jurisdiction in the Agent's exercise of remedies against the Collateraland that other actions or omissions by the Agent shall not be deemed to fail tofulfill such duties solely on account of not being indicated in thisSection 7.2. Without limitation upon the foregoing, nothing contained inthis Section 7.2 shall be construed to grant any rights to Grantor or toimpose any duties on the Agent or any Lender that would not have been granted orimposed by this Security Agreement or by applicable law in the absence of thisSection 7.2. 

          7.3 No Waiver by Agent. The Agent shall not be deemed to have waived anyof its rights and remedies in respect of the Secured Obligations or theCollateral unless such waiver shall be in writing and signed by the Agent. Nodelay or omission on the part of the Agent in exercising any right or remedyshall operate as a waiver of such right or remedy or any other right or remedy.A waiver on any one occasion shall not be construed as a bar to or waiver of anyright or remedy on any future occasion. All rights and remedies of the Agentwith respect to the Secured Obligations or the Collateral, whether evidencedhereby or by any other instrument or papers, shall be cumulative and may beexercised singularly, alternatively, successively or concurrently at such timeor at such times as the Agent deems expedient. 

          7.4 Application of Proceedsof Collection and Collateral. During the continuance of any Event of Default,all monies standing to the credit of the Collateral Account, all Collections andthe Proceeds of any sale, disposition or other realization upon all or any partof the Collateral shall be held as collateral security hereunder and, at anytime remedies shall be exercised by the Agent in accordance with Section 9of the Credit Agreement, shall be distributed by the Agent in accordance withthe provisions of Section 9(f) of the Credit Agreement. 

          7.5 Waiver by Grantor. Tothe extent permitted by applicable law, Grantor waives all claims, damages anddemands against the Agent and any Lender arising out of the repossession,removal, retention, sale or lease of the Collateral except to extent the sameclaims, damages and demands are due to such Person's willful misconduct orgross negligence. 

          **Section 8.**Preservation of Collateral; Limitation on Agent's Duty inRespect of Collateral. The Agent shall be deemed to have acted reasonably inthe custody, preservation and disposition of any of the Collateral if it takessuch action as the relevant Grantor requests in writing, but failure of theAgent to comply with any such request shall not in itself be deemed a failure toact reasonably, and no failure of the Agent to do any act not so requested shallbe deemed a failure to act reasonably.

          **Section 9.**Reinstatement. This Security Agreement shall remain infull force and effect and continue to be effective should any petition be filedby or against Grantor for liquidation or reorganization, should Grantor becomeinsolvent or make an assignment for the benefit of creditors or should areceiver or trustee be appointed for all or any significant part of Grantor'sproperty and assets, and shall continue to be effective or be reinstated, as thecase may be, if at any time payment and performance of the Secured Obligations,or any part thereof, is, pursuant to applicable law, rescinded or reduced inamount, or must otherwise be restored or returned by any obligee of the SecuredObligations, whether as an avoidable preference, "fraudulent conveyance," orotherwise, all as though such payment or performance had not been made. In theevent that any payment, or any part thereof, is rescinded, reduced, restored orreturned, the Secured Obligations shall be reinstated and deemed reduced only bysuch amount paid and not so rescinded, reduced, restored or returned.

          **Section 10.**Miscellaneous.

          10.1 Notices. Any notice or other communication hereunder to any partshall be addressed and delivered (and shall be deemed given) in accordance withthe Credit Agreement. 

          10.2 Severability. Anyprovision of this Security Agreement which is prohibited or unenforceable in anyjurisdiction shall, as to such jurisdiction, be ineffective to the extent ofsuch prohibition or unenforceability without invalidating the remainingprovisions hereof, and any such prohibition or unenforceability in anyjurisdiction shall not invalidate or render unenforceable such provision in anyother jurisdiction. 

          10.3 Headings. The various headings in this Security Agreement areinserted for convenience only and shall not affect the meaning or interpretationof this agreement or any provisions hereof. 

          10.4No Waiver; Cumulative Remedies.

                     (a) The Agent shallnot by any act, delay, omission or otherwise be deemed to have waived any oftheir respective rights or remedies hereunder, nor shall any single or partialexercise of any right or remedy hereunder on any one occasion preclude thefurther exercise thereof or the exercise of any other right or remedy.

                     (b) The rights andremedies hereunder provided are cumulative and may be exercised singly orconcurrently, and are not exclusive of any rights and remedies provided by law.

                     (c) None of theterms or provisions of this Security Agreement may be waived, altered, modifiedor amended except by an instrument in writing, duly executed by the Grantor andthe Agent.

          10.5 Termination of this Security Agreement. This Security Agreementshall terminate upon the payment and performance in full of the SecuredObligations and the expiration of any applicable preference period. 

          10.6 Successor and Assigns. No Grantor shall be permitted to assign orotherwise transfer, in whole or in part, any of its rights and obligations underthis Security Agreement without the prior written consent of the Agent and eachLender in each instance, and any attempted assignment or transfer without suchconsent shall be null and void. This Security Agreement and all obligations ofGrantor hereunder shall be binding upon the successors and permitted assigns ofGrantor, and shall, together with the rights and remedies of the Agenthereunder, inure to the benefit of the Agent, any future holder of any Note andtheir respective successors and assigns. No sales of participations, othersales, assignments, transfers or other dispositions of any agreement governingor instrument evidencing the Secured Obligations or any portion thereof orinterest therein shall in any manner affect the Lien granted to the Agenthereunder. 

          10.7 Further Indemnification. Grantor agrees to pay, and to save theAgent and each Lender, harmless from, any and all liabilities with respect to,or resulting from any delay in paying, any and all excise, sales or othersimilar taxes which may be payable or determined to be payable with respect toany of the Collateral or in connection with any of the transactions contemplatedby this Security Agreement. 

          10.8 Governing Law. This Security Agreement shall be deemed to becontracts under the laws of the State of New York and shall for all purposes beconstrued in accordance with and governed by the laws of said State (includingSection 5-1401 and 5-1402 of the General Obligations Law, but otherwisewithout giving effect to any conflicts of laws provisions contained therein);*provided, however,* in the event that by reason of mandatory provisions oflaw, any or all of the attachment, perfection or priority of the Agent'ssecurity interest in any Collateral is governed by the Uniform Commercial Codeas in effect in a jurisdiction other than the State of New York, the term UCCshall mean the Uniform Commercial Code as in effect in such other jurisdictionfor purposes of the provisions hereof relating to such attachment, perfection ofpriority and for purposes of definitions related to such provisions. 

          10.9 Counterparts. This Security Agreement may be executed in any numberof counterparts, each of which when so delivered shall be deemed an original,but all such counterparts shall constitute but one and the same instrument.

          10.10 Miscellaneous. The headings of each section of this SecurityAgreement are for convenience only and shall not define or limit the provisionsthereof. This Security Agreement and all rights and obligations hereunder shallbe binding upon Grantor and its successors and assigns, and shall inure to thebenefit of the Agent, on behalf of the Lenders, and its successors and assigns.If any term of this Security Agreement shall be held to be invalid, illegal orunenforceable, the validity of all other terms hereof shall in no way beaffected thereby, and this Security Agreement shall be construed and beenforceable as if such invalid, illegal or unenforceable term had not beenincluded herein. Grantor acknowledges receipt of a copy of this SecurityAgreement. 

          **IN WITNESS WHEREOF**, Grantor has caused this Security Agreement to beexecuted and delivered by its duly authorized officer on the date first setforth above.