Document:

<PAGE>

                                                                   EXHIBIT 10.27

                                 March 27, 2003

Roger B. Farley
6976 Fieldstone Drive
Burr Ridge, Illinois 60521

Dear Roger:

This letter confirms the agreement between you and United States Can Company
("U.S. Can"), its parent U.S. Can Corporation and their respective subsidiaries
(collectively, "the Companies") regarding your severance arrangement following
your resignation and retirement from the position of Senior Vice President -
Human Resources with U.S. Can effective April 1, 2003. Your last day worked will
be April 1, 2003 ("LDW"). On or before April 1, 2003, you will resign your
employment and all positions and offices held with each of the Companies by
tendering a signed resignation letter as set forth in Exhibit A. Notwithstanding
the date of your resignation letter, the Companies waive any requirement that
you provide 30 days prior written notice of a resignation, as provided in
Section 4(e) of the Employment Agreement (as defined below).

In consideration of your acceptance of this Letter Agreement and subject to your
meeting in full your obligations under it and the Employee Agreement between you
and U.S. Can, dated February 3, 2000 ("Employee Agreement"), as amended by the
Employment Agreement, dated October 4, 2000 ("Employment Agreement"), copies of
which are attached hereto as Exhibits B.1 and B.2, you will receive the
following severance pay and benefits:

     1.   Base Salary Continuance, Transition Assistance, Vacation Pay

As a result of your resignation and retirement from U.S. Can and the Companies,
you shall not be entitled to any further compensation, payments or remuneration,
except as provided in this Letter Agreement. You have agreed to be available to
answer any questions we may have that involved your role/responsibilities with
U.S. Can and assist in a smooth transition of your duties and responsibilities
to others within U.S. Can beginning on April 2, 2003 and continuing through
October 1, 2004 (the "Salary Continuation Period"). U.S. Can will give due
consideration to your other personal and professional commitments so as to
minimize any material disruption or interference with them. Upon delivery of a
fully executed copy of this Letter Agreement to U.S. Can and the expiration of
any statutory revocation period, you will receive annual base salary continuance
at your final base rate ($245,000 per annum), payable in bi-weekly increments,
for the Salary Continuation Period. The final payment will be dated as of the
first regularly scheduled payroll date after October 1, 2004 and will be for the
period of September 20, 2004 through October 1, 2004. You will be paid a lump
sum amount on account of all of your accrued but unused vacation days through
your LDW, which total 13 days. You will not accrue or be entitled to payment for
any vacation after your LDW. The base salary continuance and pay on account of
unused vacation will be subject to customary withholding and other employment
taxes and any other voluntary, authorized or required deductions.

     2.   Health Insurance

From April 1, 2003 through December 31, 2003, you will be eligible to continue
to participate in U.S. Can's health, dental and vision insurance, pursuant to
the terms of the applicable plan(s) for active employees and consistent with the
terms and provisions of the plans or as they may be amended or modified,
provided you continue to pay any employee portion of premium contributions for
the coverage you elected as required by the terms of the plans. Naturally, this
coverage will be discontinued if you obtain a new position with a company where
these benefits are covered as a part of their insurance coverages. Beginning
January 1, 2004 or, if earlier, the date your coverage is discontinued either
pursuant to the preceding sentence or otherwise, you will be eligible for such
COBRA benefits as are authorized and required by law.

     3.   2003 Bonus

Your bonus for 2003, prorated based on your service through your LDW will be
paid on or about March 15, 2004, based on 2003 audited results for the Company
under the 2003 Management Incentive Plan. Bonus payments are

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Roger B. Farley
March 27, 2003
Page 2

subject to customary withholding and other employment taxes and any other
voluntary, authorized or required deductions.

     4.   Miscellaneous Benefits

a)   You will be eligible for any benefits which have heretofore vested to you
     in accordance with applicable plan documents and/or your elections
     pertaining to the Salaried Employees Retirement and Accumulation Plan
     ("SRAP"), and the non-qualified 401(k) plan and benefit replacement plans
     ("non-qualified plans"). You are 100% vested in all monies that are in your
     SRAP and non-qualified plans accounts. Distributions under the
     non-qualified plans are taxable events and the value of the distributions
     would be taxable as ordinary income at your marginal tax rate. U.S. Can is
     obligated to withhold taxes upon distribution.

b)   U.S. Can will pay the reasonable legal fees you incur in the negotiation,
     review and completion of this Letter Agreement up to a maximum amount of
     $5,000, upon submission of a usual and customary final invoice, together
     with supporting documentation. Any invoice is subject to audit and
     approval.

c)   Unless otherwise addressed in this Letter Agreement, Company benefits that
     will cease on your LDW include but are not limited to business travel
     insurance, disability and life insurance, perquisites (such as executive
     physicals and any club or membership dues), car allowance and participation
     in the SRAP, the non-qualified plans, or any other equity, deferred
     compensation, welfare, benefit or bonus plan.

d)   You or your Permitted Transferees (as defined in the Stockholders Agreement
     dated October 4, 2000) will continue to hold any shares of basic U.S. Can
     Corporation restricted common stock ("basic restricted stock") and
     performance based U.S. Can Corporation restricted stock ("performance based
     restricted stock") that vested on or before April 1, 2003, subject to the
     terms and conditions of the governing Stockholders Agreement. Any unvested
     shares of basic or performance based restricted stock will be treated in
     accordance with the terms and conditions of the governing Stockholders
     Agreement. You hereby agree, however, that as of your LDW, for all purposes
     of the Stockholders Agreement, you and your Permitted Transferees shall
     each be deemed to be an "Other Stockholder" rather than a "Management
     Stockholder" and that from time to time thereafter, at the request of U.S.
     Can Corporation and without further consideration, you shall execute and
     deliver further instruments and take such other actions, as U.S. Can
     Corporation may reasonably require, to more effectively evidence such
     designation.

e)   The current term life insurance policy, with death benefits equal to
     $500,000, for which the premium has been paid through December 1, 2003 will
     be transferred to you if such transfer is permitted by such policy.

     5.  Employee Agreement, Employment Agreement, Non-Competition/Non-
         Solicitation Obligations, Confidentiality Obligations, Return of
         Company Property and Post-Employment Assistance

You are a party to that certain Employee Agreement with the Company, dated
February 3, 2000, as amended by the Employment Agreement, dated October 4, 2000,
(respectively, the "Employee Agreement" and the "Employment Agreement"), copies
of which are attached hereto as Exhibits B.1 and B.2. The Employee Agreement
contains, among other things, restrictive covenants and certain confidentiality
provisions that survive your LDW and/or its termination. You specifically agree
that the post-employment non-competition and non-solicitation of
clients/customers covenants from the Employee Agreement will remain in effect
until October 1, 2004. In addition, from July 1, 2002 through June 30, 2004, you
agree to be bound by the following non-solicitation of employees clause:

                  You will not directly or indirectly on behalf of any other
                  individual or entity solicit, induce or entice any individual
                  who was an employee of any of the Companies as of your LDW
                  ("Covered Employees") to terminate his or her employment
                  relationship with any of the Companies. Notwithstanding the
                  prior sentence, you are not prohibited from hiring any Covered
                  Employee so long as you did not initiate contact with such
                  Covered Employee for purposes of such hiring and

<PAGE>

Roger B. Farley
March 27, 2003
Page 3

                  did not, directly or indirectly, solicit, induce or entice
                  such Covered Employee to terminate his or her employment
                  relationship with any of the Companies.

You acknowledge that the Companies have a protectible interest in you not
directly or indirectly competing with them in the metal and rigid plastic
segment of the packaging industry. However, if you present to U.S. Can the names
of potential employers, U.S. Can will not unreasonably withhold giving you
approval to work for any such potential employer.

Your obligations under the confidentiality provisions of the Employee Agreement
do not expire merely by the passage of time, but rather remain in effect
according to their substantive terms. You agree to return to U.S. Can any
property (keys, credit cards, passes, confidential documents or materials, all
work-in-process, etc.) belonging to the Companies, and to return all writings,
files, records, correspondence, notebooks, notes and other document and things
(including any copies thereof) containing confidential or proprietary
information or trade secrets of the Companies. The Employee Agreement, as
amended, will remain in effect following your LDW and terminate in accordance
with its terms. Except to the extent that the Employment Agreement amends the
Employee Agreement, this Letter Agreement supersedes, terminates and discharges
agreements, commitments or understandings between you and U.S. Can or any of the
Released Parties with respect to the subject matter hereof, contained in the
Employment Agreement, dated October 4, 2000, among you, the Company and U.S. Can
Corporation.

You agree that, for the period beginning on April 2, 2003, and continuing for a
reasonable period thereafter (including, at a minimum, all times during which
you are receiving salary continuation), you will assist the Companies in the
defense or prosecution of any claim that may be made by or against any of them,
to the extent that such claim(s) may relate to services performed by you for the
Companies. You agree to promptly inform the Companies if you become aware of any
such claim or threatened claim. The Companies will give due consideration to
your other personal or professional commitments with regard to this duty of
cooperation and to reimburse you for all of your reasonable out-of-pocket
expenses associated with such assistance, in accordance with U.S. Can's
then-current business expense reimbursement policies. The Companies agrees to
provide legal counsel to you in connection with such assistance (to the extent
legally permitted). You also agree to promptly inform the Companies if you are
asked to assist in any investigation of any of them (or their actions) that may
relate to services performed by you for any of them, regardless of whether a
lawsuit has then been filed against any of them with respect to such
investigation.

     6.   This Letter Agreement

You agree not to disclose, divulge, publicize or publish the existence or terms
of this Letter Agreement, and any Exhibits, except to your counsel, immediate
family or financial advisor, or as required by law or as required to enforce the
terms of this Letter Agreement. The Companies also agrees not to disclose,
divulge, publicize or publish the existence of the terms of this agreement to
anyone except its lawyers, accountants and those persons within the Companies or
their respective boards of directors whose knowledge is necessary for the
approval and implementation of this Letter Agreement or as required by law or as
required to enforce the terms of this Letter Agreement.

     7.   Non-Disparagement/References

You agree that you will refrain from making any discrediting or disparaging
comments regarding the Companies or any of the Released Parties referred to in
this Letter Agreement. The Companies agrees that it will refrain from making any
discrediting or disparaging comments regarding you provided that it may give
truthful responses to employment reference inquiries upon receipt of a written
release from you. In response to unsolicited requests for employment references
or in the absence of a written release from you, the Company will provide a
neutral reference identifying your dates of employment and positions held and
that you separated from the Company. You agree to direct all employment
references to Thomas J. Olander, Vice President, Human Resources or John
Workman, Chief Executive Officer.

<PAGE>

Roger B. Farley
March 27, 2003
Page 4

     8.   Effect of Breach

In the event of a material breach or threatened material breach of the Employee
Agreement, as amended, the Employment Agreement, or the provisions of this
Letter Agreement, the Company shall be entitled to suspend any payment(s)
hereunder immediately and without notice, pending receipt of adequate assurances
that no breach has or will occur, or final resolution of any breach. This shall
be in addition to, and not in place of, any other remedies that may be available
to the Company for such breach or threatened breach.

     9.   Releases

     a)   By you:

In consideration for the promises herein, you, for yourself, your agents, legal
or personal representatives, assigns, heirs, distributees, administrators and
executors (the "Releasing Parties"), hereby release and forever discharge U.S.
Can, its present or past parents, subsidiaries, divisions, affiliates, or
related companies, and their respective successors or assigns, present or past
officers, trustees, directors, employees, representatives and agents of each of
them (the "Released Parties"), from any and all claims, demands, actions,
liabilities and other claims for relief and remuneration whatsoever, whether
known or unknown, arising or which could have arisen, up to and including the
date of your execution of this Letter Agreement, including, without limitation,
those arising out of or relating to your employment or change in employment
status and termination of prior agreements, including any claims arising under
Title VII of the Civil Rights Act of 1964 (as amended by the Civil Rights Act of
1991), the Americans With Disabilities Act, the Age Discrimination in Employment
Act of 1967, the Illinois Human Rights Act, the Illinois Wage Payment and
Collection Act, the Employee Retirement Income Security Act ("ERISA"), or any
other federal, state, county, or local statute, law, ordinance, regulation, code
or executive order, any tort or contract claims, whether express or implied, and
any of the claims, matters and issues which could have been asserted by the
Releasing Parties against the Released Parties in any legal, administrative, or
other proceeding. Notwithstanding any provision in this release to the contrary,
you are not releasing any of your rights that you may have (a) under any company
benefit plan, (b) to indemnity under the Company's charter, bylaws or other
agreements, (c) under any directors and officers insurance and (d) under this
Letter Agreement.

     b)   By U.S. Can:

U.S. Can, on behalf of itself, and its former and present parents, subsidiaries,
affiliates, successors, assigns and their respective present or former directors
and officers, hereby release you, your heirs, and representatives from any and
all claims, demands, actions and liabilities whatsoever arising from or out of
your employment through the date of this Release, EXCEPT wanton and willful
misfeasance, gross misconduct, fraud or criminal conduct in the discharge of
your employment duties or acts outside the scope of your employment.

     10.  Non-admission of Liability

Nothing in this Letter Agreement, nor any actions taken by any parties in
connection herewith, shall constitute, be construed as, or be deemed to be, an
admission of fault, liability or wrongdoing of any kind whatsoever on the part
of U.S. Can or the Released Parties.

     11.  Effect of Death

In the event of your death, the unfulfilled payments described in section 1 will
be made to Employee's designated beneficiary, if one has been designated. (A
form for this purpose is attached hereto as Exhibit C.) Otherwise, the payments
described in section 1 will be paid to your estate. All other benefits,
compensation, payments or remuneration shall cease, except that the Company will
provide such COBRA benefits as authorized or required by law.

     12.  Arbitration and Enforcement Costs

     Any dispute or claim under this Letter Agreement shall be settled by
arbitration in Chicago, Illinois by an

<PAGE>

Roger B. Farley
March 27, 2003
Page 5

arbitrator, who shall be appointed pursuant to the rules of the American
Arbitration Association ("AAA"). The arbitration shall be conducted in
accordance with the AAA rules governing employment disputes and shall include
any employment disputes or claims arising under Title VII of the Civil Rights
Act of 1964 (as amended by the Civil Rights Act of 1991), the Americans With
Disabilities Act, the Age Discrimination in Employment Act of 1967, the Illinois
Human Rights Act, the Illinois Wage Payment and Collection Act, the Employee
Retirement Income Security Act ("ERISA"), or any other federal, state, county,
or local statute, law, ordinance, regulation, code or executive order, or any
tort or contract claims, with respect to the subject matter hereof. Any award
issued as a result of such arbitration shall be final and binding on the
parties, and judgment upon the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof; provided, however, that any award
issued as a result of arbitration shall be reviewable de novo by a court of
competent jurisdiction for errors of law. Should you be the prevailing party in
such arbitration or appeal therefrom the Company will reimburse you for the
reasonable attorneys' fees, costs and expenses incurred by you in connection
with such arbitration or appeal therefrom.

In addition, if it becomes reasonably necessary for you to retain legal counsel
or incur other costs and expenses in connection with either enforcing any
rights(s) under this Letter Agreement or defending against any allegations of
breach of this Letter Agreement by any of the Companies:

     - You shall be entitled to recover from the Companies reasonable attorneys'
fees, cost and expenses incurred by you in connection with such enforcement or
defense.

     - Payment required under this paragraph 12 shall be made by the Companies
to you (or directly to your attorney) promptly following submission to the
Companies of appropriate documentation evidencing the incurrence of such
attorney's fees, costs and expenses.

     - You shall be entitled to select your legal counsel; provided, however,
that such right of selection shall not affect the requirement that any costs and
expenses reimbursable under this paragraph 12 be reasonable.

     - Your rights to payments under this paragraph 12 shall not be affected by
the final outcome of any dispute with any of the Companies; provided, however,
that to the extent that the arbitrators shall determine that under the
circumstances recovery by you of all or a part of any such fees and costs and
expenses would be unjust, you shall not be entitled to any such recovery; and to
the extent that such amounts have been recovered by you previously, you shall
promptly repay such amounts to the Companies.

<PAGE>

Roger B. Farley
March 27, 2003
Page 6

13.  Knowing and Voluntary Agreement; Statutory Consideration Period

YOU REPRESENT AND WARRANT THAT YOU HAVE BEEN ADVISED, IN WRITING, TO CONSULT
WITH COUNSEL OR AN ATTORNEY IN CONNECTION WITH THIS LETTER AGREEMENT. THE
PARTIES REPRESENT AND WARRANT THAT, PRIOR TO EXECUTING THIS LETTER AGREEMENT,
THEY HAVE READ IT IN ITS ENTIRETY AND FULLY UNDERSTAND ITS MEANING AND EFFECT
AND THAT THEY HAVE ENTERED INTO IT KNOWINGLY AND VOLUNTARILY.

YOU REPRESENT AND WARRANT THAT YOU HAVE BEEN GIVEN TWENTY-ONE (21) DAYS WITHIN
WHICH TO CONSIDER THIS LETTER AGREEMENT AND THAT YOU HAVE BEEN GIVEN SEVEN (7)
DAYS AFTER EXECUTING OR SIGNING IT IN WHICH TO REVOKE IT. YOUR REVOCATION MUST
BE IN WRITING, AND MUST BE RECEIVED BY THOMAS J. OLANDER WITHIN THE 7-DAY
REVOCATION PERIOD. (A FORM YOU MAY USE FOR SUCH PURPOSE IS ATTACHED HERETO AS
EXHIBIT D.) THIS LETTER AGREEMENT SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE
UNTIL THE REVOCATION PERIOD HAS EXPIRED.

     14.  Call Of Stock

Upon this agreement being executed by you, Company waives any call rights it
has, arising out of your separation, as to Company stock held by you.

     15.  Successors

Each of the Companies, as applicable, will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of such company, as applicable, to
expressly assume and agree to perform this Letter Agreement in the same manner
and to the same extent that such company would be required to perform it if no
such succession had taken place.

This Letter Agreement, consisting of six pages, plus your resignation letter
(one page), a copy of the Employee Agreement (seven pages), a copy of the
Employment Agreement (seventeen pages), your designation of beneficiary form
(one page) and a form of revocation (one page), constitutes the entire agreement
between you and U.S. Can or any of the Released Parties. This Letter Agreement
supersedes, terminates and discharges all prior oral and written agreements,
commitments or understandings between you and U.S. Can or any of the Released
Parties with respect to the subject matter hereof, including but not limited to
that certain Employment Agreement, dated October 4, 2000, among you, the Company
and U.S. Can Corporation. This Letter Agreement shall be binding upon us, our
successors, assigns, heirs and legal representatives, and inure to our benefit
and the benefit of U.S. Can's successors and assigns.

                             Sincerely,

                             UNITED STATES CAN COMPANY

                             By: /s/ Thomas J. Olander
                                 -----------------------------------------------
                                 Thomas J. Olander
                                 Vice President
                                 Organization, Staffing, Compensation & Benefits

ACCEPTED AND AGREED TO:

/s/ Roger B. Farley
------------------------------
Roger B. Farley

Date: March 27, 2003

<PAGE>

                                 March 27, 2003

U.S. Can Corporation
700 E. Butterfield Road
Suite 250
Lombard, IL 60148

Ladies and Gentlemen:

I hereby voluntarily resign effective April 1, 2003 all of my offices,
directorships, memberships and other positions with U.S. Can Corporation and its
subsidiaries and affiliates, including but not limited to Senior Vice President
- Human Resources of U.S. Can Corporation and United States Can Company.

                                     Sincerely,

                                     /s/ Roger B. Farley
                                     -------------------------------------
                                            Roger B. Farley

<PAGE>

                                 March 27, 2003

                           DESIGNATION OF BENEFICIARY

     Pursuant to section 11 of the Letter Agreement, dated March __, 2003
between me and the United States Can Company, I hereby designate the following
as my designated beneficiary:

     (a)  prior to May 17, 2003, my daughters, Kelly T. Johnston and Kyle Farley
          Schockley, in equal parts; and

     (b)  on and after May 17, 2003, my intended wife, Marilyn Joe Hurst.

                                                /s/ Roger B. Farley
                                                -----------------------------
                                                        Roger B. Farley

                                                Dated: March 27, 2003

<PAGE>

                                 March 27, 2003

Revocation of Agreement

By signing below, I, Roger B. Farley, hereby revoke my agreement. I UNDERSTAND
THAT MY REVOCATION WILL BE EFFECTIVE ONLY IF I SIGN BELOW WITHIN SEVEN (7) DAYS
OF THE DATE ON WHICH I AGREED TO THE TERMS OF THIS LETTER FROM THOMAS J.
OLANDER, DATED MARCH 27, 2003 AND MY REVOCATION IS RECEIVED BY THOMAS J. OLANDER
WITHIN THE SEVEN (7) DAY REVOCATION PERIOD.

/s/ Roger B. Farley
---------------------------------
Roger B. Farley

Date: March 27, 2003

Acknowledgement of Receipt of Revocation

By signing below, I, Thomas J. Olander, acknowledge receipt of Roger B. Farley's
revocation of my letter to him, dated March ___, 2003.

UNITED STATES CAN COMPANY

By: /s/ Thomas J. Olander
    -----------------------------
    Thomas J. Olander
    Vice President
    Human Resources

Date: March 27, 2003<PAGE>

                                                                   EXHIBIT 10.30

                               SECURITY AGREEMENT

         THIS SECURITY AGREEMENT (this "Security Agreement") is entered into as
of July 22, 2003 among UNITED STATES CAN COMPANY, a Delaware corporation (the
"Company"), U.S. CAN CORPORATION, a Delaware corporation (the "Parent
Guarantor"), and each of the Domestic Subsidiaries of the Company (individually
a "Subsidiary Guarantor" and collectively the "Subsidiary Guarantors"; together
with the Company and the Parent Guarantor, individually an "Obligor" and
collectively the "Obligors") and WELLS FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, in its capacity as trustee and collateral agent (in such capacity,
the "Collateral Agent") for the Holders (described below).

                                    RECITALS

         WHEREAS, pursuant to that certain Indenture dated as of the date hereof
(as amended, modified, extended, renewed, restated or replaced from time to time
hereinafter, the "Indenture") among the Company, the Collateral Agent, and the
Parent Guarantor, the Company has issued on the date hereof $125,000,000 10 7/8%
Senior Secured Notes due 2010 (collectively, the "Notes");

         WHEREAS, the Subsidiary Guarantors (including all future Subsidiaries
of the Company which become a party thereto by execution of a Guarantee
Supplement (as defined in the Indenture)) have guaranteed the obligations of the
Company under the Notes and the Indenture pursuant to the terms of that certain
Subsidiary Guarantee dated as of the date hereof (as amended, modified,
extended, renewed, restated or replaced from time to time hereinafter, the
"Subsidiary Guarantee") and the Parent Guarantor has guaranteed the obligations
of the Company under the Notes and the Indenture pursuant to the terms of that
certain Parent Guarantee dated as of the date hereof (as amended, modified,
extended, renewed, restated or replaced from time to time hereinafter, the
"Parent Guarantee"; collectively, the Indenture, the Notes, the Subsidiary
Guarantee and the Parent Guarantee, together with all documents and instruments
executed in connection therewith, are referred to herein as the "Note
Documents");

         WHEREAS, the obligations of the Company, the Parent Guarantor and the
Subsidiary Guarantors under the Note Documents are to be secured pursuant to the
terms of this Security Agreement by liens on and security interests in the
Collateral;

         WHEREAS, pursuant to a Lien Intercreditor Agreement dated as of the
date hereof (as amended, modified, extended, renewed, restated or replaced from
time to time hereinafter, the "Intercreditor Agreement") among Bank of America,
N.A., in its capacity as agent (in such capacity, the "Senior Agent") for the
financial institutions party to the Credit Agreement, the Collateral Agent, the
Company, the Parent Guarantor and the Subsidiary Guarantors, the liens on and
security interests in the Collateral granted by the Company, the Parent
Guarantor and the Subsidiary Guarantors pursuant hereto are junior to the liens
on and security interests in the Collateral granted by the Company, the Parent
Guarantor and the Subsidiary Guarantors to the Senior Agent; and

<PAGE>

         WHEREAS, it is a condition precedent to the effectiveness of the
Indenture and the obligations of the Holders to purchase the Notes in accordance
with Section 8.01(i) of the Indenture.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

         1.       Definitions.

                  (a)      Unless otherwise defined herein, capitalized terms
         used herein shall have the meanings ascribed to such terms in the
         Indenture, and the following terms which are defined in the Uniform
         Commercial Code (the "UCC") in effect in the State of New York are used
         herein as so defined: Accounts, Chattel Paper, Commercial Tort Claim,
         Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Farm
         Products, Fixtures, General Intangibles, Goods, Instruments, Inventory,
         Investment Property, Letter-of-Credit Rights, Payment Intangibles,
         Proceeds, Securities Intermediary, Software and Supporting Obligations.
         Except as otherwise expressly provided, all definitions shall be
         equally applicable to the singular and plural forms of the terms
         defined.

                  (b)      In addition, the following terms shall have the
         following meanings:

                  "Copyright Licenses": any agreement, whether written or oral,
         providing for the grant by or to an Obligor of any right under any
         Copyright, including, without limitation, any thereof referred to in
         Schedule I hereto.

                  "Copyrights": (a) all copyrights in all Works, now existing or
         hereafter created or acquired, all registrations and recordings
         thereof, and all applications in connection therewith, including,
         without limitation, registrations, recordings and applications in the
         United States Copyright Office or in any similar office or agency of
         the United States, any State thereof or any other country or any
         political subdivision thereof, or otherwise, and including, without
         limitation, any thereof referred to in Schedule I hereto, and (b) all
         renewals thereof, including, without limitation, any thereof referred
         to in Schedule I hereto.

                  "Governmental Authority": any nation or government, any
         intergovernmental or supranational body, any state or other political
         subdivision thereof and any entity exercising executive, legislative,
         judicial, regulatory or administrative functions of government, any
         securities exchange and any self-regulatory organization (including the
         National Association of Insurance Commissioners).

                  "Intellectual Property": all Copyrights, Copyright Licenses,
         Patents, Patent Licenses, Trademarks, and Trademark Licenses.

                                        2

<PAGE>

                  "Paid in Full": the indefeasible payment in full in of all
         obligations of the Obligors under the Indenture and the Notes in
         accordance with Section 8.01(i) of the Indenture.

                  "Patent License": all agreements, whether written or oral,
         providing for the grant by or to an Obligor of any right to
         manufacture, use or sell any invention covered by a Patent, including,
         without limitation, any thereof referred to in Schedule I hereto.

                  "Patents": (a) all letters patent of the United States or any
         other country and all improvement patents, reissues, reexaminations,
         patents of additions, renewals and extensions thereof, including,
         without limitation, any thereof referred to in Schedule I to the
         hereto, and (b) all applications for letters patent of the United
         States or any other country, and all divisions, continuations and
         continuations-in-part thereof, including, without limitation, any
         thereof referred to in Schedule I hereto.

                  "Secured Obligations": the collective reference to all of the
         obligations owing from the Company or any other Obligor to any Holder
         or the Collateral Agent in connection with the Note Documents,
         howsoever evidenced, created, incurred or acquired, whether primary,
         secondary, direct, contingent, or joint and several, including, without
         limitation, all obligations and liabilities incurred in connection with
         collecting and enforcing the foregoing.

                  "Trademark License": any agreement, whether written or oral,
         providing for the grant by or to an Obligor of any right to use any
         Trademark, including, without limitation, any thereof referred to in
         Schedule I hereto.

                  "Trademarks": (a) all trademarks, service marks, trade names,
         corporate names, fictitious business names, all elements of package or
         trade dress of goods or services, logos and other source or business
         identifiers, and the goodwill associated therewith, now existing or
         hereafter adopted or acquired, all registrations and recordings
         thereof, and all applications in connection therewith, whether in the
         United States Patent and Trademark Office or in any similar office or
         agency of the United States, any State thereof or any other country or
         any political subdivision thereof, or otherwise, including, without
         limitation, any thereof referred to in Schedule I hereto, and (b) all
         renewals thereof, including, without limitation, any thereof referred
         to in Schedule I hereto.

                  "Work": any work which is subject to copyright protection
         pursuant to Title 17 of the United States Code or the applicable
         copyright laws of any other state or country.

                                        3

<PAGE>

         2.       Grant of Security Interest in the Collateral. To secure the
prompt payment and performance in full when due, whether by lapse of time,
acceleration or otherwise, of the Secured Obligations, each Obligor hereby
grants to the Collateral Agent, for the benefit of the Holders, a continuing
security interest in, and a right to set off against, any and all right, title
and interest of such Obligor in and to the following, whether now owned or
existing or owned, acquired, or arising hereafter (collectively, the
"Collateral"):

                           (a)      all Accounts;

                           (b)      all cash and Cash Equivalents;

                           (c)      all Chattel Paper;

                           (d)      all Copyrights;

                           (e)      all Copyright Licenses;

                           (f)      all Deposit Accounts;

                           (g)      all Documents;

                           (h)      all Equipment;

                           (i)      all Fixtures;

                           (j)      all General Intangibles (including
                                    Payment Intangibles and Software);

                           (k)      all Goods;

                           (l)      all Instruments;

                           (m)      all Inventory;

                           (n)      all Investment Property;

                           (o)      all Patents;

                           (p)      all Patent Licenses;

                           (q)      all Supporting Obligations and
                                    Letter-of-Credit Rights;

                           (r)      all Trademarks;

                           (s)      all Trademark Licenses;

                                        4

<PAGE>

                                    (t)      all books, records, ledger cards,
                           files, correspondence, computer programs, tapes,
                           disks, and related data processing software (owned by
                           such Obligor or in which it has an interest) that at
                           any time evidence or contain information relating to
                           any Collateral or are otherwise necessary in the
                           collection thereof or realization thereupon;

                                    (u)      all other personal property of any
                           kind or type whatsoever owned by such Obligor; and

                                    (v)      to the extent not otherwise
                           included, all Proceeds, tort claims, insurance claims
                           and other rights to payments not otherwise included
                           in the foregoing and products of any and all of the
                           foregoing.

         Notwithstanding the foregoing, the Obligors do not grant a security
interest in, or a right of setoff against, any of the following:

         (a)      any contract, license, permit or franchise that validly
                  prohibits the creation by the Obligors of a security interest
                  in such contract, license, permit or franchise (or in any
                  rights or property obtained by the Obligors under such
                  contract, license, permit or franchise) so long as such
                  contract, license, permit or franchise was not entered into or
                  obtained by the Obligors with the intent of avoiding the
                  requirement that a security interest be granted therein and
                  except to the extent such prohibition on the creation of a
                  security interest is rendered ineffective under by Sections
                  9-406, 9-407, 9-408 and 9-409 of the UCC; provided, however,
                  that the provisions of this paragraph shall not prohibit the
                  security interests created by this Security Agreement from
                  extending to the proceeds of such contract, license, permit or
                  franchise (or such rights or property) or to the monetary
                  value of the good will and other general intangibles of the
                  Obligors relating thereto unless the contract, license, permit
                  or franchise in question so prohibits; or

         (b)      any rights or property to the extent that any valid and
                  enforceable law or regulation applicable to such rights or
                  property prohibits the creation of a security interest therein
                  and except to the extent such prohibition on the creation of a
                  security interest is rendered ineffective under by Sections
                  9-406, 9-407, 9-408 and 9-409 of the UCC; provided, however,
                  that the provisions of this paragraph shall not prohibit the
                  security interests created by this Security Agreement from
                  extending to the proceeds of such rights or property or to the
                  monetary value of the good will and other general intangibles
                  of the Obligors relating thereto unless the law or regulation
                  in question prohibits such extension.

         The Obligors and the Collateral Agent, on behalf of the Holders, hereby
acknowledge and agree that the security interest created hereby in the
Collateral (i) constitutes continuing collateral security for all of the Secured
Obligations, whether now existing or hereafter arising and (ii) is not to be
construed as an assignment of any Intellectual Property.

                                        5

<PAGE>

         3.       Provisions Relating to Accounts, Contracts and Agreements.

                  (a)      Anything herein to the contrary notwithstanding, each
         of the Obligors shall remain liable under each of its Accounts,
         contracts and agreements to observe and perform all the conditions and
         obligations to be observed and performed by it thereunder, all in
         accordance with the terms of any agreement giving rise to each such
         Account or the terms of such contract or agreement. Neither the
         Collateral Agent nor any Holder shall have any obligation or liability
         under any Account (or any agreement giving rise thereto), contract or
         agreement by reason of or arising out of this Security Agreement or the
         receipt by the Collateral Agent or any Holder of any payment relating
         to such Account, contract or agreement pursuant hereto, nor shall the
         Collateral Agent or any Holder be obligated in any manner to perform
         any of the obligations of an Obligor under or pursuant to any Account
         (or any agreement giving rise thereto), contract or agreement, to make
         any payment, to make any inquiry as to the nature or the sufficiency of
         any payment received by it or as to the sufficiency of any performance
         by any party under any Account (or any agreement giving rise thereto),
         contract or agreement, to present or file any claim, to take any action
         to enforce any performance or to collect the payment of any amounts
         which may have been assigned to it or to which it may be entitled at
         any time or times.

                  (b)      Subject to Section 5(e), the Collateral Agent shall
         have the right, but not the obligation, to make test verifications of
         the Accounts in any manner and through any medium that it reasonably
         considers advisable, and the Obligors shall furnish all such assistance
         and information as the Collateral Agent may reasonably require in
         connection with such test verifications. Upon the Collateral Agent's
         request and at the expense of the Obligors (when required by the Credit
         Agreement (to the extent incorporated herein by reference)), the
         Obligors shall cause independent public accountants or others
         satisfactory to the Collateral Agent to furnish to the Collateral Agent
         reports showing reconciliations, aging and test verifications of, and
         trial balances for, the Accounts. The Collateral Agent in its own name
         or in the name of others may communicate with account debtors on the
         Accounts to verify with them to the Collateral Agent's satisfaction the
         existence, amount and terms of any Accounts.

         4.       Representations and Warranties. Each Obligor hereby represents
and warrants to the Collateral Agent, for the benefit of the Holders, that so
long as any of the Secured Obligations remain outstanding (other than any such
obligations which by the terms thereof are stated to survive termination of the
Note Documents) or any Note Document between any Obligor and any Holder is in
effect, and until all of the Notes shall have been Paid in Full and the
Indenture shall have been terminated (except as provided in Section 8.01(iii) of
the Indenture):

                  (a)      Chief Executive Office; Books & Records. Such
         Obligor's chief executive office and chief place of business is (and
         for the prior four months has been) located at the locations set forth
         on Schedule II hereto (as updated from time to time), and such Obligor
         keeps its books and records at such locations.

                  (b)      Ownership. Such Obligor is the legal and beneficial
         owner of the Collateral which it purports to own and has a valid right
         to use all of its other Collateral. Such Obligor

                                        6

<PAGE>

         has the right to pledge, sell, assign or transfer the same. Such
         Obligor's legal name is as shown in this Security Agreement and such
         Obligor's state of incorporation and, if required for filing under the
         applicable UCC, organization identification number issued by such
         Obligor's state of incorporation is as set forth in Schedule II hereto
         and such Obligor has not in the past four months changed its name, been
         party to a merger, consolidation or other change in structure or used
         any tradename except as set forth in Schedule II attached hereto.
         Schedule II may be updated from time to time by the Obligors by giving
         written notice thereof to the Collateral Agent. Such Obligor has only
         one state of incorporation or organization.

                  (c)      Security Interest/Priority. This Security Agreement
         creates a valid security interest in favor of the Collateral Agent, for
         the benefit of the Holders, in the Collateral of such Obligor and, when
         properly perfected by filing or otherwise, shall constitute a valid
         second priority, perfected security interest in such Collateral, to the
         extent such security interest can be perfected by filing or otherwise
         under the UCC, federal law or other applicable personal property
         security legislation, free and clear of all Liens except for Permitted
         Liens.

                  (d)      Consents. Except for the filing or recording of UCC
         financing statements to perfect the Liens created by this Security
         Agreement that may be perfected through the filing of a UCC financing
         statement and/or applicable federal filings for Intellectual Property,
         no consent or authorization of, filing with, or other act by or in
         respect of, any arbitrator or Governmental Authority and no consent of
         any other Person (including, without limitation, any stockholder,
         member or creditor of such Obligor), is required (i) for the grant by
         such Obligor of the security interest in the Collateral granted hereby
         or for the execution, delivery or performance of this Security
         Agreement by such Obligor or (ii) for the perfection of such security
         interest or the exercise by the Collateral Agent of the rights and
         remedies provided for in this Security Agreement.

                  (e)      Farm Products. None of the Collateral constitutes, or
         is the Proceeds of, Farm Products.

                  (f)      Accounts. With respect to the Accounts of the
         Obligors: (i) the goods sold and/or services furnished giving rise to
         each Account are not subject to any security interest or Lien except
         the second priority, perfected security interest granted to the
         Collateral Agent herein and except for Permitted Liens; (ii) each
         Account and the papers and documents of the applicable Obligor relating
         thereto are genuine and in all material respects what they purport to
         be; (iii) no Account of an Obligor is evidenced by any Instrument
         unless such Instrument has been theretofore endorsed over and delivered
         to the Collateral Agent; (iv) the amount of each Account as shown on
         the applicable Obligor's books and records, and on all invoices and
         statements which may be delivered to the Collateral Agent with respect
         thereto, is due and payable to the applicable Obligor; and (v) to each
         of the Obligors' knowledge, the account debtor with respect to each
         Account has the capacity to contract.

                                        7

<PAGE>

                  (g)      Inventory. No Inventory of an Obligor is held by a
         third party (other than an Obligor) pursuant to consignment, sale or
         return, sale on approval or similar arrangement, unless such Obligor
         has perfected a purchase money security interest therein.

                  (h)      Copyrights, Patents and Trademarks.

                           (i)      Schedule I hereto includes all registered
                  Intellectual Property and all other material Intellectual
                  Property, in each case owned or used by the Obligors, as such
                  Schedule I may be updated from time to time.

                           (ii)     All Intellectual Property of such Obligor is
                  valid, subsisting, unexpired, enforceable and has not been
                  abandoned, and each Obligor is legally entitled to use each of
                  its tradenames.

                           (iii)    Except as set forth on Schedule IV hereto,
                  no holding, decision or judgment has been rendered against any
                  Obligor by any Governmental Authority which would limit,
                  cancel or question the validity of any material Intellectual
                  Property of the Obligors.

                           (iv)     Except as set forth on Schedule IV hereto,
                  no action or proceeding is pending seeking to limit, cancel or
                  question the validity of any material Intellectual Property of
                  the Obligors.

                           (v)      All applications pertaining to the material
                  Intellectual Property of each Obligor have been duly and
                  properly filed, all registrations or letters pertaining to
                  such Intellectual Property have been duly and properly filed
                  and issued, and all of such Intellectual Property is valid and
                  enforceable.

                           (vi)     No Obligor has made any assignment or
                  agreement in conflict with the security interest in the
                  Intellectual Property of any Obligor hereunder.

                  (i)      Documents, Instruments, Letter-of-Credit Rights and
         Chattel Paper. All Documents, Instruments, Letter-of-Credit Rights and
         Chattel Paper describing, evidencing or constituting Collateral are, to
         the Obligor's knowledge, complete, valid and genuine.

                  (j)      Restrictions on Security Interest. None of the
         Obligors is party to any material contract, license, permit or
         franchise that contains legally enforceable restrictions on the
         granting of a security interest therein in violation of any provision
         of the Indenture.

                  (k)      Equipment. With respect to each Obligor's Equipment:
         (i) such Obligor has good and marketable title thereto; and (ii) all
         such Equipment is in normal operating condition and repair, ordinary
         wear and tear alone excepted (subject to casualty events).

                  (l)      Investment Property. As of the Issue Date, none of
         the Obligors own any Investment Property except as listed on Schedule
         III hereto.

                                        8

<PAGE>

                  (m)      Commercial Tort Claims. As of the Issue Date, none of
         the Obligors has any Commercial Tort Claims.

         5.       Covenants. Each Obligor covenants that, so long as any of the
Secured Obligations remain outstanding (other than any such obligations which by
the terms thereof are stated to survive termination of the Note Documents) or
any Note Document between any Obligor and any Holder is in effect, and until all
of the Securities shall have been Paid in Full and the Indenture shall have been
terminated (except as provided in Section 8.01(iii) of the Indenture), such
Obligor shall:

                  (a)      Other Liens. Defend the Collateral against the claims
         and demands of all other parties claiming an interest therein, keep the
         Collateral free from all Liens, except for Permitted Liens, and not
         sell, exchange, transfer, assign, lease or otherwise dispose of the
         Collateral or any interest therein, except as permitted under the
         Indenture.

                  (b)      Preservation of Collateral. Keep the Collateral in
         good order, condition and repair in all material respects, ordinary
         wear and tear excepted, except for property disposed of in accordance
         with the Indenture; not use the Collateral in violation of the
         provisions of this Security Agreement or any other Note Document or any
         policy insuring the Collateral or any applicable statute, law, bylaw,
         rule, regulation or ordinance; not permit Collateral with a fair market
         value exceeding $3,000,000 in the aggregate in any year to be or become
         a fixture to real property or an accession to other personal property
         unless the Collateral Agent has a valid and perfected security interest
         for the benefit of the Holders in such fixture or such personal
         property to which such Collateral has become an accession; and not,
         without the prior written consent of the Collateral Agent, alter or
         remove any identifying symbol or number on its Equipment.

                  (c)      Instruments. If any amount payable under or in
         connection with any of the Collateral shall be or become evidenced by
         any Instrument or if any Collateral shall be stored or shipped subject
         to a Document, immediately deliver such Instrument or Document to the
         Collateral Agent, duly endorsed in a manner satisfactory to the
         Collateral Agent, to be held as Collateral pursuant to this Security
         Agreement.

                  (d)      Change in Location; No Reincorporation; Good Standing
         Certificates. Not, without providing 30 days prior written notice to
         the Collateral Agent and without filing (or confirming that the
         Collateral Agent has filed) such amendments to any previously filed
         financing statements or any new financing statements as the Collateral
         Agent may require, (a) change the location of its chief executive
         office and chief place of business (as well as its books and records)
         from the locations set forth on Schedule II hereto, (b) reincorporate
         or reorganize itself under the laws of any jurisdiction other than the
         jurisdiction in which it is incorporated or organized as of the date
         hereof, or (c) change its name, be party to a merger, consolidation or
         other change in structure or use any tradename other than as set forth
         on Schedule II hereto.

                  (e)      Inspection. Allow the Collateral Agent or its
         representatives to visit and inspect the Collateral as set forth in
         Section 7.10 of the Credit Agreement, such Section 7.10 of the Credit
         Agreement being incorporated herein by reference and such provisions
         being

                                        9

<PAGE>

         applicable mutatis mutandis to the Collateral Agent as if it were
         Administrative Agent thereunder.

                  (f)      Perfection of Security Interest. Execute and deliver
         to the Collateral Agent such agreements, assignments or instruments
         (including affidavits, notices, reaffirmations and amendments of
         existing documents, as the Collateral Agent may reasonably request) and
         do all such other things as the Collateral Agent may reasonably deem
         necessary or appropriate (i) to assure to the Collateral Agent its
         security interests hereunder, including (A) such financing statements
         (including renewal statements) or amendments thereof or supplements
         thereto or other instruments as the Collateral Agent may from time to
         time reasonably request in order to perfect and maintain the security
         interests granted hereunder in accordance with the UCC and any other
         personal property security legislation in the appropriate state(s) or
         province(s), (B) with regard to Investment Property, execute and cause
         the Securities Intermediary with respect to such Investment Property to
         execute a securities control agreement in form and substance
         satisfactory to the Collateral Agent, (C) with regard to Copyrights, a
         Notice of Grant of Security Interest in Copyrights in the form of
         Exhibit 5(f)(ii)(A) attached hereto, (D) with regard to Patents, a
         Notice of Grant of Security Interest in Patents for filing with the
         United States Patent and Trademark Office in the form of Exhibit
         5(f)(ii)(B) attached hereto and (E) with regard to Trademarks, a Notice
         of Grant of Security Interest in Trademarks for filing with the United
         States Patent and Trademark Office in the form of Exhibit 5(f)(ii)(C)
         attached hereto, (ii) to consummate the transactions contemplated
         hereby and (iii) to otherwise protect and assure the Collateral Agent
         of its rights and interests hereunder. To that end, each Obligor agrees
         that the Collateral Agent may file one or more financing statements
         (including financing statements containing a collateral description of
         "all assets" and/or "all personal property" of such Obligor) disclosing
         the Collateral Agent's security interest in any or all of the
         Collateral of such Obligor without, to the extent permitted by law,
         such Obligor's signature thereon, and further each Obligor also hereby
         irrevocably makes, constitutes and appoints the Collateral Agent, its
         nominee or any other Person whom the Collateral Agent may designate, as
         such Obligor's attorney-in-fact with full power and for the limited
         purpose to sign in the name of such Obligor any such financing
         statements, or amendments and supplements to financing statements,
         renewal financing statements, notices or any similar documents which in
         the Collateral Agent's reasonable discretion would be necessary,
         appropriate or convenient in order to perfect and maintain perfection
         of the security interests granted hereunder, such power, being coupled
         with an interest, being and remaining irrevocable so long as any of the
         Secured Obligations remain outstanding or any Note Document between any
         Obligor and the Collateral Agent or any Holder is in effect, and until
         all of the Notes shall have been Paid in Full and the Indenture shall
         have been terminated (except as provided in Section 8.01(iii) of the
         Indenture). At any time after the Credit Agreement is no longer in
         effect, each Obligor hereby agrees that a carbon, photographic or other
         reproduction of this Security Agreement or any such financing statement
         is sufficient for filing as a financing statement by the Collateral
         Agent without notice thereof to such Obligor wherever the Collateral
         Agent may in its sole discretion desire to file the same. In the event
         for any reason the law of any jurisdiction other than New York becomes
         or is applicable to the Collateral of any Obligor or any part thereof,
         or to any of the Secured Obligations, such Obligor agrees to execute
         and deliver all such instruments and to do all such other things as

                                       10

<PAGE>

         the Collateral Agent reasonably deems necessary or appropriate to
         preserve, protect and enforce the security interests of the Collateral
         Agent under the law of such other jurisdiction (and, if an Obligor
         shall fail to do so promptly upon the request of the Collateral Agent,
         then the Collateral Agent may execute any and all such requested
         documents on behalf of such Obligor pursuant to the power of attorney
         granted hereinabove). Upon the request of the Collateral Agent, at any
         time after the Credit Agreement is no longer in effect, each Obligor
         agrees to mark its books and records to reflect the security interest
         of the Collateral Agent in the Collateral.

                  (g)      Collateral Held by Warehouseman, Bailee, etc. If any
         Collateral that is a single asset with a fair market value in excess of
         $100,000 or a group of assets with a fair market value in excess of
         $500,000 is at any time in the possession or control of a warehouseman,
         bailee or any agent or processor of such Obligor, notify the Collateral
         Agent of such possession, notify such Person of the Collateral Agent's
         security interest for the benefit of the Holders in such Collateral,
         instruct such Person to hold all such Collateral for the Collateral
         Agent's account subject to the Collateral Agent's instructions and
         obtain acknowledgments from such Person that it is holding the
         Collateral for the benefit of the Collateral Agent.

                  (h)      Treatment of Accounts. (i) Not grant or extend the
         time for payment of any Account, or compromise or settle any Account
         for less than the full amount thereof, or release any Person or
         property, in whole or in part, from payment thereof, or allow any
         credit or discount thereon, other than in the prudent conduct of an
         Obligor's business and (ii) maintain at its principal place of business
         a record of Accounts consistent with customary business practices.

                  (i)      Covenants Relating to Copyrights.

                           (i)      Employ the Copyright for each material Work
                  with such notice of copyright as may be required by law to
                  secure copyright protection.

                           (ii)     (A) Not do any act or knowingly omit to do
                  any act whereby any material Copyright may become invalidated;
                  (B) not do any act, or knowingly omit to do any act, whereby
                  any material Copyright may become injected into the public
                  domain; (C) notify the Collateral Agent immediately if it
                  knows, or has reason to know, that any material Copyright may
                  become injected into the public domain or of any adverse
                  determination or development (including, without limitation,
                  the institution of, or any such determination or development
                  in, any proceeding in any court or tribunal in the United
                  States or any other country) regarding an Obligor's ownership
                  of any such material Copyright or its validity; (D) take all
                  necessary steps as it shall deem appropriate under the
                  circumstances to maintain and pursue each application, to
                  obtain the relevant registration and to maintain each
                  registration of each material Copyright owned by an Obligor
                  including, without limitation, filing of applications for
                  renewal where necessary; and (E) promptly notify the
                  Collateral Agent of any material infringement of any material
                  Copyright of an Obligor of which it becomes aware and take
                  such actions as it shall reasonably deem

                                       11

<PAGE>

                  appropriate under the circumstances to protect such Copyright,
                  including, where appropriate, the bringing of suit for
                  infringement, seeking injunctive relief and seeking to recover
                  any and all damages for such infringement.

                           (iii)    Except in connection with sales or other
                  dispositions permitted under Section 4.06 of the Indenture,
                  not make any assignment or agreement in conflict with the
                  security interest in the Copyrights of each Obligor hereunder
                  other than in the ordinary course of business.

                  (j)      Covenants Relating to Patents and Trademarks.

                           (i)      (A) Continue to use each material Trademark
                  in order to maintain such Trademark in full force free from
                  any claim of abandonment for non-use, (B) maintain as in the
                  past the quality of products and services offered under such
                  Trademark, (C) employ such Trademark with the appropriate
                  notice of registration, or notice of trademark or service
                  mark, as applicable, sufficient to protect such Trademark, (D)
                  not adopt or use any mark which is confusingly similar or a
                  colorable imitation of such Trademark unless the Collateral
                  Agent, for the ratable benefit of the Holders, shall obtain a
                  perfected security interest in such mark pursuant to this
                  Security Agreement, and (E) not (and not permit any licensee
                  or sublicensee thereof to) do any act or knowingly omit to do
                  any act whereby any material Trademark may become invalidated.

                           (ii)     Not do any act, or omit to do any act,
                  whereby any material Patent may become abandoned or dedicated.

                           (iii)    Promptly notify the Collateral Agent if it
                  knows, or has reason to know, that any application or
                  registration relating to any material Patent or material
                  Trademark may become abandoned or dedicated, or of any adverse
                  determination or development (including, without limitation,
                  the institution of, or any such determination or development
                  in, any proceeding in the United States Patent and Trademark
                  Office or any court or tribunal in any country) regarding an
                  Obligor's ownership of any such Patent or Trademark or its
                  right to register the same or to keep, maintain and use the
                  same.

                           (iv)     Whenever an Obligor, either by itself or
                  through an agent, employee, licensee or designee, shall file
                  an application for the registration of any Patent or Trademark
                  with the United States Patent and Trademark Office of any
                  similar office or agency in any other country or any political
                  subdivision thereof, such Obligor shall promptly report such
                  filing to the Collateral Agent. Upon request of the Collateral
                  Agent, an Obligor shall execute and deliver any and all
                  agreements, instruments, documents and papers as the
                  Collateral Agent, may reasonably request to evidence the
                  Collateral Agent's and the Holders' security interest in any
                  Patent or Trademark and the goodwill and General Intangibles
                  of such Obligor relating thereto or represented thereby.

                                       12

<PAGE>

                           (v)      Take all reasonable and necessary steps,
                  including, without limitation, in any proceeding before the
                  United States Patent and Trademark Office, or any similar
                  office or agency in any other country or any political
                  subdivision thereof, to maintain and pursue each application,
                  to obtain the relevant registration and to maintain each
                  registration of the material Patents and Trademarks,
                  including, without limitation, filing of applications for
                  renewal, affidavits of use and affidavits of incontestability.

                           (vi)     Promptly notify the Collateral Agent on
                  behalf of the Holders after it learns that any material Patent
                  or material Trademark included in the Collateral is infringed,
                  misappropriated or diluted by a third party and promptly sue
                  for infringement, misappropriation or dilution, to seek
                  injunctive relief where appropriate and to recover any and all
                  damages for such infringement, misappropriation or dilution,
                  or take such other actions as it shall reasonably deem
                  appropriate under the circumstances to protect such Patent or
                  Trademark.

                           (vii)    Except for licenses to third parties in the
                  ordinary course of business or except in connection with sales
                  or other dispositions permitted under Section 4.06 of the
                  Indenture, not make any assignment or agreement in conflict
                  with the security interest in the Patents or Trademarks of any
                  Obligor hereunder.

                  (k)      New Patents, Copyrights and Trademarks. Promptly
         provide the Collateral Agent with (i) a listing of all applications, if
         any, for new Copyrights, Patents or Trademarks (together with a listing
         of the issuance of registrations or letters on present applications),
         which new applications and issued registrations or letters shall be
         subject to the terms and conditions hereunder, and (ii) (A) with
         respect to new Copyrights, a duly executed Notice of Grant of Security
         Interest in Copyrights in the form of Exhibit 5(f)(ii)(A) attached
         hereto, (B) with respect to new Patents, a duly executed Notice of
         Grant of Security Interest in Patents in the form of Exhibit
         5.1(f)(ii)(B) attached hereto, (C) with respect to new Trademarks, a
         duly executed Notice of Grant of Security Interest in Trademarks in the
         form of Exhibit 5.1(f)(ii)(C) attached hereto or (D) such other duly
         executed documents as the Collateral Agent may reasonably request in a
         form acceptable to counsel for the Collateral Agent and suitable for
         recording to evidence the security interest of the Collateral Agent for
         the benefit of the Holders in the Copyright, Patent or Trademark which
         is the subject of such new application.

                  (l)      Insurance. Insure, repair and replace the Collateral
         of such Obligor as set forth in the Credit Agreement pertaining
         thereto, such provisions of the Credit Agreement being incorporated
         herein by reference and such provisions being applicable mutatis
         mutandis to the Collateral Agent as if it were Administrative Agent
         thereunder. All insurance proceeds shall be subject to the security
         interest of the Collateral Agent hereunder.

                  (m)      Investment Property. Not acquire any Investment
         Property without executing and delivering, or causing to be executed
         and delivered, to the Collateral Agent such agreements, documents and
         instruments as the Collateral Agent may require to perfect the
         Collateral Agent's security interest therein.

                                       13

<PAGE>

                  (n)      Contracts. No Obligor shall, in violation of the
         Indenture, (i) enter into any contract, license, permit or franchise
         that prohibits the granting of a security interest in favor of the
         Collateral Agent or the Holders or (ii) amend or modify any existing
         contracts, licenses, permits or franchises to prohibit the granting of
         a security interest in favor of the Collateral Agent or the Holders.

                  (o)      Commercial Tort Claims. Within 45 days of the end of
         each fiscal quarter of the Obligors, each Obligor shall notify the
         Collateral Agent of any Commercial Tort Claim acquired by it and,
         unless otherwise consented by the Collateral Agent, such Obligor shall
         enter into a supplement to this Security Agreement, granting to the
         Collateral Agent a Lien in such Commercial Tort Claim.

                  (p)      Letters of Credit. If any Obligor is or becomes the
         beneficiary of a letter of credit (other than a letter of credit which
         is a Supporting Obligation), such Obligor shall promptly, and in any
         event within two (2) Business Days after becoming a beneficiary, notify
         the Collateral Agent thereof and enter into a tri-party agreement with
         the Collateral Agent and the issuer and/or confirmation bank with
         respect to Letter-of-Credit Rights relating to such letter of credit
         assigning such Letter-of-Credit Rights to the Collateral Agent, all in
         form and substance reasonably satisfactory to the Collateral Agent.

                  (q)      Electronic Chattel Paper. Each Obligor shall take all
         steps necessary to grant the Collateral Agent control of all Electronic
         Chattel Paper in accordance with the UCC and all "transferable records"
         as defined in each of the Uniform Electronic Transactions Act and the
         Electronic Signatures in Global and National Commerce Act.

         6.       Performance of Obligations and Advances by Collateral Agent.
On failure of any Obligor to perform any of the covenants and agreements
contained herein, the Collateral Agent may, at its sole option, perform or cause
to be performed the same and in so doing may expend such sums as the Collateral
Agent may reasonably deem advisable in the performance thereof, including,
without limitation, the payment of any insurance premiums, the payment of any
taxes, a payment to obtain a release of a Lien or potential Lien, expenditures
made in defending against any adverse claim and all other expenditures which the
Collateral Agent may make for the protection of the security interest hereof or
may be compelled to make by operation of law. All such sums and amounts so
expended shall be repayable by the Obligors on a joint and several basis
promptly upon timely notice thereof and demand therefor, shall constitute
additional Secured Obligations and shall bear interest from the date said
amounts are expended at 11 7/8% per annum. No such performance of any covenant
or agreement by the Collateral Agent on behalf of any Obligor, and no such
advance or expenditure therefor, shall relieve the Obligors of any default under
the terms of this Security Agreement or any other Note Documents between any
Obligor and any Holder. The Collateral Agent may make any payment hereby
authorized in accordance with any bill, statement or estimate procured from the
appropriate public office or holder of the claim to be discharged without
inquiry into the accuracy of such bill, statement or estimate or into the
validity of any tax assessment, sale, forfeiture, tax lien, title or claim
except to the extent such payment is being contested in good faith by an Obligor
in appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP.

                                       14

<PAGE>

         7.       Events of Default.

         The occurrence of an event which under the Indenture would constitute
an Event of Default shall be an event of default hereunder (an "Event of
Default").

         8.       Remedies.

                  (a)      General Remedies. Upon the occurrence of an Event of
         Default and during the continuance thereof, the Holders shall have, in
         addition to the rights and remedies provided herein, in the Note
         Documents or by law (including, but not limited to, the rights and
         remedies set forth in the Uniform Commercial Code of the jurisdiction
         applicable to the affected Collateral), the rights and remedies of a
         secured party under the UCC (regardless of whether the UCC is the law
         of the jurisdiction where the rights and remedies are asserted and
         regardless of whether the UCC applies to the affected Collateral), and
         further, the Collateral Agent may, with or without judicial process or
         the aid and assistance of others, to the fullest extent permitted by
         law, (i) enter on any premises on which any of the Collateral may be
         located and, without resistance or interference by the Obligors, take
         possession of the Collateral, (ii) dispose of any Collateral on any
         such premises, (iii) require the Obligors to assemble and make
         available to the Collateral Agent at the expense of the Obligors any
         Collateral at any place and time designated by the Collateral Agent
         which is reasonably convenient to both parties, (iv) remove any
         Collateral from any such premises for the purpose of effecting sale or
         other disposition thereof, and/or (v) without demand and without
         advertisement, notice, hearing or process of law, all of which each of
         the Obligors hereby waives to the fullest extent permitted by law
         (including Article 9 of the UCC), at any place and time or times, sell
         and deliver any or all Collateral held by or for it at public or
         private sale, by one or more contracts, in one or more parcels, for
         cash, upon credit or otherwise, at such prices and upon such terms as
         the Collateral Agent deems advisable, in its sole discretion (subject
         to any and all mandatory legal requirements). In addition to all other
         sums due the Collateral Agent and the Holders with respect to the
         Secured Obligations, the Obligors shall pay the Collateral Agent and
         each of the Holders all reasonable documented costs and expenses
         incurred by the Collateral Agent or any such Holder, including, but not
         limited to, reasonable attorneys' fees and court costs, in obtaining or
         liquidating the Collateral, in enforcing payment of the Secured
         Obligations, or in the prosecution or defense of any action or
         proceeding by or against the Collateral Agent or the Holders or the
         Obligors concerning any matter arising out of or connected with this
         Security Agreement, any Collateral or the Secured Obligations,
         including, without limitation, any of the foregoing arising in, arising
         under or related to a case under the Bankruptcy Code. To the extent the
         rights of notice cannot be legally waived hereunder, each Obligor
         agrees that any requirement of reasonable notice shall be met if such
         notice is personally served on or mailed postage prepaid to the Company
         in accordance with the notice provisions of Section 12.02 of the
         Indenture at least 10 days before the time of sale or other event
         giving rise to the requirement of such notice. The Collateral Agent and
         the Holders shall not be obligated to make any sale or other
         disposition of the Collateral regardless of notice having been given.
         To the extent permitted by law, any Holder may be a purchaser at any
         such sale. To the extent permitted by applicable law, each of the
         Obligors hereby waives all of its

                                       15

<PAGE>

         rights of redemption with respect to any such sale. Subject to the
         provisions of applicable law, the Collateral Agent and the Holders may
         postpone or cause the postponement of the sale of all or any portion of
         the Collateral by announcement at the time and place of such sale, and
         such sale may, without further notice, to the extent permitted by law,
         be made at the time and place to which the sale was postponed, or the
         Collateral Agent and the Holders may further postpone such sale by
         announcement made at such time and place.

                  (b)      Remedies Relating to Accounts. Upon the occurrence of
         an Event of Default and during the continuance thereof, whether or not
         the Collateral Agent has exercised any or all of its rights and
         remedies hereunder, each Obligor will promptly upon request of the
         Collateral Agent instruct all account debtors to remit all payments in
         respect of Accounts to a mailing location selected by the Collateral
         Agent. In addition, upon the occurrence and during the continuance of
         an Event of Default, the Collateral Agent or its designee may notify
         any Obligor's customers and account debtors that the Accounts of such
         Obligor have been assigned to the Collateral Agent or of the Collateral
         Agent's security interest therein, and may (either in its own name or
         in the name of an Obligor or both) demand, collect (including without
         limitation by way of a lockbox arrangement), receive, take receipt for,
         sell, sue for, compound, settle, compromise and give acquittance for
         any and all amounts due or to become due on any Account, and, in the
         Collateral Agent's discretion, file any claim or take any other action
         or proceeding to protect and realize upon the security interest of the
         Holders in the Accounts. The Collateral Agent and the Holders shall
         have no liability or responsibility to any Obligor for acceptance of a
         check, draft or other order for payment of money bearing the legend
         "payment in full" or words of similar import or any other restrictive
         legend or endorsement or be responsible for determining the correctness
         of any remittance. Each Obligor hereby agrees to indemnify the
         Collateral Agent and the Holders from and against all liabilities,
         damages, losses, actions, claims, judgments, costs, expenses, charges
         and reasonable attorneys' fees suffered or incurred by the Collateral
         Agent or the Holders (each, an "Indemnified Party") because of the
         maintenance of the foregoing arrangements except as relating to or
         arising out of the gross negligence or willful misconduct of an
         Indemnified Party or its officers, employees or agents. In the case of
         any investigation, litigation or other proceeding, the foregoing
         indemnity shall be effective whether or not such investigation,
         litigation or proceeding is brought by an Obligor, its directors,
         shareholders or creditors or an Indemnified Party or any other Person
         or any other Indemnified Party is otherwise a party thereto.

                  (c)      Access. In addition to the rights and remedies
         hereunder, upon the occurrence of an Event of Default and during the
         continuance thereof, the Collateral Agent shall have the right as
         between the Collateral Agent and the Obligors to enter and remain upon
         the various premises of the Obligors without cost or charge to the
         Collateral Agent, and use the same, together with materials, supplies,
         books and records of the Obligors for the purpose of collecting and
         liquidating the Collateral, or for preparing for sale and conducting
         the sale of the Collateral, whether by foreclosure, auction or
         otherwise. In addition, the Collateral Agent may remove Collateral, or
         any part thereof, from such premises and/or any records with respect
         thereto, in order to effectively collect or liquidate such Collateral.

                                       16

<PAGE>

                  (d)      Nonexclusive Nature of Remedies. Failure by the
         Collateral Agent or the Holders to exercise any right, remedy or option
         under this Security Agreement, any other Note Document or as provided
         by law, or any delay by the Collateral Agent or the Holders in
         exercising the same, shall not operate as a waiver of any such right,
         remedy or option. No waiver hereunder shall be effective unless it is
         in writing, signed by the party against whom such waiver is sought to
         be enforced and then only to the extent specifically stated, which in
         the case of the Collateral Agent or the Holders shall only be granted
         as provided herein. To the extent permitted by law, neither the
         Collateral Agent, the Holders, nor any party acting as attorney for the
         Collateral Agent or the Holders, shall be liable hereunder for any acts
         or omissions or for any error of judgment or mistake of fact or law
         other than their gross negligence or willful misconduct hereunder. The
         rights and remedies of the Collateral Agent and the Holders under this
         Security Agreement shall be cumulative and not exclusive of any other
         right or remedy which the Collateral Agent or the Holders may have.

                  (e)      Retention of Collateral. The Collateral Agent may,
         after providing the notices required by Section 9-621 of the UCC or
         otherwise complying with the requirements of applicable law of the
         relevant jurisdiction, to the extent the Collateral Agent is in
         possession of any of the Collateral, retain the Collateral in
         satisfaction of the Secured Obligations. Unless and until the
         Collateral Agent shall have provided such notices, however, the
         Collateral Agent shall not be deemed to have retained any Collateral in
         satisfaction of any Secured Obligations for any reason.

                  (f)      Deficiency. In the event that the proceeds of any
         sale, collection or realization are insufficient to pay all amounts to
         which the Collateral Agent or the Holders are legally entitled, the
         Obligors shall be jointly and severally liable for the deficiency,
         together with interest thereon at 11 7/8% per annum, together with the
         costs of collection and the reasonable fees of any attorneys employed
         by the Collateral Agent to collect such deficiency. Any surplus
         remaining after the full payment and satisfaction of the Secured
         Obligations shall be returned to the Obligors or to whomsoever a court
         of competent jurisdiction shall determine to be entitled thereto.

         9.       Rights of the Collateral Agent.

                  (a)      Power of Attorney. In addition to other powers of
         attorney contained herein, to the fullest extent permitted by
         applicable law, each Obligor hereby designates and appoints the
         Collateral Agent, on behalf of the Holders, and each of its designees
         or agents, as attorney-in-fact of such Obligor, irrevocably and with
         power of substitution, with authority to take any or all of the
         following actions upon the occurrence and during the continuance of an
         Event of Default:

                           (i)      to demand, collect, settle, compromise,
                  adjust and give discharges and releases concerning the
                  Collateral of such Obligor, all as the Collateral Agent may
                  reasonably determine;

                                       17

<PAGE>

                           (ii)     to commence and prosecute any actions at any
                  court for the purposes of collecting any Collateral and
                  enforcing any other right in respect thereof;

                           (iii)    to defend, settle, adjust or compromise any
                  action, suit or proceeding brought and, in connection
                  therewith, give such discharge or release as the Collateral
                  Agent may deem reasonably appropriate;

                           (iv)     to receive, open and dispose of mail
                  addressed to an Obligor and endorse checks, notes, drafts,
                  acceptances, money orders, bills of lading, warehouse receipts
                  or other instruments or documents evidencing payment, shipment
                  or storage of the goods giving rise to the Collateral of such
                  Obligor, or securing or relating to such Collateral, on behalf
                  of and in the name of such Obligor;

                           (v)      to sell, assign, transfer, make any
                  agreement in respect of, or otherwise deal with or exercise
                  rights in respect of, any Collateral or the goods or services
                  which have given rise thereto, as fully and completely as
                  though the Collateral Agent were the absolute owner thereof
                  for all purposes;

                           (vi)     to adjust and settle claims under any
                  insurance policy relating thereto;

                           (vii)    to execute and deliver all assignments,
                  conveyances, statements, financing statements, renewal
                  financing statements, security agreements, affidavits, notices
                  and other agreements, instruments and documents that the
                  Collateral Agent may determine necessary in order to perfect
                  and maintain the security interests and liens granted in this
                  Security Agreement and in order to fully consummate all of the
                  transactions contemplated herein;

                           (viii)   to institute any foreclosure proceedings
                  that the Collateral Agent may deem appropriate; and

                           (ix)     to do and perform all such other acts and
                  things as the Collateral Agent may reasonably deem to be
                  necessary, proper or convenient in connection with the
                  Collateral.

         This power of attorney is a power coupled with an interest and shall be
         irrevocable (i) for so long as any of the Secured Obligations remain
         outstanding (other than any such obligations which by the terms thereof
         are stated to survive termination of the Note Documents) or any Note
         Document is in effect and (ii) until all of the Notes shall have been
         Paid in Full and the Indenture shall have been terminated (except as
         provided in Section 8.01(iii) of the Indenture). The Collateral Agent
         shall be under no duty to exercise or withhold the exercise of any of
         the rights, powers, privileges and options expressly or implicitly
         granted to the

                                       18

<PAGE>

         Collateral Agent in this Security Agreement, and shall not be liable
         for any failure to do so or any delay in doing so. The Collateral Agent
         shall not be liable for any act or omission or for any error of
         judgment or any mistake of fact or law in its individual capacity or
         its capacity as attorney-in-fact except acts or omissions resulting
         from its gross negligence or willful misconduct. This power of attorney
         is conferred on the Collateral Agent solely to protect, preserve and
         realize upon its security interest in the Collateral.

                  (b)      Assignment by the Collateral Agent. Subject to the
         terms of the Indenture and the Intercreditor Agreement, the Collateral
         Agent may from time to time assign the Secured Obligations and any
         portion thereof and/or the Collateral and any portion thereof, and the
         assignee shall be entitled to all of the rights and remedies of the
         Collateral Agent under this Security Agreement in relation thereto.

                  (c)      The Collateral Agent's Duty of Care. Other than the
         exercise of reasonable care to ensure the safe custody of the
         Collateral while being held by the Collateral Agent hereunder, the
         Collateral Agent shall have no duty or liability to preserve rights
         pertaining thereto, it being understood and agreed that the Obligors
         shall be responsible for preservation of all rights in the Collateral,
         and the Collateral Agent shall be relieved of all responsibility for
         the Collateral upon surrendering it or tendering the surrender of it to
         the Obligors. The Collateral Agent shall be deemed to have exercised
         reasonable care in the custody and preservation of the Collateral in
         its possession if the Collateral is accorded treatment substantially
         equal to that which the Collateral Agent accords its own property,
         which shall be no less than the treatment employed by a reasonable and
         prudent agent in the industry, it being understood that the Collateral
         Agent shall not have responsibility for taking any necessary steps to
         preserve rights against any parties with respect to any of the
         Collateral.

         SECTION 10. Collateral Agent's Fees and Expenses; Indemnification. (a)
The Company agrees to pay upon demand to the Collateral Agent the amount of any
and all reasonable expenses, including the reasonable fees, disbursements and
other charges of its counsel and of any experts or agents, which the Collateral
Agent may incur in connection with (i) the administration of this Security
Agreement, (ii) the custody or preservation of, or the sale of, collection from
or other realization upon any of the Collateral, (iii) the exercise, enforcement
or protection of any rights of the Collateral Agent hereunder or (iv) the
failure of the Company to perform or observe any of the provisions hereof
applicable to it.

         (b)      Without limitation of its indemnification obligations under
the other Note Documents, the Company agrees to indemnify the Collateral Agent,
the Trustee, and each Affiliate of the foregoing Persons (each such Person being
called an "Indemnitee") against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses, including the
fees, charges and disbursements of any counsel for any Indemnitee, incurred by
or asserted against any Indemnitee arising out of, in connection with, or as a
result of, the execution, delivery or performance of this Security Agreement or
any claim, litigation, investigation or proceeding relating to any of the
foregoing agreement or instrument contemplated hereby, or to the Collateral,
whether or not any Indemnitee is a party thereto; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such

                                       19

<PAGE>

losses, claims, damages, liabilities or related expenses have resulted from the
gross negligence or willful misconduct of such Indemnitee.

         (c)      Any such amounts payable as provided hereunder shall be
additional Secured Obligations secured hereby and by the other Note Documents.
The provisions of this Section 10 shall remain operative and in full force and
effect regardless of the termination of this Security Agreement or any other
Note Document, the consummation of the transactions contemplated hereby, the
repayment of any of the Secured Obligations, the invalidity or unenforceability
of any term or provision of this Security Agreement or any other Note Document,
or any investigation made by or on behalf of the Collateral Agent. All amounts
due under this Section 10 shall be payable on written demand therefor.

         (d)      The Collateral Agent shall not be responsible in any manner
whatsoever for the correctness of any recitals, statements, representations or
warranties contained herein. The Collateral Agent makes no representation as to
the value or condition of the Collateral or any part thereof, as to the title of
the Company to the Collateral, as to the security afforded by this Security
Agreement or any other Note Document or as to the validity, execution,
enforceability, legality or sufficiency of this Security Agreement or any other
Note Document, and the Collateral Agent shall incur no liability or
responsibility in respect of any such matters. Except as may be expressly
provided in any Note Document, the Collateral Agent shall not be responsible for
insuring the Collateral, for the payment of taxes, charges, assessments or liens
upon the Collateral or otherwise as to the maintenance of the Collateral, except
as provided in the immediately following sentence when the Collateral Agent has
possession of the Collateral. The Collateral Agent shall have no duty to the
Company or to the Holders as to any Collateral in its possession or control or
in the possession or control of any agent or nominee of the Collateral Agent or
any income thereon or as to the preservation of rights against prior parties or
any other rights pertaining thereto, except the duty to accord such of the
Collateral as may be in its possession substantially the same care as it accords
its own assets and the duty to account for monies received by it. Without
limitation on the Collateral Agent's right to make any such filing, the
Collateral Agent shall have no obligations (i) to file any UCC financing
statements or UCC continuation statements except at the written direction of the
Company and upon receipt of such statements completed and in a proper form for
filing provided to the Collateral Agent at least five Business Days in advance
of any requested filing date or (ii) to file any document with any foreign or
domestic patent, trademark or copyright office, or any foreign governmental,
municipal or other office. The Collateral Agent shall not be responsible for the
consequences of any oversight or error of judgment whatsoever, except that the
Collateral Agent shall be liable for losses due to its willful misconduct, gross
negligence or bad faith. The Collateral Agent shall not be required to ascertain
or inquire as to the performance by the Company of any of the covenants or
agreements contained herein or in the Indenture, the Notes or the Note
Documents. Neither the Collateral Agent nor any officer, agent or representative
thereof shall be personally liable for any action taken or omitted to be taken
by any such person in connection with this Security Agreement or any other Note
Document except for such person's own gross negligence, willful misconduct or
bad faith. The Collateral Agent may execute any of the powers granted under this
Security Agreement or any of the other Note Documents and perform any duty
hereunder or thereunder either directly or by or through agents or
attorneys-in-fact, and shall not be responsible for the misconduct of any agents
or attorneys-in-fact selected by it with due care.

                                       20

<PAGE>

         (e)      Subject to any additional requirements provided herein or in
the Indenture, if in the performance of its duties under this Security Agreement
the Collateral Agent shall deem it necessary or desirable that a matter be
proved or established with respect to any Person in connection with the taking,
suffering or omitting of any action hereunder by the Collateral Agent, such
matter may be conclusively deemed to be proved or established by a certificate
executed by an officer of such Person, and absent gross negligence, willful
misconduct or bad faith, the Collateral Agent shall have no liability with
respect to any action taken, suffered or omitted in reliance thereon.

         (f)      The Collateral Agent may consult with counsel and, in the
absence of gross negligence, willful misconduct or bad faith, shall be fully
protected in taking any action hereunder in accordance with any advice of such
counsel. The Collateral Agent shall have the right but not the obligation at any
time to seek instructions concerning the administration of this Security
Agreement, the duties created hereunder or any of the Collateral from any court
of competent jurisdiction.

         (g)      The Collateral Agent shall be fully protected in relying upon
any resolution, statement, certificate, instrument, opinion, report, notice,
request, consent, order or other paper or document which it believes to be
genuine and to have been signed or presented by the proper party or parties. In
the absence of its gross negligence, willful misconduct or bad faith the
Collateral Agent may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificate or
opinions furnished to the Collateral Agent in connection with this Security
Agreement and the other Note Documents.

         (h)      The Collateral Agent shall not be deemed to have actual,
constructive, direct or indirect notice or knowledge of the occurrence of any
Event of Default unless and until the Collateral Agent shall have received a
written notice of Event of Default. The Collateral Agent shall have no
obligation whatsoever either prior to or after receiving such a notice of Event
of Default to inquire whether an Event of Default has, in fact, occurred and
shall be entitled to rely conclusively, and shall be fully protected in so
relying, on any certificate so furnished to it and shall have no obligation to
take or omit to take any action with respect to such notice of Event of Default.

         (i)      If any dispute or disagreement shall arise as to the
allocation of any sum of money received by the Collateral Agent hereunder, under
the Indenture or under any Note Document, the Collateral Agent shall have the
right to deliver such sum to a court of competent jurisdiction and therein
commence an action for interpleader.

         (j)      The resignation or removal of the Collateral Agent and
appointment of a successor Collateral Agent shall become effective only upon the
successor Collateral Agent's acceptance of appointment as provided in this
Section 10.

         (k)      The Collateral Agent may resign in writing at any time and be
discharged from the duties hereby created by so notifying the Obligors and the
Trustee. The Company or the Trustee may remove the Collateral Agent if:

                                       21

<PAGE>

         (A)      the Collateral Agent is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the Collateral Agent under Title
11, U.S. Code or any similar federal or state law for the relief of debtors;

         (B)      a custodian or public officer takes charge of the Collateral
Agent or its property; or

         (C)      the Collateral Agent becomes incapable of acting.

         (ii)     If the Collateral Agent resigns or is removed or if a vacancy
exists in the office of Collateral Agent for any reason, the Trustee shall
promptly appoint a successor Collateral Agent.

         (iii)    If a successor Collateral Agent does not take office within 60
days after the retiring Collateral Agent resigns or is removed, the retiring
Collateral Agent may petition any court of competent jurisdiction for the
appointment of a successor Collateral Agent.

         (iv)     A successor Collateral Agent shall deliver a written
acceptance of its appointment to the retiring Collateral Agent, the Trustee and
the Company. Thereupon, the resignation or removal of the retiring Collateral
Agent shall become effective, and the successor Collateral Agent shall have all
the rights, powers and duties of the Collateral Agent under this Security
Agreement. The successor Collateral Agent shall mail a notice of its succession
to the Indenture Trustee. The retiring Collateral Agent shall promptly transfer
all property held by it as Collateral Agent to the successor Collateral Agent,
provided all sums owing to the Collateral Agent hereunder have been paid.
Notwithstanding replacement of the Collateral Agent pursuant to this Section 10,
the Company's obligations under Sections 10(a), (b) and (c) hereof shall
continue for the benefit of the retiring Collateral Agent, and the Company shall
pay to any such replaced or removed Collateral Agent all amounts owed to such
replaced or removed Collateral Agent under Sections 10(a), (b) and (c) hereof
upon such replacement or removal.

         11.      Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of the Collateral, when received by the Collateral
Agent or any of the Holders in cash or its equivalent, subject to the
Intercreditor Agreement, will be applied in reduction of the Secured Obligations
in the order set forth in Section 6.10 of the Indenture, and each Obligor
irrevocably waives the right to direct the application of such payments and
proceeds.

         12.      Costs of Counsel. At all times hereafter, whether or not an
Event of Default exists, the Obligors agree to promptly pay upon demand any and
all reasonable costs and expenses of the Collateral Agent or the Holders, (a) as
required under Section 7.07 of the Indenture and (b) as necessary to protect the
Collateral or to exercise any rights or remedies under this Security Agreement
or with respect to any Collateral. All of the foregoing costs and expenses shall
constitute Secured Obligations hereunder.

                                       22

<PAGE>

         13.      Continuing Agreement.

                  (a)      This Security Agreement shall be a continuing
         agreement in every respect and shall remain in full force and effect so
         long as any of the Secured Obligations remain outstanding (other than
         any such obligations which by the terms thereof are stated to survive
         termination of the Note Documents) or any Note Document is in effect,
         and until all of the Notes shall have been Paid in Full and the
         Indenture shall have terminated (except as provided in Section
         8.01(iii) of the Indenture). Upon such payment and termination, this
         Security Agreement shall be automatically terminated and the Collateral
         Agent and the Holders shall, upon the request and at the expense of the
         Obligors, forthwith release all of their Liens and security interests
         hereunder and shall execute and deliver all UCC termination statements
         and/or other documents reasonably requested by the Obligors evidencing
         such termination. Notwithstanding the foregoing, all releases and
         indemnities provided hereunder shall survive termination of this
         Security Agreement.

                  (b)      This Security Agreement shall continue to be
         effective or be automatically reinstated, as the case may be, if at any
         time payment, in whole or in part, of any of the Secured Obligations is
         rescinded or must otherwise be restored or returned by the Collateral
         Agent or any Holder as a preference, fraudulent conveyance or otherwise
         under any bankruptcy, insolvency or similar law, all as though such
         payment had not been made; provided that in the event payment of all or
         any part of the Secured Obligations is rescinded or must be restored or
         returned, all reasonable costs and expenses (including without
         limitation any reasonable legal fees and disbursements) incurred by the
         Collateral Agent or any Holder in defending and enforcing such
         reinstatement shall be deemed to be included as a part of the Secured
         Obligations.

         14.      Amendments; Waivers; Modifications. This Security Agreement
and the provisions hereof may not be amended, waived, modified, changed,
discharged or terminated except as set forth in Section 2.2 of the Intercreditor
Agreement and Article 9 of the Indenture.

         15.      Successors in Interest. This Security Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Obligor, its successors and assigns and shall inure, together with the rights
and remedies of the Collateral Agent and the Holders hereunder, to the benefit
of the Collateral Agent and the Holders and their successors and permitted
assigns; provided, however, that none of the Obligors may assign its rights or
delegate its duties hereunder except as permitted by the Indenture. To the
fullest extent permitted by law, each Obligor hereby releases the Collateral
Agent and each Holder, and its successors and assigns, from any liability for
any act or omission relating to this Security Agreement or the Collateral,
except for any liability arising from the gross negligence or willful misconduct
of the Collateral Agent, or such Holder, or its officers, employees or agents.

         16.      Notices. All notices required or permitted to be given under
this Security Agreement shall be in conformance with Section 12.02 of the
Indenture.

         17.      Counterparts; Telecopy. This Security Agreement may be
executed in any number of counterparts, each of which where so executed and
delivered shall be an original, but all of

                                       23

<PAGE>

which shall constitute one and the same instrument. It shall not be necessary in
making proof of this Security Agreement to produce or account for more than one
such counterpart. Delivery of an executed counterpart by facsimile shall be as
effective as an original executed counterpart and shall be deemed a
representation that an original executed counterpart will be delivered.

         18.      Headings. The headings of the sections and subsections hereof
are provided for convenience only and shall not in any way affect the meaning,
construction or interpretation of any provision of this Security Agreement.

         19.      Governing Law; Submission to Jurisdiction; Venue.

                  (a)      THIS SECURITY AGREEMENT AND THE RIGHTS AND
         OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED
         AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
         Any legal action or proceeding with respect to this Security Agreement
         may be brought in the courts of the State of New York, or of the United
         States for the Southern District of New York, and, by execution and
         delivery of this Security Agreement, each Obligor hereby irrevocably
         accepts for itself and in respect of its property, generally and
         unconditionally, the jurisdiction of such courts. Each Obligor further
         irrevocably consents to the service of process out of any of the
         aforementioned courts in any such action or proceeding by the mailing
         of copies thereof by registered or certified mail, postage prepaid, to
         it at the address for notices pursuant to Section 12.02 of the
         Indenture, such service to become effective 30 days after such mailing.
         Nothing herein shall affect the right of the Collateral Agent to serve
         process in any other manner permitted by law or to commence legal
         proceedings or to otherwise proceed against any Obligor in any other
         jurisdiction.

                  (b)      Each Obligor hereby irrevocably waives any objection
         which it may now or hereafter have to the laying of venue of any of the
         aforesaid actions or proceedings arising out of or in connection with
         this Security Agreement brought in the courts referred to in subsection
         (a) hereof and hereby further irrevocably waives and agrees not to
         plead or claim in any such court that any such action or proceeding
         brought in any such court has been brought in an inconvenient forum.

         20.      Waiver of Jury Trial; Waiver of Consequential Damages. EACH OF
THE PARTIES TO THIS SECURITY AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS SECURITY AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY. Each Obligor agrees not to assert any claim
against the Collateral Agent, any Holder, any of their Affiliates, or any of
their respective directors, officers, employees, attorneys or agents, on any
theory of liability, for special, indirect, consequential or punitive damages
arising out of or otherwise relating to any of the transactions contemplated
herein.

                                       24

<PAGE>

         21.      Severability. If any provision of this Security Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.

         22.      Entirety. This Security Agreement together with the other Note
Documents represent the entire agreement of the parties hereto and thereto, and
supersede all prior agreements and understandings, oral or written, if any,
including any commitment letters or correspondence relating to the Note
Documents or the transactions contemplated herein and therein.

         23.      Survival. All representations and warranties of the Obligors
hereunder shall survive the execution and delivery of this Security Agreement
and the other Note Documents and the issuance of the Notes.

         24.      Other Security. To the extent that any of the Secured
Obligations are now or hereafter secured by property other than the Collateral
(including, without limitation, real property and securities owned by an
Obligor), or by a guarantee, endorsement or property of any other Person, then
the Collateral Agent, on behalf of the Holders, shall have the right to proceed
against such other property, guarantee or endorsement upon the occurrence of any
Event of Default, and the Collateral Agent and the Lenders have the right, in
their sole discretion, to determine which rights, security, liens, security
interests or remedies the Collateral Agent, on behalf of the Holders, shall at
any time pursue, relinquish, subordinate, modify or take with respect thereto,
without in any way modifying or affecting any of them or any of the Collateral
Agent's and the Holders', rights or the Secured Obligations under this Security
Agreement or under any other of the Note Documents.

         25.      Priority of Liens. The relative priority of the security
interests with respect to certain of the Collateral is governed by the terms of
the Intercreditor Agreement. This Security Agreement and the Liens granted
herein will be junior in priority to the First Priority Liens (as defined in the
Intercreditor Agreement) in the manner and to the extent set forth in the
Intercreditor Agreement. This Security Agreement shall automatically be amended
and the Collateral covered hereunder (or portion thereof) automatically released
upon the terms and conditions set forth in Section 2.2 of the Intercreditor
Agreement. To the extent of any inconsistency between the terms of the
Intercreditor Agreement and this Security Agreement, the terms of the
Intercreditor Agreement shall govern.

         26.      Delivery to Senior Agent. Notwithstanding any other provision
of this Security Agreement, during the term of the Credit Agreement, in the
event any requirement hereunder of an Obligor to deliver or cause to be
delivered any agreement, instrument, Collateral or other document to the
Collateral Agent is also a requirement of such Obligor under the terms of the
Credit Agreement, such requirement hereunder shall be deemed to be satisfied
upon the delivery of such agreement, instrument, Collateral or other document to
the Senior Agent pursuant to the terms of the Credit Agreement.

                                       25

<PAGE>

         Each of the parties hereto has caused a counterpart of this Security
Agreement to be duly executed and delivered as of the date first above written.

COMPANY:

                                          UNITED STATES CAN COMPANY,

                                          a Delaware corporation

                                          By: /s/ Sandra K. Vollman
                                          Name: Sandra K. Vollman
                                          Title: Sr. VP and CFO

GUARANTORS:

                                          U.S. CAN CORPORATION,
                                          a Delaware corporation

                                          By: /s/ Sandra K. Vollman
                                          Name: Sandra K. Vollman
                                          Title: Sr. VP and CFO

                                          USC MAY VERPACKUNGEN HOLDING, INC.,
                                          a Delaware corporation

                                          By: /s/ Sandra K. Vollman
                                          Name: Sandra K. Vollman
                                          Title: Sr. VP and CFO

                                                              SECURITY AGREEMENT
<PAGE>

         Accepted and agreed to as of the date first above written.

                                          WELLS FARGO BANK MINNESOTA,
                                          NATIONAL ASSOCIATION,
                                          as Collateral Agent

                                          By: /s/ Jane Y. Schweiger
                                          Name: Jane Y. Schweiger
                                          Title: Vice President

                                                              SECURITY AGREEMENT
<PAGE>

                                   SCHEDULE I

                              Intellectual Property

<PAGE>

                                   SCHEDULE II

  Chief Executive Office; Books and Records; Ownership; Mergers, Consolidations
                  and Use of Tradenames; State of Organization

<PAGE>

                                  SCHEDULE III

                               Investment Property

<PAGE>

                                   SCHEDULE IV

                                 Judgments, etc.

<PAGE>

                               EXHIBIT 5(f)(ii)(A)

                                     NOTICE

                                       OF

                           GRANT OF SECURITY INTEREST

                                       IN

                                   COPYRIGHTS

United States Copyright Office

         Please be advised that pursuant to the Security Agreement dated as of
July 22, 2003 (as the same may be amended, modified, extended or restated from
time to time, the "Security Agreement") by and among the Obligors party thereto
(each a "Obligor" and collectively, the "Obligors") and Wells Fargo Bank
Minnesota, National Association, as Collateral Agent (the "Collateral Agent")
for the Holders referenced therein (the "Holders"), the undersigned Obligor has
granted a continuing security interest in and continuing lien upon, the
copyrights and copyright applications shown below to the Collateral Agent for
the ratable benefit of the Holders:

                                 COPYRIGHTS

<TABLE>
<CAPTION>
                                                              Date of
Copyright No.              Description of Copyright          Copyright
-------------              ------------------------          ---------
<S>                        <C>                               <C>
</TABLE>

                            Copyright Applications

<TABLE>
<CAPTION>
   Copyright               Description of Copyright          Date of Copyright
Applications No.                 Applied For                    Applications
----------------                 -----------                    ------------
<S>                        <C>                               <C>
</TABLE>

<PAGE>

         The Obligors and the Collateral Agent, on behalf of the Holders, hereby
acknowledge and agree that the security interest in the foregoing copyrights and
copyright applications (i) may only be in accordance with the terms of the
Security Agreement and (ii) is not to be construed as an assignment of any
copyright or copyright application.

                                          Very truly yours,

                                          ___________________________________
                                          [Obligor]

                                          By:________________________________
                                          Name:______________________________
                                          Title:_____________________________

Acknowledged and Accepted:

WELLS FARGO BANK, NATIONAL ASSOCIATION
as Collateral Agent

By:___________________________
Name:_________________________
Title:________________________

<PAGE>

                               EXHIBIT 5(f)(ii)(B)

                                     NOTICE

                                       OF

                           GRANT OF SECURITY INTEREST

                                       IN

                                     PATENTS

United States Patent and Trademark Office

         Please be advised that pursuant to the Security Agreement dated as of
July 22, 2003 (the "Security Agreement") by and among the Obligors party thereto
(each a "Obligor" and collectively, the "Obligors") and Wells Fargo Bank
Minnesota, National Association, as Collateral Agent (the "Collateral Agent")
for the Holders referenced therein (the "Holders"), the undersigned Obligor has
granted a continuing security interest in and continuing lien upon, the patents
and patent applications shown below to the Collateral Agent for the ratable
benefit of the Holders:

                            PATENTS

<TABLE>
<CAPTION>
                      Description of Patent          Date of
Patent No.                    Item                   Patent
----------                    ----                   ------
<S>                   <C>                            <C>
</TABLE>

                       Patent Applications

<TABLE>
<CAPTION>
    Patent                                           Date of Patent
Applications No.                                      Applications
----------------                                      ------------
<S>                                                  <C>
</TABLE>

<PAGE>

         The Obligors and the Collateral Agent, on behalf of the Holders, hereby
acknowledge and agree that the security interest in the foregoing patents and
patent applications (i) may only be terminated in accordance with the terms of
the Security Agreement and (ii) is not to be construed as an assignment of any
patent or patent application.

                                          Very truly yours,

                                          ____________________________________
                                          [Obligor]

                                          By:_________________________________
                                          Name:_______________________________
                                          Title:______________________________

Acknowledged and Accepted:

WELLS FARGO BANK MINNESOTA
NATIONAL ASSOCIATION,
as Collateral Agent

By:____________________________
Name:__________________________
Title:_________________________

<PAGE>

                               EXHIBIT 5(f)(ii)(C)

                                     NOTICE

                                       OF

                           GRANT OF SECURITY INTEREST

                                       IN

                                   TRADEMARKS

United States Patent and Trademark Office

         Please be advised that pursuant to the Security Agreement dated as of
July 22, 2003 (the "Security Agreement") by and among the Obligors party thereto
(each a "Obligor" and collectively, the "Obligors") and Wells Fargo Bank
Minnesota, National Association, as Collateral Agent (the "Collateral Agent")
for the Holders referenced therein (the "Holders"), the undersigned Obligor has
granted a continuing security interest in and continuing lien upon, the
trademarks and trademark applications shown below to the Collateral Agent for
the ratable benefit of the Holders:

                                          TRADEMARKS

<TABLE>
<CAPTION>
                                    Description of Trademark           Date of
Trademark Registration No.                    Item                    Trademark
--------------------------                    ----                    ---------
<S>                                 <C>                               <C>
</TABLE>

                                     Trademark Applications

<TABLE>
<CAPTION>
   Trademark                        Description of Trademark          Date of Trademark
Applications No.                           Applied For                   Applications
----------------                           -----------                   ------------
<S>                                 <C>                               <C>
</TABLE>

<PAGE>

         The Obligors and the Collateral Agent, on behalf of the Holders, hereby
acknowledge and agree that the security interest in the foregoing trademarks and
trademark applications (i) may only be terminated in accordance with the terms
of the Security Agreement and (ii) is not to be construed as an assignment of
any trademark or trademark application.

                                          Very truly yours,

                                          _____________________________________
                                          [Obligor]

                                          By:_________________________________
                                          Name:_______________________________
                                          Title:______________________________

Acknowledged and Accepted:

WELLS FARGO BANK MINNESOTA
NATIONAL ASSOCIATION,
as Collateral Agent

By:__________________________
Name:________________________
Title:_______________________

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