SECURITY AGREEMENT

SECURITY AGREEMENT, dated as of February 17, 2003 (together with all amendments,
if any, from time to time hereto, this "Security Agreement"), among Phone1,
Inc., a Florida corporation ("Phone1"), Phone1Globalwide, Inc., a Delaware
corporation ("Global") and Globaltron Communication Corporation, a Delaware
corporation ("GCC" and collectively with Phone1 and Global, the "Grantors" and
individually, a "Grantor"), and GNB Bank Panama S.A., a bank organized under the
laws of the Republic of Panama ("Lender").

W I T N E S S T H:

WHEREAS, pursuant to that certain Loan Agreement (which is incorporated herein
by reference) dated as of the date hereof (the "Loan Agreement") by and among
Lender and the Grantors, Lender has agreed to make the Loan;

WHEREAS, in order to induce Lender to enter into the Loan Agreement, Grantors
have agreed to grant a continuing Lien on the Collateral (as hereinafter
defined) to secure all of the payment obligations of Phone1 (guaranteed by
Global and GCC) under the Loan Agreement, including any additional loans made to
Lender pursuant to the terms of the Loan Agreement or otherwise (the "Secured
Obligations");

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

1.

DEFINED TERMS.

All capitalized terms used but not otherwise defined herein (included in the
recitals hereof) have the meanings given to them in the Loan Agreement. All
other terms contained in this Security Agreement, unless the context indicates
otherwise, have the meanings provided for by the Code to the extent the same are
used or defined therein.

(a)

"Accounts" means all "accounts," as such term is defined in the Code, now owned
or hereafter acquired by any Grantor, including (a) all accounts receivable,
other receivables, book debts and other forms of obligations (other than forms
of obligations evidenced by Chattel Paper, or Instruments), (including any such
obligations that may be characterized as an account or contract right under the
Code), (b) all of each Grantor's rights in, to and under all purchase orders or
receipts for goods or services, (c) all of each Grantor's rights to any goods
represented by any of the foregoing (including unpaid sellers' rights of
rescission, replevin, reclamation and stoppage in transit and rights to
returned, reclaimed or repossessed goods), (d) all rights to payment due to any
Grantor for property sold, leased, licensed, assigned or otherwise disposed of,
for a policy of insurance issued or to be issued, for a secondary obligation
incurred or to be incurred, for energy provided or to be provided, for the use
or hire of a vessel under a charter or other contract, arising out of the use of
a credit card or charge card, or for services rendered or to be rendered by such
Grantor or in connection with any other transaction (whether or not yet earned
by performance on the part of such Grantor), (e) all health care insurance
receivables and (f) all collateral security of any kind, given by any Account
Debtor or any other Person with respect to any of the foregoing.

(b)

 "Account Debtor" means any Person who may become obligated to any Grantor
under, with respect to, or on account of, an Account, Chattel Paper or General
Intangibles (including a payment intangible).

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(c)

"Chattel Paper" means any "chattel paper," as such term is defined in the Code,
including electronic chattel paper, now owned or hereafter acquired by any
Grantor.

(d)

"Code" means the Uniform Commercial Code as the same may, from time to time, be
enacted and in effect in the State of New York; provided, that to the extent
that the Code is used to define any term herein or in the Loan Agreement and
such term is defined differently in different Articles or Divisions of the Code,
the definition of such term contained in Article or Division 9 shall govern;
provided further, that in the event that, by reason of mandatory provisions of
law, any or all of the attachment, perfection or priority of, or remedies with
respect to Lender's Lien on any Collateral is governed by the Uniform Commercial
Code as enacted and in effect from time to time in a jurisdiction other than the
State of New York, the term "Code" shall mean the Uniform Commercial Code as
enacted and in effect in such other jurisdiction solely for purposes of the
provisions thereof relating to such attachment, perfection, priority or remedies
and for purposes of definitions related to such provisions.

(e)

"Contracts" means all contracts and agreements to which any Grantor is a party,
as the same may be amended, supplemented or otherwise modified from time to
time, including without limitation, (i) all rights of any Grantor to receive
moneys due and to become due to it thereunder or in connection therewith, (ii)
all rights of any Grantor to damages arising thereunder and (iii) all rights of
any Grantor to perform and to exercise all remedies thereunder.

(f)

"Copyright Licenses" means any and all rights now owned or hereafter acquired by
any Grantor under any written agreement granting any right to use any Copyright
(as defined below) or Copyright registration.

(g)

"Copyrights" means all of the following now owned or hereafter adopted or
acquired by any Grantor: (i) all Copyrights and General Intangibles of like
nature (whether registered or unregistered), all registrations and recordings
thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright Office
or in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof, and (ii) all
reissues, extensions or renewals thereof.

(h)

"Deposit Accounts" means all "deposit accounts" as such term is defined in the
Code, now or hereafter held in the name of any Grantor.

(i)

"Documents" means all “documents”, as such term is defined in the Code, now
owned or hereafter acquired by any Grantor, wherever located.

(j)

"Equipment" means all "equipment," as such term is defined in the Code, now
owned or hereafter acquired by any Grantor, wherever located and, in any event,
including all such Grantor's machinery and equipment, including processing
equipment, conveyors, machine tools, data processing and computer equipment,
including embedded software and peripheral equipment and all engineering,
processing and manufacturing equipment, office machinery, furniture, materials
handling equipment, tools, attachments, accessories, automotive equipment,
trailers, trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock
and other equipment of every kind and nature, trade fixtures and fixtures not
forming a part of real property, together with all additions and accessions
thereto, replacements therefor, all parts therefor, all substitutes for any of
the foregoing, fuel therefor, and all manuals, drawings, instructions,
warranties and rights with respect thereto, and all products and proceeds
thereof and condemnation awards and insurance proceeds with respect thereto.

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(k)

"Fixtures" means all "fixtures" as such term is defined in the Code, now owned
or hereafter acquired by any Grantor.

(l)

"General Intangibles" means all "general intangibles," as such term is defined
in the Code, now owned or hereafter acquired by any Grantor, including all
right, title and interest that such Grantor may now or hereafter have in or
under any contract, all payment intangibles, customer lists, licenses,
Copyrights, Trademarks, Patents, and all applications therefor and reissues,
extensions or renewals thereof, rights in Intellectual Property, interests in
partnerships, joint ventures and other business associations, licenses, permits,
Copyrights, trade secrets, proprietary or confidential information, inventions
(whether or not patented or patentable), technical information, procedures,
designs, knowledge, know-how, software, data bases, data, skill, expertise,
experience, processes, models, drawings, materials and records, goodwill
(including the goodwill associated with any Trademark or Trademark license), all
rights and claims in or under insurance policies (including insurance for fire,
damage, loss and casualty, whether covering personal property, real property,
tangible rights or intangible rights, all liability, life, key man and business
interruption insurance, and all unearned premiums), uncertificated securities,
choses in action, deposit, checking and other bank accounts, rights to receive
tax refunds and other payments, rights to receive dividends, distributions,
cash, instruments and other property in respect of or in exchange for pledged
stock and investment property, rights of indemnification, all books and records,
correspondence, credit files, invoices and other papers, including without
limitation all tapes, cards, computer runs and other papers and documents in the
possession or under the control of such Grantor or any computer bureau or
service company from time to time acting for such Grantor.

(m)

"Global Subsidiaries Stock" means all of Global's right, title and interest in
and to any and all of its subsidiaries; the Global Subsidiaries Stock shall
include any additional shares of any class or series of capital stock of any
subsidiary of Global hereafter acquired by Global from time to time and at any
time and all dividends, cash, instruments and other property or proceeds, from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all the Global Subsidiaries Stock.

(n)

"Goods" means all "goods" as defined in the Code, now owned or hereafter
acquired by any Grantor, wherever located, including embedded software to the
extent included in "goods" as defined in the Code, manufactured homes, standing
timber that is cut and removed for sale and unborn young of animals.

(o)

"Instruments" means all "instruments," as such term is defined in the Code, now
owned or hereafter acquired by any Grantor, wherever located, and, in any event,
including all certificated securities, all certificates of deposit, and all
promissory notes and other evidences of indebtedness, other than instruments
that constitute, or are a part of a group of writings that constitute, Chattel
Paper.

(p)

"Intellectual Property" means any and all Licenses, Patents, Copyrights,
Trademarks, service marks, trade dress, trade names, domain names, brand names
and certification marks presently owned by any Grantor or (pursuant to license,
sublicense, agreement or permission) used by any Grantor in connection with such
Grantor’s business.

(q)

"Inventory" means all "inventory" as such term is defined in the Code, now owned
or hereafter acquired by any Grantor, wherever located, and in any event
including inventory, merchandise, goods and other personal property that are
held by or on behalf of any Grantor for sale or lease or are

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furnished or are to be furnished under a contract of service, or that constitute
raw materials, work in process, finished goods, returned goods, or materials or
supplies of any kind, nature or description used or consumed or to be used or
consumed in the respective Grantor’s business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including other supplies
and embedded software.

(r)

"Investment Property" means all “investment property” as such term is defined in
the Code now owned or hereafter acquired by any Grantor, wherever located
including (i) all securities, whether certificated or uncertificated, including
stocks, bonds, interests in limited liability companies, partnership interests,
treasuries, certificates of deposit, and mutual fund shares; (ii) all securities
entitlements of any Grantor, including the rights of any Grantor to any
securities account and the financial assets held by a securities intermediary in
such securities account and any free credit balance or other money owing by any
securities intermediary with respect to that account, (iii) all securities
accounts of any Grantor; (iv) all commodity contracts of any Grantor and (v) all
commodity accounts held by any Grantor.

(s)

"Letter of Credit Rights" means letter of credit rights as such term is defined
in the Code, now owned or hereafter acquired by any Grantor, including rights to
payment or performance under a letter of credit, whether or not such Grantor, as
beneficiary, has demanded or is entitled to demand payment or performance.

(t)

"License" means any Copyright License, Patent License, Trademark License or
other license of rights or interests now held or hereafter acquired by any
Grantor.

(u)

"Lien" means any mortgage, pledge, security interest, lien, claim, encumbrance
or other similar restrictions, of any kind or nature whatsoever.

(v)

"Patent Licenses" means rights under any written agreement now owned or
hereafter acquired by any Grantor granting any right with respect to any
invention on which a Patent (as defined below) is in existence.

(w)

"Patents" means all of the following in which any Grantor now holds or hereafter
acquires any interest: (i) all letters patent of the United States or of any
other country, all registrations and recordings thereof, and all applications
for letters patent of the United States or of any other country, including
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State or any other country, and (ii) all reissues, continuations,
continuations-in-part or extensions thereof.

(x)

"Permitted Encumbrances" means (i) Liens on Equipment leased pursuant to the
existing leases and Liens reported on the SEC reports of Global as of the date
hereof; (ii) Liens for taxes not yet payable; (iii) Liens of materialmen,
mechanics, warehousemen, carriers, or other similar liens arising in the
ordinary course of business and securing obligations which are not delinquent;
and (iv) Liens incurred in connection with the extension, renewal or refinancing
of the indebtedness secured by liens of the type described above in clauses (i)
or (ii) above, provided that any extension, renewal or replacement Lien is
limited to the property encumbered by the existing Lien and the principal amount
of the indebtedness being extended, renewed or refinanced does not increase.

(y)

"Proceeds" means "proceeds," as such term is defined in the Code, including (a)
any and all proceeds of any insurance, indemnity, warranty or guaranty payable
to any Grantor from time to

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time with respect to any of the Collateral, (b) any and all payments (in any
form whatsoever) made or due and payable to any Grantor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental authority
(or any Person acting under color of governmental authority), (c) any claim of
any Grantor against third parties (i) for past, present or future infringement
of any Patent or Patent License, or (ii) for past, present or future
infringement or dilution of any Copyright, Copyright License, Trademark or
Trademark License, or for injury to the goodwill associated with any Trademark
or Trademark License, (d) any recoveries by any Grantor against third parties
with respect to any litigation or dispute concerning any of the Collateral
including claims arising out of the loss or nonconformity of, interference with
the use of, defects in, or infringement of rights in, or damage to, Collateral,
(e) all amounts collected on, or distributed on account of, other Collateral,
including dividends, interest, distributions and Instruments with respect to
investment property and pledged stock, and (f) any and all other amounts, rights
to payment or other property acquired upon the sale, lease, license, exchange or
other disposition of Collateral and all rights arising out of Collateral.

(z)

"Software" means all "software" as such term is defined in the Code, now owned
or hereafter acquired by any Grantor, other than software embedded in any
category of goods, including all computer programs and all supporting
information provided in connection with a transaction related to any program.

(aa)

"Supporting Obligations" means all supporting obligations as such term is
defined in the Code, including letters of credit and guaranties issued in
support of Accounts, Chattel Paper, Documents, General Intangibles, Instruments,
or Investment Property.

(bb)

"Trademark License" means rights under any written agreement now owned or
hereafter acquired by any Grantor granting any right to use any Trademark.

(cc)

"Trademarks" means all of the following now owned or hereafter existing or
adopted or acquired by any Grantor: (i) all Trademarks, trade names, corporate
names, business names, trade styles, service marks, logos, other source or
business identifiers, prints and labels on which any of the foregoing have
appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), all registrations and recordings thereof, and all
applications in connection therewith, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any state or territory thereof, or any
other country or any political subdivision thereof; (ii) all reissues,
extensions or renewals thereof; and (iii) all goodwill associated with or
symbolized by any of the foregoing.

(dd)

"Uniform Commercial Code Jurisdiction" means any jurisdiction that had adopted
all or substantially all of Article 9 as contained in the 2000 Official Text of
the Uniform Commercial Code, as recommended by the National Conference of
Commissioners on Uniform State Laws and the American Law Institute, together
with any subsequent amendments or modifications to the Official Text.

2.

GRANT OF LIEN. To secure the prompt and complete payment, performance and
observance of all of the Secured Obligations, each Grantor hereby grants,
assigns, conveys, mortgages, pledges, hypothecates and transfers to Lender,
subject to the last paragraph of this Section 2, a first priority security
interest in, and Lien upon all of its right, title and interest in, to and under
all personal property and other assets whether now owned by or owing to, or
hereafter acquired by or arising in favor of such Grantor (including under any
trade names, styles or derivations thereof), and whether owned or

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consigned by or to, or leased from or to, such Grantor, and regardless of where
located (all of which being hereinafter collectively referred to as the
"Collateral"), including:

(i)

all Accounts;

(ii)

all Chattel Paper;

(iii)

all Contracts;

(iv)

all Documents;

(v)

all General Intangibles (including payment intangibles and Software);

(vi)

all Goods (including Inventory, Equipment and Fixtures);

(vii)

all Instruments;

(viii)

all Investment Property;

(ix)

all Deposit Accounts, of any Grantor, inclusive all deposit and other bank
accounts and all deposits therein;

(x)

all money, cash or cash equivalents of any Grantor;

(xi)

all Inventory;

(xii)

all Global Subsidiaries Stock;

(xiii)

all Supporting Obligations and Letter of Credit Rights of any Grantor;

(xiv)

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 the foregoing and all accessions to, substitutions and replacements
for, and rents and profits of, each of the foregoing.

Lender acknowledges that it has previously been granted prior security interests
in, and Liens upon, all of the above assets in connection with loan agreements,
dated September 30, 2002 and November 26, 2002, by and among the same parties
hereto.

3.

LENDER'S RIGHTS. LIMITATIONS. LENDER'S OBLIGATIONS.

(a)

It is expressly agreed by Grantors that, anything herein to the contrary
notwithstanding, each Grantor shall remain liable under each of its Contracts
and each of its Licenses to observe and perform all the conditions and
obligations to be observed and performed by it thereunder. Lender shall have no
obligation or liability under any Contract or License by reason of or arising
out of this Security Agreement or the granting herein of a Lien thereon or the
receipt by Lender of any payment relating to any Contract or License pursuant
hereto. Lender shall not be required or obligated in any manner to perform or
fulfill any of the obligations of any Grantor under or pursuant to any Contract
or License, or to make any payment, or to make any inquiry as to the nature or
the sufficiency of any payment received by it or the sufficiency of any
performance by any party under any Contract or

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License, or to present or file any claims, or to take any action to collect or
enforce any performance or 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)

Lender may at any time after an Event of Default has occurred and be continuing,
without prior notice to any Grantor, notify Account Debtors and other Persons
obligated on the Collateral that Lender has a security interest therein, and
that payments shall be made directly to Lender. Upon the request of Lender after
the occurrence and during the continuance of an Event of Default, each Grantor
shall so notify Account Debtors and other Persons obligated on Collateral. Once
any such notice has been given to any Account Debtor or other Person obligated
on the Collateral, the affected Grantor shall not give any contrary instructions
to such Account Debtor or other Person without Lender’s prior written consent.

(c)

Lender may at any time in its own name, in the name of a nominee of Lender or in
the name of any Grantor communicate (by mail, telephone, facsimile or otherwise)
with Account Debtors, parties to Contracts, obligors in respect of Instruments
and obligors in respect of Chattel Paper and/or payment intangibles to verify
with such Persons, to Lender's satisfaction, the existence, amount terms of, and
any other matter relating to, any such Accounts, Contracts, Instruments or
Chattel Paper and/or payment intangibles. If a Default or Event of Default shall
have occurred and be continuing, each Grantor, at its own expense, shall cause
the independent certified public accountants then engaged by such Grantor to
prepare and deliver to Lender at any time and from time to time promptly upon
Lender's request the following reports with respect to each Grantor: (i) a
reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial
balances; and (iv) a test verification of such Accounts as Lender may request.
Each Grantor, at its own expense, shall deliver to Lender the results of each
physical verification, if any, which such Grantor may in its discretion have
made, or caused any other Person to have made on its behalf, of all or any
portion of its Inventory.

4.

REPRESENTATIONS AND WARRANTIES. Each Grantor represents and warrants that:

(a)

Each Grantor has rights in and the power to transfer each item of the Collateral
upon which it purports to grant a Lien hereunder free and clear of any and all
Liens other than Permitted Encumbrances.

(b)

No effective security agreement, financing statement, equivalent security or
Lien instrument or continuation statement covering all or any part of the
Collateral is on file or of record in any public office, except such as may have
been filed (i) by any Grantor in favor of Lender pursuant to this Security
Agreement, and (ii) in connection with any other Permitted Encumbrances.

(c)

This Security Agreement is effective to create a valid and continuing Lien on
and, upon the filing of the appropriate financing statements listed on Schedule
I hereto, a perfected Lien in favor of Lender on the Collateral with respect to
which a Lien may be perfected by filing pursuant to the Code. Such Lien is prior
to all other Liens, except Permitted Encumbrances that would be prior to Liens
in favor of Lender as a matter of law, and is enforceable as such as against any
and all creditors of and purchasers from any Grantor (other than purchasers and
lessees of Inventory in the ordinary course of business). All action by any
Grantor necessary or desirable to protect and perfect such Lien on each item of
the Collateral has been duly taken.

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(d)

Schedule II hereto lists all Instruments, Letter of Credit Rights and Chattel
Paper of each Grantor. All actions by any Grantor necessary or desirable to
protect and perfect the Lien of Lender on each item set forth on Schedule II
(including the delivery of all originals thereof to Lender and the legending of
all Chattel Paper as required by Section 5(b) hereof) has been duly taken. The
Lien of Lender on the Collateral listed on Schedule II hereto is prior to all
other Liens, except Permitted Encumbrances that would be prior to the Liens in
favor of Lender as a matter of law, and is enforceable as such against any and
all creditors of and purchasers from any Grantor.

(e)

Each Grantor’s name as it appears in official filings in the state of its
incorporation or other organization, the type of entity of each Grantor
(including corporation, partnership, limited partnership or limited liability
company), organizational identification number issued by each Grantor’s state of
incorporation or organization or a statement that no such number has been
issued, each Grantor’s state of organization or incorporation, the location of
each Grantor’s chief executive office, principal place of business, offices, all
warehouses and premises where Collateral is stored or located, and the locations
of its books and records concerning the Collateral are set forth on Schedule III
hereto. Each Grantor has only one state of incorporation or organization.

(f)

With respect to the Accounts (i) they represent bona fide sales of Inventory or
rendering of services to Account Debtors in the ordinary course of each
Grantor's business and are not evidenced by a judgment, Instrument or Chattel
Paper; (ii) there are no setoffs, claims or disputes existing or asserted with
respect thereto and no Grantor has made any agreement with any Account Debtor
for any extension of time for the payment thereof, any compromise or settlement
for less than the full amount thereof, any release of any Account Debtor from
liability therefor, or any deduction therefrom except a discount or allowance
allowed by such Grantor in the ordinary course of its business for prompt
payment and disclosed to Lender; (iii) to each Grantor's knowledge, there are no
facts, events or occurrences which in any way impair the validity or
enforceability thereof or could reasonably be expected to reduce the amount
payable thereunder as shown on any Grantor's books and records and any invoices,
statements and Collateral Reports delivered to Lender with respect thereto; (iv)
no Grantor has received any notice of proceedings or actions which are
threatened or pending against any Account Debtor which might result in any
adverse change in such Account Debtor's financial condition; and (v) no Grantor
has knowledge that any Account Debtor is unable generally to pay its debts as
they become due. Further with respect to the Accounts (x) the amounts shown on
all invoices, statements and Collateral Reports which may be delivered to the
Lender with respect thereto are actually and absolutely owing to such Grantor as
indicated thereon and are not in any way contingent; (y) to each Grantor's
knowledge, all Account Debtors have the capacity to contract.

(g)

With respect to any Inventory scheduled or listed on the most recent Collateral
Report delivered to Lender pursuant to the terms of this Security Agreement, (i)
such Inventory is located at one of the applicable Grantor's locations set forth
on Schedule III hereto, (ii) no Inventory is now, or shall at any time or times
hereafter be stored at any other location without Lender's prior consent, and if
Lender gives such consent, each applicable Grantor will concurrently therewith
obtain, to the extent required by Lender, bailee, landlord and mortgagee
agreements, (iii) the applicable Grantor has good, indefeasible and merchantable
title to such Inventory and such Inventory is not subject to any Lien or
security interest or document whatsoever except for the Lien granted to Lender
and except for Permitted Encumbrances, (iv) except as specifically disclosed in
the most recent Collateral Report delivered to Lender, such Inventory is good
and merchantable quality, free from any defects, (v) such Inventory is not
subject to any licensing, Patent, royalty, Trademark, trade name or Copyright
agreements with any third parties which would require any consent of any third
party upon sale or disposition of that

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Inventory or the payment of any monies to any third party as a precondition of
such sale or other disposition, and (vi) the completion of manufacture, sale or
other disposition of such Inventory by Lender following an Event of Default
shall not require the consent of any Person and shall not constitute a breach or
default under any contract or agreement to which any Grantor is a party or to
which such property is subject.

(h)

No Grantor has any interest in, or title to, any Patent, Trademark or Copyright
except as set forth in Schedule IV hereto. This Security Agreement is effective
to create a valid and continuing Lien on and, upon filing of the appropriate
documents with the United States Copyright Office and filing of the appropriate
documents with the United States Patent and Trademark Office, perfected Liens in
favor of Lender on each Grantor' s Patents, Trademarks and Copyrights and such
perfected Liens are enforceable as such as against any and all creditors of and
purchasers from any Grantor. Upon filing of the appropriate documents with the
United States Copyright Office and filing of the appropriate documents with the
United States Patent and Trademark Office and the filing of appropriate
financing statements listed on Schedule I hereto, all action necessary or
desirable to protect and perfect Lender's Lien on each Grantor's Patents,
Trademarks or Copyrights shall have been duly taken.

(i)

All motor vehicles owned by each Grantor are listed on Schedule V hereto, by
model, model year and vehicle identification number ("VIN"). Each Grantor shall
deliver to Lender motor vehicle title certificates for all motor vehicles from
time to time owned by it and shall cause those title certificates to be filed
(with Lender's lien noted thereon) in the appropriate state motor vehicle filing
office.

5.

COVENANTS. Each Grantor covenants and agrees with Lender, that from and after
the date of this Security Agreement and until the Termination Date:

(a)

Further Assurances: Pledge of Instruments; Chattel Paper.

(i)

At any time and from time to time, upon the written request of Lender and at the
sole expense of Grantors, each Grantor shall promptly and duly execute and
deliver any and all such further instruments and documents and take such further
actions as Lender may deem desirable to obtain the full benefits of this
Security Agreement and of the rights and powers herein granted, including (A)
using its commercially reasonable efforts to secure all consents and approvals
necessary or appropriate for the assignment to or for the benefit of Lender of
any License or Contract held by such Grantor and to enforce the security
interests granted hereunder; and (B) filing any financing or continuation
statements under the Code with respect to the Liens granted hereunder or under
the Loan Agreement as to those jurisdictions that are not Uniform Commercial
Code Jurisdictions.

(ii)

Unless Lender shall otherwise consent in writing (which consent may be revoked),
each Grantor shall deliver to Lender all Collateral consisting of negotiable
Documents, certificated securities, Chattel Paper and Instruments (in each case,
accompanied by stock powers, allonges or other instruments of transfer executed
in blank) promptly after such Grantor receives the same.

(iii)

Each Grantor shall, if required by Lender, obtain or use its commercially
reasonable efforts to obtain waivers or subordinations of Liens from landlords
and mortgagees, and each Grantor shall in all instances obtain signed
acknowledgements of Lender’s Liens from bailees having possession of any
Grantor’s Goods that they hold for the benefit of Lender.

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(iv)

Each Grantor that is or becomes the beneficiary of a letter of credit shall
promptly, and in any event within two (2) Business Days after becoming a
beneficiary, notify Lender thereof and enter into a tri-party agreement with
Lender and the issuer and/or confirmation bank with respect to Letter of Credit
Rights assigning such Letter of Credit Rights to Lender and directing all
payments thereunder to Lender, all in form and substance reasonably satisfactory
to Lender.

(v)

Each Grantor shall take all steps necessary to grant the Lender control of all
electronic chattel paper in accordance with the Code and all "transferable
records" as defined in each of the Uniform Electronic Transactions Act and the
Electronic Signatures in Global and National Commerce Act.

(vi)

Each Grantor hereby irrevocably authorizes the Lender at any time and from time
to time to file in any filing office in any Uniform Commercial Code Jurisdiction
any initial financing statements and amendments thereto that (a) indicate the
Collateral (i) as all assets of such Grantor or words of similar effect,
regardless of whether any particular asset comprised in the Collateral falls
within the scope of Article 9 of the Code of such jurisdiction, or (ii) as being
of an equal or lesser scope or with greater detail, and (b) contain any other
information required by part 5 of Article 9 of the Code for the sufficiency or
filing office acceptance of any financing statement or amendment, including (i)
whether such Grantor is an organization, the type of organization and any
organization identification number issued to such Grantor, and (ii) in the case
of a financing statement filed as a fixture filing or indicating Collateral as
as-extracted collateral or timber to be cut, a sufficient description of real
property to which the Collateral relates. Each Grantor agrees to furnish any
such information to the Lender promptly upon request. Each Grantor also ratifies
its authorization for the Lender to have filed in any Uniform Commercial Code
Jurisdiction any initial financing statements or amendments thereto if filed
prior to the date hereof.

(vii)

Each Grantor shall promptly, and in any event within two (2) Business Days after
the same is acquired by it, notify Lender of any commercial tort claim (as
defined in the Code) acquired by it and unless otherwise consented by Lender,
such Grantor shall enter into a supplement to this Security Agreement, granting
to Lender a Lien in such commercial tort claim.

(b)

Maintenance of Records. Grantors shall keep and maintain, at their own cost and
expense, satisfactory and complete records of the Collateral, including a record
of any and all payments received and any and all credits granted with respect to
the Collateral and all other dealings with the Collateral. Grantors shall mark
their books and records pertaining to the Collateral to evidence this Security
Agreement and the Liens granted hereby. If any Grantor retains possession of any
Chattel Paper or Instruments with Lender’s consent, such Chattel Paper and
Instruments shall be marked with the following legend: "This writing and the
obligations evidenced or secured hereby are subject to the security interest of
GNB Bank Panama S.A., as Lender".

(c)

Covenants Regarding Patent, Trademark and Copyright Collateral.

(i)

Grantors shall notify Lender immediately if they know or have reason to know
that any application or registration relating to any Patent, Trademark or
Copyright (now or hereafter existing) may become abandoned or dedicated, or of
any adverse determination or development (including the institution of, or any
such determination or development in, any

10

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proceeding in the United States Patent and Trademark Office, the United States
Copyright Office or any court) regarding any Grantor’s ownership of any Patent,
Trademark or Copyright, its right to register the same, or to keep and maintain
the same.

(ii)

In no event shall any Grantor, either itself or through any agent, employee,
licensee or designee, file an application for the registration of any Patent,
Trademark or Copyright with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency without giving
Lender prior written notice thereof.

(iii)

Grantors shall take all actions necessary or requested by Lender to maintain and
pursue each application, to obtain the relevant registration and to maintain the
registration of each of the Patents, Trademarks and Copyrights (now or hereafter
existing), including the filing of applications for renewal, affidavits of use,
affidavits of noncontestability and opposition and interference and cancellation
proceedings.

(iv)

In the event that any of the Patent, Trademark or Copyright Collateral is
infringed upon, or misappropriated or diluted by a third party, such Grantor
shall comply with Section 5(a)(vii) of this Security Agreement. Such Grantor
shall, unless such Grantor shall reasonably determine that such Patent,
Trademark or Copyright Collateral is in no way material to the conduct of its
business or operations, promptly sue for infringement, misappropriation or
dilution and to recover any and all damages for such infringement,
misappropriation or dilution, and shall take such other actions as Lender shall
deem appropriate under the circumstances to protect such Patent, Trademark or
Copyright Collateral.

(d)

Indemnification. In any suit, proceeding or action brought by Lender relating to
any Collateral for any sum owing with respect thereto or to enforce any rights
or claims with respect thereto, each Grantor will save, indemnify and keep
Lender harmless from and against all expense (including reasonable attorneys’
fees and expenses), loss or damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction of liability whatsoever of the Account
Debtor or other Person obligated on the Collateral, arising out of a breach by
any Grantor of any obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to, or in favor of, such obligor or
its successors from such Grantor, except to the extent such expense, loss, or
damage is attributable solely to the gross negligence or willful misconduct of
Lender as finally determined by a court of competent jurisdiction. All such
obligations of Grantors shall be and remain enforceable against and only against
Grantors and shall not be enforceable against Lender.

(e)

Compliance with Terms of Accounts, etc. In all material respects, each Grantor
will perform and comply with all obligations in respect of the Collateral and
all other agreements to which it is a party or by which it is bound relating to
the Collateral.

(f)

Limitation on Liens on Collateral. No Grantor will create, permit or suffer to
exist, and each Grantor will defend the Collateral against, and take such other
action as is necessary to remove, any Lien on the Collateral except Permitted
Encumbrances, and will defend the right, title and interest of Lender in and to
any of such Grantor's rights under the Collateral against the claims and demands
of all Persons whomsoever.

(g)

Limitations on Disposition. No Grantor will sell, license, lease, transfer or
otherwise dispose of any of the Collateral, or attempt or contract to do so
except as permitted herein or in the Loan Agreement.

11

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(h)

Further Identification of Collateral. Grantors will, if so requested by Lender,
furnish to Lender, as often as Lender requests, statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as Lender may reasonably request, all in such detail as
Lender may specify.

(i)

Notices. Grantors will advise Lender promptly, in reasonable detail, (i) of any
Lien (other than Permitted Encumbrances) or claim made or asserted against any
of the Collateral, and (ii) of the occurrence of any other event which would
have a material adverse effect on the aggregate value of the Collateral or on
the Liens created hereunder.

(j)

Good Standing Certificates. Not less frequently than once during each calendar
semester, unless Lender shall otherwise consent, provide to Lender a certificate
of good standing from its state of incorporation or organization.

(k)

No Reincorporation. Without limiting the negative covenants provided under the
Loan Agreement, no Grantor shall 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 without the prior written consent of Lender.

(l)

Terminations; Amendments Not Authorized. Each Grantor acknowledges that it is
not authorized to file any financing statement or amendment or termination
statement with respect to any financing statement without the prior written
consent of Lender and agrees that it will not do so without the prior written
consent of Lender, subject to such Grantor's rights under Section 9-509(d)(2) of
the Code.

6.

LENDER'S APPOINTMENT AS ATTORNEY-IN-FACT.

On the date hereof each Grantor shall execute and deliver to Lender a power of
attorney (the "Power of Attorney") substantially in the form attached hereto as
Exhibit A. The power of attorney granted pursuant to the Power of Attorney is a
power coupled with an interest and shall be irrevocable until the Secured
Obligations have been paid in full. The powers conferred on Lender under the
Power of Attorney are solely to protect Lender’s interests in the Collateral and
shall not impose any duty upon Lender to exercise any such powers. Lender agrees
that (a) except for the powers granted in clause (h) of the Power of Attorney,
it shall not exercise any power or authority granted under the Power of Attorney
unless an Event of Default has occurred and is continuing, and (b) Lender shall
account for any moneys received by Lender in respect of any foreclosure on or
disposition of Collateral pursuant to the Power of Attorney provided that Lender
shall not have any duty as to any Collateral, and Lender shall be accountable
only for amounts that it actually receives as a result of the exercise of such
powers. NEITHER LENDER NOR ITS AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS OR REPRESENTATIVES SHALL BE RESPONSIBLE TO ANY GRANTOR FOR ANY ACT OR
FAILURE TO ACT UNDER ANY POWER OF ATTORNEY OR OTHERWISE, EXCEPT IN RESPECT OF
DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION, NOR FOR ANY
PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

12

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7.

REMEDIES: RIGHTS UPON DEFAULT.

(a)

In addition to all other rights and remedies granted to it under this Security
Agreement and the Loan Agreement and under any other instrument or agreement
securing, evidencing or relating to any of the Secured Obligations, if any Event
of Default shall have occurred and be continuing, Lender may exercise all rights
and remedies of a secured party under the Code. Without limiting the generality
of the foregoing, each Grantor expressly agrees that in any such event Lender,
without demand of performance or other demand, advertisement or notice of any
kind (except the notice specified below of time and place of public or private
sale) to or upon such Grantor or any other Person (all and each of which
demands, advertisements and notices are hereby expressly waived to the maximum
extent permitted by the Code and other applicable law), may forthwith enter upon
the premises of such Grantor where any Collateral is located through self-help,
without judicial process, without first obtaining a final judgment or giving
such Grantor or any other Person notice and opportunity for a hearing on
Lender’s claim or action and may collect, receive, assemble, process,
appropriate and realize upon the Collateral, or any part thereof, and may
forthwith sell, lease, license, assign, give an option or options to purchase,
or sell or otherwise dispose of and deliver said Collateral (or contract to do
so), or any part thereof, in one or more parcels at a public or private sale or
sales, at any exchange at such prices as it may deem acceptable, for cash or on
credit or for future delivery without assumption of any credit risk. Lender
shall have the right upon any such public sale or sales and, to the extent
permitted by law, upon any such private sale or sales, to purchase for the
benefit Lenders, the whole or any part of said Collateral so sold, free of any
right or equity of redemption, which equity of redemption each Grantor hereby
specifically waives and releases. Such sales may be adjourned and continued from
time to time with or without notice. Lender shall have the right to conduct such
sales on any Grantor’s premises or elsewhere and shall have the right to use any
Grantor’s premises without charge for such time or times as Lender deems
necessary or advisable.

If any Event of Default shall have occurred and be continued, each Grantor
further agrees, at Lender’s request, to assemble the Collateral and make it
available to Lender at a place or places designated by Lender which are
reasonably convenient to Lender and such Grantor, whether at such Grantor’s
premises or elsewhere. Until Lender is able to effect a sale, lease, or other
disposition of Collateral, Lender shall have the right to hold or use
Collateral, or any part thereof, to the extent that it deems appropriate for the
purpose of preserving Collateral or its value or for any other purpose deemed
appropriate by Lender. Lender shall have no obligation to any Grantor to
maintain or preserve the rights of such Grantor as against third parties with
respect to Collateral while Collateral is in the possession of Lender. Lender
may, if it so elects, seek the appointment of a receiver or keeper to take
possession of Collateral and to enforce any of Lender’s remedies (for the
benefit of Lender), with respect to such appointment without prior notice or
hearing as to such appointment. Lender shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale to the Secured
Obligations, and only after so paying over such net proceeds, and after the
payment by Lender of any other amount required by any provision of law, need
Lender account for the surplus, if any, to any Grantor. To the maximum extent
permitted by applicable law, each Grantor waives all claims, damages, and
demands against Lender arising out of the repossession, retention or sale of the
Collateral except such as arise solely out of the gross negligence or willful
misconduct of Lender as finally determined by a court of competent jurisdiction.
Each Grantor agrees that ten (10) days prior notice by Lender of the time and
place of any public sale or of the time after which a private sale may take
place is reasonable notification of such matters. Grantors shall remain liable
for any deficiency if the proceeds of any sale or disposition of the Collateral
are insufficient to pay all Secured Obligations, including any attorneys’ fees
and other expenses incurred by Lender to collect such deficiency.

13

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(b)

Except as otherwise specifically provided herein, each Grantor hereby waives
presentment, demand, protest or any notice (to the maximum extent permitted by
applicable law) of any kind in connection with this Security Agreement or any
Collateral.

(c)

To the extent that applicable law imposes duties on the Lender to exercise
remedies in a commercially reasonable manner, each Grantor acknowledges and
agrees that it is not commercially unreasonable for the Lender (i) to fail to
incur expenses reasonably deemed significant by the Lender to prepare Collateral
for disposition or otherwise to complete raw material or work in process into
finished goods or other finished products for disposition, (ii) to fail to
obtain third party consents for access to Collateral to be disposed of, or to
obtain or, if not required by other law, to fail to obtain governmental or third
party consents for the collection or disposition of Collateral to be collected
or disposed of, (iii) to fail to exercise collection remedies against Account
Debtors or other Persons obligated on Collateral or to remove Liens on or any
adverse claims against Collateral, (iv) to exercise collection remedies against
Account Debtors and other Persons obligated on Collateral directly or through
the use of collection agencies and other collection specialists, (v) to
advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (vi) to
contact other Persons, whether or not in the same business as the Grantor, for
expressions of interest in acquiring all or any portion of such Collateral,
(vii) to hire one or more professional auctioneers to assist in the disposition
of Collateral, whether or not the Collateral is of a specialized nature, (viii)
to dispose of Collateral by utilizing internet sites that provide for the
auction of assets of the types included in the Collateral or that have the
reasonable capacity of doing so, or that match buyers and sellers of assets,
(ix) to dispose of assets in wholesale rather than retail markets, (x) to
disclaim disposition warranties, such as title, possession or quiet enjoyment,
(xi) to purchase insurance or credit enhancements to insure the Lender against
risks of loss, collection or disposition of Collateral or to provide to the
Lender a guaranteed return from the collection or disposition of Collateral, or
(xii) to the extent deemed appropriate by the Lender, to obtain the services of
other brokers, investment bankers, consultants and other professionals to assist
the Lender in the collection or disposition of any of the Collateral. Each
Grantor acknowledges that the purpose of this Section 7(c) is to provide
non-exhaustive indications of what actions or omissions by the Lender would not
be commercially unreasonable in the Lender's exercise of remedies against the
Collateral and that other actions or omissions by the Lender shall not be deemed
commercially unreasonable solely on account of not being indicated in this
Section 7(c). Without limitation upon the foregoing, nothing contained in this
Section 7(c) shall be construed to grant any rights to any Grantor or to impose
any duties on Lender that would not have been granted or imposed by this
Security Agreement or by applicable law in the absence of this Section 7(c).

(d)

Lender shall not be required to make any demand upon, or pursue or exhaust any
of their rights or remedies against, any Grantor, any other obligor, guarantor,
pledgor or any other Person with respect to the payment of the Secured
Obligations or to pursue or exhaust any of their rights or remedies with respect
to any Collateral therefor or any direct or indirect guarantee thereof. Lenders
shall not be required to marshal the Collateral or any guarantee of the Secured
Obligations or to resort to the Collateral or any such guarantee in any
particular order, and all of its and their rights hereunder or under the Loan
Agreement shall be cumulative. To the extent it may lawfully do so, each Grantor
absolutely and irrevocably waives and relinquishes the benefit and advantage of,
and covenants not to assert against Lender, any valuation, stay, appraisement,
extension, redemption or similar laws and any and all rights or defenses it may
have as a surety now or hereafter existing which, but for this provision, might
be applicable to the sale of any Collateral made under the judgment, order or
decree of any court, or privately under the power of sale conferred by this
Security Agreement, or otherwise.

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8.

GRANT OF LICENSE TO USE INTELLECTUAL PROPERTY COLLATERAL. For the purpose of
enabling Lender to exercise rights and remedies under Section 7 hereof
(including, without limiting the terms of Section 7 hereof, in order to take
possession of, hold, preserve, process, assemble, prepare for sale, market for
sale, sell or otherwise dispose of Collateral) at such time as Lender shall be
lawfully entitled to exercise such rights and remedies, each Grantor hereby
grants to Lender an irrevocable, nonexclusive license (exercisable without
payment of royalty or other compensation to such Grantor) to use, license or
sublicense any Intellectual Property now owned or hereafter acquired by such
Grantor, and wherever the same may be located, and including in such license
access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs used for the compilation or printout
thereof.

9.

LIMITATION ON LENDER'S DUTY IN RESPECT OF COLLATERAL. Lender shall use
reasonable care with respect to the Collateral in its possession or under its
control. Lender shall not have any other duty as to any Collateral in its
possession or control or in the possession or control of any agent or nominee of
Lender, or any income thereon or as to the preservation of rights against prior
parties or any other rights pertaining thereto.

10.

REINSTATEMENT. This Security Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against any Grantor
for liquidation or reorganization, should any Grantor become insolvent or make
an assignment for the benefit of any creditor or creditors or should a receiver
or trustee be appointed for all or any significant part of any Grantor's assets,
and shall continue to be effective or be reinstated, as the case may be, if at
any time payment and performance of the Secured Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the Secured Obligations,
whether as a "voidable preference," "fraudulent conveyance," or otherwise, all
as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Secured Obligations shall be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.

11.

NOTICES. Except as otherwise provided herein, whenever it is provided herein
that any notice, demand, request, consent, approval, declaration or other
communication shall or may be given to or served upon any of the parties by any
other party, or whenever any of the parties desires to give and serve upon any
other party any communication with respect to this Security Agreement, each such
notice, demand, request, consent, approval, declaration or other communication
shall be in writing and shall be given in the manner, and deemed received, as
provided for in the Loan Agreement.

12.

SEVERABILITY. Whenever possible, each provision of this Security Agreement shall
be interpreted in a manner as to be effective and valid under applicable law,
but if any provision of this Security Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Security Agreement. This Security
Agreement is to be read, construed and applied together with the Loan Agreement
which, taken together, set forth the complete understanding and agreement of
Lender and Grantors with respect to the matters referred to herein and therein.

13.

NO WAIVER; CUMULATIVE REMEDIES. Lender shall not by any act, delay, omission or
otherwise be deemed to have waived any of its rights or remedies hereunder, and
no waiver shall be valid unless in writing, signed by Lender and then only to
the extent therein set forth. A waiver

15

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by Lender of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which Lender would otherwise have had
on any future occasion. No failure to exercise nor any delay in exercising on
the part of Lender, any right, power or privilege hereunder, shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or future exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
hereunder provided are cumulative and may be exercised singly or concurrently,
and are not exclusive of any rights and remedies provided by law. None of the
terms or provisions of this Security Agreement may be waived, altered, modified
or amended except by an instrument in writing, duly executed by Lender and
Grantors.

14.

LIMITATION BY LAW. All rights, remedies and powers provided in this Security
Agreement may be exercised only to the extent that the exercise thereof does not
violate any applicable provision of law, and all the provisions of this Security
Agreement are intended to be subject to all applicable mandatory provisions of
law that may be controlling and to be limited to the extent necessary so that
they shall not render this Security Agreement invalid, unenforceable, in whole
or in part, or not entitled to be recorded, registered or filed under the
provisions of any applicable law.

15.

TERMINATION OF THIS SECURITY AGREEMENT. Subject to Section 10 hereof, this
Security Agreement shall terminate upon payment in full of the secured
Obligations.

16.

SUCCESSORS AND ASSIGNS. This Security Agreement and all obligations of Grantors
hereunder shall be binding upon the successors and assigns of each Grantor
(including any debtor-in-possession on behalf of such Grantor) and shall,
together with the rights and remedies of Lender, hereunder, inure to the benefit
of Lender, all future holders of any instrument evidencing any of the Secured
Obligations and their respective successors and assigns. No sales of
participations, other sales, assignments, transfers or other dispositions of any
agreement governing or instrument evidencing the Secured Obligations or any
portion thereof or interest therein shall in any manner affect the Lien granted
to Lender hereunder. No Grantor may assign, sell, hypothecate or otherwise
transfer any interest in or obligation under this Security Agreement.

17.

COUNTERPARTS. This Security Agreement may be executed in any number of separate
counterparts, each of which shall collectively and separately constitute one
agreement.

18.

GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN
DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS SECURITY AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL
BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE, AND
ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH GRANTOR HEREBY
CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY,
CITY OF NEW YORK, STATE OF NEW YORK, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR
AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN GRANTORS AND LENDER PERTAINING TO
THIS SECURITY AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER
ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS, PROVIDED, THAT LENDERS AND GRANTORS ACKNOWLEDGE THAT ANY APPEALS FROM
THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK COUNTY,

16

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AND, PROVIDED, FURTHER, NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE LENDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE SECURED
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF LENDER.
EACH GRANTOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN
ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH GRANTOR HEREBY WAIVES
ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF
SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH
GRANTOR HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL ADDRESSED TO SUCH GRANTOR AT THE ADDRESS SET FORTH ON SECTION 8.1 OF THE
LOAN AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE
EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S.
MAILS, PROPER POSTAGE PREPAID.

19.

WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX
FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT DISPUTES
ARISING HEREUNDER OR RELATING HERETO BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, AMONG LENDER AND GRANTORS
ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED IN CONNECTION WITH, THIS SECURITY AGREEMENT OR THE LOAN AGREEMENT.

20.

SECTION TITLES. The Section titles contained in this Security Agreement are and
shall be without substantive meaning or content of any kind whatsoever and are
not a part of the agreement between the parties hereto.

21.

NO STRICT CONSTRUCTION. The parties hereto have participated jointly in the
negotiation and drafting of this Security Agreement. In the event an ambiguity
or question of intent or interpretation arises, this Security Agreement shall be
construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Security Agreement.

22.

ADVICE OF COUNSEL. Each of the parties represents to each other party hereto
that it has discussed this Security Agreement and, specifically, the provisions
of Section 18 and Section 19, with its counsel.

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23.

BENEFIT OF LENDER. All Liens granted or contemplated hereby shall be for the
benefit of Lender, and all proceeds or payments realized from Collateral in
accordance herewith shall be applied to the Secured Obligations.

18

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IN WITNESS WHEREOF, each of the parties hereto has caused this Security
Agreement to be executed and delivered by its duly authorized officer as of the
date first set forth above.

 

PHONE1, INC.

 

By: /s/ Dario Echeverry

 

Name: Dario Echeverry

 

Title: Chief Executive Officer

    

PHONE1GLOBALWIDE, INC.

 

By: /s/ Dario Echeverry

 

Name: Dario Echeverry

 

Title: Chief Executive Officer

    

GLOBALTRON COMMUNICATIONS CORPORATION

 

By: /s/ Dario Echeverry

 

Name: Dario Echeverry

 

Title: Chief Executive Officer

    

GNB BANK PANAMA S.A.

 

By: /s/ Dario Echeverry

 

Name: Camilo Verastegui

 

Title: General Manager

19

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SCHEDULE I

TO

SECURITY AGREEMENT

FILING JURISDICTIONS

Offices and/or switches are located in:

New York

Florida

Costa Rica

Brazil

Headsets, advertising materials and eproms, and in certain cases, circuit
boards, are located in or proximate to phones placed by carriers with whom we do
business. These headsets, advertising materials and/or eproms are currently
placed in:

Arizona

California

Florida

Georgia

Illinois

Kentucky

Maryland

Massachusetts

Michigan

New York

North Carolina

Ohio

Utah

South Carolina

Tennessee

Texas

Virginia

Washington

West Virginia

Wisconsin

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SCHEDULE II

TO

SECURITY AGREEMENT

INSTRUMENTS, CHATTEL PAPER AND LETTER OF CREDIT RIGHTS

Instruments

Certificate of Deposit owned by Phone1 in the approximate amount of $13,200,
maintained on deposit with Eagle National Bank.

Chattel Paper

None.

Letters of Credit Rights

None.

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SCHEDULE III

TO

SECURITY AGREEMENT

SCHEDULE OF OFFICES, LOCATIONSOF COLLATERAL AND RECORDS CONCERNING COLLATERAL

Official Name of Grantor

Type of Entity

Organizational ID Number

State of Incorpor-ation

Chief Office and Principal Place of Business

Corporate Office

Warehouses

Other Premises at which Collateral Stored

Location of Records Concerning Collateral

         

Phone1, Inc.

Corp.

Unknown

Florida

100 N. Biscayne Blvd., Suite 2500, Miami, FL

100 N. Biscayne Blvd., Suite 2500, Miami, FL

None

*

100 N. Biscayne Blvd., Suite 2500, Miami, FL

         

Phone1Globalwide, Inc.

Corp.

Unknown

Delaware

100 N. Biscayne Blvd., Suite 2500, Miami, FL

100 N. Biscayne Blvd., Suite 2500, Miami, FL

None

None

100 N. Biscayne Blvd., Suite 2500, Miami, FL

         

Globaltron Communications Corporation

Corp.

Unknown

Delaware

100 N. Biscayne Blvd., Suite 2500, Miami, FL

100 N. Biscayne Blvd., Suite 2500, Miami, FL

None

60 Hudson Street, New York, NY

Brazil

Costa Rica

100 N. Biscayne Blvd., Suite 2500, Miami, FL

         

*

Switches, headsets, advertising materials and/or eproms, and in certain cases,
circuit boards, are located in or proximate to phones placed by carriers with
whom we do business. These headsets, advertising materials and eproms are
currently placed in:

Arizona

California

Florida

Costa Rica

Kentucky

Maryland

Massachusetts

Brazil

Michigan

New York

Ohio

Utah

West Virginia

Washington

Illinois

Virginia

South Carolina

Wisconsin

Georgia

Tennessee

Texas

North Carolina

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

SCHEDULE IV

TO

SECURITY AGREEMENT

PATENTS, TRADEMARKS AND COPYRIGHTS

Patents

"provisional" U.S. Patent Application Serial No. 60/367,539 that we filed on
behalf of Phone1, Inc. on March 25, 2002

Trademarks

1.

Phone 1 Globalwide, Inc.

 

None.

 

2.

Phone1, Inc.

 

  

U.S. Registration No. 2,602,991 for PHONE1

  

U.S. Application No. 76/251,479 for Phone1 & Design

  

U.S. Application No. 78/097,107 for PHONE1SMART

3.

Globaltron Communications Corporation

 

U.S. Registration No. 2,539,103 for GLOBALTRON

  

U.S. Registration No. 2,539,102 for GLOBALTRON COMMUNICATIONS

CORPORATION & Design

Copyrights

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

SCHEDULE V

TO

SECURITY AGREEMENT

VEHICLES

None.

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

EXHIBIT A

POWER OF ATTORNEY

This Power of Attorney is executed and delivered by ______________________, a
_____________________ corporation ("Grantor") to GNB Bank Panama S.A., a bank
organized under the laws of the Republic of Panama (hereinafter referred to as
"Attorney"), as Lender, under a Loan Agreement and a Security Agreement, both
dated as of September 30, 2002 (collectively, the "Loan Documents"). No person
to whom this Power of Attorney is presented, as authority for Attorney to take
any action or actions contemplated hereby, shall be required (including in
respect of clauses (d) and (e) in the next succeeding paragraph) to inquire into
or seek confirmation from Grantor as to the authority of Attorney to take any
action described below, or as to the existence of or fulfillment of any
condition to this Power of Attorney, which is intended to grant to Attorney
unconditionally the authority to take and perform the actions contemplated
herein, and Grantor irrevocable waives any right to commence any suit or action,
in law or equity, against any person or entity which acts in reliance upon or
acknowledges the authority granted under this Power of Attorney. The power of
attorney granted hereby is coupled with an interest, and may not be revoked or
canceled by Grantor without Attorney’s written consent.

Grantor hereby irrevocably constitutes and appoints Attorney (and all officers,
employees or agents designated by Attorney), with full power of substitution, as
Grantor’s true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of Grantor and in the name of Grantor or in its
own name, from time to time in Attorney’s discretion, to take any and all
appropriate action and to execute and deliver any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
the Loan Documents and, without limiting the generality of the foregoing,
Grantor hereby grants to Attorney the power and right, on behalf of Grantor,
without notice to or assent by Grantor, (other than in connection with a change
of address as specified in clause (a), as to which Attorney shall use
commercially reasonable efforts to give Grantor concurrent notice thereof
provided that failure to do so will not affect Attorney's rights hereunder, and
at any time, to do the following: (a) change the mailing address of Grantor,
open a post office box on behalf of Grantor, open mail for Grantor, and ask,
demand, collect, give acquittances and receipts for, take possession of, endorse
any invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, and notices in
connection with any property of Grantor; (b) effect any repairs to any asset of
Grantor, or continue or obtain any insurance and pay all or any part of the
premiums therefor and costs thereof, and make, settle and adjust all claims
under such policies of insurance, and make all determinations and decisions with
respect to such policies; (c) pay or discharge any taxes, liens, security
interests, or other encumbrances levied or placed on or threatened against
Grantor or its property; (d) defend any suit, action or proceeding brought
against Grantor if Grantor does not defend such suit, action or proceeding or if
Attorney believes that Grantor is not pursuing such defense in a manner that
will maximize the recovery to Attorney, and settle, compromise or adjust any
suit, action, or proceeding described above and, in connection therewith, give
such discharges or releases as Attorney may deem appropriate, provided that in
connection with the foregoing Attorney shall act in a manner consistent with the
terms of the Loan Documents to the extent explicitly covered thereby; (e) file
or prosecute any claim, litigation, suit or proceeding in any court of competent
jurisdiction or before any arbitrator, or take any other action otherwise deemed
appropriate by Attorney for the purpose of collecting any and all such moneys
due to Grantor whenever payable and to enforce any other right in respect of
Grantor’s property provided, in the case of any such claim, litigation, suit or
proceeding relating to product liability insurance Attorney shall act in a
manner consistent with the terms of the Loan Documents to the extent explicitly
covered thereby; (f) cause the certified public accountants then engaged by
Grantor to prepare and deliver to Attorney at any time and from time to time,
promptly upon Attorney’s request, the following reports: (1) a reconciliation of
all accounts, (2) an aging of all accounts, (3) trial balances, (4) test
verifications of such accounts as Attorney may request, and (5) the results of
each physical verification of inventory; (g) communicate in its own name with
any party to any Contract with regard to the assignment of the right, title and
interest of such Grantor in and under the Contracts and other matters relating
thereto; (h) to file such financing statements with respect to the Security
Agreement, with or without Grantor's signature, or to file a photocopy of the
Security Agreement in substitution for a financing statement, as the Lender may
deem appropriate and to execute in Grantor's name such financing statements and
amendments thereto and continuation statements which may require the Grantor's
signature; and (i) execute, in connection with any sale provided for in any Loan
Document, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral and to otherwise direct such sale or
resale, all as though Attorney were the absolute owner of the property of
Grantor for all purposes, and to do, at Attorney’s option and Grantor’s expense,
at any time or from time to time, all acts and other things that Attorney
reasonably deems necessary to perfect, preserve, or realize upon Grantor’s
property or assets and Attorney’s Liens thereon, all as fully and effectively as
Grantor might do. Grantor hereby ratifies, to the extent permitted by law, all
that said Attorney shall lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, this Power of Attorney is executed by Grantor, and Grantor
has caused its seal to be affixed pursuant to the authority of its board of
directors this _____________ day of ______________________.

[

GRANTOR

]

By:

Name:

Title:

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

NOTARY PUBLIC CERTIFICATE

On this _____ day of ______________, 2002, [officer's name] who is personally
known to me appeared before me in his/her capacity as the [title] of [Grantor]
("Grantor") and executed on behalf of Grantor the Power of Attorney in favor of
GNB Bank Panama S.A. to which this Certificate is attached.

 

 

Notary Public