EXHIBIT 10.2

                               SECURITY AGREEMENT
                               ------------------

         SECURITY AGREEMENT, dated as of November 26, 2002 (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


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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).

         (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.

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         (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.

         (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


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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 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


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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 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


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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.

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         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, 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 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.

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            Lender acknowledges that it has previously been granted a first
     priority security interest in, and Lien upon, all of the above assets in
     connection with a loan agreement, dated September 30, 2002, with the same
     parties hereof.

            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 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


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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.

         (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.

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         (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
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.

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         (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.

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            (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.

            (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


                                       12
<PAGE>

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 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


                                       13
<PAGE>

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.

         (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


                                       14
<PAGE>

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.

         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


                                       15
<PAGE>

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.

                                       16
<PAGE>

         (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,

                                       17
<PAGE>

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.

         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


                                       18
<PAGE>

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 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


                                       19
<PAGE>

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,
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


                                       20
<PAGE>

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.

                                       21
<PAGE>

         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.

         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.

                                       22
<PAGE>

         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/ Syed Naqvi
                                   Name:  Syed Naqvi
                                   Title:  Chief Financial Officer


                                   PHONE1GLOBALWIDE, INC.



                                   By:  /s/ Syed Naqvi
                                   Name:  Syed Naqvi
                                   Title:  Chief Financial Officer


                                   GLOBALTRON COMMUNICATIONS CORPORATION



                                   By:  /s/ Syed Naqvi
                                   Name:  Syed Naqvi
                                   Title:  Chief Financial Officer


                                   GNB BANK PANAMA S.A.



                                   By:  /s/ Camilo Verastegui
                                   Name:  Camilo Verastegui
                                   Title:  General Manager



                                       23
<PAGE>

                                   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



<PAGE>


                                   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.


<PAGE>
                                  SCHEDULE III
                                       TO
                               SECURITY AGREEMENT
                               ------------------

  SCHEDULE OF OFFICES, LOCATIONSOF COLLATERAL AND RECORDS CONCERNING COLLATERAL

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
OFFICIAL NAME OF GRANTOR  TYPE OF     ORGANIZATIONAL      STATE OF        CHIEF OFFICE AND          CORPORATE OFFICE      WAREHOUSES
                           ENTITY        ID NUMBER      INCORPORATION   PRINCIPAL PLACE OF
                                                                              BUSINESS
------------------------------------------------------------------------------------------------------------------------------------
<S>                       <C>        <C>                <C>           <C>                       <C>                       <C>
Phone1, Inc.              Corp.      Unknown            Florida       100 N. Biscayne Blvd.,    100 N. Biscayne Blvd.,    None
                                                                      Suite 2500, Miami, FL     Suite 2500, Miami, FL
------------------------------------------------------------------------------------------------------------------------------------
Phone1Globalwide, Inc.    Corp.      Unknown            Delaware      100 N. Biscayne Blvd.,    100 N. Biscayne Blvd.,    None
                                                                      Suite 2500, Miami, FL     Suite 2500, Miami, FL
------------------------------------------------------------------------------------------------------------------------------------
Globaltron                Corp.      Unknown            Delaware      100 N. Biscayne Blvd.,    100 N. Biscayne Blvd.,    None
Communications                                                        Suite 2500, Miami, FL     Suite 2500, Miami, FL
Corporation



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

[RESTUB]

<CAPTION>
-------------------------------------------
 OTHER PREMISES AT     LOCATION OF RECORDS
  WHICH COLLATERAL    CONCERNING COLLATERAL
       STORED
-------------------------------------------
 <S>                 <C>
 *                   100 N. Biscayne Blvd.,
                     Suite 2500, Miami, FL
-------------------------------------------
 None                100 N. Biscayne Blvd.,
                     Suite 2500, Miami, FL
-------------------------------------------
 60 Hudson Street,   100 N. Biscayne Blvd.,
 New York, NY        Suite 2500, Miami, FL

 Brazil

 Costa Rica
-------------------------------------------
</TABLE>


*        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


<PAGE>

                                   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
----------


<PAGE>



                                   SCHEDULE V
                                       TO
                               SECURITY AGREEMENT
                               ------------------

                                    VEHICLES



         None.







<PAGE>

                                    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


<PAGE>

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:
                                         -----------------------------


<PAGE>


                            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