<PAGE>

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

             This SECURITY AGREEMENT is made and entered into as of this 28th
day of October, 1997, by and among FIRST UNION NATIONAL BANK, successor to First
Fidelity Bank, N.A., a national banking association with offices at 123 South
Broad Street, Philadelphia, PA 19109 (the "Secured Party"), CENTRAL SPRINKLER
COMPANY, a Pennsylvania corporation with offices located at 451 Cannon Avenue,
Lansdale, PA 19446 ("Borrower"), CENTRAL SPRINKLER CORPORATION, a Pennsylvania
corporation with offices located at 451 Cannon Avenue, Lansdale, PA 19446 (the
"Existing Guarantor") and CENTRAL SPRINKLER EXPORT CORPORATION, a Barbados
corporation with offices at 451 Cannon Avenue, Lansdale, PA 19446 (the "New
Guarantor," and, together with the Existing Guarantor, the "Guarantors"). The
Borrower and the Guarantors are referred to collectively herein as the
"Obligors."

                                   BACKGROUND
                                   ----------

             A. The Borrower, the Existing Guarantor and the Secured Party are
parties to a certain Loan Agreement dated as of April 15, 1994, which has been
amended from time to time (the "Loan Agreement"), including most recently
pursuant to a certain Fifth Amendment to Loan Agreement of even date herewith
(the "Fifth Amendment").

             B. The Secured Party is willing to enter into the Fifth Amendment
only on the condition that the Obligors execute and deliver this Security
Agreement to the Secured Party.

             C. Capitalized terms which are used herein without definition shall
have the meanings ascribed to them in the Loan Agreement. Other terms used
herein without definition that are defined in the Uniform Commercial Code, as
enacted in Pennsylvania and in effect on the date hereof (the "Uniform
Commercial Code") shall have the meanings ascribed to them therein, unless the
context requires otherwise.

             NOW, THEREFORE, incorporating the Background section herein, for
good and valuable consideration, the receipt and legal sufficiency of which is
hereby acknowledged and intending to be legally bound, the Obligors and the
Secured Party hereby agree as follows:

             Section 1. Creation of Security Interest. The Obligors hereby grant
to the Secured Party a lien and security interest in and to all of the following
personal property of the Obligors, whether now owned or hereafter acquired or
arising and wherever located, including but not limited to the following
("Collateral"):

                           (a) all accounts, accounts receivable, rights under
contracts, chattel paper, instruments, and all obligations due any of the
Obligors for goods sold or to be sold, consigned or leased or to be leased, or
services rendered or to be rendered ("Accounts");


                                      - 1 -

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                      (b) all inventory, whether raw materials, work-in-process,
finished goods, parts or supplies or otherwise; all goods, merchandise and other
property held for sale or lease or to be furnished under any contract of
service; all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and all
returned, reclaimed or repossessed goods sold, consigned, leased or otherwise
furnished by any of the Obligors to others ("Inventory");

                      (c) all machinery, equipment, furniture, fixtures, tools,
motor vehicles, and all accessories, parts and equipment now or hereafter
attached thereto or used in connection therewith, whether or not the same shall
be deemed affixed to real property, and all other tangible personal property
("Equipment");

                      (d) all additions, replacements, attachments, accretions,
accessions, components and substitutions to or for any Inventory or Equipment;

                      (e) all books and records evidencing or relating to the
foregoing, including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software and
related material, including computer programs, computer tapes, cards, disks and
printouts, and including any of the foregoing which are in the possession of any
affiliate or any computer service bureau;

                      (f) all proceeds, which term shall have the meaning given
to it in the Uniform Commercial Code and shall additionally include but not be
limited to, whatever is received upon the use, lease, sale, exchange, collection
or other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (e) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").

             Section 2.  Secured Obligations.  The security interest created 
herein is given as ecurity for the prompt payment, performance, satisfaction and
discharge of the following bligations ("Obligations") of the Obligors:

                      (a) To pay the principal, interest, commitment fees and
any other liabilities of the Obligors to the Secured Party under the Loan
Agreement and the other Loan Documents in accordance with the terms thereof;

                      (b) To repay the Secured Party all amounts advanced by the
Secured Party hereunder or under the other Loan Documents on behalf of any of
the Obligors, including, but without limitation, advances for principal or
interest payments to prior secured parties, mortgagors or lienors, or for taxes,
levies, insurance, rent, wages, repairs to or maintenance or storage of any
Collateral; and


                                      - 2 -


<PAGE>



                      (c) To reimburse the Secured Party, on demand, for all of
the Secured Party's expenses and costs, including the reasonable fees and
expenses of its counsel, in connection with the negotiation, preparation,
administration, amendment, modification, or enforcement of the Loan Agreement
and the other Loan Documents.

             Section 3. Representations and Warranties. Each Obligor, as of the
date hereof and at the time of each advance or extension of credit under the
Loan Agreement, represents and warrants as follows:

                      3.01 Good Title to Collateral. Each has good and
marketable title to the Collateral free and clear of all liens and encumbrances
other than the security interests granted to the Secured Party hereunder and
those liens and encumbrances set forth in Exhibit A to this Security Agreement.

                      3.02 Location of Books and Records. The locations of the
offices where each maintains its books and records concerning the Collateral are
as set forth in Exhibit B or at the location(s) hereafter disclosed to the
Secured Party pursuant to Section 5.10 hereof.

                      3.03 Chief Executive Office. The chief executive offices
of each are at the address set forth in Exhibit B or at the location(s)
hereafter disclosed to the Secured Party pursuant to Section 5.10 hereof

                      3.04 Location of Inventory and Equipment. All Inventory
and Equipment of each is located at one or more of the addresses set forth in
Exhibit B or at the location(s) hereafter disclosed to the Secured Party
pursuant to Section 5.10 hereof.

                      3.05 Other Representations. Each representation, warranty
or other statement by the Obligors in, or in connection with, any of the Loan
Documents is true and correct and states all material facts necessary to make it
not misleading.

             Section 4.  Collection, Disposition and Use of Collateral.

                      4.01 Accounts. The Secured Party hereby authorizes the
Obligors to collect all Accounts from the account debtors. The Proceeds of
Accounts so collected by the Obligors shall be received and held by the Obligors
in trust for the Secured Party but may be applied by the Obligors in their
discretion towards payment of the Obligations or other corporate purposes. Upon
the occurrence of a default as set forth in Section 7 hereof, the authority
hereby given to the Obligors to collect the Proceeds of Accounts in trust for
the Secured Party may be terminated by the Secured Party at any time and Secured
Party shall have the right at any time thereafter, acting if it so chooses in
any Obligor's name, to collect Accounts itself, to sell, assign, compromise,
discharge or extend the time for payment of any Account, and to do all acts and
things necessary or incidental thereto and the Obligors hereby ratify all such
acts. Upon the occurrence of a default as set forth in Section 7 hereof, at the
Secured Party's request, the Obligors will notify account debtors and any
guarantor thereof that the Accounts payable by

                                      - 3 -

<PAGE>



such account debtors have been assigned to the Secured Party and shall indicate
on all billings to account debtors that payments thereon are to be made to the
Secured Party.

                      4.02 Inventory. So long as there has been no default
hereunder, the Obligors shall be permitted to process and sell their Inventory,
but only to the extent that such processing and sale are conducted in the
ordinary course of the Obligors' business.

                      4.03 Equipment. So long as there has been no default
hereunder, the Obligors shall be permitted to use their Equipment in the
ordinary course of their respective businesses.

             Section 5.  Covenants and Agreements of the Obligors.

                      5.01 Maintenance and Inspection of Books and Records. The
Obligors shall maintain complete and accurate books and records and shall make
all necessary entries therein to reflect the costs, values and locations of
their Inventory and Equipment and the transactions and documents giving rise to
their Accounts and all payments, credits and adjustments thereto. The Obligors
shall keep the Secured Party fully informed as to the location of all such books
and records and shall permit the Secured Party and its authorized agents to have
full, complete and unrestricted access thereto at any reasonable time and to
inspect, audit and make copies of all books and records, data storage and
processing media, software, printouts, journals, orders, receipts, invoices,
correspondence and other documents and written or printed matter related to any
of the Collateral. The Secured Party's rights hereunder shall be enforceable at
law or in equity, and the Obligors consent to the entry of judicial orders or
injunctions enforcing specific performance of such obligations hereunder.

                      5.02 Confirmation of Accounts. The Obligors agree that the
Secured Party shall at all times have the right to confirm orders and to verify
any or all of each Obligor's Accounts in the Secured Party's name, or in any
fictitious name used by the Secured Party for verifications, or through any
public accountants.

                      5.03 Delivery of Accounts Documentation. At such intervals
as the Secured Party shall require, the Obligors shall deliver to the Secured
Party copies of purchase orders, invoices, contracts, shipping and delivery
receipts and any other document or instrument which evidences or gives rise to
an Account.

                      5.04 Physical Inspection of Inventory and Equipment. The
Obligors shall permit the Secured Party and its authorized agents to inspect any
or all of the Obligors' Inventory and Equipment at all reasonable times.

                      5.05 Notice of the Secured Party's Interests. If requested
by the Secured Party, the Obligors shall give notice of the Secured Party's
security interests in the Collateral to any third person with whom the Obligors
have any actual or prospective contractual relationship or other business
dealings.

                                      - 4 -


<PAGE>



                      5.06 Delivery of Certain Accounts and Documents to the
Secured Party. Immediately upon receipt of any instrument, chattel paper,
document of title (including bills of lading and warehouse receipts), the
Obligors shall deliver such Collateral to the Secured Party and shall execute
any form of assignment requested by the Secured Party with respect thereto. The
Obligors shall deliver to the Secured Party all such reports and certificates
reasonably requested by the Secured Party and all such reports and certificates
delivered or required to be delivered to CoreStates Bank, N.A. pursuant to the
same terms and at the same intervals as set forth in the terms and conditions of
the CoreStates Financing.

                      5.07 Accounts Agings. The Obligors shall furnish the
Secured Party with agings of their Accounts in such form and detail and at such
intervals as the Secured Party may from time to time require.

                      5.08 Government Accounts. The Obligors shall immediately
provide written notice to the Secured Party of any and all Accounts in excess of
one hundred thousand dollars ($100,000) which arise out of contracts with the
United States or any department, agency or instrumentality thereof, and shall
execute and deliver to the Secured Party an assignment of claims for such
Accounts and cooperate with the Secured Party in taking any other steps
required, in the Secured Party's judgment, to perfect or continue the perfected
status of the Secured Party's security interest in such Accounts and proceeds
thereof under the Federal Assignment of Claims Act.

                      5.09 Insurance of Collateral. The Obligors shall keep
their Inventory and Equipment insured against such perils, in such amounts and
with such insurance companies as the Secured Party may require. All insurance
policies shall name the Secured Party as lender loss payee as its interest may
appear and shall provide for not less than thirty (30) days' advance notice in
writing to the Secured Party of any cancellation thereof. The Secured Party
shall have the right (but shall be under no obligation) to pay any of the
premiums on such insurance. Any premiums paid by the Secured Party shall, if the
Secured Party so elects, be considered an advance at the highest rate of
interest provided in the Loan Agreement, and all such accrued interest shall be
payable on demand. Any credit insurance covering Accounts shall name the Secured
Party as loss payee. The Obligors expressly authorize their insurance carriers
to pay proceeds of all insurance policies covering any or all of the Collateral
directly to the Secured Party.

                      5.10 New Locations of Collateral and Books and Records.
The Obligors shall immediately notify the Secured Party of any change in the
location of their chief executive office, of any new or additional address where
their books and records concerning the Collateral are located and of any new
locations of Inventory or Equipment not specified in Sections 3.02, 3.03 or 3.04
of this Security Agreement, and if any such location is on leased or mortgaged
premises, use their best efforts to promptly furnish the Secured Party with
landlord's or mortgagee's waivers in form and substance satisfactory to the
Secured Party.


                                      - 5 -


<PAGE>



                      5.11 Perfection of the Secured Party's Interests. The
Obligors agree to cooperate and join, at its expense, with the Secured Party in
taking such steps as are necessary, in the Secured Party's judgment, to perfect
or continue the perfected status of the security interests granted hereunder,
including, without limitation, the execution and delivery of any financing
statements, amendments thereto and continuation statements, the delivery of
chattel paper, documents or instruments to the Secured Party, the obtaining of
landlords' and mortgagees' waivers required by the Secured Party, the notation
of encumbrances in favor of the Secured Party on certificates of title, and the
execution and filing of any collateral assignments and any other instruments
requested by the Secured Party to perfect its security interest in any and all
of the Obligors' patents, trademarks, service marks, tradenames, copyrights and
other general intangibles. The Secured Party is expressly authorized to file
financing statements without the Obligors' signature.

                      5.12 Maintenance of Inventory and Equipment. The Obligors
shall care for and preserve the Inventory and Equipment in good condition and
repair, and will pay the cost of all replacement parts, repairs to and
maintenance of the Equipment. The Obligors will keep complete and accurate
maintenance records with respect to its Equipment.

                      5.13 Notification of Adverse Change in Collateral. The
Obligors agree immediately to notify the Secured Party if a "material adverse
effect" has occurred by virtue of (a) the creation of an Account pursuant to a
sale under terms which differ materially from those customarily offered by the
Obligors; or (b) an account or any inventory losing its qualified status, if
any, or any material diminution in the value of any significant item or type of
Collateral. For purposes hereof, "material adverse effect" shall mean relative
to any occurrence of whatever nature, a material adverse effect on (a) the
assets, operations, profits, financial condition, or business of the Obligors
taken as whole, (b) the ability of the Obligors taken as a whole to perform
their respective obligations under this Security Agreement or any of the other
Loan Documents, or (c) the validity or enforceability of this Security
Agreement, any of the other Loan Documents, or any of the rights and remedies of
the Secured Party hereunder or thereunder.

                      5.14 Reimbursement and Indemnification. The Obligors agree
to reimburse the Secured Party on demand for out-of-pocket expenses incurred in
connection with the Secured Party's exercise of its rights under this Security
Agreement. The Obligors agree to indemnify the Secured Party and hold it
harmless against any costs, expenses, losses, damages and liabilities (including
reasonable attorney's fees) incurred in connection with this Security Agreement,
other than as a direct result of the Secured Party's gross negligence or willful
misconduct.

             Section 6. Power of Attorney. The Obligors hereby appoint the
Secured Party as their lawful attorney-in-fact to do, at the Secured Party's
option, and at the Obligors' expense and liability, all acts and things which
the Secured Party may deem necessary or desirable to effectuate its rights under
this Security Agreement, including without limitation, (a) file financing
statements and otherwise perfect any security interest granted hereby, (b)
correspond and negotiate directly with insurance carriers, (c) upon the
occurrence of a default hereunder,

                                      - 6 -

<PAGE>



receive, open and dispose of in any reasonable manner all mail addressed to the
Obligors and notify Postal Service authorities to change the address for mail
addressed to the Obligors to an address designated by the Secured Party, (d)
upon the occurrence of a default hereunder, demand, collect and receive from
account debtors and other third parties for the purpose of recovering,
protecting or preserving the Collateral, and (e) upon the occurrence of a
default hereunder and acceleration of the Obligations, in the Obligors' or the
Secured Party's name, to compound, compromise, settle and give acquittance for,
and prosecute and discontinue or dismiss, with or without prejudice, any suit or
proceeding respecting any of the Collateral.

             Section 7.  Default.  The occurrence of any one or more of the 
following shall be a default hereunder:

                      7.01 Default Under Loan Agreement. The occurrence of an
Event of Default under the Loan Agreement or any of the Loan Documents.

                      7.02 Failure to Observe Covenants. The failure of the
Obligors to keep, observe or perform any provisions of this Security Agreement,
which failure is not cured and remedied within fifteen (15) days after written
notice thereof is given to the Obligors.

                      7.03 Representations, Warranties. If any representation,
warranty or certificate furnished by the Obligors under or in connection with
this Security Agreement shall, at any time, be materially false or incorrect.

             Section 8. Secured Party's Rights Upon Default. Upon the occurrence
of a default hereunder, or at any time thereafter, the Secured Party may
immediately and without notice do any or all of the following, which rights and
remedies are cumulative, may be exercised from time to time, and are in addition
to any rights and remedies available to the Secured Party under the Loan
Agreement or any other Loan Document:

                      8.01 Uniform Commercial Code Rights. Exercise any and all
of the rights and remedies of a secured party under the Uniform Commercial Code,
including the right to require the Obligors to assemble the Collateral and make
it available to the Secured Party at a place reasonably convenient to the
parties.

                      8.02 Operation of Collateral. Operate, utilize,
recondition and/or refurbish (at the Secured Party's sole option and discretion
and in any manner) any of the Collateral which is Equipment, for the purpose of
enhancing or preserving the value thereof or the value of any other Collateral.

                      8.03 Notification of Account Debtors. Notify the account
debtors for any of the Accounts that such Accounts have been assigned to the
Secured Party and that payments are to be made directly to the Secured Party, or
to such post office box as the Secured Party may direct. The Obligors shall not
compromise, discharge, extend the time for payment or otherwise

                                      - 7 -


<PAGE>



grant any indulgence or allowance with respect to any Account without the prior
written consent of the Secured Party.

                      8.04 Sale of Collateral. Upon five (5) calendar days'
prior written notice to the Obligors, which the Obligors hereby acknowledge to
be sufficient, commercially reasonable and proper, sell, lease or otherwise
dispose of any or all of the Collateral at any time and from time to time at
public or private sale, with or without advertisement thereof and apply the
proceeds of any such sale first to the Secured Party's expenses in preparing the
Collateral for sale (including reasonable attorneys' fees) and second to the
complete satisfaction of the Obligations. The Obligors waive the benefit of any
marshalling doctrine with respect to the Secured Party's exercise of its rights
hereunder.

             Section 9.  Notices.  Any written notices required or permitted by 
this Security Agreement shall be effective if delivered in accordance with the 
Loan Agreement.

             Section 10.  Miscellaneous.

                      10.01 No Waiver. No delay or omission by the Secured Party
in exercising any right or remedy hereunder shall operate as a waiver thereof or
of any other right or remedy, and no single or partial exercise thereof shall
preclude any further exercise thereof or the exercise of any other right or
remedy.

                      10.02 Preservation of Rights. The Secured Party shall have
no obligation or responsibility to take any steps to enforce or preserve rights
against any parties to any Account and such obligation and responsibility shall
be those of the Obligors exclusively.

                      10.03 Successors. The provisions of this Security
Agreement shall inure to the benefit of and be binding upon the Secured Party
and the Obligors and their respective successors and assigns, provided that the
Obligors' obligations hereunder may not be assigned without the written consent
of the Secured Party.

                      10.04 Amendments. No modification, rescission, waiver,
release or amendment of any provisions of this Security Agreement shall be
effective unless set forth in a written agreement signed by the Obligors and an
authorized officer of the Secured Party.

                      10.05 Governing Law. This Security Agreement shall be
construed under the internal laws of the Commonwealth of Pennsylvania without
reference to conflict of laws principles.

                      10.06 Severability. If any provision of this Security
Agreement shall be held invalid or unenforceable under applicable law in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of such provision in any other jurisdiction or the validity or
enforceability of any other provision of this Security Agreement that can be
given effect without such invalid or unenforceable provision.

                                      - 8 -


<PAGE>



                      10.07 Judicial Proceedings. Each party to this Agreement
agrees that any suit, action or proceeding, whether claim or counterclaim,
brought or instituted by any party hereto or any successor or assign of any
party, on or with respect to this Agreement or the dealings of the parties with
respect hereto, shall be tried only by a court and not by a jury. EACH PARTY
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY
JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. Further, each party waives any
right it may have to claim or recover, in any such suit, action or proceeding,
any special, exemplary, punitive or consequential damages or any damages other
than, or in addition to, actual damages. THE OBLIGORS ACKNOWLEDGE AND AGREE THAT
THIS PARAGRAPH IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND THAT THE
SECURED PARTY WOULD NOT ENTER INTO THE FIFTH AMENDMENT IF THE WAIVERS SET FORTH
IN THIS PARAGRAPH WERE NOT A PART OF THIS AGREEMENT.



                                      - 9 - 
<PAGE>




             IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be executed and delivered by their authorized officers the day and
year first above written.

ATTEST:                                CENTRAL SPRINKLER COMPANY


By: /s/ Jennifer R. Cemini             By: /s/ Albert T. Sabol
   -----------------------                ----------------------------
Name: Jennifer R. Cemini               Name: Albert T. Sabol
Title: Secretary                       Title: Executive Vice President

ATTEST:                                CENTRAL SPRINKLER CORPORATION


By: /s/ Jennifer R. Cemini             By: /s/ Albert T. Sabol
   -----------------------                ----------------------------
Name: Jennifer R. Cemini               Name: Albert T. Sabol
Title: Assistant Secretary             Title: Executive Vice President

ATTEST:                                CENTRAL SPRINKLER EXPORT
                                       CORPORATION


By: /s/ Jennifer R. Cemini             By: /s/ Albert T. Sabol
   -----------------------                ----------------------------
Name: Jennifer R. Cemini               Name: Albert T. Sabol
Title: Secretary                       Title: Executive Vice President

                                       FIRST UNION NATIONAL BANK


                                       By: /s/ Suzanne Storm
                                          -------------------------
                                       Name: Suzanne Storm
                                       Title: Senior Vice President


                                     - 10 -


<PAGE>



                                    EXHIBIT A
                                    ---------

Central Sprinkler Company:


1.  Mortgage Lien - CoreStates         Security Interest on
                                       451 North Cannon Avenue
                                       Lansdale, PA

2.  All Equipment and Warehouse Leases - contractually obliged to grant security
    interest to Landlord upon equipment and property held at warehouse if rents
    are unpaid.

3.  All Auto and Truck Leases - lien upon autos and trucks under lease.

4.  All Auto and Truck Loans - lien upon autos and trucks subject to loan.

5.  Lien of First Union National Bank ("First Union") in and to any property,
    credits, securities or monies of Central Sprinkler Company in the possession
    of First Union from time to time, as provided in Section 6.02 of the First
    Union Term Loan Agreement, upon event of default.

6.  Mortgage Lien - CoreStates         Security Interest on
                                       90 North Towamencin Street
                                       Lansdale, PA

7.  Cannon Financial Services - lien upon copiers under lease.

8.  AT&T Capital Corporation - lien upon one copier under lease.

9.  Pitney Bowes Credit Corp. - lien upon Pitney Bowes equipment under lease.

10. Deere Credit, Inc. - lien upon Manlift under lease.

11. Crown Credit Co. - lien upon Crown Lift trucks.

12. Orix Credit Alliance - lien upon equipment under lease.

13. Judgement Lien related to case #92-07079 and filed April 3, 1992 in the
    amount of $80,799.65.

<PAGE>

   CSC

   Lien of First Union in and to any property, credits, securities or monies of
   CSC in the possession of First Union from time to time, as provided in
   Section 5 of the Guaranty, dated April 5, 1994 of the First Union Term Loan
   Agreement, upon event of default.

   All Obligors

1. The liens and security interests created or permitted by the Security
   Agreements between CoreStates Bank, N.A. and Obligors, dated as of even date
   herewith.

2. Liens for taxes not yet payable or being contested in good faith by
   appropriate proceedings and for which adequate reserves have been provided on
   the books of the Obligors.

3. Mechanics', materialmen's, warehousemen's, carriers' or other like Liens
   arising in the ordinary course of business of the Borrowers or any
   Subsidiary, arising with respect to obligations which are not overdue for a
   period longer than thirty (30) days or which are being contested in good
   faith by appropriate proceedings, and for which adequate reserves have been
   provided on the books of the Obligors.

4. Deposits or pledges to secure the performance of bids, tenders, contracts,
   leases, public or statutory obligations, surety or appeal bonds or other
   deposits or pledges for purposes of a like general nature or given in the
   ordinary course of business by the Obligors.

5. Other encumbrances consisting of zoning restrictions, easements, restrictions
   on the use of real property or minor irregularities in the title thereto,
   which do not arise in connection with the borrowing of, or any obligation for
   the payment of, money and which, in the aggregate, do not materially detract
   from the value of the business, properties or assets of the Obligors.

6. Judgment and other similar Liens arising in connection with court
   proceedings, provided the execution or other enforcement of such Lien is
   effectively stayed and the claims secured thereby are being actively
   contested in good faith and by appropriate proceedings promptly initiated and
   diligently conducted and adequate reserves have been established with respect
   thereto.

7. Cash collateral provided by CPVC to Brown Brothers as security for the Brown
   Brothers Loan.

<PAGE>

                                    EXHIBIT B

Collateral Locations

Chief Executive Offices of Central Sprinkler Company, Central Sprinkler
Corporation and Central Sprinkler Export Corporation:

451 N. Cannon Avenue
Lansdale, PA 19446

Central Sprinkler Company Locations:

451 N. Cannon Avenue               7th Street
Lansdale, PA 19446                 Anniston, AL 36206

W. 2nd & Towamencin Avenue         2660 Old Gadsden Highway
Lansdale, PA 19446                 Anniston, AL 36206

245 Swancott Rd.
Madison, AL 35758

Regional Distribution Centers (Central Sprinkler Company):

Atlanta                            Los Angeles
3080 N. Lanier Parkway             3170 Nasa Street
Decatur, GA 30030                  Brea, CA 92621

Baltimore/Washington D.C.          Miami
8230-C Preston Court               1500 S.W. 5th Ct., Suite A
Jessup, MD 20794                   Pompano Beach, FL 33069

Boston                             Philadelphia
27R Doherty Avenue                 201 King Manor Road
Avon, MA 02322                     King of Prussia, PA 19406

Chicago                            Portland
85 O'Leary Drive                   7500 S.W. Tech Center Dr. Ste. 110
Bensenville, IL 60106              Tigard, OR 97223

Cleveland                          Salt Lake City
12400 Plaza Drive                  2915 S. West Temple
Parma, OH 44130                    Salt Lake City, UT 84115

<PAGE>

Regional Distribution Centers (continued):

Dallas                             San Francisco
1780 Hurd Drive                    2380 Lincoln Avenue
Irving, TX 75038                   Hayward, CA 94545

Greensboro                         Seattle
156 Industrial Avenue              19307 70th Avenue South
Greensboro, NC 27406               Kent, WA 98032


Glass Bulb Manufacturing:
Glinecke Glass Company
94 Walker Lane
Newtown, PA 18940

Contract Manufacturing (Steel Pipe):
Youngstown Tube
301 Andrews Avenue
Youngstown, OH 44505

Consignment of Inventory:
Atlantic American Fire Equipment Co.
121 Titus Avenue
Warrington, PA 18976