SECOND AMENDMENT TO SECURITY AGREEMENT

         SECOND AMENDMENT TO SECURITY AGREEMENT ("Amendment") dated as of
November 15, 1996, by and among LYON CREDIT CORPORATION ("Secured Party"),
AMERICAN NETWORK EXCHANGE, INC. ("ANEI") and CRESCENT PUBLIC COMMUNICATIONS INC.
("Crescent" and ANEI are collectively herein, the "Borrower" ).

                                    RECITALS

         WHEREAS,  the undersigned are parties to a certain  Security  Agreement
No.  001  dated as of  October  4,  1995 (the  "Original  Security  Agreement"),
pursuant to which,  among other  things and  subject to the terms  thereof,  the
Borrower  granted  to  the  Secured  Party  a  first  security  interest  in the
Collateral  (as such term is defined in the Security  Agreement) for purposes of
securing  payment on that certain  Promissory Note, cated as of October 4, 1995,
in the original stated amount of $2,500,000.00  executed by Borrower and payable
to Secured Party ("First Note") and each promissory note made by the Borrower in
favor of the Secured  Party and all other  indebte!dness  of the Borrower to the
Secured Party; and

         WHEREAS,  Secured Party advanced further funds to Borrower  pursuant to
that  Promissory  Note,  dated as of December 28, 1995,  in the original  stated
principal  amount  of  $500,000.00  ("Second  Note").  In  connection  with this
additional  funding,  the parties  amended the  Original  Security  Agreement in
accordance with that Amendment to Security  Agreement,  dated as of December 28,
1995 ("First Amendment") and other related amendment and loan documents; and

         WHEREAS,  simultaneously  herewith,  Borrower is refinancing  the First
Note and Seconcl Note and receiving  additional funds under a new  Consolidated,
Renewed and Restated  Promissory Note in the original stated principal amount of
$7,000,000.00  executed  by  Borrower  in  favor  of  the  Secured  Party  (such
refinancing and additional  funding being sometimes  hereinafter  referred to as
the "Loan") and other related  amendment and loan  documents;  and in connection
therewith,  the undersigned  desire to amend the Original Security  Agreement as
amended by the First  Amendment to incorporate  therein  certain new conditions,
terms and additional collateral.

                                   AGREEMENTS

         NOW,  THEREFORE,  in  consideration of the foregoing and for other good
and  valuable  consideration,  the  receipt and  sufficiency  of which is hereby
acknowledged, the undersigned hereby agree as follows:

         1. The recitals set forth above are incorporated herein for all 
purposes.

         2. Except as otherwise  provided  herein,  all  capitalized  terms used
herein  without  definition  shall  have the  meanings  ascribed  to them in the
Security Agreement.  "Security Agreement" as used herein shall mean the Original
Security  Agreement  as  amended by the First  Amendment  and as amended by this
Amendment.



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         3. Schedule No. 1 to the Original Security Agreement was wholly 
restated and revised by Schedule No. 2 executed in connection with and as part
of the First Amendment. Schedule No. 2 is hereby wholly restated and replaced by
Schedule No. 3 attached hereto and incorporated herein for all purposes. It is
understood and agreed that only Schedule No. 3 shall serve as Collateral under
the Security Agreement.

         4. "Note" as used in the  Security  Agreement  shall  include,  without
limitation,  that certain  Consolidated,  Renewed and Restated  Promissory  Note
dated as of November  15,  1996,  in the  original  stated  principal  amount of
$7,000,000.00,  which note shall be  included,  without  limitation,  within the
Indebtedness secured by the Security Agreement.

         5. Clause (i) under Section 1 of the Security  Agreement which reads as
follows  "(i) each unit of  property  (such  unit,  an  "Item")  described  in a
Schedule in the form attached hereto as Exhibit "B" (a "Schedule") and each unit
of property constituting  Replacement Equipment as defined in Section 9 hereof,"
is replaced with the following:

                  (i) each unit of property  (such unit,  an "Item")  having the
                  location  and  phone  number  set  forth  on  and  as  further
                  described on Schedule No. 3 attached hereto  ("Schedule")  and
                  each Item  constituting  Replacement  Equipment  as defined in
                  Section  9  hereof  ("Item"  as used  herein  shall  mean  the
                  applicable pay telephone,  together with any telephone booths,
                  enclosures,  stations,  pedestals,  apparatus, circuit boards,
                  coin banks and any other equipment  physically connected to or
                  installed in or with such telephones  located at the addresses
                  set forth on the Schedule),

         6. Section 5 of the Security Agreement is hereby amended to read in its
entirety as follows:

                  5. Liens:  Borrower shall keep the  Collateral  free and clear
                  from all liens,  charges,  encumbrances and security interests
                  of any kind  ("Liens"),  except  for (i) the  Lien of  Secured
                  Party, as provided in this Security Agreement,  (ii) Liens for
                  taxes  either not yet due or being  contested  by  Crescent in
                  good faith with due diligence and by appropriate  proceedings,
                  so long as such  proceedings do not, in the opinion of Secured
                  Party, involve any material danger of sale, forfeiture or loss
                  of Collateral or any part thereof or title thereto or interest
                  therein,   and  (iii)  inchoate   materialmen's,   mechanics',
                  workmen's, repairmen's,  employees', carriers', warehousemen's
                  or other like Liens arising in the ordinary course of business
                  of  Crescent  and  not   delinquent   and  Crescent  shall  be
                  maintaining adequate reserves therefor. No additional Liens on
                  the Collateral shall be permitted for the benefit of any third
                  party or in connection  with any other third party  financing.
                  Secured  Party shall,  at its own cost and  expense,  promptly
                  take such action as may be  necessary  to  discharge  duly all
                  Secured  Party's Liens upon full payment and  satisfaction  of
                  all  Indebtedness.  Secured Party expressly  acknowledges  and
                  agrees that for purposes of this Security Agreement  including
                  but not  limited  to the  provisions  of this  Section  5, the
                  Collateral   consists  only  of  3500  Items  and   associated
                  Contracts, Proceeds and Additions as more fully defined and

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                  described in Section 1 hereof and the Schedule dated as of 
                  even date herewith attached hereto as Schedule No. 3.

         7. The references to "1866" appearing in clause (a) of Section 6 and 
clause (a) of Section 9 of the Security Agreement are hereby amended to read 
"3500."

         8.  Clause (x) of Section 17 of the Security Agreement is hereby 
revised to read as follows:

         (x) the  related  Contracts  for at least 3500 of the Items have terms,
         including  automatic  renewals  thereof,  of at least sixty (60) months
         from the date hereof;

         9.   The following phrase is hereby deleted from Section 17 (v) "except
as otherwise provided in Section 5 hereof."

         10.  Clause  (viii) of Section 17 of the  Security  Agreement is hereby
revised to read as follows:

         (viii) each of the Contracts  is, by its terms,  assignable by Crescent
         (except  for  Contracts  covering  approximately  65  Items  which  are
         maintained in hospitals,  which  assignments are subject to the consent
         of such hospitals and subject to applicable laws and regulations),  and
         no Contract  provides for any claim (other than a claim for non-payment
         of commissions  due thereunder) or lien by the owner of the premises on
         which any Item is located on any such Item,  and each  Contract  (other
         than 2 of the Contracts)  allows Crescent to remove the Collateral from
         the premises  whenever Crescent or its assigns feels it is necessary to
         do so to prevent the deterioration of the Collateral  without liability
         or accountability to such owner;

         11. The Security Agreement is hereby amended by adding Sections 22, 23,
24,  25,  26,  27  and  28 as  set  forth  below  (currently  Section  21 is the
Miscellaneous  Section  as the prior  Section 21  "Release  of  Collateral"  was
deleted in the First Amendment):

                  22.  Earnest  Money Fee.  Borrower  paid a refundable  earnest
                  money  fee  (the  "EMF")  in the  amount  of  $70,000.00  upon
                  Borrower's execution of the proposal to make the Loan. The EMF
                  shall be returned  to  Borrower  within 30 days after the Loan
                  proceeds  have been  funded  to  Borrower  (less any  Expenses
                  incurred by Secured Party in connection with making the Loan).
                  Expenses as used in this Section 22 shall include,  but not be
                  limited to, all costs of  recording  of liens,  UCC  searches,
                  reasonable   attorneys'   fees   and   expenses,   appraisals,
                  reasonable  travel  expenses  and  other  fees  incidental  to
                  closing  of the Loan.  In the event the Loan  should not close
                  due to rejection by Borrower  and/or its parent company of the
                  financing  contemplated  hereunder,  Borrower acknowledges and
                  agrees that the EMF was fully earned by Secured  Party and was
                  not contingent  upon the execution of the Second  Amendment to
                  Security Agreement or the making of any advance thereunder.

                  

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<PAGE>

                  23. Prepayment Fee: Loan Fee. Concurrently with the execution 
                  of the Agreement, Borrower shall pay a non-refundable fee 
                  ("Fee") in the amount of Seventy Thousand
                  and No/100 Dollars  ($70,000.00)  to Secured  Party.  Borrower
                  acknowledges  and agrees  that the Fee was fully  earned  upon
                  Borrower's  execution  of this  Agreement,  and  shall  not be
                  subject to  proration or rebate upon the  termination  of this
                  Agreement  or repayment of the Loan. A portion of the Fee, the
                  calculation of which shall be determined by Secured Party,  is
                  payable to Secured  Party in  connection  with the  prepayment
                  premium  due to Secured  Party under the First Note and Second
                  Note.  The  remainder  of the Fee shall be  payment to Secured
                  Party as  consideration  for  making  the loan and shall  also
                  compensate  Secured  Party  for the cost  associated  with the
                  origination, structuring, processing, approving and closing of
                  the  transactions  contemplated  herein,  including,  but  not
                  limited to,  Secured  Party's  administrative,  out-of-pocket,
                  general overhead and lost opportunity costs, but not including
                  any  expenses  for which  Borrower  has  agreed  to  reimburse
                  Secured Party pursuant to this Security Agreement .

                  24. Right to Participate.  Borrower  acknowledges  that it has
                  been informed that Secured Party intends to sell participation
                  interests in the Indebtedness to other financial institutions.
                  To  the  extent  that  any  such   participants   should  find
                  typographical,   word  processing  or  other  similar  errors,
                  Borrower agrees to correct such matters.

                  25.  No  Additional  Debt  on  Coastal  Transaction.   Without
                  limiting Borrower's rights to use any non-Collateral  property
                  for  security  for  new  debt  for  future   acquisitions   or
                  otherwise,  Borrower  agrees and  represents  and  warrants to
                  Secured Party that no additional debt,  whether through seller
                  financing,  third  party  financing,  or  whether  secured  or
                  unsecured,  shall be entered  into or incurred  in  connection
                  with the  purchase of the assets of Coastal  Telecom  Payphone
                  Company,  Inc.,  BEK Tel,  Inc.,  and Garden  State  Telephone
                  Installation  & Service Co., Inc. as  originally  set forth in
                  that certain Asset Purchase Agreement, dated as of November 8,
                  1996.

                  26. Inadvertent  Replacement.  Without limiting or waiving any
                  of  the  other  affirmative  obligations  of  Borrower  as  to
                  maintaining  the Collateral  herein,  Borrower agrees that the
                  Items of Collateral  hereunder shall be maintained at the 3500
                  level and should  Borrower  have been  mistaken  (such mistake
                  must be  inadvertent  and in good faith) as to the term of, or
                  automatic  renewals of, any of the  Contracts  causing such to
                  terminate  prior to the maturity of the Note,  Borrower  shall
                  within ten (10) Business Days of such  termination  cause such
                  to be  replaced  in  accordance  with  Section  9 (c) of  this
                  Security Agreement.

                  27. Copies of Contracts. Borrower represents and warrants that
                  it has  available  in its  files the  Contracts  and that such
                  shall be held in trust by Borrower  for the benefit of Secured
                  Party.  Borrower  agrees  that within ten (10)  business  days
                  after request by Secured  Party after an Event of Default,  it
                  shall provide the Contracts to Secured Party.

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                  28.  Cash  Flow  Ratio.  AMNEX,  INC.  is a  guarantor  of the
                  Indebtedness and parent company to each corporation comprising
                  Borrower.  As a  condition  and  inducement  to Secured  Party
                  refinancing  and  providing   additional  funds  to  Borrower,
                  Borrower  agrees  that  it  shall  be  a  covenant   hereunder
                  applicable to Borrower that AMNEX,  Inc.  maintain a Cash Flow
                  Ratio  (as  hereafter  defined)  of not less than 1.25 to 1.0.
                  Borrower shall provide annual  certifications to Secured Party
                  (such  shall  be  delivered  along  with  the  annual  reports
                  provided  under  Section 8 (iv)).  "Cash  Flow  Ratio" as used
                  herein is  derived  by  dividing  Net Cash Flow (as  hereafter
                  defined)  by  Current  Maturities  of Long Debt (as  hereafter
                  defined).  "Net Cash Flow" shall mean the sum of net after tax
                  income (but excluding any  condemnation or insurance  proceeds
                  payable), depreciation, and amortization of intangible assets.
                  "Current  Maturities  of Long Term Debt" shall mean the sum of
                  the  current  portion  of long  term debt and  capital  leases
                  payable in the twelve months following the fiscal year end.

         12. Borrower  remakes its  representations  and warranties set forth in
the  Security  Agreement  as of the date of this  Amendment  and  reaffirms  and
remakes all of its covenants and agreements as of the date of this Amendment.

         13. Secured Party agrees within thirty (30) days after funding the Loan
to type  legends on the First Note and Second Note  stating  that such have been
consolidated,  renewed and  restated in the  Consolidated,  Renewed and Restated
Note, dated as of November 15, 1996 and to provide a copy of same to Borrower or
AMNEX, Inc. but the First Note and Second Note shall be, as so marked,  retained
by Secured  Party  until the Loan shall  have been paid in full.  Secured  Party
intends to file new UCC-1s in connection  with the Loan and agrees after receipt
of the  recorded new UCC-1s to file UCC  terminations  as to the UCC-1s filed in
connection with Original Security Agreement and the First Amendment.

         14. Except as expressly amended herein, the terms and conditions of the
Security  Agreement  shall  remain in full  force and effect  without  waiver or
modification of the rights of any party thereto.

      15. This  Amendment may be executed in any number of  counterparts  and by
different  parties  hereto  on  separate  counterparts  each of  which,  when so
executed and delivered,  shall be an original,  and all such counterparts  shall
together constitute one of the same instrument.

                 [THE REMAINDER OF PAGE IS INTENTIONALLY BLANK]



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         IN WITNESS  WHEREOF,  each of the parties hereto has caused this Second
Amendment  to  Security  Agreement  to be  executed  on its behalf by an officer
thereunto duly authorized as of the date first above written.

BORROWER:

CRESCENT PUBLIC COMMUNICATIONS INC.


By:/s/
     Kenneth G. Baritz, Chairman


ATTEST:/s/
          Renee A. Brandner, Secretary


AMERICAN NETWORK EXCHANGE, INC.,


By: /s/
        Kenneth G. Baritz, Chairman



ATTEST:/s/
         Amy S. Gross, Secretary


SECURED PARTY:

LYON CREDIT CORPORATION


By:/s/
Printed Name:Randall C. House
Title:VP/Division Manager



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                                 Schedule No, 3
                              to Security Agreement


                      SCHEDULE NO. 3 TO SECURITY AGREEMENT



Description of Collateral:    3500 Pay Telephones as outlined on Schedule "A"
                              attached hereto and made a part hereof.

Cost of Collateral:           $7,000,000.00

Collateral be located at:     See Schedule "A" attached hereto and made a part
                              hereof.


      Reference is rnade to that certain Security Agreernent No. 001, dated as 
of October 4, 1995, as amended by that certain Amendment to Security Agreement,
dated as of December 28, 1995 and that certain Second Amendment to Security
Agreement, dated as of November 15, 1996 (as it may be modified or amended, now
or hereafter, called the "Security Agreement") between Lyon Credit Corporation
("Secured Party") and American Network Exchange, Inc. and Crescent Public
Communications Inc. ("Borrower").

     All of the terms and  provisions  of the  Security  Agreernent  are  hereby
incorporated by reference into and made part of this Schedule to the same extent
as if fully set forth  herein.  Borrower  and Secured  Party  hereby agree to be
bound by the terms and  provisions,  and hereby make,  as if made as of the date
hereof, the representations  and warranties  contained in the Security Agreement
as each relates to the Collateral described above.



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     IN WITNESS  WHEREOF,  the parties  hereto have executed this Schedule as of
the 15th day of November, 1996.

                                             AMERICAN NETWORK EXCHANGE, INC.,
                                             as Borrower

Attest: /s/                                  By:/s/
Printed Name: Amy S. Gross                      Kenneth G. Baritz
Title: Secretary

                                             CRESCENT PUBLIC COMMUNICATIONS INC.
                                             as Borrower

Attest:/s/                                   By:/s/
Printed Name: Renee A. Brandner                 Kenneth G. Baritz, Chairman
Title:Secretary

LYON CREDIT CORPORATION
as Secured Party

By:/s/
Title: V.P. Division Manager

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                                   SCHEDULE A

Reference is made to that certain Security Agreement No. 001 dated as of October
4, 1995 as amended by the Amendment to Security Agreement,  dated as of December
28, 1995, and Second Amendment to Security  Agreement,  dated as of November 15,
1996  (collectively,   the  "Security  Agreement")  by  and  among  Lyon  Credit
Corporation (together with its successors and assigns, if any, "Secured Party"),
American Network Exchange, Inc. ("ANEI") and Crescent Public Communications Inc.
("Crescent",  and  collectively  with ANEI, the  "Borrower"),  pursuant to which
Borrower granted and conveyed to Secured Party a first security interest in, and
mortgaged and collaterally  assigned to Secured Party, (i) each unit of property
(such unit, an "Item")  having the location and phone number set forth on and as
further  described on Attachment 1 attached  hereto  ("Schedule")  and each Item
constituting  Replacement  Equipment  as defined  in  Section 9 of the  Security
Agreement  ("Item" as used  herein  shall  mean the  applicable  pay  telephone,
together with any telephone booths, enclosures,  stations, pedestals, apparatus,
circuit boards,  coin banks and any other equipment  physically  connected to or
installed in or with such  telephones  located at the addresses set forth on the
Schedule),  (ii) each Pay Telephone  Location Agreement between Crescent and the
owner or lessee of any location on which any Item may be located,  and (iii) all
products and proceeds of each Item,  if any,  which  Crescent may be entitled to
receive, i.e., excluding any and all non-coin revenues but including commissions
receivable on non-coin  revenues and any coin revenues derived from an Item, all
additions,  attachments,  accessories  and  accessions  thereto  and any and all
substitutions,  replacements  or exchanges  thereto,  and any and all  insurance
proceeds  thereof,  including,  but not limited  to,  every  permitted  lease or
sublease,  however  designated,  covering all or any part  thereof,  (all of the
foregoing hereinafter collectively called the "Collateral").


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