Exhibit 10.2

                 FORM OF AMENDED AND RESTATED SECURITY AGREEMENT

                           Dated as of April 30, 2001

                                      FROM

        MEDIABAY, INC., RADIO SPIRITS, INC., AUDIO BOOK CLUB, INC., VIDEO
      YESTERYEAR, iNC., MEDIABAY.COM, INC., AUDIOBOOKCLUB.COM, INC., ABC-
         COA ACQUISITION CORP., MEDIABAY SERVICES, INC., ABC INVESTMENT
           CORP., MEDIABAY PUBLISHING, INC. AND RADIO CLASSICS, INC.

                                   as Grantors

                                       to

                             ING (U.S.) CAPITAL LLC,

                             as Administrative Agent

<PAGE>

<TABLE>
<CAPTION>
                             Table of Contents                                        Page
                             -----------------                                        ----
<S>          <C>                                                                        <C>
Section 1.   Grant of Security...........................................................2
Section 2.   Security for Obligations....................................................6
Section 3.   Grantors Remain Liable......................................................6
Section 4.   Delivery of Security Collateral and Account Collateral......................6
Section 5.   Maintaining the L/C Cash Collateral Account.................................7
Section 6.   Investing of Amounts in the L/C Cash Collateral Account.....................7
Section 7.   Release of Amounts..........................................................7
Section 8.   Representations and Warranties..............................................8
Section 9.   Further Assurances.........................................................10
Section 10.  As to Equipment and Inventory..............................................11
Section 11.  Insurance..................................................................11
Section 12.  Place of Perfection; Record; Collection of Receivables.....................12
Section 13.  Voting Rights; Dividends; Etc..............................................13
Section 14.  As to the Assigned Agreements..............................................15
Section 15.  Payments Under the Assigned Agreements.....................................16
Section 16.  Transfers and Other Liens; Additional Shares...............................16
Section 17.  Administrative Agent Appointed Attorney-in-Fact............................16
Section 18.  Administrative Agent May Perform...........................................17
Section 19.  Administrative Agent's Duties..............................................17
Section 20.  Remedies...................................................................17
Section 21.  Registration Rights; Private Sale..........................................18
Section 22.  Indemnity and Expenses.....................................................19
Section 23.  Security Interest Absolute.................................................20
Section 24.  Amendments; Waivers; Etc...................................................21
Section 25.  Addresses for Notices......................................................21
Section 26.  Continuing Security Interest; Assignments under the Credit Agreement.......21
Section 27.  Release and Termination....................................................22
Section 28.  Governing Law; Terms.......................................................22
Section 29.  JURISDICTION...............................................................23
Section 30.  WAIVER OF JURY TRIAL.......................................................23
Section 31.  Counterparts...............................................................24
Section 32.  Amendment and Restatement; Reaffirmation of Continuing Security............24
</TABLE>

                                    Schedules

                  Schedule I         Pledged Shares and Pledged Debt

                  Schedule II        Locations of Equipment and Inventory

                  Schedule III       Trade Names

<PAGE>

                                    Exhibits
                                    --------

                  Exhibit A          Form of Cash Collateral Account Letter

                  Exhibit B          Form of Consent and Agreement

                  Exhibit C          Form of Security Agreement Supplement


                                      -ii-
<PAGE>

                     AMENDED AND RESTATED SECURITY AGREEMENT

     AMENDED AND RESTATED  SECURITY  AGREEMENT (this  "Agreement"),  dated as of
April 30, 2001, by and among MediaBay, Inc., a Florida corporation ("MediaBay"),
Radio Spirits, Inc., a Delaware corporation ("Radio Spirits"),  Audio Book Club,
Inc., a Delaware  corporation ("Audio Book Club", and together with MediaBay and
Radio  Spirits,   the   "Borrowers"  and  each   individually,   a  "Borrower"),
MediaBay.com, Inc., a Delaware corporation ("MediaBay.com"),  AudioBookClub.com,
Inc., a Delaware corporation ("AudioBookClub.com"), ABC-COA Acquisition Corp., a
Delaware   corporation   ("ABC-COA"),   MediaBay  Services,   Inc.,  a  Delaware
corporation   ("MediaBay   Services"),   Video  Yesteryear,   Inc.,  a  Delaware
corporation ("Video  Yesteryear"),  ABC Investment Corp., a Delaware corporation
("ABC Investment"), Mediabay Publishing, Inc., a Delaware corporation ("MediaBay
Publishing")  and  Radio  Classics,   Inc.,  a  Delaware   corporation   ("Radio
Classics"),  the  Additional  Grantors (as defined in Section 24(c) hereof) (the
Additional    Grantors,    together    with   the    Borrowers,    MediaBay.com,
AudioBookClub.com, ABC-COA, MediaBay Services, Video Yesteryear, ABC Investment,
MediaBay Publishing,  and Radio Classics, the "Grantors") and ING (U.S.) Capital
LLC  ("ING"),  as  administrative  agent (in such  capacity,  together  with its
successors in such capacity, the "Administrative Agent") for the Secured Parties
(as defined in the Credit Agreement referred to below).

                             PRELIMINARY STATEMENTS

     (1) MediaBay has entered into a Credit Agreement,  dated as of December 31,
1998,  which Credit  Agreement is  contemporaneously  herewith being amended and
restated  in its  entirety  to  continue  in effect  pursuant  to an Amended and
Restated Credit Agreement dated as of even date herewith (said Agreement,  as it
may hereafter be amended, restated, supplemented, extended or otherwise modified
from time to time,  the "Credit  Agreement";  the terms defined  therein and not
otherwise defined herein being used herein as therein defined),  with the banks,
financial  institutions  and other  institutional  lenders  party  thereto  (the
"Lenders"),  and ING (U.S.)  Capital LLC, as Issuing Bank and as  Administrative
Agent.

     (2) Each Grantor is the owner of the shares (such shares being the "Pledged
Shares") set forth  opposite such  Grantor's name in Part I of Schedule I hereto
and  issued  by the  corporations  named  therein  and of the  indebtedness  for
borrowed  money (the "Pledged  Debt") set forth  opposite such Grantor's name in
Part II of Schedule I and issued by the obligors named therein.

     (3) If and when determined by the Administrative  Agent, the Administrative
Agent will open a non-interest  bearing cash  collateral  account (the "L/C Cash
Collateral  Account")  with Fleet  National Bank at its office at Fleet National
Bank,  One  Federal  Street,  Boston,  Massachusetts  02110,  (or at such  other
institution as may be acceptable to the  Administrative  Agent),  in the name of
the  Borrowers  but under the sole  control and  dominion of the  Administrative
Agent and subject to the terms of this Agreement.

<PAGE>

     (4) Each Grantor  other than the MediaBay is a  wholly-owned  Subsidiary of
MediaBay and will derive substantial  benefit from the Advances made to, and the
issuance of Letters of Credit on behalf of, the Borrowers.

     (5) It is a condition  precedent  to the Lenders'  making of Advances,  the
Issuing Bank's  issuing of Letters of Credit under the Credit  Agreement and the
Hedge Banks entering into Bank Hedge  Agreements with the Borrowers from time to
time that the Borrowers shall have granted the assignment and security  interest
and made the pledge and assignment contemplated by this Agreement.

     NOW, THEREFORE, in consideration of the premises and in order to induce the
Lenders to make Advances under the Credit  Agreement,  the Issuing Bank to issue
Letters of Credit under the Credit  Agreement  and the Hedge Banks to enter into
Bank Hedge Agreements with the Borrowers from time to time, each of the Grantors
hereby  agrees  with  the   Administrative   Agent,   for  the  benefit  of  the
Administrative Agent and the ratable benefit of the Secured Parties, as follows:

     Section  1 Grant of  Security.

     Each of the  Grantors  hereby  assigns  and  pledges to the  Administrative
Agent,  for the benefit of the  Administrative  Agent and the ratable benefit of
the Secured  Parties,  and hereby grants to the  Administrative  Agent,  for the
benefit of the  Administrative  Agent and the  ratable  benefit  of the  Secured
Parties, a security interest in the following (collectively, the "Collateral"):

     (a) all of such  Grantor's  machinery  and  equipment  in all of its forms,
whether now owned or hereafter  arising or acquired,  wherever  located,  now or
hereafter  existing,  all  fixtures  and all parts  thereof  and all  accessions
thereto  (any  and all such  equipment,  fixtures,  parts  and  accessions,  the
"Equipment");

     (b) all of such Grantor's inventory in all of its forms,  whether now owned
or hereafter arising or acquired,  wherever located,  now or hereafter  existing
(including,  without  limitation,  (i) raw materials  and work in process,  (ii)
finished  goods,  (iii)  materials  used  or  consumed  in  the  manufacture  or
production thereof,  (iv) goods in which such Grantor has an interest in mass or
a joint or other interest or right of any kind (including,  without  limitation,
goods in which such Grantor has an interest or right as consignee) and (v) goods
that  are  returned  to or  repossessed  by such  Grantor),  and all  accessions
thereto,  products  thereof and documents  therefor (any and all such inventory,
accessions, products and documents, the "Inventory");

     (c)  all of  such  Grantor's  accounts,  contract  rights,  chattel  paper,
instruments, deposit accounts and other claims of any kind, whether now owned or
hereafter arising or acquired, now or hereafter existing, whether or not arising
out of or in  connection  with the sale or  lease of goods or the  rendering  of
services,  and all  rights  now or  hereafter  existing  in and to all  security
agreements,  leases and other  contracts  securing or otherwise  relating to any
such accounts, contract rights, chattel paper, instruments,  deposit accounts or
claims, except that the Grantor shall not grant, for so long as such grant would
be prohibited by the terms of any such agreements,  leases or other contracts or
by applicable law, a security  interest in any such agreements,  leases or other
contracts with respect to which the grant of any security interest or collateral
assignment  contemplated  hereby is prohibited by its terms or by applicable law
(any


                                      -2-
<PAGE>

and all such accounts,  contract  rights,  chattel paper,  instruments,  deposit
accounts  and claims,  to the extent not  referred to in clause (d),  (e) or (f)
below, being the "Receivables", and any and all such leases, security agreements
and other contracts being the "Related Contracts");

     (d) all of such Grantor's right,  title and interest,  whether now existing
or  hereafter  arising  or  acquired,  in and to the  following  (the  "Security
Collateral"), without duplication:

          (i) the Pledged Shares and the  certificates  representing the Pledged
     Shares, including without limitation, the shares of capital stock of all of
     such Grantor's Subsidiaries,  and the certificates representing the Pledged
     Shares; provided,  however, that only 65% of the shares of capital stock of
     such Grantor's Foreign  Subsidiaries  shall be pledged,  and all dividends,
     cash, instruments and other property from time to time received, receivable
     or  otherwise  distributed  in respect of or in exchange  for any or all of
     such Pledged Shares;

          (ii) the Pledged Debt and the instruments evidencing the Pledged Debt,
     and all interest,  cash,  instruments  and other property from time to time
     received,  receivable or otherwise distributed in respect of or in exchange
     for any or all of the Pledged Debt;

          (iii)  all  additional  shares of stock of any  issuer of the  Pledged
     Shares from time to time acquired by such Grantor in any manner,  provided,
     however,  that only 65% of the  shares of capital  stock of such  Grantor's
     Foreign  Subsidiaries shall be pledged pursuant to this Agreement,  and the
     certificates representing such additional shares, and all dividends,  cash,
     instruments  and other property from time to time  received,  receivable or
     otherwise  distributed  in respect of or in exchange for any or all of such
     shares;

          (iv) all additional  indebtedness for borrowed money from time to time
     owed to such Grantor by any obligor of the Pledged Debt and the instruments
     evidencing such indebtedness, and all interest, cash, instruments and other
     property from time to time received, receivable or otherwise distributed in
     respect of or in exchange for any or all of such indebtedness;

          (v) all additional  "investment  property" (as defined in the UCC) now
     owned or hereafter arising or acquired by such Grantor  including,  without
     limitation,  (A) all securities,  whether  certificated or  uncertificated,
     including,   without  limitation,   stocks,  bonds,  interests  in  limited
     liability companies,  partnership  interests,  treasuries,  certificates of
     deposit,  and mutual fund  shares;  (B) all security  entitlements  of such
     Grantor including,  without  limitation,  the rights of such Grantor to any
     securities   account  and  the  financial   assets  held  by  a  securities
     intermediary  in such  securities  account and any free  credit  balance or
     other  money  owing by any  securities  intermediary  with  respect to that
     account;  (C)  all  securities  accounts  held  by  such  Grantor;  (D) all
     commodity  contracts held by such Grantor;  and (E) all commodity  accounts
     held by such Grantor.


                                      -3-
<PAGE>

     (e) each of the  agreements  to which such Grantor is now or may  hereafter
become a party,  and each Hedge  Agreement  to which such  Grantor is now or may
hereafter  become a  party,  in each  case as such  agreements  may be  amended,
restated or otherwise  modified from time to time, unless and for so long as the
Grantor is not  permitted  to grant a security  interest  therein or  collateral
assignment thereof (collectively, the "Assigned Agreements"), including, without
limitation,  (i) all rights of such Grantor to receive  moneys due and to become
due  under or  pursuant  to the  Assigned  Agreements,  (ii) all  rights of such
Grantor to receive  proceeds of any insurance,  indemnity,  warranty or guaranty
with  respect to the  Assigned  Agreements,  (iii)  claims of such  Grantor  for
damages  arising  out  of  or  for  breach  of or  default  under  the  Assigned
Agreements,  and (iv) the  right  of such  Grantor  to  terminate  the  Assigned
Agreements,  to  perform  thereunder  and to compel  performance  and  otherwise
exercise all  remedies  thereunder  (all such  Collateral  being the  "Agreement
Collateral");

     (f) all of such Grantor's right,  title and interest,  whether now existing
or hereafter  arising or acquired,  in and to the following  (collectively,  the
"Account Collateral"):

          (i) the L/C Cash  Collateral  Account,  all funds held therein and all
     certificates  and  instruments,  if any, from time to time  representing or
     evidencing the L/C Cash Collateral Account;

          (ii) all deposit accounts of such Grantor,  all funds held therein and
     all certificates and instruments, if any, from time to time representing or
     evidencing such deposit accounts;

          (iii) all Collateral Investments (as hereinafter defined) from time to
     time  and all  certificates  and  instruments,  if any,  from  time to time
     representing or evidencing the Collateral Investments;

          (iv) all notes,  certificates of deposit, deposit accounts, checks and
     other  instruments  from time to time  hereafter  delivered to or otherwise
     possessed by the  Administrative  Agent for or on behalf of such Grantor in
     substitution  for or in addition to any or all of the then existing Account
     Collateral; and

          (v) all interest, dividends, cash, instruments and other property from
     time to time received, receivable or otherwise distributed in respect of or
     in exchange for any or all of the then existing Account Collateral;

     (g) all of such Grantor's  corporate and business records,  customer lists,
credit  files,  computer  program  printouts  and other  computer  materials and
records;

     (h)  without  limitation  of any of the  foregoing,  all of such  Grantor's
general intangibles, including, without limitation,

          (i) all  choses in  action,  claims  and causes of action or rights of
     recovery or set-off of every kind and  character,  and the  goodwill of the
     business of such Grantor as a going concern;


                                      -4-
<PAGE>

          (ii) (A) all  rights of such  Grantor  to  receive  moneys  due and to
     become due under or pursuant to any general intangibles,  (B) all rights of
     such Grantor to receive proceeds of any insurance,  indemnity,  warranty or
     guaranty  with  respect  to any  general  intangibles,  (C)  claims of such
     Grantor  for damages  arising out of or for breach of or default  under any
     general  intangibles,  and (D) the right of such Grantor to  terminate  any
     general  intangibles,  to perform  thereunder and to compel performance and
     otherwise exercise all remedies thereunder;

          (iii) all of such  Grantor's  right,  title and interest,  whether now
     owned  or  hereafter   arising  or  acquired,   in  and  to  the  following
     (individually  a  "Copyright"  and  collectively,  "Copyrights"):  (A)  all
     copyrights and general  intangibles of like nature  (whether  registered or
     unregistered),  now owned or existing or hereafter adopted or acquired, 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 (B) all reissues, extensions or renewals
     thereof;

          (iv) all  rights of such  Grantor  now owned or  hereafter  arising or
     acquired  under  any and  all  agreements  granting  any  right  to use any
     Copyright;

          (v) all of such  Grantor's  right,  title and  interest,  whether  now
     existing  or  hereafter  arising  or  acquired,  in and  to  the  following
     (individually  a "Patent"  and  collectively,  "Patents"):  (A) all letters
     patent of the United States or any other  country,  all  registrations  and
     recordings  thereof,  and all applications for letters patent of the United
     States  or 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  Territory
     thereof,  or any  other  country,  and  (B)  all  reissues,  continuations,
     continuations-in-part or extensions thereof;

          (vi) all  rights of such  Grantor  now owned or  hereafter  arising or
     acquired  under any and all  agreements  granting any right with respect to
     any invention on which a Patent is in existence;

          (vii) all of such  Grantor's  right,  title and interest,  whether now
     existing  or  hereafter  arising  or  acquired,  in and  to  the  following
     (individually  a  "Trademark"  and  collectively,  "Trademarks"):  (A)  all
     trademarks,  trade names,  corporate names,  business names,  trade styles,
     service  marks,  logos,  other source or business


                                      -5-
<PAGE>

     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),  now owned or existing or hereafter adopted or
     acquired, 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; and (B) all reissues,
     extensions or renewals thereof; and

          (viii) all rights of such  Grantor now owned or  hereafter  arising or
     acquired  under all  agreements  granting any right to use any Trademark or
     Trademark registration.

     (i) all  proceeds of any and all of the  foregoing  Collateral  (including,
without limitation,  proceeds that constitute property of the types described in
clauses (a) - (h) of this Section 1) and, to the extent not otherwise  included,
all (i) payments under insurance (whether or not the Administrative Agent is the
loss payee thereof), or any indemnity,  warranty or guaranty,  payable by reason
of  loss  or  damage  to or  otherwise  with  respect  to any  of the  foregoing
Collateral and (ii) cash.

     Section 2. Security for Obligations.

     This Agreement  secures the payment of all  Obligations of each Grantor now
or hereafter existing under the Loan Documents, whether for principal, interest,
fees,   expenses  or  otherwise  (all  such   Obligations   being  the  "Secured
Obligations").  Without limiting the generality of the foregoing, this Agreement
secures  the  payment  of all  amounts  that  constitute  part  of  the  Secured
Obligations and would be owed by such Grantor to the Administrative Agent or the
Secured  Parties under the Loan Documents and the Bank Hedge  Agreements but for
the fact that they are  unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving such Grantor.

     Section  3.  Grantors  Remain  Liable.

     Anything  herein to the contrary  notwithstanding,  (a) each Grantor  shall
remain liable under the contracts and  agreements  included in the Collateral to
which it is a party to the extent set forth therein to perform all of its duties
and obligations  thereunder to the same extent as if this Agreement had not been
executed,  (b) the  exercise  by the  Administrative  Agent of any of the rights
hereunder  shall not release any Grantor  from any of its duties or  obligations
under the contracts and  agreements  included in the Collateral to which it is a
party and (c) neither the Administrative  Agent nor any Secured Party shall have
any obligation or liability  under the contracts and agreements  included in the
Collateral by reason of this Agreement,  nor shall the  Administrative  Agent or
any Secured  Party be obligated to perform any of the  obligations  or duties of
any Grantor under such  contracts and  agreements  included in the Collateral to
which it is a party or to take any action to  collect  or enforce  any claim for
payment assigned hereunder.

     Section 4.  Delivery of Security  Collateral  and Account  Collateral.

     All  certificates  or  instruments   representing  or  evidencing  Security
Collateral or Account  Collateral  (except  those  relating to cash accounts and
deposit instruments not required by the


                                      -6-
<PAGE>

Administrative  Agent to be delivered to the Administrative Agent on the Closing
Date (but which it retains the right to require)  shall be delivered to and held
by or on behalf of the  Administrative  Agent  pursuant  hereto  and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments  of  transfer  or  assignment  in blank,  all in form and  substance
satisfactory to the Administrative  Agent. The  Administrative  Agent shall have
the  right,  upon the  occurrence  and during  the  continuation  of an Event of
Default and on five (5) business days' notice to the  Borrowers,  to transfer to
or to register in the name of the  Administrative  Agent or any of its  nominees
any or all of the Security Collateral and the Account  Collateral,  subject only
to  the  revocable  rights   specified  in  Section  13(a).  In  addition,   the
Administrative  Agent shall have the right at any time to exchange  certificates
or  instruments  representing  or  evidencing  Security  Collateral  or  Account
Collateral for certificates or instruments of smaller or larger denominations.

     Section 5.  Maintaining  the L/C Cash  Collateral  Account.

     So long as any Advance shall remain  unpaid,  any Letter of Credit shall be
outstanding or any Lender shall have any Commitment  under the Credit  Agreement
or any Hedge Bank or any Loan Party shall have any  obligations  under any Hedge
Agreement:

          (a) The Borrowers will maintain the L/C Cash  Collateral  Account with
     Fleet (or such other  institution  as may be acceptable  to  Administrative
     Agent).

          (b) It  shall  be a term  and  condition  of the L/C  Cash  Collateral
     Account, notwithstanding any term or condition to the contrary in any other
     agreement  relating  to the L/C Cash  Collateral  Account  and,  except  as
     otherwise  provided by the  provisions of Section 7 and Section 20, that no
     amount  (including  interest on  Collateral  Investments)  shall be paid or
     released to or for the account of, or  withdrawn  by or for the account of,
     any Grantor or any other Person from the L/C Cash Collateral Account.

The L/C Cash Collateral  Account shall be subject to such  applicable  laws, and
such  applicable  regulations,  of the Board of Governors of the Federal Reserve
System and of any other appropriate  banking or governmental  authority,  as may
now or hereafter be in effect.

     Section 6.  Investing  of Amounts in the L/C Cash  Collateral  Account.

     If requested by the Borrowers,  the  Administrative  Agent will, subject to
the provisions of Section 7 and Section 20, from time to time invest (a) amounts
on deposit in the L/C Cash  Collateral  Account in such Cash  Equivalents as the
Borrowers may select,  in each case which  investments shall be made in the name
of the Administrative Agent on behalf of the Borrowers, and (b) interest paid on
the Cash  Equivalents  referred  to in clause  (a)  above,  and  reinvest  other
proceeds of any such Cash  Equivalents  that may mature or be sold, in each case
in such Cash  Equivalents  as the  Borrowers  may  select,  in each  case  which
investments shall be made in the name of the  Administrative  Agent on behalf of
the  Borrowers  (the Cash  Equivalents  referred to in clauses (a) and (b) above
being collectively "Collateral Investments"). Interest and proceeds that are not
invested or  reinvested  in Collateral  Investments  as provided  above shall be
deposited and held in the L/C Cash Collateral Account.

     Section 7. Release of Amounts.

     Upon the  drawing of any Letter of Credit for which funds are on deposit in
the L/C Cash Collateral Account, such funds shall be applied to


                                      -7-
<PAGE>

reimburse the Issuing Bank or the Revolving  Credit Lenders,  as applicable,  as
provided in the Credit Agreement.

     Section 8.  Representations  and  Warranties.

     Each Grantor represents and warrants as follows:

          (a) All of such Grantor's existing Equipment and Inventory are located
     at the places  specified for such Grantor on Schedule II hereto.  The chief
     place of business and chief executive office of such Grantor and the office
     where such Grantor keeps its records  concerning the  Receivables,  and, to
     the extent  possessed,  the original copies of each Assigned  Agreement and
     all originals of all chattel paper that evidence Receivables, are currently
     located  at the  address  specified  below the name of such  Grantor on the
     signature  pages  hereof (or in the case of any  Additional  Grantor at the
     address  specified  below  the  name  of  such  Additional  Grantor  on the
     signature page of the Security Agreement  Supplement (as defined in Section
     24(c))  executed and  delivered by such  Additional  Grantor).  None of the
     material  Receivables or Agreement  Collateral is evidenced by a promissory
     note or other instrument.

          (b) Such Grantor is the legal and  beneficial  owner of the Collateral
     pledged by such Grantor  hereunder  free and clear of any Lien,  except for
     security   interests   created  or  permitted   under  the  Loan  Documents
     (including,  without limitation,  any Liens disclosed on Schedule 6.1(c) to
     the Credit Agreement). No effective financing statement or other instrument
     similar in effect  covering all or any part of the Collateral is on file in
     any recording  office,  except such as may have been filed: (i) in favor of
     the Administrative Agent relating to this Agreement or (ii) with respect to
     Permitted Liens or as otherwise permitted pursuant to the Credit Agreement.

          (c) Set forth below on Schedule  III hereto is a complete and accurate
     list of (i) all names under which any Grantor is or has been doing business
     within the last five years (including, without limitation, all trade names,
     division names and fictitious names), (ii) all trade names that any Grantor
     owns or, if  applicable,  all  material  trade  names  that any  Grantor is
     licensed  to use  (including  the  expiration  date  of  such  license,  if
     applicable)  and (iii) all trade names that any Grantor has established the
     right to use  (collectively,  the "Trade  Names").  No Grantor  has changed
     within the past six  months  its name or  identity,  by  reorganization  or
     otherwise,  or its address set forth below the name of such  Grantor on the
     signature pages hereof or the Security  Agreement  Supplement  executed and
     delivered  by it, as the case may be,  except as set forth on Schedule  III
     hereto.

          (d) Except as set forth for each  Grantor on Schedule II hereto,  such
     Grantor has exclusive  possession and control of the existing Equipment and
     Inventory pledged by such Grantor hereunder.

          (e) The Pledged Shares owned by such Grantor have been duly authorized
     and  validly  issued  and are fully  paid and  non-assessable.  To the best
     knowledge of such  Grantor,  the Pledged Debt owed to such Grantor has been
     duly  authorized,  authenticated or issued and delivered and, is the legal,
     valid and binding obligation of the issuers thereof and is not in default.


                                      -8-
<PAGE>

          (f) The Pledged  Shares  constitute  the  percentage of the issued and
     outstanding shares of stock of the issuers thereof indicated on Schedule I.
     The Pledged  Debt is  outstanding  in the  principal  amount  indicated  on
     Schedule I.

          (g) The Assigned Agreements to which such Grantor is a party have been
     duly  authorized,  executed and delivered by such Grantor.  There exists no
     default  under any material  Assigned  Agreement to which such Grantor is a
     party,  by Grantor or, to  Grantor's  knowledge,  any other party  thereto,
     except under any Assigned  Agreement  which involves a sum not in excess of
     $50,000 individually or $250,000 in the aggregate per annum for any default
     which  individually  or in the  aggregate  with  other  defaults  would not
     reasonably  be expected to have a Material  Adverse  Effect.  If reasonably
     required by the Administrative  Agent each party to the Assigned Agreements
     to which such Grantor is a party, other than such Grantor, has executed and
     delivered to such Grantor a consent, in substantially the form of Exhibit C
     hereto,   to  the  assignment  of  the  Agreement  and  Collateral  to  the
     Administrative Agent pursuant to this Agreement.

          (h)  Upon  either  the  filing  by  the  Administrative  Agent  or its
     representatives of the proper financing  statements  referred to in Section
     3.1 of the  Credit  Agreement  or the  taking  of  possession  thereof,  as
     applicable,  this Agreement, the pledge of the Security Collateral pursuant
     hereto and the pledge and  assignment  of the Account  Collateral  pursuant
     hereto create a valid and perfected first priority security interest in the
     Collateral of such Grantor which can be perfected by such filings or by the
     taking  of  possession,  to  the  extent  possession  is so  taken  by  the
     Administrative Agent, securing the payment of the Secured Obligations,  and
     all filings and other actions necessary or desirable to perfect and protect
     such security interest shall have been duly taken.

          (i) No consent of any other Person and no  authorization,  approval or
     other  action  by,  and no  notice  to or  filing  with,  any  governmental
     authority or  regulatory  body or other third party is required  either (i)
     for the grant by such  Grantor  of the  assignment  and  security  interest
     granted hereby,  for the pledge by such Grantor of the Security  Collateral
     pursuant  hereto or for the  execution,  delivery  or  performance  of this
     Agreement by such Grantor,  (ii) for the  perfection or  maintenance of the
     pledge,  assignment and security  interest  created  hereby  (including the
     first  priority  nature of such pledge,  assignment or security  interest),
     except for the filing of financing and  continuation  statements  under the
     Uniform Commercial Code, which financing  statements are in proper form and
     are duly executed and except for any other actions  required to be taken as
     requested by the Administrative  Agent which have been duly taken, or (iii)
     for the exercise by the Administrative  Agent of its voting or other rights
     provided for in this Agreement or the remedies in respect of the Collateral
     pursuant to this  Agreement,  except as may be required in connection  with
     the disposition of any portion of the Security Collateral by laws affecting
     the offering and sale of securities generally.

          (j) The  Inventory  which has been  produced by such  Grantor has been
     produced in compliance  with all  requirements  of the Fair Labor Standards
     Act.


                                      -9-
<PAGE>

     Section 9. Further Assurances.

     (a) Each of the Grantors  agrees that from time to time,  at the expense of
the  Borrowers,  such  Grantor  will  promptly  execute  and deliver all further
instruments and documents,  and take all further action,  that may be necessary,
or that the Administrative Agent may reasonably request, in order to perfect and
protect any pledge,  assignment or security  interest granted or purported to be
granted hereby or to enable the Administrative Agent to exercise and enforce its
rights and remedies  hereunder with respect to any Collateral.  Without limiting
the generality of the  foregoing,  such Grantor will,  upon any such  reasonable
request of the  Administrative  Agent:  (i) upon the  occurrence  and during the
continuance of an Event of Default mark  conspicuously each document included in
the Inventory pledged by such Grantor hereunder,  each chattel paper included in
the Receivables pledged by such Grantor hereunder, each Related Contract pledged
by such  Grantor  hereunder,  each  Assigned  Agreement  pledged by such Grantor
hereunder and each of its records pertaining to the Collateral with a legend, in
form and substance  satisfactory to the  Administrative  Agent,  indicating that
such document, chattel paper, Related Contract, Assigned Agreement or Collateral
is subject to the  security  interest  granted  hereby;  (ii) if any  Collateral
pledged by such Grantor  hereunder  shall be  evidenced by a promissory  note or
other  instrument  or chattel  paper,  deliver and pledge to the  Administrative
Agent  hereunder  such note or  instrument  or chattel  paper duly  indorsed and
accompanied by duly executed instruments of transfer or assignment,  all in form
and substance  satisfactory to the Administrative  Agent; and (iii) execute such
financing or  continuation  statements,  or amendments  thereto,  and such other
instruments  or notices as may be  reasonably  requested  by the  Administrative
Agent in order to perfect and  preserve  the  pledge,  assignment  and  security
interest granted or purported to be granted hereby.

     (b) Each Grantor hereby authorizes the Administrative  Agent to file one or
more financing or continuation statements,  and amendments thereto,  relating to
all or any part of the Collateral pledged by such Grantor hereunder, without the
signature  of such  Grantor  where  permitted  by law in  order to  perfect  and
preserve the pledge, assignment and security interest granted or purported to be
granted  hereby.  A copy of each such  statement  and  amendment  will be timely
provided to such Grantor. A photocopy or other reproduction of this Agreement or
any  financing  statement  covering its  Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.

     (c) Each Grantor will furnish to the Administrative Agent from time to time
statements and schedules  further  identifying and describing the Collateral and
such reports in connection with its Collateral as the  Administrative  Agent may
reasonably request, all in reasonable detail.

     (d) Each  Grantor  hereby  agrees,  upon the request of the  Administrative
Agent at any time  following the  occurrence  and during the  continuance  of an
Event of Default, and at the expense of the Borrowers,  (i) within fourteen (14)
days after such request deliver to the  Administrative  Agent a letter agreement
among such Grantor, the bank where the account is located and the Administrative
Agent in respect of the main cash concentration  account of such Grantor,  which
agreement shall be in  substantially  the form of Exhibit A hereto,  (ii) within
twenty-one  (21) days after such request deliver to the  Administrative  Agent a
letter  agreement,  in substantially the form of Exhibit B hereto, in respect of
each lockbox and blocked  deposit


                                      -10-
<PAGE>

account of such Grantor,  (iii) within thirty (30) days after such request, take
whatever action (including, without limitation, the filing of Uniform Commercial
Code financing  statements)  as may be reasonably  necessary or advisable in the
sole discretion of the Administrative  Agent to vest in the Administrative Agent
(or in any representative of the Administrative Agent designated by it), for the
benefit of the  Administrative  Agent and the  ratable  benefit  of the  Secured
Parties,  valid and subsisting Liens on the main cash concentration  accounts of
the  Borrowers  and each other  Grantor and the  lockboxes  and blocked  deposit
accounts of the Grantors,  and (iv) at any time and from time to time,  promptly
execute and deliver any and all further  instruments  and documents and take all
such other action as the Administrative  Agent may deem reasonably  necessary in
obtaining the full benefits of the Liens on, or in preserving the Liens in, such
main concentration accounts, lockboxes and blocked deposit accounts.

     Section 10. As to Equipment and Inventory.

     (a) Each  Grantor  shall  keep the  Equipment  and  Inventory  (other  than
Inventory  sold in the  ordinary  course of  business)  pledged by such  Grantor
hereunder at the places therefor specified in Section 8(a) or, upon fifteen (15)
days' prior written notice to the Administrative  Agent, at such other places in
a  jurisdiction  where all action  required by this  Agreement  to maintain  the
security  interest of the  Administrative  Agent in such Equipment and Inventory
granted  hereby  shall  have been  taken  with  respect  to such  Equipment  and
Inventory.

     (b)  Each  Grantor  shall  cause  the  Equipment  pledged  by such  Grantor
hereunder  which  individually or in the aggregate is material to such Grantor's
business to be maintained  and preserved in good working  condition,  repair and
working order,  ordinary wear and tear excepted and except for insured  casualty
losses and shall forthwith,  or in the case of any loss or damage to any of such
Equipment, as quickly as practicable after the occurrence thereof, make or cause
to be made all  repairs,  replacements  and  other  improvements  in  connection
therewith  that are  necessary  or desirable  to such end.  Each  Grantor  shall
promptly furnish to the Administrative  Agent a statement respecting any loss or
damage to any of the  Equipment  pledged by such Grantor  hereunder  (other than
immaterial loss or damage) or loss or damage to Equipment which  individually or
in the aggregate is not material to such Grantor's business.

     (c) Each  Grantor  shall  timely pay when due all property and other taxes,
assessments  and  governmental  charges or levies  imposed upon,  and all claims
(including claims for labor,  materials and supplies) against, the Equipment and
Inventory  pledged  by such  Grantor  hereunder;  provided,  however,  that such
Grantor shall not be required to pay any such tax,  assessment,  charge or claim
that is being contested in good faith and by proper  proceedings and as to which
appropriate  reserves are being maintained,  unless and until any Lien resulting
therefrom attaches to its property and becomes enforceable against the Borrowers
or any of their Subsidiaries. In producing the Inventory pledged by such Grantor
hereunder,  each  Grantor  shall  comply  in  all  material  respects  with  all
requirements of the Fair Labor Standards Act.

     Section 11. Insurance.

     (a) Each Grantor shall, at its own expense, maintain insurance with respect
to the  Equipment  and  Inventory  pledged  by such  Grantor  hereunder  in such
amounts, against such risks, in such form and with such insurers, as required by
the Credit Agreement.  Each policy for liability insurance shall provide for all
losses to be paid on  behalf of the  Administrative  Agent


                                      -11-
<PAGE>

and each  Grantor as their  interests  may appear and each  policy for  property
damage insurance shall provide for all losses (except so long as the payor shall
not have  received  notice from the  Administrative  Agent to the effect that an
Event of Default shall have  occurred and is continuing  for losses of less than
$250,000 per  occurrence)  to be paid directly to the  Administrative  Agent and
with respect to losses of $250,000 or more per  occurrence  but not in excess of
$500,000 per occurrence or $500,000 in the aggregate,  the Administrative  Agent
shall,  unless an Event of Default shall have  occurred and then be  continuing,
make such insurance  proceeds available to the subject Grantor for the repair or
replacement  of the subject  Collateral.  Each such policy shall in addition (i)
name such Grantor and the  Administrative  Agent as insured  parties  thereunder
(without any representation or warranty by or obligation upon the Administrative
Agent) as their interests may appear,  (ii) contain the agreement by the insurer
that any loss thereunder in excess of $250,000 per occurrence unless an Event of
Default  shall  have  occurred  and  be  continuing  shall  be  payable  to  the
Administrative  Agent   notwithstanding  any  action,   inaction  or  breach  of
representation or warranty by such Grantor, (iii) provide that there shall be no
recourse  against  the  Administrative  Agent for  payment of  premiums or other
amounts with respect thereto and (iv) provide that the insurer shall endeavor to
provide at least thirty (30) days' prior written  notice of  cancellation  or of
lapse to the  Administrative  Agent.  Each Grantor shall, if so requested by the
Administrative  Agent, deliver to the Administrative Agent original or duplicate
policies  of such  insurance  and,  as often  as the  Administrative  Agent  may
reasonably  request,  a report of a reputable  insurance  broker with respect to
such   insurance.   Further,   each  Grantor  shall,   at  the  request  of  the
Administrative Agent, duly exercise and deliver instruments of assignment of its
insurance  policies to comply with the  requirements  of Section 9 and cause the
insurers to acknowledge notice of such assignment.

     (b) Reimbursement under any liability  insurance  maintained by any Grantor
pursuant  to this  Section 11 may be paid  directly to the Person who shall have
incurred  liability  covered by such  insurance.  In case of any loss  involving
damage to Equipment  or  Inventory  which  individually  or in the  aggregate is
material to such  Grantor's  business when  subsection (c) of this Section 11 is
not applicable,  the Grantor that owns such Equipment or Inventory shall make or
cause to be made the necessary  repairs to or  replacements of such Equipment or
Inventory out of available net proceeds of insurance  maintained by such Grantor
pursuant to this Section 11.

     (c) Upon the occurrence and during the  continuance of any Event of Default
or the  loss  (equal  to or in  excess  of  $500,000  per  occurrence  or in the
aggregate) of any Equipment or Inventory,  all insurance  payments in respect of
such Equipment or Inventory shall,  except as provided in Section 11(a), be paid
to and applied by the Administrative Agent as specified in Section 20(b).

     Section 12. Place of Perfection; Record; Collection of Receivables.

     (a) Each of the  Grantors  shall keep its chief place of business and chief
executive  office  and the  office  where it keeps its  records  concerning  the
Collateral,  and, to the extent  possessed,  the original copies of the Assigned
Agreements and all originals of all chattel paper that evidence Receivables,  at
the  location  therefor  specified  in Section  8(a) or, upon fifteen (15) days'
prior written notice to the  Administrative  Agent, at such other locations in a
jurisdiction  where all actions  required  by this  Agreement  to  maintain  the
security interest of the


                                      -12-
<PAGE>

Administrative  Agent in such  Collateral  granted  hereby shall have been taken
with respect to the  Collateral.  Each of the  Grantors  shall hold and preserve
such  records,   Assigned   Agreements   and  chattel  paper  and  shall  permit
representatives of the  Administrative  Agent at any time during normal business
hours to inspect and make abstracts from such records and chattel paper.

     (b)  Except as  otherwise  provided  in this  subsection  (b),  each of the
Grantors  shall continue to collect,  at its own expense,  all amounts due or to
become due such Grantor under the Receivables  pledged by such Grantor hereunder
provided  that,  so long as no Event of Default has occurred and is  continuing,
each  Grantor  may  settle or  compromise  the  amount of  payment of any of its
Receivables,  release wholly or partly any Obligor thereof,  or allow any credit
or discount thereon in the ordinary course of business.  In connection with such
collections,  each  Grantor  may  take  such  action  as such  Grantor  may deem
necessary or advisable to enforce collection of the Receivables  pledged by such
Grantor hereunder;  provided,  however, that the Administrative Agent shall have
the right at any time,  upon the  occurrence  and during the  continuance  of an
Event of  Default  and upon  five  business  (5)  days'  written  notice  to the
Borrowers  of  its  intention  to do  so,  to  notify  the  obligors  under  any
Receivables of the assignment of such  Receivables to the  Administrative  Agent
and to direct such  Obligors to make payment of all amounts due or to become due
to such Grantor thereunder  directly to the Administrative  Agent and, upon such
notification  and at the expense of such Grantor,  to enforce  collection of any
such  Receivables,  and to adjust,  settle or  compromise  the amount or payment
thereof,  in the same manner and to the same extent as such  Grantor  might have
done. After receipt by any Grantor of the notice from the  Administrative  Agent
referred to in the proviso of the  preceding  sentence upon the  occurrence  and
during the  continuance  of an Event of Default,  (i) all  amounts and  proceeds
(including  instruments)  received by such Grantor in respect of the Receivables
pledged by such Grantor  hereunder shall be received in trust for the benefit of
the Administrative Agent hereunder, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Administrative Agent in the same
form as so received (with any necessary  endorsement)  to be applied as provided
by Section 20(b) and (ii) without the prior consent of the Administrative Agent,
such Grantor shall not adjust, settle or compromise the amount or payment of any
of its Receivables,  release wholly or partly any Obligor thereof,  or allow any
credit or discount thereon.

     Section 13. Voting Rights; Dividends; Etc.

     (a) So long as no Event of Default shall have occurred and be continuing:

          (i) The Grantors  shall be entitled to exercise any and all voting and
     other consensual rights  pertaining to the Security  Collateral or any part
     thereof for any purpose not  inconsistent  with the terms of this Agreement
     or the other Loan Documents; provided, however, that the Grantors shall not
     exercise or refrain  from  exercising  any such right if such action  would
     reasonably  be expected to have a material  adverse  effect on the value of
     the Security Collateral or any part thereof.

          (ii) The Grantors  shall be entitled to receive and retain any and all
     dividends  and  interest  paid  in  respect  of  the  Security  Collateral;
     provided, however, that any and all


                                      -13-
<PAGE>

               (A)  dividends and interest paid or payable other than in cash in
          respect of, and instruments and other property received, receivable or
          otherwise  distributed in respect of, or in exchange for, any Security
          Collateral,

               (B) dividends and other  distributions paid or payable in cash in
          respect of any Security  Collateral  in  connection  with a partial or
          total  liquidation or dissolution or in connection with a reduction of
          capital, capital surplus or paid-in-surplus, and

               (C) cash paid,  payable or  otherwise  distributed  in respect of
          principal  of, or in  redemption  of, or in exchange for, any Security
          Collateral

shall be, and shall be forthwith,  delivered to the Administrative Agent to hold
as  Security  Collateral  and shall,  if  received  by any of the  Grantors,  be
received in trust for the benefit of the  Administrative  Agent,  be  segregated
from the other  property or funds of such Grantor and be forthwith  delivered to
the Administrative  Agent as Security Collateral in the same form as so received
(with any necessary endorsement);  provided further,  however, that the Grantors
shall be entitled to retain any such payments  referred to in clause (A), (B) or
(C) above to the extent such  payments are made between the  Borrowers and their
Subsidiaries  or  between  the  Borrowers'  Subsidiaries  and in each  case  are
otherwise  permitted  by the terms of the Credit  Agreement,  including  without
limitation  Sections 6.4 and 6.7 thereof and in each case to the extent relating
to Investments  prior to the occurrence and during the  continuance of a Default
subject however to any prepayment requirements under the Credit Agreement.

          (iii) The Administrative  Agent shall execute and deliver (or cause to
     be executed  and  delivered)  to each of the  Grantors all such proxies and
     other  instruments  as such Grantor may request for the purpose of enabling
     such  Grantor  to  exercise,   prior  to  the  occurrence  and  during  the
     continuance of an Event of Default,  the voting and other rights that it is
     entitled to exercise  pursuant  to  paragraph  (i) above and to receive the
     dividends or interest  payments that it is authorized to receive and retain
     pursuant to paragraph (ii) above.

     (b) Upon the occurrence and during the continuation of an Event of Default:

          (i) All rights of each of the Grantors (x) to exercise or refrain from
     exercising the voting and other  consensual  rights that it would otherwise
     be entitled to exercise  pursuant to Section  13(a)(i) shall  automatically
     cease and (y) to receive the dividends and interest  payments that it would
     otherwise be authorized to receive and retain pursuant to Section 13(a)(ii)
     shall  automatically  cease,  and all such rights shall thereupon be vested
     solely in the  Administrative  Agent,  which shall  thereupon have the sole
     right to  exercise  or  refrain  from  exercising  such  voting  and  other
     consensual  rights  and to receive  and hold as  Security  Collateral  such
     dividends and interest payments.

          (ii) All dividends  and interest  payments that are received by any of
     the Grantors  contrary to the  provisions  of paragraph (i) of this Section
     13(b)  shall be  received  in trust for the  benefit of the  Administrative
     Agent,  shall be  segregated  from other funds of such Grantor and shall be
     forthwith paid over to the Administrative  Agent as Security  Collateral in
     the same form as so received (with any necessary endorsement).


                                      -14-
<PAGE>

     Section 14. As to the Assigned Agreements.


     (a) Each of the Grantors shall, at its expense:

          (i) perform and observe all the material  terms and  provisions of the
     Assigned  Agreements  to which such  Grantor is a party to be  performed or
     observed by it, maintain such Assigned  Agreements in full force and effect
     and enforce such Assigned Agreements in accordance with their terms, except
     where  the  failure  to do so  would  not be  reasonably  likely  to have a
     Material Adverse Effect and take all such action to such end as may be from
     time to time reasonably requested by the Administrative Agent; and

          (ii) furnish to the Administrative Agent promptly upon receipt thereof
     copies of all material  notices  received by such Grantor (other than those
     created  or  arising  in the  ordinary  course)  under or  pursuant  to the
     Assigned Agreements to which such Grantor is a party relating to any breach
     or  default by any party  which  could  reasonably  be  expected  to have a
     Material  Adverse  Effect,  and  from  time  to  time  (A)  furnish  to the
     Administrative  Agent such information and reports regarding the Collateral
     pledged  by  such  Grantor  hereunder  as  the  Administrative   Agent  may
     reasonably   request   and  (B)  upon  the   reasonable   request   of  the
     Administrative  Agent,  make to  each  other  party  to any  such  Assigned
     Agreement  such  demands and requests  for  information  and reports or for
     action as such Grantor is entitled to make thereunder.

     (b) Each of the  Grantors  agrees  that it shall not without the consent of
the

Administrative  Agent if any such  action  would  reasonably  be  expected to be
adverse to the interests of, or impair the security value of such Collateral to,
the  Administrative  Agent or the  Lenders  (except  if  adverse,  or causing an
impairment, in each case only in an immaterial way or with respect to Collateral
which  individually  or in the  aggregate  is not  material  to  such  Grantor's
business) and shall not in any event take any such action at any time  following
the occurrence and during the continuance of a Default or an Event of Default:

          (i) cancel or terminate  any Assigned  Agreement to which such Grantor
     is a party,  or  consent  to or  accept  any  cancellation  or  termination
     thereof;

          (ii) amend or otherwise  modify any  Assigned  Agreement to which such
     Grantor is a party, or give any consent, waiver or approval thereunder;

          (iii)  waive any  material  default  under or  material  breach of any
     Assigned Agreement to which such Grantor is a party;

          (iv)  consent  to or permit or accept  any  prepayment  of  amounts to
     become due under or in connection with any Assigned Agreement to which such
     Grantor is a party, except as expressly provided therein; or

          (v) take any other action in connection with any Assigned Agreement to
     which such Grantor is a party,  that would impair the value of the interest
     or rights of such Grantor  thereunder  or that would impair the interest or
     rights of the Administrative Agent.


                                      -15-
<PAGE>

          Section 15.  Payments  Under the Assigned  Agreements.

     Following  the  occurrence  and  continuance  of an  Event of  Default,  if
requested by the  Administrative  Agent,  each of the Grantors shall effectively
instruct each other party to each Assigned  Agreement to which such Grantor is a
party,  that all payments due or to become due under or in connection  with such
Assigned  Agreement  shall be made in accordance  with the  instructions  of the
Administrative Agent. In such event the Administrative Agent shall instruct such
party to make (A) such  payments to the Borrowers so long as no Event of Default
shall have occurred and be continuing or (B) such payments to the Administrative
Agent if any Event of Default shall have occurred and be continuing. Any payment
made to the  Administrative  Agent  under  this  Section  15 shall be applied as
provided in Section 20(b).

          Section 16. Transfers and Other Liens; Additional Shares.

     (a) Each of the  Grantors  agrees  that it shall not (i) sell,  assign  (by
operation of law or otherwise) or otherwise dispose of, or grant any option with
respect to, any of the  Collateral,  except  sales of  Inventory in the ordinary
course of business or sales or other  dispositions of other assets  permitted by
the Credit  Agreement,  or (ii)  create or suffer to exist any Lien upon or with
respect to any of the  Collateral  except  for (A) the  pledge,  assignment  and
security  interest  created by this Agreement and (B) any other Liens  expressly
permitted under Section 6.1 of the Credit Agreement.

     (b) Each of the Grantors  agrees that it shall (i) cause each issuer of the
Pledged  Shares which it controls not to issue any stock or other  securities in
addition to or in  substitution  for the Pledged  Shares  issued by such issuer,
except  to  such  Grantor  and  except  as  otherwise  permitted  by the  Credit
Agreement, and (ii) pledge hereunder, immediately upon its acquisition (directly
or  indirectly)  thereof,  any and all  additional  shares  of  stock  or  other
securities owned by such Grantor of each issuer of the Pledged Shares; provided,
however,  that in no  event  shall  more  than 65% of the  capital  stock of any
Foreign  Subsidiary of a Grantor be pledged pursuant to this Agreement except if
and to the extent otherwise provided in the Credit Agreement.

     Section 17.  Administrative Agent Appointed  Attorney-in-Fact.

     Each of the Grantors hereby irrevocably  appoints the Administrative  Agent
such Grantor's  attorney-in-fact,  with full authority in the place and stead of
the Borrowers and in the name of the Borrowers or otherwise, upon the occurrence
and during the  continuance  of an Event of  Default,  to take any action and to
execute any  instrument  that the  Administrative  Agent may deem  necessary  or
advisable to  accomplish  the  purposes of this  Agreement,  including,  without
limitation:

          (a)  to  obtain  and  adjust  insurance  required  to be  paid  to the
     Administrative Agent pursuant to Section 11,

          (b) to ask for, demand, collect, sue for, recover, compromise, receive
     and give acquittance and receipts for moneys due and to become due under or
     in respect of any of its Collateral,

          (c) to receive,  endorse and collect any drafts or other  instruments,
     documents and chattel  paper,  in connection  with clause (a) or (b) above,
     and


                                      -16-
<PAGE>

          (d) to file any claims or take any action or institute any proceedings
     that the  Administrative  Agent may deem  necessary  or  desirable  for the
     collection of any of its Collateral or otherwise to enforce compliance with
     the terms and  conditions  of any  Assigned  Agreement or the rights of the
     Administrative Agent with respect to any of its Collateral.

     Section 18.  Administrative Agent May Perform.

     If any of the Grantors fails to perform any agreement contained herein, the
Administrative  Agent may itself,  upon reasonable prior notice to such Grantor,
perform, or cause performance of, such agreement,  and the reasonable and actual
expenses of the Administrative  Agent incurred in connection  therewith shall be
payable by such Grantor under Section 22(b).

     Section 19.  Administrative  Agent's  Duties.

     The powers  conferred on the  Administrative  Agent hereunder are solely to
protect its interest in the  Collateral and shall not impose any duty upon it to
exercise any such powers.  Except for the safe custody of any  Collateral in its
possession and the accounting for moneys actually received by it hereunder,  the
Administrative Agent shall have no duty as to any Collateral, as to ascertaining
or taking  action with  respect to calls,  conversions,  exchanges,  maturities,
tenders or other matters relative to any Security Collateral, whether or not the
Administrative  Agent or any Secured Party has or is deemed to have knowledge of
such  matters,  or as to the taking of any  necessary  steps to preserve  rights
against  any  parties or any other  rights  pertaining  to any  Collateral.  The
Administrative   Agent  shall  exercise  reasonable  care  in  the  custody  and
preservation  of  any  Collateral  in  its  possession  and  shall  accord  such
Collateral  treatment  equal to that which  Administrative  Agent  accords other
similar property in its possession.

     Section 20.  Remedies.

     If any Event of Default shall have occurred and be continuing:

          (a)  The   Administrative   Agent  may  exercise  in  respect  of  the
     Collateral, in addition to other rights and remedies provided for herein or
     otherwise  available to it, all the rights and remedies of a secured  party
     upon default  under the Uniform  Commercial  Code in effect in the State of
     New York at such time (the "N.Y.  Uniform Commercial Code") (whether or not
     the N.Y.  Uniform  Commercial Code applies to the affected  Collateral) and
     also may (i) require any or all of the Grantors to, and each Grantor hereby
     agrees that it will at its expense and upon  request of the  Administrative
     Agent forthwith,  assemble all or part of the Collateral as directed by the
     Administrative Agent and make it available to the Administrative Agent at a
     place to be  designated  by the  Administrative  Agent  that is  reasonably
     convenient  to both  parties and (ii)  without  notice  except as specified
     below and as required by law,  sell the  Collateral  or any part thereof in
     one or more parcels at public or private sale, at any of the Administrative
     Agent's offices or elsewhere,  for cash, on credit or for future  delivery,
     and upon such other terms as the Administrative Agent may deem commercially
     reasonable. Each Grantor agrees that, to the extent notice of sale shall be
     required by law, at least ten (10) days' notice to such Grantor of the time
     and place of any public sale or the time after which any private sale is to
     be made shall constitute reasonable notification.  The Administrative Agent
     shall not be obligated to make any sale of Collateral  regardless of notice
     of sale having been given. The Administrative  Agent may adjourn any public
     or  private  sale from time to time by  announcement  at the time and place
     fixed  therefor,  and such  sale  may,  without  further  notice  except as
     required  by  law,  be  made at the  time  and  place  to  which  it was so
     adjourned.


                                      -17-
<PAGE>

          (b) Any  cash  held by or on  behalf  of the  Administrative  Agent as
     Collateral and all cash proceeds  received by the  Administrative  Agent in
     respect of any sale of,  collection from, or other  realization upon all or
     any part of the  Collateral  may, in the  discretion of the  Administrative
     Agent, be held by the  Administrative  Agent as Collateral for, and/or then
     or at any time thereafter  applied (after payment of any amounts payable to
     the Administrative Agent pursuant to Section 22) in whole or in part by the
     Administrative  Agent  for  the  ratable  benefit  of the  Secured  Parties
     against,  all or any part of the  Secured  Obligations  in such order as is
     specified by the Credit  Agreement and, if the Credit Agreement does not so
     specify an order of application  against the Obligations,  in such order as
     the Administrative Agent shall elect, provided,  however, that this Section
     20(b) shall be subject to the provisions of Section  11(a).  Any surplus of
     such cash or cash proceeds held by the  Administrative  Agent and remaining
     after payment in full of all the Secured  Obligations shall be paid over to
     the  applicable  Grantors  or to  whomsoever  may be  lawfully  entitled to
     receive such surplus.

          (c) The  Administrative  Agent may  exercise  any and all  rights  and
     remedies of any of the Grantors  under or in  connection  with the Assigned
     Agreements or otherwise in respect of the  Collateral,  including,  without
     limitation,  any and all  rights of any  Grantor  to  demand  or  otherwise
     require  payment of any amount under,  or  performance of any provision of,
     any Assigned Agreement.

          (d) All payments  received by any Grantor under or in connection  with
     any Assigned  Agreement or otherwise in respect of the Collateral  shall be
     received in trust for the  benefit of the  Administrative  Agent,  shall be
     segregated  from other funds of such  Grantor and shall be  forthwith  paid
     over to the Administrative  Agent in the same form as so received (with any
     necessary endorsement or assignment).

          (e) The Administrative Agent may, with reasonable notice to any of the
     Grantors and at any time or from time to time, charge, set-off or otherwise
     apply  all or any  part of the  Secured  Obligations  against  the L/C Cash
     Collateral Account or any part thereof; provided, however, that the failure
     to give notice  shall not affect the  validity of such  charge,  set-off or
     application.

          (f) Each Grantor will furnish to the Administrative  Agent correct and
     complete customer lists and updates thereof as the Administrative Agent may
     reasonably request, all in reasonable detail.

     Section 21.  Registration  Rights;  Private Sale.

     (a) If the  Administrative  Agent shall  determine to exercise its right to
sell all or any of the Security  Collateral pursuant to Section 20 pursuant to a
public  offering  (it  being  understood  by  each  of  the  Grantors  that  the
Administrative  Agent shall be under no obligation to do so and may, in its sole
discretion,  dispose of the Security  Collateral in any manner  permitted by law
that the  Administrative  Agent may  select),  each Grantor  agrees  that,  upon
request of the Administrative Agent, such Grantor will, at its own expense:

          (i)  execute  and  deliver,  and cause  each  issuer  of the  Security
     Collateral  contemplated to be sold and the directors and officers  thereof
     to execute and deliver all such instruments and documents,  and do or cause
     to be done all such other acts and  things as


                                      -18-
<PAGE>

     may be necessary or, in the sole  discretion of the  Administrative  Agent,
     desirable to register its Security  Collateral  under the provisions of the
     Securities  Act of 1933,  as amended  (the  "Securities  Act"),  to cause a
     registration  statement  relating thereto to become effective and to remain
     effective  for  such  period  as  prospectuses  are  required  by law to be
     furnished,  and to make all amendments and  supplements  thereto and to the
     related  prospectus  that,  in the sole  discretion  of the  Administrative
     Agent, are necessary or desirable,  all in conformity with the requirements
     of the Securities  Act and the rules and  regulations of the Securities and
     Exchange Commission applicable thereto;

          (ii) use its best efforts to qualify its Security Collateral under the
     state   securities   or  "Blue  Sky"  laws  and  to  obtain  all  necessary
     governmental  approvals  for  the  sale  of  the  Security  Collateral,  as
     requested by the Administrative Agent in its sole discretion;

          (iii)  cause  each  such  issuer  to make  available  to its  security
     holders,  as soon as practicable,  an earnings  statement that will satisfy
     the provisions of Section 10(a) of the Securities Act;

          (iv) provide the Administrative  Agent with such other information and
     projections  as  may  be  necessary  or,  in  the  sole  discretion  of the
     Administrative  Agent,  desirable  to enable  the  Administrative  Agent to
     effect the sale of its Security Collateral; and

          (v) do or cause to be done all such  other  acts and  things as may be
     necessary to make such sale of its Security  Collateral or any part thereof
     valid and binding and in compliance with applicable law.

The  Administrative  Agent is  authorized,  in  connection  with any sale of the
Security  Collateral pursuant to Section 20, to deliver or otherwise disclose to
any  prospective  purchaser  of the  Security  Collateral  (A) any  registration
statement or prospectus,  and all supplements and amendments  thereto,  prepared
pursuant to clause (i) above, (B) any information and projections provided to it
pursuant to clause (iv) above and (C) any other  information  in its  possession
relating to the Security Collateral.

     (b) The  Grantors  recognize  that,  upon the  occurrence  and  during  the
continuance of an Event of Default,  the  Administrative  Agent may be unable to
effect a public  sale of all or a part of the  Security  Collateral,  and may be
compelled  to  resort  to one or more  private  sales to a  restricted  group of
purchasers who will be obligated to agree,  among other things,  to acquire such
securities  for their own  account,  for  investment  and not with a view to the
distribution or resale thereof.  The Grantors  acknowledge that any such private
sales may be at places and on terms less  favorable  to the sellers than if sold
at public sales and agrees that such private  sales shall be deemed to have been
made in a commercially  reasonable manner, and that the Administrative Agent has
no  obligation to delay the sale of any such  securities  for the period of time
necessary to permit any such securities to be registered for public sale.

     Section 22. Indemnity and Expenses.

     (a) Each of the Grantors hereby agrees, jointly and severally, to indemnify
the  Administrative  Agent  from and  against  any and all  claims,  losses  and
liabilities arising out of or


                                      -19-
<PAGE>

resulting from this Agreement  (including,  without  limitation,  enforcement of
this  Agreement),  except  claims,  losses  or  liabilities  resulting  from the
Administrative Agent's gross negligence or willful misconduct as determined by a
final judgment of a court of competent jurisdiction.

     (b) The  Borrowers  will upon  demand pay to the  Administrative  Agent the
amount of any and all reasonable  expenses,  including the  reasonable  fees and
expenses of its counsel and of any experts and agents,  that the  Administrative
Agent may incur in connection  with (i) the  administration  of this  Agreement,
(ii) the custody,  preservation, use or operation of, or the sale of, collection
from or other  realization  upon, any of the  Collateral,  (iii) the exercise or
enforcement  of any of the  rights of the  Administrative  Agent or the  Secured
Parties  hereunder or (iv) the failure by the  Borrowers or any other Grantor to
perform or observe any of the provisions hereof.

     Section 23.  Security  Interest  Absolute.

     The obligations of each Grantor under this Agreement are independent of the
Secured  Obligations,  and a  separate  action or  actions  may be  brought  and
prosecuted  against  each  Grantor to enforce this  Agreement,  irrespective  of
whether any action is brought  against  the  Borrowers  or any other  Grantor or
whether  the  Borrowers  or any other  Grantor  is joined in any such  action or
actions. All rights of the Administrative  Agent and the pledge,  assignment and
security  interest  hereunder,  and all  obligations of each Grantor  hereunder,
shall be absolute and unconditional, irrespective of:

          (a) any lack of validity or enforceability of any Loan Document or any
     other agreement or instrument relating thereto;

          (b) any change in the time,  manner or place of payment  of, or in any
     other term of, all or any of the Secured Obligations or any other amendment
     or  waiver  of or any  consent  to any  departure  from any Loan  Document,
     including,  without  limitation,  any  increase in the Secured  Obligations
     resulting  from the extension of additional  credit to the Borrowers or any
     Guarantor or any of their subsidiaries or otherwise;

          (c) any  taking,  exchange,  release  or  non-perfection  of any other
     collateral,  or any taking, release or amendment or waiver of or consent to
     departure from any guaranty, for all or any of the Secured Obligations;

          (d) any manner of application of collateral,  or proceeds thereof,  to
     all or any of the  Secured  Obligations,  or any  manner  of sale or  other
     disposition of any collateral for all or any of the Secured  Obligations or
     any  other  assets  of the  Borrowers  or  any  Guarantor  or any of  their
     subsidiaries;

          (e)  any  change,   restructuring  or  termination  of  the  corporate
     structure or existence  of the  Borrowers or any  Guarantor or any of their
     subsidiaries; or

          (f) any other  circumstance that might otherwise  constitute a defense
     available  to, or a discharge of, any Grantor or a third party grantor of a
     security interest.


                                      -20-
<PAGE>

     Section 24. Amendments; Waivers; Etc.

     (a) No  amendment  or waiver of any  provision  of this  Agreement,  and no
consent  to any  departure  by any  Grantor  herefrom,  shall  in any  event  be
effective  unless the same shall be in writing and signed by the  Administrative
Agent,  and then such waiver or consent shall be effective  only in the specific
instance and for the specific purpose for which given.

     (b) No failure on the part of the Administrative Agent to exercise,  and no
delay in exercising,  any right hereunder shall operate as a waiver thereof; nor
shall any single or partial  exercise  of any such right  preclude  any other or
further exercise thereof or the exercise of any other right.

     (c) Upon the  execution  and delivery by any Person of a supplement to this
Agreement,  in each case in  substantially  the form of Exhibit D hereto (each a
"Security  Agreement  Supplement"),  (i) such Person  shall be referred to as an
"Additional  Grantor" and shall be and become a Grantor,  and each  reference in
this Agreement to an "Additional  Grantor" or a "Grantor" shall also mean and be
a reference  to such  Additional  Grantor and each  reference  in any other Loan
Document to a "Grantor"  or a "Loan Party" shall also mean and be a reference to
such  Additional  Grantor,  and (ii) the  supplements  attached to each Security
Agreement  Supplement  shall  be  incorporated  into  and  become  a part of and
supplement  the  Schedules  to  this   Agreement,   as   appropriate,   and  the
Administrative  Agent may attach such  supplements to such  Schedules,  and each
reference to such Schedules shall mean and be a reference to such Schedules,  as
supplemented pursuant hereto.

     Section 25.  Addresses  for Notices.

     All notices and other  communications  provided for  hereunder  shall be in
writing  (including  telegraphic,  telecopy or telex  communication) and mailed,
telegraphed,  telecopied, telexed or delivered if to any Grantor addressed to it
at the address set forth below its name on the signature pages hereof; if to any
Additional  Grantor,  addressed to it at the address set forth below its name on
the signature pages to the Security Agreement  Supplement executed and delivered
by such Additional Grantor; if to the Administrative  Agent,  addressed to it at
its address  set forth in Section  11.2 of the Credit  Agreement  or, as to each
other party,  at such other  address as shall be  designated  by such party in a
written notice to the Grantors and the  Administrative  Agent.  All such notices
and  communications  shall,  when  mailed  by  certified  mail,  return  receipt
requested,  telegraphed,  telecopied or telexed, be effective three (3) Business
Days after  mailing,  or two (2)  Business  Days after  being  deposited  with a
recognized  overnight delivery service with all changes prepaid or billed to the
account of the sender,  or upon  transmission  to the  telegraph  company,  upon
delivery by telecopier or upon confirmation by telex  answerback,  respectively,
addressed  as  aforesaid.  Any party  hereto may change the  Person,  address or
telecopier number to whom or which notices are to be given hereunder,  by notice
duly given hereunder; provided, however, that any such notice shall be deemed to
have been given  hereunder only when actually  received by the party to which it
is addressed.

     Section 26.  Continuing  Security  Interest;  Assignments  under the Credit
Agreement.

     This  Agreement  shall  create  a  continuing   security  interest  in  the
Collateral  and shall (a) remain in full force and effect until the later of (i)
the indefeasible payment in full in cash of


                                      -21-
<PAGE>

the Secured  Obligations and (ii) the Termination Date, (b) be binding upon each
Grantor, its successors and assigns and (c) inure,  together with the rights and
remedies  of  the  Administrative  Agent  hereunder,   to  the  benefit  of  the
Administrative  Agent,  the  Lender  Parties  and their  respective  successors,
transferees and assigns. Without limiting the generality of the foregoing clause
(c),  any Lender  may assign or  otherwise  transfer  all or any  portion of its
rights  and  obligations   under  the  Credit  Agreement   (including,   without
limitation,  all or any portion of its Commitment,  the Advances owing to it and
the Note or Notes held by it) to any other  Person,  and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender  herein or  otherwise,  in each case as provided  in Section  11.7 of the
Credit Agreement.  Notwithstanding  the foregoing,  no Grantor may assign any of
its rights or obligations under this Agreement without the prior written consent
of the Administrative Agent, which consent may be withheld for any reason.

     Section 27. Release and Termination.

     (a) Upon any sale,  lease,  transfer  or other  disposition  of any item of
Collateral  in  accordance  with the express  terms of the Loan  Documents,  the
Administrative Agent will, at the Grantors' expense, execute and deliver to each
Grantor such documents as such Grantor shall reasonably  request to evidence the
release of such item of Collateral  from the  assignment  and security  interest
granted hereby; provided, however, that (i) at the time of such request and such
release no Default  shall have  occurred  and be  continuing,  (ii) such Grantor
shall deliver to the  Administrative  Agent, at least ten (10) days prior to the
date of the proposed release,  a written request for release describing the item
of Collateral and the terms of the sale, lease, transfer or other disposition in
reasonable  detail,  including  the price thereof and any expenses in connection
therewith,  together with a form of release for execution by the  Administrative
Agent and a certification  by such Grantor to the effect that the transaction is
in  compliance  with the Loan  Documents  and as to such  other  matters  as the
Administrative  Agent may  request,  and (iii) the  proceeds  of any such  sale,
lease,  transfer or other disposition  required to be applied in accordance with
Section 2.6 or any other  provision of the Credit  Agreement shall be applied as
required by the terms of the Credit Agreement.

     (b) Upon the latest of (i) the indefeasible  payment in full in cash of the
Secured Obligations, (ii) the expiration,  termination or cancellation of all of
the Letters of Credit and (iii) the Termination Date, the pledge, assignment and
security interest granted by each of the Grantors hereby shall terminate and all
rights to the Collateral shall revert to the appropriate Grantor.  Upon any such
termination,  the Administrative  Agent will, at the Grantors' expense,  execute
and deliver to the  appropriate  Grantor such  documents  as such Grantor  shall
reasonably request to evidence such termination.

     (c) To the  extent  any one or more  provisions  of  this  Agreement  shall
conflict with one or more provisions in the Credit Agreement,  the provisions of
the  Credit   Agreement  shall  control  and  supersede  any  such   conflicting
provision(s) of this Agreement.

     Section 28.  Governing Law; Terms.

     THIS  AGREEMENT  SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE  WITH THE
LAWS OF THE  STATE OF NEW  YORK,  EXCEPT  TO THE  EXTENT  THAT THE  VALIDITY  OR
PERFECTION OF THE SECURITY INTERESTS HEREUNDER, OR REMEDIES


                                      -22-
<PAGE>

HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION  OTHER THAN THE STATE OF NEW YORK.  Unless otherwise defined herein
or in the  Credit  Agreement,  terms  used  in  Article  9 of the  N.Y.  Uniform
Commercial Code are used herein as therein defined.

     Section 29. JURISDICTION.

     EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY  SUBMITS,
FOR ITSELF AND ITS PROPERTY,  TO THE  NONEXCLUSIVE  JURISDICTION OF ANY NEW YORK
STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW YORK
CITY,  NEW YORK AND ANY  APPELLATE  COURT  FROM ANY  THEREOF,  IN ANY  ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS  TO WHICH IT IS A PARTY,  OR FOR  RECOGNITION  OR  ENFORCEMENT  OF ANY
JUDGMENT,  AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING  MAY BE HEARD
AND  DETERMINED IN ANY SUCH NEW YORK STATE COURT OR, TO THE EXTENT  PERMITTED BY
LAW,  IN SUCH  FEDERAL  COURT.  EACH OF THE PARTIES  HERETO  AGREES THAT A FINAL
JUDGMENT  IN ANY  SUCH  ACTION  OR  PROCEEDING  SHALL BE  CONCLUSIVE  AND MAY BE
ENFORCED IN OTHER  JURISDICTIONS  BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED  BY LAW.  NOTHING  IN THIS  AGREEMENT  SHALL  AFFECT ANY RIGHT THAT ANY
LENDER PARTY MAY OTHERWISE  HAVE TO BRING ANY ACTION OR  PROCEEDING  RELATING TO
THIS  AGREEMENT  OR  ANY OF THE  OTHER  LOAN  DOCUMENTS  IN  THE  COURTS  OF ANY
JURISDICTION.

     EACH OF THE PARTIES HERETO IRREVOCABLY AND  UNCONDITIONALLY  WAIVES, TO THE
FULLEST  EXTENT IT MAY LEGALLY AND  EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY
NOW OR HEREAFTER  HAVE TO THE LAYING OF VENUE OF ANY SUIT,  ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS  AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
TO  WHICH IT IS A PARTY IN ANY NEW YORK  STATE  OR  FEDERAL  COURT.  EACH OF THE
PARTIES HERETO HEREBY  IRREVOCABLY  WAIVES,  TO THE FULLEST EXTENT  PERMITTED BY
LAW, THE DEFENSE OF AN  INCONVENIENT  FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.

     Section 30. WAIVER OF JURY TRIAL.

     EACH OF THE BORROWERS,  THE LOAN PARTIES,  THE ADMINISTRATIVE AGENT AND THE
SECURED PARTIES  VOLUNTARILY,  INTENTIONALLY AND IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL  BY JURY IN ANY  ACTION,  PROCEEDING  OR  COUNTERCLAIM  (WHETHER  BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS,  THE ADVANCES OR THE ACTIONS OF THE  ADMINISTRATIVE
AGENT OR ANY SECURED PARTY IN THE  NEGOTIATION,  ADMINISTRATION,  PERFORMANCE OR
ENFORCEMENT  THEREOF.  THIS WAIVER  CONSTITUTES  A MATERIAL  INDUCEMENT  FOR THE
SECURED PARTIES AND THE ADMINISTRATIVE AGENT TO ENTER INTO THIS AGREEMENT AND TO
MAKE ADVANCES PURSUANT TO THE LOAN DOCUMENTS.


                                      -23-
<PAGE>

     Section 31.  Counterparts.

     This Agreement may be executed in any number of several counterparts,  each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.  Delivery by telecopier of an executed  counterpart
of a signature  page to this  Agreement  shall be as  effective as delivery of a
manually executed counterpart to this Agreement.

     Section  32.  Amendment  and   Restatement;   Reaffirmation  of  Continuing
Security.

     This Agreement amends and restates in its entirety the Security  Agreement,
originally  dated  December  31,  1998,  by and among  MediaBay,  the other Loan
Parties party thereto and Fleet National Bank, as  Administrative  Agent,  which
Security  Agreement  continues in effect as so amended and restated as set forth
herein.  Without limiting the generality of the immediately  preceding sentence,
the Liens granted under the Security Agreement as so amended and restated as set
forth  herein  shall in all  respects  be and remain  continuing,  securing  the
payment of all  Obligations.  MediaBay and the other Loan  Parties  party to the
Security  Agreement  as so amended  and  restated  as set forth  herein,  hereby
reaffirm the security  interests and Liens granted to the  Administrative  Agent
for its benefit and the ratable benefit of the other Secured Parties pursuant to
the Security Agreement.


                            [SIGNATURE PAGES FOLLOW]


                                      -24-
<PAGE>

     IN WITNESS  WHEREOF,  each of the Grantors has caused this  Agreement to be
duly executed and delivered by its officer  thereunto duly  authorized as of the
date first above written.

                                            MEDIABAY, INC.

                                            By:_________________________________
                                            Title:______________________________
                                            Address:




                                            RADIO SPIRITS, INC.

                                            By:_________________________________
                                            Title:______________________________
                                            Address:




                                            AUDIO BOOK CLUB, INC.

                                            By:_________________________________
                                            Title:______________________________
                                            Address:




                                            MEDIABAY.COM, INC.

                                            By:_________________________________
                                            Title:______________________________
                                            Address:




                                            AUDIOBOOKCLUB.COM, INC.

                                            By:_________________________________
                                            Title:______________________________
                                            Address:



<PAGE>

                                            ABC-COA ACQUISITION CORP.

                                            By:_________________________________
                                            Title:______________________________
                                            Address:




                                            MEDIABAY SERVICES, INC.

                                            By:_________________________________
                                            Title:______________________________
                                            Address:




                                            VIDEO YESTERYEAR, INC.

                                            By:_________________________________
                                            Title:______________________________
                                            Address:





                                            ABC INVESTMENT CORP.

                                            By:_________________________________
                                            Title:______________________________
                                            Address:




                                            MEDIABAY PUBLISHING, INC.

                                            By:_________________________________
                                            Title:______________________________
                                            Address:


<PAGE>

                                            RADIO CLASSICS, INC.

                                            By:_________________________________
                                            Title:______________________________
                                            Address:



ACCEPTED:


ING (U.S.) CAPITAL LLC,
AS ADMINISTRATIVE AGENT


By: _____________________________________

Title: ____________________________________