Exh. 10-33

                       ASSIGNMENT AND SECURITY AGREEMENT


        THIS  ASSIGNMENT  AND SECURITY  AGREEMENT  (this  Agreement) is made and
entered  into as of the 6th  day of  November,  1997,  by and  between  American
Physicians  Service  Group,  Inc., a Texas  corporation  (the Secured Party) and
Consolidated Eco-Systems,  Inc., an Idaho corporation formerly known as Exsorbet
Industries, Inc. (the Debtor).

                                   RECITALS:

A. Debtor executed and delivered that certain Promissory Note dated November 26,
1996 (the Original Note) in the original principal amount of Three Million Three
Hundred Thousand Dollars ($3,300,000) payable to the order of Secured Party.

B. The Original Note was secured pursuant to the following  agreements,  all for
the benefit of Secured Party: (i) that certain Security Agreement dated December
12, 1996,  entered into by7-7,  Inc., an Arkansas  corporation  (7-7),  formerly
known as 7-7 Merger,  Inc.; (ii) that certain Security Agreement dated September
30,  1996,  entered  into by 77;  (iii) that  certain  Assignment  and  Security
Agreement  dated  September  30, 1996,  entered  into by Debtor;  and (iv) those
certain Guaranty  Agreements  dated September 30, 1996,  entered into by each of
the following entities:

        a.      Consolidated Environmental Services, Inc., an Arkansas
                    corporation (CES);

        b.      Cierra, Inc., an Arkansas corporation (Cierra);

        c.      Larco Environmental Services, Inc., a Louisiana corporation
                    (Larco);

        d.      KR Industrial Services of Alabama, Inc., an Alabama corporation
                    (KR Industrial);

        e.      Exsorbet Technical Services, Inc., an Arkansas corporation
                    (Exsorbet Technical) doing business as SpilTech Services,
                    Inc.;

        f.      Eco Acquisition, Inc., an Arkansas corporation (Acquisition),
                    also known as Eco-Systems, Inc.; and

        g.      7-7

(all of the  agreements  described  in (i) through  (iv) above are  collectively
referred to herein as the Original Security Documents).
<PAGE>

C. Debtor has executed and delivered a new note of even date  herewith,  payable
to the order of Secured Party,  in the original  principal  amount of $3,788,580
(the New Note) in renewal and extension of the Original Note,  which New Note is
also secured  pursuant to (i) the  Original  Security  Documents,  and (ii) that
certain Security Agreement of even date herewith entered into for the benefit of
Secured Party by Larco (the Larco Security Agreement) (the agreements  described
in (i) and  (ii) of this  sentence,  together  with  the  Refinancing  Agreement
described below and this Agreement,  are collectively  referred to herein as the
Security Documents).

D. Secured Party has requested  that Debtor  pledge the  Collateral  (as defined
below)  to  secure  certain  obligations  and  liabilities,   including  without
limitation  (i) Debtors  obligation to pay to Secured  Party the New Note,  (ii)
Debtors performance of the covenants set forth in the Security Documents,  (iii)
Debtors and Debtors  Subsidiaries  (as hereinafter  defined)  performance of the
covenants set forth in that certain  Master  Refinancing  Agreement of even date
herewith  entered  into for the  benefit of Secured  Party by Debtor and Debtors
Subsidiaries  (as hereinafter  defined) (the  Refinancing  Agreement),  and (iv)
Debtors performance of the covenants more fully set forth herein.

        E.  Reference  is  hereby  made  to  Schedule  I,  attached  hereto  and
incorporated  herein  by  reference,  for  certain  defined  terms  used in this
Agreement.


                                   AGREEMENT:

        Now, Therefore,  in consideration of the foregoing and the covenants and
agreements hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which Debtor  acknowledges,  Debtor and Secured Party
agree as follows:

                                   ARTICLE I
                       COLLATERAL AND SECURED OBLIGATIONS

1.1 GRANT OF SECURITY INTEREST. Debtor hereby assigns, transfers, and pledges to
Secured Party, and Debtor hereby grants to Secured Party a security interest in,
the following described collateral (collectively, the Collateral):

        (a) SHARES OF ACQUISITION AND LARCO.  All issued and outstanding  shares
of common stock of Acquisition and Larco,  including  without  limitation  those
shares  evidenced by the  certificates  described in Schedule II attached hereto
and incorporated  herein, and any replacements,  substitutions,  or exchanges of
such  certificates;  and any additional shares of common stock of Acquisition or
Larco  subsequently  delivered or issued to Secured  Party (the above  described
stock is sometimes  collectively  referred to as the Subsidiary Shares); and any
options, rescission rights, registration rights, conversion rights, subscription
rights,  contractual or quasicontractual  rights,  warrants,  redemption rights,
redemption proceeds,  calls, preemptive rights and all other rights and benefits
pertaining to the Subsidiary Shares;
<PAGE>

                (b)  SHARES OF DEBTOR.  1,200,000  shares of the $.001 par value
per  share  common  stock  of  Consolidated  (the  Consolidated   Shares),  such
Consolidated  Shares being those certain shares of common stock of  Consolidated
purchased by Consolidated from Secured Party in November,  1996, for $3,300,000,
and any replacements,  substitutions, or exchanges of such certificates; and any
options, rescission rights, registration rights, conversion rights, subscription
rights,  contractual  or  quasicontrac  rights,  warrants,   redemption  rights,
redemption rights,  redemption proceeds,  calls, preemptive rights and all other
rights and benefits pertaining to the Consolidated Shares (the Subsidiary Shares
and the  Consolidated  Shares  are  sometimes  collectively  referred  to as the
Shares);

        (c) ACCOUNTS.  All accounts and rights now or hereafter  attributable to
any of the  Collateral  described in (a) or (b) above,  and all rights of Debtor
now or  hereafter  arising  under any  agreement  pertaining  to the  Collateral
described in (a) or (b) above,  including without  limitation all distributions,
proceeds, fees, dividends,  preferences,  payments or other benefits of whatever
nature which  Debtor are now or may  hereafter  become  entitled to receive with
respect to any Collateral described in (a) or (b) above; and

                (d)  ADDITIONAL  PROPERTY.  Collateral  shall also  include  the
following property (collectively,  the Additional Property) which Debtor becomes
entitled to receive or shall  receive in connection  with any other  Collateral:
(i)  any  stock  certificate,  including  without  limitation,  any  certificate
representing  a  stock  dividend  or any  certificate  in  connection  with  any
recapitalization,  reclassification,  merger, consolidation, conversion, sale of
assets, combination of shares, stock split, reverse stock split or spinoff; (ii)
any  option,  warrant,  subscription  or right,  whether as an addition to or in
substitution of any other  Collateral;  (iii) any dividends or  distributions of
any kind  whatsoever,  whether  distributable  in cash, stock or other property;
(iv) any  interest,  premium or principal  payments;  and (v) any  conversion or
redemption proceeds.

                (e) PROCEEDS. All proceeds (cash and noncash) arising out of the
sale,  exchange,  collection or other  disposition  of all or any portion of the
Collateral  described  in  (a),  (b),  (c),  or  (d)  above,  including  without
limitation proceeds in the form of stock, accounts,  chattel paper, instruments,
documents, goods, inventory and equipment.

The  security  interest in the  Collateral  hereby  granted by Debtor to Secured
Party may sometimes be referred to in this Agreement as the Security Interest.

        1.2 OBLIGATIONS.  This Agreement and the Security  Interest shall secure
full and punctual payment and performance of the following indebtedness,  duties
and obligations (the Obligations):

                (a)     All covenants, obligations, and liabilities of Debtor
and Debtors Subsidiaries to Secured Party under the Security Documents;

                (b) All principal,  interest,  fees and other amounts payable to
the Secured  Party  pursuant  to the New Note,  including  all future  advances,
extensions, renewals, modifications, increases, or substitutions thereof;
<PAGE>

                (c) All  liabilities  and obligations of Debtor to Secured Party
under and  pursuant to this  Agreement  and/or any other  contract or  agreement
between  Secured Party and Debtor or between Secured Party and any Subsidiary or
affiliate of Debtor; and

                (d) (i)all  indebtedness,  obligations and liabilities of Debtor
and/or  Debtors  Subsidiaries  and  affiliates  to Secured  Party of any kind or
character, now existing or hereafter arising, whether direct, indirect, related,
unrelated, fixed, contingent, liquidated,  unliquidated, joint, several or joint
and several, arising from, connected with, or related to the Security Documents,
the New Note,  or any other  document,  agreement,  or  instrument  executed  in
connection   therewith,   (ii)all  accr  but  unpaid  interest  on  any  of  the
indebtedness  described  in  (i)above,  (iii)all  obligations  of Debtor  and/or
Debtors  Subsidiaries  and  affiliates  to  Secured  Party  under any  documents
evidencing,  securing,  governing  and/or  pertaining  to all or any part of the
indebtedness  described  in (i) and  (ii)  above,  (iv)all  costs  and  expenses
incurred by Secured Party in connection  with the collection and  administration
of all or any part of the  indebtedness  and obligations  described in (i), (ii)
and (iii) above or the protection or preservation  of, or realization  upon, the
collateral  securing  all or any  part of  such  indebtedness  and  obligations,
including without limitation all reasonable attorneys fees, and (v)all renewals,
extensions, modifications and rearrangements of the indebtedness and obligations
described in (i), (ii), (iii) and (iv) above.

                (e) All sums expended or advanced by Secured  Party  pursuant to
any term or  provision  of this  Agreement  (i) to collect  and/or  enforce  the
Obligations,  (ii) to maintain,  protect and preserve the Collateral,  and (iii)
all other sums now or hereafter  loaned or advanced by Secured  Party to Debtor,
or expended by Secured  Party for the  account of Debtor or  otherwise  owing by
Debtor to Secured Party, in respect to the Obligations.

        1.3 VOTING  RIGHTS.  As long as no Event of Default  shall have occurred
hereunder,  any voting rights incident to any stock or other securities  pledged
as Collateral may be exercised by Debtor;  provided,  however,  that Debtor will
not exercise,  or cause to be  exercised,  any such voting  rights,  without the
prior written consent of Secured Party, if the direct or indirect effect of such
vote will result in an Event of Default hereunder


                                   ARTICLE II
       DEBTORS REPRESENTATIONS AND WARRANTIES WITH RESPECT TO COLLATERAL

        Debtor hereby represents and warrants to Secured Party as follows:

2.1  OWNERSHIP  OF  COLLATERAL.  Debtor  has  good and  marketable  title to the
Collateral  free  and  clear  of any  liens,  security  interests,  shareholders
agreement, calls, charge, or encumbrance,  except for this Security Interest. No
financing  statement or other  instrument  similar in effect covering all or any
part of the  Collateral is on file in any recording  office,  except as may have
been filed in favor of Secured Party relating to this Agreement.

2.2 POWER & AUTHORITY.Debtor has the lawful right, power, and authority to grant
the Security  Interest in the  Collateral.  This  Agreement,  together  with all
filings and other  actions  necessary  or  desirable to perfect and protect such
security  interest,  which have been duly  taken,  create a valid and  perfected
first  priority  security  interest in the  Collateral  securing the payment and
performance of the Obligations.
<PAGE>

2.3 NO  AGREEMENTS.  The Shares are not  subject to any right of  redemption  by
Acquisition,  Larco, or Consolidated, as applicable, or any call or put options,
voting  trust,  proxy,  shareholders  agreement,  right of first  refusal or any
provision of the articles of incorporation  or bylaws of Acquisition,  Larco, or
Debtor, as applicable, or any other document or agreement which would in any way
impair or adversely affect this Security Interest or the rights of Secured Party
under this Agreement.

2.4 LOCATION. Debtors principal place of business and chief executive office are
located at 6807 West 12th Street, Little Rock, Arkansas, 72204. The office where
the records  concerning the Collateral are kept is located at Debtors  principal
place of business.

2.5 SOLVENCY OF DEBTOR AND THE  SUBSIDIARIES.  As of the date hereof,  and after
giving effect to this  Agreement,  the Security  Documents and the New Note, and
the  completion  of all  other  transactions  contemplated  by  Debtor  and  the
Subsidiaries  at the time of the  execution of this  Agreement and the New Note,
(i) Debtor and each  Subsidiary  (other than Cierra,  CES and 77) is and will be
solvent,  (ii) the  fair  saleable  value of  Debtors  assets  exceeds  and will
continue to exceed Debtor's  liabilities (both fixed and contingent),  and (iii)
Debtor has and will have sufficient  capital to carry on Debtors  businesses and
all businesses in which Debtor is about to engage.

2.6 SECURITIES. Any certificates evidencing securities pledged as Collateral are
valid  and  genuine  and  have not  been  altered.  All  securities  pledged  as
Collateral  have been duly  authorized  and validly  issued,  are fully paid and
nonassessable,  and were not issued in violation of the preemptive rights of any
party or of any  agreement  by which Debtor or the issuer  thereof is bound.  No
restrictions  or conditions  exist with respect to the transfer or voting of any
securities pledged as Collateral.  Debtor owns all of the issued and outstanding
stock, of all classes,  of Acquisition  and Larco,  and there are no outstanding
stock rights, rights to subscribe,  options,  warrants or convertible securities
outstanding  or any other  rights  outstanding  entitling  any party,  including
Debtor,  to obtain  (through  conversion or otherwise) any capital stock, of any
class,  of Acquisition  or Larco.  All issued and  outstanding  shares of common
stock of Acquisition  and Larco are evidenced by the  certificates  described in
Schedule II attached hereto.

2.7  OWNERSHIP  OF  SHARES.  Debtor  is,  as of the date  hereof,  the legal and
beneficial  owner of the Shares,  and Debtor has paid the full purchase price or
other consideration for the Shares on the date hereof.

2.8 SUBSIDIARY  SHARES ISSUED AND PAID. All of the Subsidiary Shares are validly
issued and  outstanding  shares of capital stock of  Acquisition  and Larco,  as
applicable, and are fully paid and nonassessable.

2.9  CONSOLIDATED  SHARES  ISSUED.  All of the  Consolidated  Shares are validly
issued to Debtor, and since being purchased by Debtor,  have been held by Debtor
and  reflected  on its books and in all  filings  with the  Securities  Exchange
Commission and other regulatory  bodies,  as treasury shares,  and have not been
retired or otherwise transferred to the status of unissued shares.
<PAGE>

                                  ARTICLE III
                  DEBTORS OTHER REPRESENTATIONS AND WARRANTIES

        3.1  GOODSTANDING - DEBTOR.  Debtor is a duly formed Idaho  corporation,
duly  organized  and in good standing  under the laws of Idaho,  qualified to do
business  in and in good  standing  in each  state  or  country  in  which  such
qualification is necessary for the conduct of its business, and has the power to
own its  property  and to carry on its  business in each  jurisdiction  in which
Debtor operates.

        3.2  GOODSTANDING  -  SUBSIDIARIES.   Each  Subsidiary  (as  more  fully
described below) is a duly formed corporation under the laws of the state of its
incorporation,  duly  organized and in good standing under the laws of the state
of its  incorporation,  qualified to do business in and in good standing in each
state or country in which such qualification is necessary for the conduct of its
business,  and has the power to own its property and to carry on its business in
each jurisdiction in which it operates.  As of the date hereof, the Subsidiaries
constitute all the  subsidiaries of Debtor which generate revenue and/or own any
assets and/or engage in any business activities.

        3.3 AUTHORITY AND COMPLIANCE.Debtor has full power and authority toenter
into this Agreement.  Debtor and Debtors  Subsidiaries,  where applicable,  have
full power and authority to enter into and perform their  obligations  under the
New Note, the Refinancing  Agreement,  and all other Security Documents governed
by this  Agreement and the  Refinancing  Agreement,  all of which have been duly
authorized by all proper and necessary  corporate  action. No further consent or
approval is required as a condition to the validity of this  Agreement,  the New
Note,  or any  other  Security  Documents.  Debtor  and  each  Subsidiary  is in
compliance with all Laws to which it is subject.

3.4 BINDING AGREEMENT.  This Agreement, the Security Documents, and the New Note
constitute   valid  and  legally  binding   obligations  of  Debtor  and,  where
applicable,  the  Subsidiaries,  in accordance with their terms,  subject to the
applicable bankruptcy, insolvency, reorganization,  moratorium, and similar laws
affecting creditors' rights generally.

3.5 LITIGATION. There are no proceedings pending or, to the knowledge of Debtor,
threatened  before any court or  administrative  agency which will or may have a
material  adverse  effect on the financial  condition or operations of Debtor or
any  Subsidiary  or upon  Debtors or any  Subsidiarys  ability  to  perform  its
obligations under the New Note, this Agreement, or the Security Documents.

3.6 NO CONFLICTING AGREEMENTS.There are no charter, bylaw or stock provisions of
Debtor and no  provisions  of any  existing  agreement,  mortgage,  indenture or
contract binding on Debtor or affecting its property,  which would conflict with
or in any way prevent the execution,  delivery,  or carrying out of the terms of
the New Note,  this Agreement or the Security  Documents.  There are no charter,
bylaw or stock  provisions of any  Subsidiary  and no provisions of any existing
agreement,  mortgage,  indenture  or  contract  binding  on  any  Subsidiary  or
affecting  its  property,  which would  conflict  with or in any way prevent the
execution,  delivery,  or  carrying  out of  the  terms  of any of the  Security
Documents to which such Subsidiary is a party.
<PAGE>

3.7 OWNERSHIP OF ASSETS.Debtor has good and full title to the Collateral,and the
Collateral  is  owned  free  and  clear  of  liens,  charges,  claims,  security
interests,  and  other  encumbrances.  Debtor  will at all  times  maintain  its
tangible  property,  real and  personal,  in good order and repair  taking  into
consideration reasonable wear and tear.

3.8 TAXES.  Debtor and each Subsidiary has filed all tax returns  required to be
filed  and has paid  taxes  shown  thereon  to be due,  including  interest  and
penalties,  except such taxes,  if any, as are being contested in good faith and
as to which adequate  reserves have been provided.  The charges,  accruals,  and
reserves  on the books of Debtor or the  Subsidiary  in  respect of any taxes or
other  governmental  charges are, in the opinion of Debtor and such  Subsidiary,
adequate.

3.9  FINANCIAL  STATEMENTS.  The books and  records of Debtor  properly  reflect
Debtor's financial  condition,  and the financial statements of Debtor submitted
to Secured Party properly reflect Debtor's  financial  condition as of such date
and were prepared in accordance with generally accepted  accounting  principles,
consistently applied.

3.10  ERISA  PLAN.  No  Reportable  Event or  Prohibited
Transaction  (as those terms are defined by erisa) has occurred  with respect to
any employee benefit plan of Debtor or any Subsidiary which is subject to erisa.
Neither Debtor nor any Subsidiary has incurred any material accumulated unfunded
deficiency  within the meaning of erisa,  and neither  Debtor nor any Subsidiary
has incurred any material liability to the Pension Benefit Guaranty  Corporation
established  under erisa (or any  successor  thereto  under erisa) in connection
with any such benefit plan.

                                   ARTICLE IV
                 DEBTOR'S COVENANTS WITH RESPECT TO COLLATERAL

        Debtor  covenants  and  agrees  that from the date  hereof and until the
payment  and  performance  in  full  of the  Obligations  unless  Secured  Party
otherwise consents in writing:

        4.1  DELIVERY  OF  INSTRUMENTS  AND/OR  CERTIFICATES.  Contemporaneously
herewith,   Debtor  covenants  and  agrees  to  deliver  to  Secured  Party  any
certificates,   documents,   or  instruments   representing  or  evidencing  the
Collateral,  with Debtors  endorsement  thereon  and/or  accompanied by property
instruments of transfer and assignment duly executed in blank with, if requested
by Secured Party,  signatures  guaranteed by a member or member  organization in
good standing of an authorized Securities Transfer Agents Medallion Program, all
in form and substance satisfactory to Secured Party.

        4.2 FURTHER ASSURANCES - All Shares. Debtor will  contemporaneously with
the execution  hereof and from time to time  thereafter at its expense  promptly
execute and deliver all further  instruments  and documents and take all further
<PAGE>

action  necessary or  appropriate or that Secured Party may request in order (i)
to perfect and protect the security  interest created or purported to be created
hereby and the first priority of such security interest,  (ii) to enable Secured
Party to exercise  and enforce its rights and  remedies  hereunder in respect of
the  Collateral,  and (iii) to otherwise  effect the purposes of this Agreement,
including  without  limitation:  (A)  executing  and  filing  any  financing  or
continuation  statements,  or any  amendments  thereto;  (B)  obtaining  written
confirmation  from the issuer of any  securities  pledged as  Collateral  of the
pledge of such securities,  in form and substance satisfactory to Secured Party;
(C)  cooperating  with Secured Party in registering the pledge of any securities
pledged as Collateral with the issuer of such securities;  (D) delivering notice
of Secured Partys security  interest in any securities  pledged as Collateral to
any securities or financial  intermediary,  clearing  corporation or other party
required by Secured Party, in form and substance  satisfactory to Secured Party;
and  (E)  obtaining  written  confirmation  of  the  pledge  of  any  securities
constituting Collateral from any securities or financial intermediary,  clearing
corporation  or other party  required by Secured  Party,  in form and  substance
satisfactory  to  Secured  Party.  If all  or any  part  of  the  Collateral  is
securities  issued by an agency  or  department  of the  United  States,  Debtor
covenants and agrees,  at Secured  Partys  request,  to cooperate in registering
such securities in Secured Partys name or with Secured Partys account maintained
with a Federal Reserve Bank.

        4.3  FURTHER   ASSURANCES  -  CONSOLIDATED   SHARES.   Contemporaneously
herewith,  Debtor  covenants  and agrees to issue and  deliver  (unless  already
issued  and  delivered)  to Secured  Party a stock  certificate  evidencing  the
Consolidated  Shares,  with Debtors  endorsement  thereon, in form and substance
satisfactory to Secured Party. Debtor further covenants and agrees that it will,
at all times,  except as may be  consented  to  otherwise  in writing by Secured
Party in connection with any registration  and sale of the  Consolidated  Shares
for the benefit of Secured  Party,  maintain the  Consolidated  Shares as issued
treasury  shares,  and will not retire or otherwise  transfer  the  Consolidated
Shares, on its books or to any third party.

        4.4  ADDITIONAL  PROPERTY.  All Additional  Property  received by Debtor
shall be  received  in trust for the benefit of Secured  Party.  All  Additional
Property  and  all  certificates  or  other  written  instruments  or  documents
evidencing  and/or  representing  the  Additional  Property  that is received by
Debtor, together with such instruments of transfer as Secured Party may request,
shall  immediately  be delivered to or deposited  with Secured Party and held by
Secured Party as Collateral under the terms of this Agreement. If the Additional
Property received by Debtor shall be shares of stock or other  securities,  such
shares  of  stock  or  other  securities  shall  be duly  endorsed  in  blank or
accompanied by proper  instruments  of transfer and assignment  duly executed in
blank with, if requested by Secured Party,  signatures guaranteed by a member or
member organization in good standing of an authorized Securities Transfer Agents
Medallion  Program,  all in form and substance  satisfactory  to Secured  Party.
Secured Party shall be deemed to have possession of any Collateral in transit to
Secured Party or its agent.

        4.5  SALE,  TRANSFER,  ENCUMBRANCE.  Debtor  will  not  sell,  transfer,
mortgage,  or otherwise  encumber any  Collateral or impair the value thereof in
any manner  without  Secured  Partys prior written  consent,  including  without
limitation by purchase, lease, barter, trade, payment deferral, or the creation,
assumption  or guarantee of  indebtedness  or other  lending of credit.  Secured
Partys written consent to any sale, mortgage, transfer, or encumbrance shall not
be  construed  to be a waiver of this  provision  in respect  to any  subsequent
proposed sale, mortgage, transfer, or encumbrance.
<PAGE>

        4.6 LIENS.  Neither  Debtor nor any person acting on Debtors behalf has,
or shall have any right, power, or authority to and shall not create,  incur, or
permit to be placed or  imposed,  upon the  Collateral,  any lien of any type or
nature whatsoever, other than the liens in favor of Secured Party.

        4.7  MATTERS OR  OCCURRENCES  AFFECTING  COLLATERAL  OR THIS  AGREEMENT.
Debtor will promptly  notify Secured Party of any and all matters or occurrences
that may have a material adverse effect on the status or value of the Collateral
or this Agreement,  including  without  limitation the occurrence of an Event of
Default,  or an event  which,  with giving of notice or lapse of time,  or both,
would constitute an Event of Default.

        4.8 AGREEMENTS PERTAINING TO COLLATERAL.  Debtor will not enter into any
type of contract or agreement  pertaining to any of the Collateral or in any way
transfer any voting rights pertaining to the Collateral to any person.

        4.9 CHANGE OF NAME.  Debtor  shall not  change its name (or any  assumed
name or other name under which Debtor does business) unless at least thirty (30)
days prior to the effective  date of any such name change,  Debtor gives Secured
Party written notice of such intended name change and the new name. Debtor shall
execute all such documents and agreements (including without limitation security
agreements,  financing  statements,  and amendments to financing  statements) as
Secured Party may reasonably request in connection with any such name change.

        4.10 DILUTION OF OWNERSHIP.  As to any securities pledged as Collateral,
Debtor  will not  consent to or approve of the  issuance  of (i) any  additional
shares  of  any  class  of  securities  of  such  issuer,  (ii)  any  instrument
convertible  voluntarily  by  the  holder  thereof  or  automatically  upon  the
occurrence or  non-occurrence  of any event or condition  into, or  exchangeable
for, any such  securities,  or (iii) any warrants,  options,  contracts or other
commitments  entitling any third party to purchase or otherwise acquire any such
securities.

        4.11  RESTRICTIONS  ON  SECURITIES.  Debtor  will  not  enter  into  any
agreement  creating,  or otherwise permit to exist, any restriction or condition
upon the transfer,  voting or control of any  securities  pledged as Collateral,
except as  consented to in writing by Secured  Party.  Debtor will not engage in
any stock split, reverse stock split, stock dividend, reclassification, or other
similar act or transaction  regarding its capital stock unless the  Consolidated
Shares are  included  in such act or  transaction  and  effected  thereby in all
respects the same as any other shares,  or class of shares,  of Debtors  capital
stock.


                                   ARTICLE V
                         DEBTORS AFFIRMATIVE COVENANTS

        Until payment and performance of all  Obligations,  Debtor covenants and
agrees as follows:
<PAGE>

       5.1 FINANCIAL  STATEMENTS.  Debtor and each  Subsidiary  shall maintain a
system of accounting reasonably  satisfactory to Secured Party and in accordance
with generally accepted accounting  principles  consistently  applied,  and will
permit  Secured  Party's  officers or  authorized  representatives  to visit and
inspect  Debtor's  and  Subsidiarys  books of account and other  records at such
reasonable  times and as often as Secured  Party may desire  during office hours
and after  reasonable  notice to Debtor and the  applicable  Subsidiary.  Unless
written notice of another location is given to Secured Party, Debtor's books and
records  will be located at Debtor's  address set forth  above.  Debtor and each
Subsidiary  further agree that Debtor and the Subsidiaries will promptly provide
Secured Party with such additional information, reports or statements respecting
their  business   operations  and  financial  condition  as  Secured  Party  may
reasonably  request from time to time.  Debtor shall  deliver to Lender,  within
three (3) days after filing same, all annual,  periodic,  and other filings made
by Debtor with the Securities and Exchange Commission.

        5.2 INSURANCE.  Debtor and each Subsidiary shall maintain insurance with
responsible  insurance companies on such of its properties,  in such amounts and
against such risks as is customarily  maintained by similar businesses operating
in the same  vicinity,  specifically  to  include a policy of fire and  extended
coverage insurance covering all assets, and liability insurance,  all to be with
such companies and in such amounts  satisfactory to Secured Party and to contain
a mortgage  clause naming Secured Party as its interest may appear.  Evidence of
such insurance will be supplied to Secured Party.

       5.3 EXISTENCE AND COMPLIANCE.  Debtor and each Subsidiary  shall maintain
its corporate  existence in good standing and comply with all Laws applicable to
it or to any of its property,  business operations and transactions.  Debtor and
each  Subsidiary  shall qualify as a foreign  corporation  in all  jurisdictions
wherein any  property  now or  hereafter  owned or any business now or hereafter
transacted by Debtor or such Subsidiary makes such qualifications necessary.

        5.4 ADVERSE  CONDITIONS  OR EVENTS.  Debtor and the  Subsidiaries  shall
promptly advise Secured Party in writing of any litigation  filed against Debtor
or any  Subsidiary  and of any  condition,  event  or  act  which  comes  to its
attention  that would or might have a material  adverse effect on Debtors or any
Subsidiarys financial condition or on Debtors ability to perform the Obligations
or any Subsidiarys  ability to perform under its guaranty  agreement executed in
favor of  Secured  Party  with  respect to the  Obligations,  including  without
limitation any  Environmental  Condition that might have such a material adverse
effect the  financial  condition  of Debtor or any  Subsidiary,  any  Reportable
Event,  or any event that could be the basis for  institution  of proceedings by
the Pension Benefit Guaranty Corporation to terminate a plan subject to erisa.

        5.5 TAXES. Debtor and each Subsidiary shall pay all taxes as they become
due and payable.

        5.6  MAINTENANCE.  Debtor and each Subsidiary  shall maintain all of its
tangible  property  in good  condition  and  repair,  reasonable  wear  and tear
excepted, and make all necessary replacements thereof, and preserve and maintain
all licenses,  privileges,  franchises,  certificates and the like necessary for
the operation of their respective business.
<PAGE>

        5.7  ENVIRONMENTAL.  Debtor  and each  Subsidiary  shall  promptly  give
Secured Party written notice of any  investigation,  claim,  demand,  lawsuit or
other action by any governmental or regulatory agency or private party involving
any  property  owned or leased by Debtor  or any  Subsidiary  and any  Hazardous
Substance or Environmental  Law of which Debtor or any Subsidiary has knowledge.
If Debtor or any  Subsidiary  learns,  or is  notified  by any  governmental  or
regulatory  authority,  that any removal or other  remediation  of any Hazardous
Substance affecting any property owned by Debtor or any Subsidiary is necessary,
Debtor or such Subsidiary shall promptly take all necessary  remedial actions in
accordance with Environmental Law.

        5.8 SUBSIDIARIES.  Subsidiary means (a) CES; (b) Cierra;  (c) Larco; (d)
KR Industrial; (e) Exsorbet Technical; (f) Acquisition;  and (g) 7-7. Debtor and
Secured Party  contemplate  that,  from time to time,  additional  subsidiaries,
either directly or indirectly  wholly-owned by Debtor, may be formed.  Upon such
formation,  each such new subsidiary shall sign a Guaranty Agreement in the form
substantially  the same as  those  executed  in  connection  with  the  Security
Documents,  and shall execute and be bound by the  Refinancing  Agreement.  Each
such new subsidiary  shall be deemed a Subsidiary as defined in and used in this
Agreement and shall be subject to the terms,  conditions,  and covenants of this
Agreement.

        5.9 DIVIDEND RIGHTS. Secured Party shall have the sole right to receive,
hold and apply as Collateral any dividends or other  distributions  with respect
to the  Collateral,  or any part thereof,  in cash or in kind.  All dividend and
other  distributions which are received by Debtor contrary to the provisions the
preceding  sentence shall be received in trust for the benefit of Secured Party,
shall be segregated from other funds of Debtor, and shall be forthwith paid over
to Secured  Party in the exact form received  (properly  endorsed or assigned if
requested by Secured Party),  to be held by Secured Party as Collateral,  or, in
Secured Partys sole discretion, to be applied against payment of any Obligation.

                                   ARTICLE VI
                               NEGATIVE COVENANTS

        Until payment and performance of all  Obligations,  Debtor covenants and
agrees  that  Debtor and each of its  Subsidiaries  will not,  without the prior
written consent of Secured Party:

     6.1  TRANSFE OF ASSETS.  Enter into any merger or  consolidation,  or sell,
lease,  assign,  or otherwise  dispose of or transfer  any assets  having a book
value or fair market value of greater than $50,000  except in the normal  course
of its business.

     6.2 CHANGE IN OWNERSHIP OR STRUCTURE. Dissolve or liquidate; become a party
to any  merger  or  consolidation;  reorganize  as a  professional  corporation;
acquire by purchase,  lease or otherwise all or substantially  all of the assets
or capital stock of any corporation or other entity; or sell,  transfer,  lease,
or otherwise dispose of all or any substantial part of its property or assets or
business.

     6.3  LIENS.  Knowingly  grant,  suffer,  or  permit  liens  on or  security
interests in Debtor's or such  Subsidiarys  assets,  or fail to promptly pay all
lawful claims, whether for labor, materials,  or otherwise,  except for purchase
money security interests arising in the ordinary course of business.
<PAGE>

     6.4  LOANS.  Make any loans,  advances  or  investments  to or in any joint
venture, corporation or other entity, except for the purchase of U.S. Government
obligations or the purchase of Federally-insured certificates of deposit.

     6.5 BORROWINGS.  Create,  incur, assume, or become liable in any manner for
any  indebtedness  (for  borrowed  money,  deferred  payment for the purchase of
assets,  lease  payments,  as surety or  guarantor  of the debt of  another,  or
otherwise)  other than to Secured  Party without  Secured  Party's prior written
consent, except trade debts incurred in the ordinary course of business.

     6.6 VIOLATE OTHER COVENANTS.Violate or fail to comply with any covenants or
agreements  regarding other debt which will or would with the passage of time or
upon demand cause the maturity of any other debt to be accelerated.

     6.7 ENVIRONMENTAL. Cause or permit the presence, use, disposal, storage, or
release of any Hazardous Materials on or in any property owned by, leased by, or
managed or  operated  by Debtor or any  Subsidiary.  Debtor and each  Subsidiary
shall not do, nor allow  anyone else to do, any act that is in  violation of any
Environmental Law.

     6.8  DIVIDENDS.  Declare  any  dividends  on any shares of any class of its
capital  stock,  or  apply  any of  its  property  or  assets  to the  purchase,
redemption or other retirement of any shares of any class of capital stock or in
any way amend its capital structure.

     6.9  CHARACTER  OF  BUSINESS.  Change the general  character of business as
conducted at the date hereof,  or engage in any type of business not  reasonably
related to its business as presently and normally conducted.

                                  ARTICLE VII
                              DEFAULT AND REMEDIES

     7.1 EVENTS OF DEFAULT.  An Event of Default  (herein so called) shall exist
if any one or more of the following events shall occur:

                (a) The failure of Debtor to pay any amount of  principal  under
and/or  interest  on the New Note,  or any other  amounts due under the New Note
within fifteen (15) calendar days after such principal, interest or other amount
is due;

                (b) Debtors  breach of a covenant in this Agreement or any other
failure to perform its  obligations  under this  Agreement or any other Security
Documents;
<PAGE>

                (c) Any representation or warranty made in this Agreement or any
other Security Documents shall be false or materially misleading,  as determined
in the reasonable discretion of Secured Party;

                (d)     The occurrence of an Event of Default of any other
Security Documents;

                (e) If Debtor or any other party obligated to pay any portion of
the Obligations:  (i) becomes  insolvent  (except for any insolvency,  as of the
date hereof,  of CES,  Cierra or 77), or makes a transfer in fraud of creditors,
or makes an assignment  for the benefit of  creditors,  or admits in writing its
inability to pay its debts as they become due; (ii)  generally is not paying its
debts as such debts become due and Secured Party, in good faith, determines that
such event or condition could l to a material  impairment of the Collateral,  or
any part thereof,  or of any other payment  security for any of the Obligations;
(iii) has a receiver, trustee or custodian appointed for, or take possession of,
all or  substantially  all of the assets of such party or any of the Collateral,
either in a proceeding  brought by such party or in a proceeding brought against
such party and such  appointment  is not  discharged  or such  possession is not
terminated within sixty (60) days after the effective date thereof or such party
consents  to or  acquiesces  in such  appointment  or  possession;  (iv) files a
petition for relief under the United States Bankruptcy Code or any other present
or future  federal or state  insolvency,  bankruptcy or similar laws (all of the
foregoing  hereinafter  collectively  called  Applicable  Bankruptcy  Law) or an
involuntary petition for relief is filed against such party under any Applicable
Bankruptcy Law and such involuntary  petition is not dismissed within sixty (60)
days  after the filing  thereof,  or an order for  relief  naming  such party is
entered under any Applicable Bankruptcy Law, or any composition,  rearrangement,
extension,  reorganization or other relief of debtors now or hereafter  existing
is requested or consented to by such party; (v) fails to have discharged  within
a period of sixty (60) days any attachment, sequestration or similar writ levied
upon any property of such party; or (vi) fails to pay within ninety(90) days any
final money judgment against such party; or

                (f) The issuer of any securities constituting Collateral files a
petition for relief under any Applicable Bankruptcy Law, an involuntary petition
for relief is filed against any such issuer under any Applicable  Bankruptcy Law
and such involuntary petition is not dismissed within thirty (30) days after the
filing  thereof,  or an order for relief naming any such issuer is entered under
any Applicable Bankruptcy Law.

        7.2     SECURED PARTYS REMEDIES.  Upon the occurrence of an Event of
Default:

                (a) Secured Party may declare the  Obligations  in whole or part
immediately due and may enforce payment and performance of the same and exercise
any rights under the Texas ucc,  rights and remedies of Secured Party under this
Agreement, or otherwise.

                (b)  Secured  Party may,  at Secured  Party's  option and at the
expense of Debtor,  either in Secured Party's own right or in the name of Debtor
and in the same manner and to the same extent that Debtor  might  reasonably  so
act  if  this  Agreement  had  not  been  made:  (i) do  all  things  requisite,
convenient,  or  necessary  to enforce the  performance  and  observance  of all
rights,  remedies and privileges of Debtor arising from the  Collateral,  or any
part thereof, including without limitation compromi waiving, excusing, or in any
manner  releasing or discharging  any obligation of any party to or arising from
the Collateral;
<PAGE>

(ii) take possession of the books,  papers,  chattel paper,  documents of title,
and accounts of Debtor, wherever located, relating to the Collateral;  (iii) sue
or otherwise collect and receive money attributable to the Collateral;  and (iv)
exercise  any other  lawfully  available  powers or  remedies,  and do all other
things which Secured Party deems requisite, convenient or necessary or which the
Secured Party deems proper to protect the Security Interest.

                (b) Secured Party may foreclose this Agreement in the manner now
or  hereafter  provided  or  permitted  by law  and  may  upon  such  reasonable
notification  prior thereto as may be required by applicable  law (Debtor hereby
agreeing  that ten  days'  notice is  commercially  reasonable),  sell,  assign,
transfer,  or otherwise  dispose of the Collateral at public or private sale, in
whole  or in  part,  and  Secured  Party  may,  in its own  name  or as  Debtors
attorneyinfact  effectively  assign and  transfer  the  Collateral,  or any part
thereof,   absolutely,  and  execute  and  deliver  all  necessary  assignments,
conveyances,  bills of sale, and other  instruments with power to substitute one
or more persons or  corporations  with like power.  Any such  foreclosure  sale,
assignment,  transfer,  or other  disposition  shall, to the extent permitted by
law,  be a  perpetual  bar,  both at law and in equity,  against  Debtor and all
persons and corporations  lawfully  claiming by or through or under Debtor.  Any
such foreclosure sale may be adjourned from time to time. Upon any sale, Secured
Party may bid for and purchase the  Collateral,  or any part  thereof,  and upon
compliance with the terms of sale may hold,  retain,  possess and dispose of the
Collateral, in its absolute right without further accountability.  Secured Party
shall have the right to be  credited  on the  amount of its bid a  corresponding
amount of the Obligations as of the date of such sale.

                (c) If, in the opinion of Secured  Party,  there is any question
that a public sale or  distribution  of any Collateral will violate any state or
federal  securities  law,  Secured  Party  (i) may  offer  and  sell  securities
privately to purchasers who will agree to take them for investment  purposes and
not with a view to distribution  and who will agree to imposition of restrictive
legends on the  certificates  representing  the security,  or (ii) may sell such
securities in an intrastate  offering und Section 3(a)(11) of the Securities Act
of 1933,  and no sale so made in good faith by Secured  Party shall be deemed to
be not commercially reasonable because so made.

                (d) Not in limitation of any other  provision of this Agreement,
Secured  Party shall have all rights and  remedies of a secured  party under the
Texas UCC.

        7.3 APPLICATION OF PROCEEDS. Secured Party may apply the proceeds of any
foreclosure  sale  hereunder  or from any  other  permitted  disposition  of the
Collateral  or any part  thereof as  follows:  (a)first,  to the  payment of all
reasonable  costs and expenses of any foreclosure  and collection  hereunder and
all proceedings in connection  therewith,  including reasonable attorneys' fees;
(b)then,  to the  reimbursement of Secured Party for all  disbursements  made by
Secured Party for taxes,  assessments or liens superior to the Security Interest
and  which  Secured  Party  shall  deem  expedient  to  pay;  (c)then,   to  the
reimbursement of Secured Party of any other  disbursements made by Secured Party
in accordance with the terms hereof;  (d) then, to or among the amounts of fees,
interest and principal then owing and unpaid in respect of the  Obligations,  in
such  priority as Secured  Party may  determine  in its  discretion;  and (e)the
remainder of such proceeds,  if any,  shall be paid to Debtor.  If such proceeds
shall be insufficient to discharge the entire  Obligations,  Secured Party shall
have any other  available  legal  recourse  against Debtor and all other persons
obligated  under,  or  for  the  performance  of,  the  Security  Documents  and
Refinancing  Agreement,  or on the New Note, for the  deficiency,  together with
interest thereon at fifteen percent (15%) per annum.
<PAGE>

        7.4  ENFORCEMENT  OF  OBLIGATIONS.  Nothing in this  Agreement or in any
other agreement shall affect or impair the  unconditional  and absolute right of
the Secured Party to enforce the  Obligations  as and when the same shall become
due in accordance with the terms of the New Note.

        7.5 VOTING RIGHTS.  Upon the  occurrence of an Event of Default,  Debtor
will not  exercise  any voting  rights  with  respect to  securities  pledged as
Collateral.   Debtor  hereby  irrevocably  appoints  Secured  Party  as  Debtors
attorneyinfact (such power of attorney being coupled with an interest) and proxy
to exercise  any voting  rights with  respect to Debtors  securities  pledged as
Collateral upon the occurrence of an Event of Default.

                                  ARTICLE VIII
                            RIGHTS OF SECURED PARTY

        8.1  SUBROGATION.  Upon the  occurrence of an Event of Default,  Secured
Party,  at its  election,  may  subrogate  to all of the  interest,  rights  and
remedies  of the  Debtor,  in respect  to any of the  Collateral  or  agreements
pertaining thereto.

        8.2 SECURED  PARTY  APPOINTED  ATTORNEYINFACT.  Debtor  hereby  appoints
Secured Party as attorneyinfact of Debtor,  with full authority in the place and
stead of Debtor and in the name of Debtor, Secured Party or otherwise, from time
to time on Secured  Party's  discretion  and upon the  occurrence of an Event of
Default,  to take any action and to execute any  instrument  which Secured Party
may deem  necessary or advisable to accomplish  the purposes of this  Agreement,
including without  limitation:  (a) to ask, demand,  collect,  sue for, recover,
compound, receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;  (b) to receive,  endorse, and
collect  any  drafts or other  instruments,  documents  and  chattel  paper,  in
connection  with clause (a) of this  Section 8.2; (c) to file any claims or take
any action or institute any proceeding which Secured Party may deem necessary or
desirable for the  collection  of any of the  Collateral or otherwise to enforce
the rights of Secured Party against any of the Collateral; and (d) to assign and
transfer the  Collateral,  or any part  thereof,  absolutely  and to execute and
deliver  endorsements,   assignments,  conveyances,  bills  of  sale  and  other
instruments  with power to substitute  one or more persons or  corporation  with
like power.

        8.3  PERFORMANCE  BY  SECURED  PARTY.  If Debtor  fails to  perform  any
agreement  contained  herein,  Secured  Party may itself  perform,  or cause the
performance  of, such  agreement,  and the reasonable  expenses of Secured Party
incurred in connection  therewith  shall be payable by Debtor under Section 8.8.
In no  event,  however,  shall  Secured  Party  have any  obligation  or  duties
whatsoever to perform any covenant or agreement of Debtor contained herein,  and
any such performance by Secured Party shall be wholly discretionary with Secured
Party.
<PAGE>

        8.4 DUTIES OF SECURED  PARTY.  The powers  conferred  upon Secured Party
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 money  actually
received by it hereunder,  Secured Party shall have no duty as to any Collateral
or as to the taking of any  necessary  steps to preserve  rights  against  prior
parties or any other rights  pertaining to any Collateral.  Without limiting the
generality of the foregoing,  Secured Party shall not have any obligation,  duty
or  responsibility  to do any of the  following:  (a) ascertain any  maturities,
calls,  conversions,  exchanges,  offers, tenders or similar matters relating to
the  Collateral or informing  Debtor with respect to any such matters;  (b) fix,
preserve  or  exercise  any  right,  privilege  or option  (whether  conversion,
redemption or otherwise) with respect to the Collateral  unless (i) Debtor makes
written  demand to Secured Party to do so, (ii) such written  demand is received
by Secured Party in sufficient  time to permit  Secured Party to take the action
demanded in the  ordinary  course of its  business,  and (iii)  Debtor  provides
additional collateral,  acceptable to Secured Party in its sole discretion;  (c)
collect any amounts  payable in respect of the  Collateral  (Secured Party being
liable to account to Debtor only for what Secured Party may actually  receive or
collect thereon);  (d) sell all or any portion of the Collateral to avoid market
loss; (e) sell all or any portion of the Collateral  unless and until (i) Debtor
makes written demand upon Secured Party to sell the Collateral,  and (ii) Debtor
provides  additional  collateral,  acceptable  to  Secured  Party  in  its  sole
discretion;  or (f) hold the Collateral for or on behalf of any party other than
Debtor.

        8.5 NO  LIABILITY  OF SECURED  PARTY.  Neither  the  acceptance  of this
Agreement by Secured Party,  nor the exercise of any rights hereunder by Secured
Party,  shall be construed in any way as an  assumption  by Secured Party of any
obligations,  responsibilities,  or duties of Debtor arising in connection  with
the  Collateral  assigned  hereunder  or  otherwise  bind  Secured  Party to the
performance of any  obligations  respecting the  Collateral,  it being expressly
understood  that Secured  Party shall not be obligated to perform,  observe,  or
discharge  any  obligation,  responsibility,  duty,  or  liability  of Debtor in
respect of any of the Collateral,  including without limitation  appearing in or
defending any action, expending any money or incurring any expense in connection
therewith.

        8.6 RIGHT OF SECURED PARTY TO DEFEND ACTION AFFECTING SECURITY.  Secured
Party  may,  at the  expense  of  Debtor,  appear in and  defend  any  action or
proceeding at law or in equity  purporting to affect  Secured  Party's  Security
Interest under this Agreement.

        8.7 RIGHT OF SECURED PARTY TO PREVENT OR REMEDY DEFAULT. If Debtor shall
fail to perform any of the covenants,  conditions and agreements  required to be
performed  and observed by Debtor under the New Note,  or any other  instruments
secured  hereby,  or in respect of the  Collateral  (subject  to any  applicable
default cure  period),  Secured Party (a) may but shall not be obligated to take
any action  Secured Party deems  necessary or desirable to prevent or remedy any
such default by Debtor or otherwise  to protect the Security  Interest,  and (b)
shall have the absolute and immediate right to take possession of the Collateral
or any part  thereof  (to the  extent  Secured  Party has not  previously  taken
possession)  to such  extent  and as often  as the  Secured  Party,  in its sole
discretion, deems necessary or desirable in order to prevent or to cure any such
default by Debtor,  or  otherwise  to protect the  security  of this  Agreement.
Secured Party may advance or expend such sums of money for the account of Debtor
as Secured Party in its sole discretion deems necessary for any such purpose.
<PAGE>

        8.8 SECURED PARTY'S EXPENSES. All reasonable advances,  costs, expenses,
charges and attorneys' fees which Secured Party may make, pay or incur under any
provision  of this  Agreement  for the  protection  of its  security  or for the
enforcement  of any of  its  rights  hereunder,  or in  foreclosure  proceedings
commenced and subsequently  abandoned,  or in any dispute or litigation in which
Secured  Party or the holder of any of the  Obligations  may become  involved by
reason of or arising out of the New Note, or the  Collateral  shall be a part of
the Obligations and shall be paid by Debtor to Secured Party,  upon demand,  and
shall bear interest until paid at the rate otherwise chargeable on the New Note,
but not to exceed the maximum rate of interest permitted by applicable law, from
the date of such payment until repaid by Debtor.

        8.9.  CONVERTIBLE  COLLATERAL.  Secured Party may present for conversion
any  Collateral  which is  convertible  into any other  instrument or investment
security or a  combination  thereof with cash,  but Secured Party shall not have
any duty to present for conversion any Collateral  unless it shall have received
from Debtor  detailed  written  instructions to that effect at a time reasonably
far in advance of the final conversion date to make such conversion possible.

        8.10 SECURED  PARTY'S  RIGHT OF SETOFF.  Upon the happening of any event
entitling  Secured  Party to pursue any remedy  provided  herein,  or if Secured
Party shall be served with garnishment process in which Debtor shall be named as
defendant,  whether or not Debtor  shall be in  default  hereunder  at the time,
Secured Party may, but shall not be required to, setoff any  indebtedness  owing
by  Secured  Party  to  Debtor  against  any of the  Obligations  without  first
resorting to the security hereunder and without prejudice to any other rights or
remedies of Secured Party or its Security Interest.

        8.11  REMEDIES.  No right or remedy herein  reserved to Secured Party is
intended to be exclusive  of any other right or remedy,  but each and every such
remedy shall be cumulative,  not in lieu of, but in addition to any other rights
or remedies given under this Agreement and all other security documents. Any and
all of Secured  Party's  rights and remedies may be exercised  from time to time
and as often as such exercise as deemed necessary or desirable by Secured Party.

        8.12 DEBTOR'S  WAIVERS.  Debtor waives notice of the creation,  advance,
increase,  existence,  extension,  or  renewal  of, and of any  indulgence  with
respect to, the  Obligations;  waives notice of intent to accelerate,  notice of
acceleration,  notice  of  intent  to  demand,  presentment,  demand,  notice of
dishonor,  and  protest;   waives  notice  of  the  amount  of  the  Obligations
outstanding  at any time,  notice of any change in  financial  condition  of any
person liable for the  Obligations  or any part thereof,  notice of any Event of
Default,  and all other  notices  respecting  the  Obligations;  and agrees that
maturity of the Obligations  and any part thereof may be accelerated,  extended,
or renewed one or more times by Secured Party in its discretion,  without notice
to Debtor.

        8.13 OTHER PARTIES AND OTHER  COLLATERAL.  No renewal or extension of or
any other  indulgence  with respect to the  Obligations or any part thereof,  no
release  of any  security,  no  release  of any  person  (including  any  maker,
endorser, guarantor, or surety) liable on the Obligations, no delay in
<PAGE>

enforcement  of payment,  and no delay or admission or lack of diligence or care
in exercising any right or power with respect to the Obligations or any security
therefor  or  guaranty  thereof or under this  Agreement  shall in other  manner
impair  or affect  the  rights  of  Secured  Party  under  the law,  under  this
Agreement, or under any other agreement pertaining to the other security for the
Obligations,  before  foreclosing  upon the Collateral for the purpose of paying
the  Obligations.  Debtor  waives  any right to the  benefit of or to require or
control application of any other security or proceeds thereof, and Debtor agrees
that Secured  Party shall have no duty or  obligation  to Debtor to apply to the
Obligations any such other security or proceeds thereof.

                                   ARTICLE IX
                                 MISCELLANEOUS

        9.1 TERMS COMMERCIALLY REASONABLE.  The terms of this Agreement shall be
deemed commercially reasonable within the meaning of the Texas ucc.

        9.2  NOTICES.  Any notices or demands  required or permitted to be given
hereunder  shall be  deemed  sufficiently  given if in  writing  and  personally
delivered or mailed (with all postage and charges prepaid), addressed to Secured
Party or to Debtor their respective  addresses set forth below, or at such other
address as the above parties may from time to time  designate by written  notice
to the other given in  accordance  with this Section  9.2.  Any such notice,  if
personally  delivered or  transmitted  by telex or telegram,  shall be deemed to
have been given on the date so delivered or transmitted or, if mailed, be deemed
to have been given on the day after such  notice is placed in the United  States
mail in accordance with this Section 9.2.

                Secured Party:           1301 Capital of Texas Hwy., Suite C-300
                                         Austin, Travis County, Texas 78746
                                         Attn: Mr. Duane K. Boyd, Jr.

                with copy to:          Timothy L. LaFrey, Esq.
                                       Akin, Gump, Strauss, Hauer & Feld, L.L.P.
                                       1900 Frost Bank Plaza
                                       816 Congress Avenue
                                       Austin, Texas 78701

                Debtor:                6807 West 12th Street
                                       Little Rock, Arkansas 72204

        9.3 PARTIES BOUND.  Secured  Party's rights under this Agreement and the
Security Interest shall inure to the benefits of its successors and assigns, and
in the event of any  assignment  or  transfer of any of the  Obligations  or the
Collateral,  Secured  Party  thereafter  shall  be  fully  discharged  from  any
responsibility  with respect to the Collateral so assigned or  transferred,  but
Secured  Party shall  retain all rights and powers  hereby given with respect to
any of the  Obligations  or  Collateral  not so  assigned  or  transferred.  All
representations, warranties, and agreements of Debtor if more than one are joint
and several, and all shall be binding upon the personal representatives,  heirs,
successors, and assigns of Debtor.
<PAGE>

        9.4 WAIVER.  No delay of Secured Party in exercising  any power or right
shall operate as a waiver thereof;  nor shall any single or partial  exercise of
any power or right preclude other or further exercise thereof or the exercise of
any other power or right.  No waiver by Secured Party of any right  hereunder of
any default by Debtor shall be binding upon Secured Party unless in writing, and
no failure by Secured  Party to exercise any power or right  hereunder or waiver
of any  default  by Debtor  shall  operate  as a waiver of any other or  further
exercise of such right or power of any further default.

        9.5     AGREEMENT CONTINUING.  This Agreement shall constitute a
continuing agreement, applying to all future as well as existing transactions,
whether or not of the character contemplated at the date of this Agreement, and
if all transactions between Secured Party and Debtor shall be closed at any
time, shall be equally applicable to any new transactions thereafter. Provisions
 of this  Agreement,  unless by their terms  exclusive,  shall be in addition to
other agreements between the parties.

        9.6 DEFINITIONS. Unless the context indicated otherwise,  definitions in
the Texas  Business and Commerce  Code (Texas ucc) apply to words and phrases in
this Agreement; if Texas ucc definitions conflict, Chapter 9 definitions apply.

        9.7 MISCELLANEOUS.  In this Agreement, whenever the context so requires,
the neuter gender  includes the masculine and feminine,  and the singular number
includes  the plural and vice  versa.  The  headings  of  paragraphs  herein are
inserted only for convenience and shall in no way define,  describe or limit the
scope of intent of any  provisions  of this  Agreement.  No  change,  amendment,
modification,  cancellation,  or  discharge of any  provision of this  Agreement
shall be valid unless consented to in writing by Secured Party.

        9.8 ASSIGNMENT OF SECURED PARTY'S INTEREST. Secured Party shall have the
right to assign  all or any  portion  of its  rights in this  Agreement  without
approval or consent.  Debtor may not assign this  Agreement or any of its rights
or obligations  hereunder  without the express prior written  consent of Secured
Party in each instance.

        9.9     APPLICABLE LAWS.  This Agreement Shall Be Governed By And
Construed In Accordance With The Laws Of The State Of Texas And The Applicable
Laws Of The United States Of America.



<PAGE>


        9.10 ENTIRE AGREEMENT.  This Agreement,  the Security  documents and the
New Note  Represent  The Final  Agreement  Between  The  Parties  And May Not Be
Contradicted  By  Evidence  Of  Prior,   Contemporaneous,   Or  Subsequent  Oral
Agreements Of The Parties.  There Are No Unwritten Oral  Agreements  Between The
Parties.

        Executed this 6th day of November, 1997.

Debtor:                                         Consolidated Eco-Systems, Inc.



                                           By: /s/ James J. Connors, Jr.

                                           Name: James J. Connors, Jr.

                                           Title: President/CEO


Secured Party:                           American Physicians Service Group, Inc.



                                           By: /s/ Duane Boyd

                                           Name: Duane Boyd

                                           Title: Senior VP




<PAGE>


                                   SCHEDULE I

                      TO ASSIGNMENT AND SECURITY AGREEMENT


        Environmental  Laws  means all Laws that  relate  to  health,  safety or
environmental   protection,   including  without  limitation  the  (i)  Resource
Conservation  and Recovery Act of 1976, as amended by the Used Oil Recycling Act
of 1980,  the Solid Waste Disposal Act Amendments of 1980, and the Hazardous and
Solid Waste Amendments of 1984; (ii) the Comprehensive  Environmental  Response,
Compensation  and Liability Act of 1980, as amended by the Superfund  Amendments
and  Reauthorization  Act of 1986; (iii) the Toxic Substances  Control Act; (iv)
the Americans with  Disabilities Act of 1990, and (iv) the Clean Air Act; all as
amended from time to time and including all regulations  promulgated pursuant to
any one or more of them.

        erisa means the Employment  Retirement  Income  Security Act of 1974, as
amended, together with all rules and regulations issued pursuant thereto and all
rulings or interpretations adopted by any Governmental Entity thereunder.

        Governmental  Entity means any government (or any political  subdivision
or jurisdiction thereof), court, bureau, agency, or other governmental authority
having  jurisdiction  over  Debtor,  any  Subsidiary,  or any  of  its or  their
respective businesses, operations, assets, or properties.

        Hazardous  Material means those substances defined as toxic or hazardous
substances by or under any Environmental Laws.

        Laws shall  mean all  applicable  laws,  ordinances,  statutes,  orders,
regulations, judgments, writs, or decrees of any Governmental Entity.



<PAGE>


                                  Schedule II



     1.  Certificate  No. 1, dated  January 24,  1997,  for 1,000  shares of Eco
Acquisition,  Inc.  $0.001  par  value  common  stock,  issued  to  Consolidated
Eco-Systems, Inc.

     2.  Certificate  No. 1, dated  January 24, 1997,  for 1,000 shares of Larco
Environmental Services,  Inc. common stock, issued to Consolidated  Eco-Systems,
Inc.


<PAGE>