EXHIBIT 10.2

                               SECURITY AGREEMENT

      SECURITY AGREEMENT,  dated as of August 8, 2006 (this "Agreement"),  among
Able  Energy,  Inc.,  a  Delaware  corporation  (the  "Company")  and all of the
Subsidiaries of the Company (such  subsidiaries,  the "Guarantors") (the Company
and Guarantors are collectively  referred to as the "Debtors") and the holder or
holders of the  Company's  Variable Rate Secured  Convertible  Debentures in the
original aggregate principal amount of $2,000,000 (the "Debentures"),  signatory
hereto, their endorsees,  transferees and assigns (collectively  referred to as,
the "Secured Parties").

                              W I T N E S S E T H:

      WHEREAS,  pursuant to the  Debentures,  the Secured Parties have severally
agreed to extend the loans to the Company evidenced by the Debentures;

      WHEREAS,  pursuant to a certain Subsidiary  Guarantee dated as of the date
hereof (the  "Guaranty"),  the Guarantors  have jointly and severally  agreed to
guaranty and act as surety for payment of such loans; and

      WHEREAS,  in order to induce  the  Secured  Parties  to  extend  the loans
evidenced  by the  Debentures,  each Debtor has agreed to execute and deliver to
the Secured Parties this Agreement and to grant the Secured Parties,  pari passu
with each other Secured Party, a perfected security interest in certain property
of such Debtor to secure the prompt  payment,  performance and discharge in full
of all of the Company's  obligations  under the Debenture and the other Debtor's
obligations under the Guaranty.

      NOW,  THEREFORE,  in consideration of the agreements  herein contained and
for other good and valuable consideration,  the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:

      1. Certain  Definitions.  As used in this  Agreement,  the following terms
shall  have  the  meanings  set  forth in this  Section  1.  Terms  used but not
otherwise  defined in this  Agreement  that are  defined in Article 9 of the UCC
(such as "account", "chattel paper", "commercial tort claim", "deposit account",
"document",    "equipment",    "fixtures",   "general   intangibles",   "goods",
"instruments",  "inventory",  "investment property",  "letter-of-credit rights",
"proceeds" and  "supporting  obligations")  shall have the  respective  meanings
given such terms in Article 9 of the UCC.

            (a)  "Collateral"  means the collateral in which the Secured Parties
      are granted a security  interest by this Agreement and which shall include
      the following personal property of the Debtors, whether presently owned or
      existing  or  hereafter  acquired  or  coming  into  existence,   wherever
      situated,  and all additions and accessions  thereto and all substitutions
      and replacements thereof, and all proceeds, products and accounts thereof,
      including,  without limitation,  all proceeds from the sale or transfer of
      the Collateral  and


                                       1
<PAGE>

      of  insurance  covering  the  same and of any tort  claims  in  connection
      therewith, and all dividends,  interest,  cash, notes, securities,  equity
      interest  or other  property  at any time and from time to time  acquired,
      receivable or otherwise distributed in respect of, or in exchange for, any
      or all of the Pledged Securities (as defined below):

                  (i)  All  goods,  including,   without  limitations,  (A)  all
            machinery,  equipment,  computers,  motor vehicles,  trucks,  tanks,
            boats,  ships,  appliances,  furniture,  special and general  tools,
            fixtures,  test and quality  control  devices and other equipment of
            every kind and  nature  and  wherever  situated,  together  with all
            documents  of  title  and  documents   representing  the  same,  all
            additions and accessions thereto,  replacements  therefor, all parts
            therefor, and all substitutes for any of the foregoing and all other
            items used and useful in connection with any Debtor's businesses and
            all improvements thereto; and (B) all inventory;

                  (ii)  All  contract  rights  and  other  general  intangibles,
            including, without limitation, all partnership interests, membership
            interests,  stock  or  other  securities,  rights  under  any of the
            Organizational   Documents,   agreements   related  to  the  Pledged
            Securities,  licenses,  distribution and other agreements,  computer
            software (whether "off-the-shelf",  licensed from any third party or
            developed  by any Debtor),  computer  software  development  rights,
            leases,  franchises,  customer lists,  quality  control  procedures,
            grants  and  rights,  goodwill,  trademarks,  service  marks,  trade
            styles, trade names, patents, patent applications,  copyrights,  and
            income tax refunds;

                  (iii)  All  accounts,  together  with  all  instruments,   all
            documents of title representing any of the foregoing,  all rights in
            any merchandising, goods, equipment, motor vehicles and trucks which
            any of the same may represent,  and all right,  title,  security and
            guaranties  with  respect to each  account,  including  any right of
            stoppage in transit;

                  (iv) All documents,  letter-of-credit rights,  instruments and
            chattel paper;

                  (v) All commercial tort claims;

                  (vi)  All  deposit  accounts  and  all  cash  (whether  or not
            deposited in such deposit accounts);

                  (vii) All investment property;

                  (viii)All supporting obligations; and

                  (ix) All files,  records,  books of account,  business papers,
            and computer programs; and

                  (x)  the  products  and  proceeds  of  all  of  the  foregoing
            Collateral set forth in clauses (i)-(ix) above.


                                       2
<PAGE>

                  Without   limiting  the  generality  of  the  foregoing,   the
            "Collateral"  shall  include  all  investment  property  and general
            intangibles  respecting  ownership  and/or other equity interests in
            each Guarantor, including, without limitation, the shares of capital
            stock and the other equity interests listed on Schedule H hereto (as
            the same may be  modified  from time to time  pursuant  to the terms
            hereof),  including but not limited to 10.5 million shares of common
            stock of CCI Group,  Inc.  (subject  to  adjustment  for reverse and
            forward  stock  splits  the like),  and any other  shares of capital
            stock and/or other equity  interests of any other direct or indirect
            subsidiary of any Debtor obtained in the future,  and, in each case,
            all  certificates  representing  such shares and/or equity interests
            and,  in each case,  all rights,  options,  warrants,  stock,  other
            securities  and/or equity  interests that may hereafter be received,
            receivable or  distributed  in respect of, or exchanged  for, any of
            the foregoing (all of the foregoing  being referred to herein as the
            "Pledged  Securities") and all rights arising under or in connection
            with the  Pledged  Securities,  including,  but not  limited to, all
            dividends, interest and cash.

                  Notwithstanding the foregoing,  nothing herein shall be deemed
            to constitute  an assignment of any asset which,  in the event of an
            assignment,  becomes  void by  operation  of  applicable  law or the
            assignment of which is otherwise  prohibited  by applicable  law (in
            each case to the extent that such  applicable  law is not overridden
            by Sections  9-406,  9-407 and/or 9-408 of the UCC or other  similar
            applicable law); provided,  however, that to the extent permitted by
            applicable  law,  this  Agreement  shall  create  a  valid  security
            interest in such asset and, to the extent  permitted  by  applicable
            law, this Agreement  shall create a valid  security  interest in the
            proceeds of such asset.

            (b)  "Intellectual  Property" Except for the Hosting and Development
      Agreement  between  Able  Energy,  Inc.  and  Trans-Montaigne,  means  the
      collective reference to all rights,  priorities and privileges relating to
      intellectual property, whether arising under United States,  multinational
      or foreign  laws or  otherwise,  including,  without  limitation,  (i) all
      copyrights  arising under the laws of the United States, any other country
      or any political  subdivision thereof,  whether registered or unregistered
      and whether  published or unpublished,  all  registrations  and recordings
      thereof, and all applications in connection therewith,  including, without
      limitation,  all registrations,  recordings and applications in the United
      States Copyright Office, (ii) all letters patent of the United States, any
      other  country or any  political  subdivision  thereof,  all  reissues and
      extensions thereof,  and all applications for letters patent of the United
      States  or  any  other  country  and  all  divisions,   continuations  and
      continuations-in-part   thereof,   (iii)  all  trademarks,   trade  names,
      corporate names, company names, business names, fictitious business names,
      trade  dress,  service  marks,  logos,  domain  names and other  source or
      business identifiers,  and all goodwill associated therewith, now existing
      or  hereafter  adopted  or  acquired,  all  registrations  and  recordings
      thereof,  and all  applications  in connection  therewith,  whether in the
      United  States  Patent and  Trademark  Office or in any similar  office or
      agency of the United States, any State thereof or any other country or any
      political  subdivision  thereof,  or otherwise,  and all common law rights
      related  thereto,  (iv) all trade  secrets  arising  under the laws of the
      United States, any other country or any p


                                       3
<PAGE>

      olitical  subdivision  thereof,  (v) all  rights to obtain  any  reissues,
      renewals or extensions of the foregoing,  (vi) all licenses for any of the
      foregoing,  and  (vii)  all  causes  of  action  for  infringement  of the
      foregoing.

            (c) "Majority in Interest" shall mean, at any time of determination,
      the majority in interest (based on  then-outstanding  principal amounts of
      Debentures at the time of such determination) of the Secured Parties.

            (d) "Necessary Endorsement" shall mean undated stock powers endorsed
      in blank or other proper  instruments of assignment duly executed and such
      other  instruments  or  documents  as the Agent  (as that term is  defined
      below) may reasonably request.

            (e)  "Obligations"  means  all of the  liabilities  and  obligations
      (primary, secondary, direct, contingent, sole, joint or several) due or to
      become due, or that are now or may be hereafter contracted or acquired, or
      owing  to,  of any  Debtor  to the  Secured  Parties,  including,  without
      limitation,  all  obligations  under this Agreement,  the Debentures,  any
      prior  existing   notes  or   debentures,   the  Guaranty  and  any  other
      instruments,  agreements or other documents  executed and/or  delivered in
      connection  herewith or therewith,  in each case, whether now or hereafter
      existing,  voluntary  or  involuntary,  direct or  indirect,  absolute  or
      contingent,  liquidated or unliquidated,  whether or not jointly owed with
      others, and whether or not from time to time decreased or extinguished and
      later  increased,  created  or  incurred,  and all or any  portion of such
      obligations or liabilities that are paid, to the extent all or any part of
      such payment is avoided or recovered  directly or  indirectly  from any of
      the Secured Parties as a preference,  fraudulent  transfer or otherwise as
      such  obligations  may be amended,  supplemented,  converted,  extended or
      modified  from  time to  time.  Without  limiting  the  generality  of the
      foregoing, the term "Obligations" shall include,  without limitation:  (i)
      principal  of,  and  interest  on the  Debentures  and the loans  extended
      pursuant  thereto;  (ii)  any  and all  other  fees,  indemnities,  costs,
      obligations  and  liabilities of the Debtors from time to time under or in
      connection with this Agreement, the Debentures, the Guaranty and any other
      instruments,  agreements or other documents  executed and/or  delivered in
      connection herewith or therewith; and (iii) all amounts (including but not
      limited to post-petition  interest) in respect of the foregoing that would
      be payable but for the fact that the  obligations  to pay such amounts are
      unenforceable  or not  allowable  due to the  existence  of a  bankruptcy,
      reorganization or similar proceeding involving any Debtor.

            (f) "Organizational Documents" means with respect to any Debtor, the
      documents by which such Debtor was  organized  (such as a  certificate  of
      incorporation,   certificate   of  limited   partnership  or  articles  of
      organization,  and including,  without  limitation,  any  certificates  of
      designation  for preferred  stock or other forms of preferred  equity) and
      which relate to the internal  governance of such Debtor (such as bylaws, a
      partnership  agreement  or an  operating,  limited  liability  or  members
      agreement).

            (g) "UCC" means the Uniform Commercial Code of the State of New York
      and  or any  other  applicable  law  of any  state  or  states  which  has
      jurisdiction  with  respect


                                       4
<PAGE>

      to all, or any portion of, the Collateral or this Agreement,  from time to
      time. It is the intent of the parties that defined terms in the UCC should
      be construed in their broadest sense so that the term "Collateral" will be
      construed in its broadest  sense.  Accordingly  if there are, from time to
      time,  changes to defined  terms in the UCC that broaden the  definitions,
      they are  incorporated  herein and if existing  definitions in the UCC are
      broader  than  the  amended  definitions,   the  existing  ones  shall  be
      controlling.

      2. Grant of Perfected Security Interest.  As an inducement for the Secured
Parties to extend the loans as  evidenced  by the  Debentures  and to secure the
complete and timely payment,  performance and discharge in full, as the case may
be,  of  all  of  the  Obligations,   each  Debtor  hereby  unconditionally  and
irrevocably pledges, grants and hypothecates to the Secured Parties a continuing
and  perfected  security  interest in and to, a lien upon and a right of set-off
against all of their respective right, title and interest of whatsoever kind and
nature in and to, the  Collateral  (the  "Security  Interest").  Notwithstanding
anything  herein to the contrary,  in the event the Company  obtains a long-term
non-equity  linked loan facility of  immediately  available  cash proceeds of at
least $100 million,  and not more than $150 million,  with Manns Haggerskjold of
North America,  Ltd. and/or Windstar  Financial Corp.  and/or their  Affiliates,
each Secured  Party,  severally and not jointly with the other Secured  Parties,
shall use commercially  reasonable  efforts to negotiate with Manns Haggerskjold
of North  America,  Ltd.  and/or  Windstar  Financial  Corp.  and  the Company a
subordination of the Obligations provided that any subordination agreement shall
not impede upon each Secured  Parties  negotiated  benefits,  including  but not
limited  to the right to  convert,  collect  regularly  scheduled  interest  and
principal  payments,  seek  specific  performance  by  the  Company  and  demand
liquidated damage payments. The acceptability of such subordination agreement by
the Secured Parties shall be in the sole determination of the Agent.

      3.  Delivery  of  Certain  Collateral.  Contemporaneously  or prior to the
execution of this Agreement,  each Debtor shall deliver or cause to be delivered
to the Agent (a) any and all certificates and other instruments  representing or
evidencing the Pledged  Securities,  and (b) any and all  certificates and other
instruments or documents representing any of the other Collateral, in each case,
together with all  Necessary  Endorsements.  The Debtors are,  contemporaneously
with the execution hereof,  delivering to Agent, or have previously delivered to
Agent, a true and correct copy of each Organizational  Document governing any of
the Pledged Securities.

      4. Representations,  Warranties,  Covenants and Agreements of the Debtors.
Each Debtor  represents  and warrants  to, and  covenants  and agrees with,  the
Secured Parties as follows:

            (a) Each Debtor has the requisite  corporate,  partnership,  limited
      liability  company  or  other  power  and  authority  to enter  into  this
      Agreement  and  otherwise  to carry  out its  obligations  hereunder.  The
      execution,  delivery and  performance by each Debtor of this Agreement and
      the  filings  contemplated  therein  have  been  duly  authorized  by  all
      necessary  action  on the part of such  Debtor  and no  further  action is
      required by such Debtor.  This  Agreement  has been duly  executed by each
      Debtor. This Agreement constitutes the legal, valid and binding obligation
      of each Debtor,  enforceable  against each Debtor in  accordance  with its
      terms  except  as  such   enforceability  may  be  limited  by


                                       5
<PAGE>

      applicable  bankruptcy,  insolvency,  reorganization  and similar  laws of
      general  application  relating to or affecting  the rights and remedies of
      creditors and by general principles of equity.

            (b) The Debtors  have no place of  business  or offices  where their
      respective  books of account and records are kept (other than  temporarily
      at the offices of its attorneys or accountants) or places where Collateral
      is stored or located,  except as set forth on Schedule A attached  hereto.
      Except as specifically  set forth on Schedule A, each Debtor is the record
      owner of the real property  where such  Collateral  is located,  and there
      exist no  mortgages  or other liens on any such real  property  except for
      Permitted  Liens (as defined in the  Debentures).  Except as  disclosed on
      Schedule A, none of such Collateral is in the possession of any consignee,
      bailee, warehouseman, agent or processor.

            (c) Except for Permitted  Liens (as defined in the  Debentures)  and
      except as set forth on  Schedule B attached  hereto,  the  Debtors are the
      sole owner of the Collateral (except for non-exclusive licenses granted by
      any  Debtor in the  ordinary  course of  business),  free and clear of any
      liens, security interests,  encumbrances,  rights or claims, and are fully
      authorized  to grant the  Security  Interest.  There is not on file in any
      governmental  or  regulatory  authority,  agency  or  recording  office an
      effective financing statement,  security agreement, license or transfer or
      any notice of any of the foregoing (other than those that will be filed in
      favor of the  Secured  Parties  pursuant  to this  Agreement)  covering or
      affecting any of the  Collateral.  So long as this  Agreement  shall be in
      effect, the Debtors shall not execute and shall not knowingly permit to be
      on file in any such office or agency any such financing statement or other
      document or instrument (except to the extent filed or recorded in favor of
      the Secured Parties pursuant to the terms of this Agreement).

            (d) No  written  claim  has been  received  that any  Collateral  or
      Debtor's  use of any  Collateral  violates  the rights of any third party.
      There has been no adverse  decision  to any  Debtor's  claim of  ownership
      rights in or exclusive rights to use the Collateral in any jurisdiction or
      to any Debtor's  right to keep and maintain such  Collateral in full force
      and effect,  and there is no proceeding  involving said rights pending or,
      to the best knowledge of any Debtor, threatened before any court, judicial
      body,   administrative   or   regulatory   agency,   arbitrator  or  other
      governmental authority.

            (e) Each Debtor shall at all times maintain its books of account and
      records  relating to the Collateral at its principal place of business and
      its  Collateral at the  locations set forth on Schedule A attached  hereto
      and may not  relocate  such  books of  account  and  records  or  tangible
      Collateral  unless it  delivers  to the  Secured  Parties at least 30 days
      prior to such relocation (i) written notice of such relocation and the new
      location  thereof  (which  must be  within  the  United  States)  and (ii)
      evidence that  appropriate  financing  statements  under the UCC and other
      necessary documents have been filed and recorded and other steps have been
      taken to perfect the  Security  Interest to create in favor of the Secured
      Parties  a  valid,   perfected  and  continuing   perfected  lien  in  the
      Collateral.


                                       6
<PAGE>

            (f) This Agreement  creates in favor of the Secured Parties a valid,
      security  interest in the Collateral,  subject only to Permitted Liens (as
      defined in the  Debentures)  securing the payment and  performance  of the
      Obligations.   Upon  making  the  filings  described  in  the  immediately
      following  paragraph,  all  security  interests  created  hereunder in any
      Collateral  which may be  perfected  by  filing  Uniform  Commercial  Code
      financing statements shall have been duly perfected. Except for the filing
      of the Uniform  Commercial  Code financing  statements  referred to in the
      immediately  following  paragraph,  the  recordation  of the  Intellectual
      Property Security  Agreement (as defined below) with respect to copyrights
      and copyright  applications in the United States Copyright Office referred
      to in paragraph (m), the execution and delivery of deposit account control
      agreements  satisfying the requirements of Section  9-104(a)(2) of the UCC
      with respect to each deposit  account of the Debtors,  and the delivery of
      the certificates and other instruments provided in Section 3, no action is
      necessary  to create,  perfect or protect the security  interests  created
      hereunder.  Without  limiting the generality of the foregoing,  except for
      the  filing  of  said  financing  statements,   the  recordation  of  said
      Intellectual  Property Security Agreement,  and the execution and delivery
      of said  deposit  account  control  agreements,  no  consent  of any third
      parties and no  authorization,  approval or other action by, and no notice
      to or filing  with,  any  governmental  authority  or  regulatory  body is
      required  for  (i)  the  execution,   delivery  and  performance  of  this
      Agreement,  (ii) the  creation or  perfection  of the  Security  Interests
      created hereunder in the Collateral or (iii) the enforcement of the rights
      of the Secured Parties hereunder.

            (g) Each Debtor hereby  authorizes  the Secured  Parties,  or any of
      them, to file one or more financing statements under the UCC, with respect
      to the Security Interest with the proper filing and recording  agencies in
      any jurisdiction deemed proper by them.

            (h) The execution, delivery and performance of this Agreement by the
      Debtors does not (i) violate any of the  provisions of any  Organizational
      Documents  of any Debtor or any  judgment,  decree,  order or award of any
      court,  governmental  body or  arbitrator or any  applicable  law, rule or
      regulation applicable to any Debtor or (ii) conflict with, or constitute a
      default  (or an event  that  with  notice  or lapse of time or both  would
      become a default)  under,  or give to others  any  rights of  termination,
      amendment,  acceleration or cancellation (with or without notice, lapse of
      time or both) of, any agreement, credit facility, debt or other instrument
      (evidencing  any Debtor's  debt or otherwise)  or other  understanding  to
      which  any  Debtor  is a party or by which  any  property  or asset of any
      Debtor is bound or affected.  No consent  (including,  without limitation,
      from  stockholders  or creditors of any Debtor) is required for any Debtor
      to enter into and perform its obligations hereunder.

            (i) The capital stock and other equity  interests listed on Schedule
      H hereto  represent all of the capital stock and other equity interests of
      the Guarantors, and represent all capital stock and other equity interests
      owned,  directly  or  indirectly,  by the  Company.  All  of  the  Pledged
      Securities  are  validly  issued,  fully paid and  nonassessable,  and the
      Company is the legal and beneficial owner of the Pledged Securities,  free
      and clear of any lien,  security interest or other encumbrance  except for
      the security interests created by this Agreement and other Permitted Liens
      (as defined in the Debenture).


                                       7
<PAGE>

            (j) The ownership  and other equity  interests in  partnerships  and
      limited  liability  companies  (if any)  included in the  Collateral  (the
      "Pledged  Interests")  by their express terms do not provide that they are
      securities  governed  by  Article  8 of the  UCC  and  are  not  held in a
      securities account or by any financial intermediary.

            (k) Each Debtor  shall at all times  maintain the liens and Security
      Interest  provided for hereunder as valid and perfected liens and security
      interests in the  Collateral  in favor of the Secured  Parties  until this
      Agreement and the Security Interest hereunder shall be terminated pursuant
      to Section 11 hereof. Each Debtor hereby agrees to defend the same against
      the  claims  of any  and all  persons  and  entities.  Each  Debtor  shall
      safeguard  and  protect  all  Collateral  for the  account of the  Secured
      Parties. At the request of the Secured Parties,  each Debtor will sign and
      deliver  to the  Secured  Parties  at any time or from time to time one or
      more  financing   statements  pursuant  to  the  UCC  in  form  reasonably
      satisfactory  to the  Secured  Parties and will pay the cost of filing the
      same in all public offices wherever filing is, or is deemed by the Secured
      Parties to be, necessary or desirable to effect the rights and obligations
      provided for herein.  Without  limiting the  generality of the  foregoing,
      each  Debtor  shall pay all fees,  taxes and other  amounts  necessary  to
      maintain the  Collateral  and the Security  Interest  hereunder,  and each
      Debtor shall obtain and furnish to the Secured  Parties from time to time,
      upon demand, such releases and/or subordinations of claims and liens which
      may  be  required  to  maintain  the  priority  of the  Security  Interest
      hereunder.

            (l)  Subject  to  Section  14,  no  Debtor  will  transfer,  pledge,
      hypothecate,  encumber,  license,  sell or otherwise dispose of any of the
      Collateral  (except for non-exclusive  licenses granted by a Debtor in its
      ordinary  course of  business  and sales of  inventory  by a Debtor in its
      ordinary  course of  business)  without  the prior  written  consent  of a
      Majority in Interest.

            (m) Each Debtor shall keep and preserve its equipment, inventory and
      other tangible  Collateral in good  condition,  repair and order and shall
      not  operate or locate any such  Collateral  (or cause to be  operated  or
      located) in any area excluded from insurance coverage.

            (n) Each Debtor shall maintain with financially  sound and reputable
      insurers,  insurance with respect to the Collateral against loss or damage
      of the kinds and in the amounts customarily insured against by entities of
      established reputation having similar properties similarly situated and in
      such amounts as are  customarily  carried under similar  circumstances  by
      other such  entities and  otherwise as is prudent for entities  engaged in
      similar  businesses  but  in  any  event  sufficient  to  cover  the  full
      replacement  cost thereof.  Each Debtor shall cause each insurance  policy
      issued in  connection  herewith to provide,  and the insurer  issuing such
      policy to  certify to the Agent that (a) the Agent will be named as lender
      loss payee and additional insured under each such insurance policy; (b) if
      such  insurance be proposed to be cancelled or materially  changed for any
      reason  whatsoever,  such insurer will promptly  notify the Agent and such
      cancellation or change shall not be effective as to the Agent for at least
      thirty  (30) days after  receipt by the Agent


                                       8
<PAGE>

      of such notice,  unless the effect of such change is to extend or increase
      coverage  under the policy;  and (c) the Agent will have the right (but no
      obligation)  at its  election  to remedy  any  default  in the  payment of
      premiums  within  thirty  (30) days of  notice  from the  insurer  of such
      default.  If no Event of Default (as defined in the Debenture)  exists and
      if the  proceeds  arising out of any claim or series of related  claims do
      not exceed $100,000, loss payments in each instance will be applied by the
      applicable  Debtor to the  repair  and/or  replacement  of  property  with
      respect to which the loss was incurred to the extent reasonably  feasible,
      and any loss payments or the balance thereof remaining,  to the extent not
      so applied, shall be payable to the applicable Debtor, provided,  however,
      that payments  received by any Debtor after an Event of Default occurs and
      is  continuing  or in excess of $100,000 for any  occurrence  or series of
      related  occurrences  shall be paid to the Agent and,  if received by such
      Debtor,  shall be held in trust for and immediately paid over to the Agent
      unless otherwise directed in writing by the Agent. Copies of such policies
      or the related certificates, in each case, naming the Agent as lender loss
      payee and  additional  insured  shall be  delivered  to the Agent at least
      annually and at the time any new policy of insurance is issued.

            (o) Each Debtor shall,  within ten (10) days of obtaining  knowledge
      thereof, advise the Secured Parties promptly, in sufficient detail, of any
      substantial  change in the Collateral,  and of the occurrence of any event
      which would have a material  adverse effect on the value of the Collateral
      or on the Secured Parties' security interest therein.

            (p) Each Debtor  shall  promptly  execute and deliver to the Secured
      Parties such further deeds, mortgages,  assignments,  security agreements,
      financing  statements or other  instruments,  documents,  certificates and
      assurances  and take such further  action as the Secured  Parties may from
      time to time  request and may in its sole  discretion  deem  necessary  to
      perfect,  protect or  enforce  its  security  interest  in the  Collateral
      including,  without limitation, if applicable,  the execution and delivery
      of  a  separate   security   agreement   with  respect  to  each  Debtor's
      Intellectual  Property  ("Intellectual  Property  Security  Agreement") in
      which the Secured Parties have been granted a security interest hereunder,
      substantially  in  a  form  acceptable  to  the  Secured  Parties,   which
      Intellectual  Property Security  Agreement,  other than as stated therein,
      shall be subject to all of the terms and conditions hereof.

            (q)  Each  Debtor  shall  permit  the  Secured   Parties  and  their
      representatives  and agents to inspect the  Collateral at any time, and to
      make copies of records pertaining to the Collateral as may be requested by
      a Secured Party from time to time.

            (r)  Each  Debtor  shall  take all  steps  reasonably  necessary  to
      diligently  pursue and seek to  preserve,  enforce and collect any rights,
      claims,  causes  of action  and  accounts  receivable  in  respect  of the
      Collateral.

            (s) Each  Debtor  shall  promptly  notify  the  Secured  Parties  in
      sufficient  detail upon  becoming  aware of any  attachment,  garnishment,
      execution or other legal process  levied against any Collateral and of any
      other  information  received by such Debtor that


                                       9
<PAGE>

      may materially  affect the value of the Collateral,  the Security Interest
      or the rights and remedies of the Secured Parties hereunder.

            (t) All information heretofore,  herein or hereafter supplied to the
      Secured  Parties  by or on  behalf  of  any  Debtor  with  respect  to the
      Collateral  is accurate and  complete in all  material  respects as of the
      date furnished.

            (u) The Debtors  shall at all times  preserve and keep in full force
      and effect their  respective  valid  existence  and good  standing and any
      rights and franchises material to its business.

            (v)  No  Debtor  will  change  its  name,   type  of   organization,
      jurisdiction of organization,  organizational identification number (if it
      has  one),  legal or  corporate  structure,  or  identity,  or add any new
      fictitious  name unless it provides at least 30 days prior written  notice
      to the Secured  Parties of such  change  and, at the time of such  written
      notification,  such Debtor  provides any  financing  statements or fixture
      filings necessary to perfect and continue perfected the perfected security
      Interest granted and evidenced by this Agreement.

            (w) No Debtor may  consign any of its  Inventory  or sell any of its
      Inventory on bill and hold,  sale or return,  sale on  approval,  or other
      conditional  terms of sale  without  the consent of a Majority in Interest
      which  shall  not be  unreasonably  withheld,  except to the  extent  such
      consignment  or sale does not exceed 15% of the total  value of all of the
      Company's finished goods in Inventory.

            (x) No  Debtor  may  relocate  its chief  executive  office to a new
      location without providing 30 days prior written  notification  thereof to
      the  Secured  Parties  and  so  long  as,  at the  time  of  such  written
      notification,  such Debtor  provides any  financing  statements or fixture
      filings necessary to perfect and continue perfected the perfected security
      Interest granted and evidenced by this Agreement.

            (y) Each Debtor was organized and remains organized solely under the
      laws of the  state  set  forth  next to such  Debtor's  name in the  first
      paragraph of this  Agreement.  Schedule D attached  hereto sets forth each
      Debtor's  organizational  identification number or, if any Debtor does not
      have one, states that one does not exist.

            (z) (i) The actual  name of each Debtor is the name set forth in the
      preamble above;  (ii) no Debtor has any trade names except as set forth on
      Schedule E attached  hereto;  (iii) no Debtor has used any name other than
      that stated in the  preamble  hereto or as set forth on Schedule E for the
      preceding  five  years;  and (iv) no entity has merged  into any Debtor or
      been acquired by any Debtor within the past five years except as set forth
      on Schedule E.

            (aa) At any time and from time to time that any Collateral  consists
      of  instruments,  certificated  securities  or other items that require or
      permit  possession by the


                                       10
<PAGE>

      secured  party to  perfect  the  security  interest  created  hereby,  the
      applicable Debtor shall deliver such Collateral to the Agent.

            (bb) Each Debtor, in its capacity as issuer, hereby agrees to comply
      with any and all orders and  instructions  of Agent  regarding the Pledged
      Interests  consistent with the terms of this Agreement without the further
      consent of any Debtor as  contemplated  by Section 8-106 (or any successor
      section) of the UCC.  Further,  each Debtor agrees that it shall not enter
      into a similar  agreement (or one that would confer  "control"  within the
      meaning of Article 8 of the UCC) with any other person or entity.

            (cc) Each Debtor shall cause all tangible chattel paper constituting
      Collateral  to be  delivered  to the Agent,  or, if such  delivery  is not
      possible,  then to cause such  tangible  chattel paper to contain a legend
      noting  that  it is  subject  to the  security  interest  created  by this
      Agreement.  To the  extent  that any  Collateral  consists  of  electronic
      chattel paper,  the applicable  Debtor shall cause the underlying  chattel
      paper to be "marked"  within the  meaning of Section  9-105 of the UCC (or
      successor section thereto).

            (dd) If there is any investment property or deposit account included
      as  Collateral  that can be  perfected  by  "control"  through  an account
      control  agreement,  the  applicable  Debtor  shall  cause such an account
      control agreement,  in form and substance in each case satisfactory to the
      Secured Parties, to be entered into and delivered to the Secured Parties.

            (ee) To the extent that any Collateral  consists of letter-of-credit
      rights,  the applicable  Debtor shall cause the issuer of each  underlying
      letter of credit to consent to an  assignment  of the proceeds  thereof to
      the Secured Parties.

            (ff) To the extent that any  Collateral is in the  possession of any
      third party, the applicable  Debtor shall join with the Secured Parties in
      notifying such third party of the Secured  Parties'  security  interest in
      such   Collateral   and   shall  use  its  best   efforts   to  obtain  an
      acknowledgement  and  agreement  from such third party with respect to the
      Collateral, in form and substance satisfactory to the Secured Parties.

            (gg) If any Debtor  shall at any time hold or  acquire a  commercial
      tort claim,  such Debtor shall  promptly  notify the Secured  Parties in a
      writing signed by such Debtor of the particulars  thereof and grant to the
      Secured  Parties in such  writing a security  interest  therein and in the
      proceeds thereof, all upon the terms of this Agreement,  with such writing
      to be in form and substance satisfactory to the Secured Parties.

            (hh) Each Debtor shall  immediately  provide  written  notice to the
      Secured  Parties of any and all accounts which arise out of contracts with
      any  governmental  authority  and, to the extent  necessary  to perfect or
      continue the  perfected  status of the Security  Interest in such accounts
      and proceeds thereof,  shall execute and deliver to the Secured Parties an
      assignment  of claims for such  accounts  and  cooperate  with the Secured
      Parties in taking any other steps required,  in their judgment,  under the
      Federal  Assignment of Claims Act or any similar  federal,  state or local
      statute  or rule to  perfect  or


                                       11
<PAGE>

      continue the  perfected  status of the Security  Interest in such accounts
      and proceeds thereof.

            (ii) Each  Debtor  shall  cause each  subsidiary  of such  Debtor to
      immediately become a party hereto (an "Additional  Debtor"),  by executing
      and delivering an Additional  Debtor Joinder in substantially  the form of
      Annex A attached hereto and comply with the provisions  hereof  applicable
      to the Debtors.  Concurrent therewith, the Additional Debtor shall deliver
      replacement  schedules for, or  supplements to all other  Schedules to (or
      referred to in) this Agreement, as applicable, which replacement schedules
      shall  supersede,  or  supplements  shall modify,  the  Schedules  then in
      effect. The Additional Debtor shall also deliver such opinions of counsel,
      authorizing   resolutions,   good   standing   certificates,    incumbency
      certificates,  organizational  documents,  financing  statements and other
      information  and  documentation  as the  Secured  Parties  may  reasonably
      request.  Upon  delivery  of the  foregoing  to the Secured  Parties,  the
      Additional  Debtor shall be and become a party to this  Agreement with the
      same rights and  obligations  as the Debtors,  for all purposes  hereof as
      fully and to the same  extent as if it were an original  signatory  hereto
      and  shall be  deemed to have  made the  representations,  warranties  and
      covenants  set forth  herein as of the date of  execution  and delivery of
      such Additional Debtor Joinder, and all references herein to the "Debtors"
      shall be deemed to include each Additional Debtor.

            (jj) Each Debtor  shall vote the Pledged  Securities  to comply with
      the covenants and agreements set forth herein and in the Debentures.

            (kk) Each Debtor shall register the pledge of the applicable Pledged
      Securities  on the books of such  Debtor.  Each Debtor  shall  notify each
      issuer of Pledged  Securities  to  register  the pledge of the  applicable
      Pledged Securities in the name of the Secured Parties on the books of such
      issuer.  Further, except with respect to certificated securities delivered
      to  the  Agent,   the   applicable   Debtor  shall  deliver  to  Agent  an
      acknowledgement of pledge (which, where appropriate, shall comply with the
      requirements   of  the  relevant  UCC  with  respect  to   perfection   by
      registration)  signed by the issuer of the applicable Pledged  Securities,
      which acknowledgement shall confirm that: (a) it has registered the pledge
      on its books and records; and (b) at any time directed by Agent during the
      continuation of an Event of Default,  such issuer will transfer the record
      ownership  of such  Pledged  Securities  into the name of any  designee of
      Agent,  will take such steps as may be necessary  to effect the  transfer,
      and will  comply  with all  other  instructions  of Agent  regarding  such
      Pledged Securities without the further consent of the applicable Debtor.

            (ll) Subject to the terms of this Agreement, in the event that, upon
      an occurrence  of an Event of Default,  Agent shall sell all or any of the
      Pledged  Securities  to  another  party  or  parties  (herein  called  the
      "Transferee")  or  shall  purchase  or  retain  all or any of the  Pledged
      Securities,  each Debtor shall, to the extent  applicable:  (i) deliver to
      Agent  or  the   Transferee,   as  the  case  may  be,  the   articles  of
      incorporation,  bylaws,  minute books, stock certificate books,  corporate
      seals, deeds, leases, indentures,  agreements,  evidences of indebtedness,
      books of account, financial records and all other


                                       12
<PAGE>

      Organizational  Documents  and records of the Debtors and their direct and
      indirect subsidiaries; (ii) use its best efforts to obtain resignations of
      the persons  then  serving as officers  and  directors  of the Debtors and
      their direct and indirect subsidiaries, if so requested; and (iii) use its
      best efforts to obtain any approvals that are required by any governmental
      or regulatory  body in order to permit the sale of the Pledged  Securities
      to the  Transferee or the purchase or retention of the Pledged  Securities
      by Agent and allow the Transferee or Agent to continue the business of the
      Debtors and their direct and indirect subsidiaries.

            (mm) Without limiting the generality of the other obligations of the
      Debtors  hereunder,  each Debtor shall promptly (i) cause to be registered
      at the United States Copyright Office all of its material copyrights, (ii)
      cause the  security  interest  contemplated  hereby  with  respect  to all
      Intellectual  Property registered at the United States Copyright Office or
      United  States  Patent and  Trademark  Office to be duly  recorded  at the
      applicable  office,  and (iii) give the Agent notice  whenever it acquires
      (whether  absolutely  or by license) or creates  any  additional  material
      Intellectual Property.

            (nn) Each  Debtor  will from time to time,  at the joint and several
      expense of the  Debtors,  promptly  execute and  deliver all such  further
      instruments  and  documents,  and take all such  further  action as may be
      necessary or desirable,  or as the Secured Parties may reasonably request,
      in order to perfect and protect any security interest granted or purported
      to be granted  hereby or to enable the  Secured  Parties to  exercise  and
      enforce  their  rights  and  remedies  hereunder  and with  respect to any
      Collateral or to otherwise carry out the purposes of this Agreement.

            (oo)  Schedule F attached  hereto lists all of the  patents,  patent
      applications,  registered copyrights, and domain names owned by any of the
      Debtors as of the date hereof.  Schedule F lists all material  licenses in
      favor of any  Debtor  for the use of any  patents,  copyrights  and domain
      names as of the date hereof. All material patents of the Debtors have been
      duly recorded at the United  States  Patent and  Trademark  Office and all
      material  copyrights  of the Debtors have been duly recorded at the United
      States Copyright Office.

            (pp) Except as set forth on Schedule G attached hereto,  none of the
      account  debtors or other  persons  or  entities  obligated  on any of the
      Collateral is a governmental  authority covered by the Federal  Assignment
      of Claims Act or any similar  federal,  state or local  statute or rule in
      respect of such Collateral.

      5. Effect of Pledge on Certain Rights. If any of the Collateral subject to
this Agreement consists of nonvoting equity or ownership  interests  (regardless
of class,  designation,  preference or rights) that may be converted into voting
equity or ownership  interests upon the occurrence of certain events (including,
without limitation, upon the transfer of all or any of the other stock or assets
of the  issuer),  it is  agreed  that the  pledge of such  equity  or  ownership
interests pursuant to this Agreement or the enforcement of any of Agent's rights
hereunder  shall not be deemed to be the type of event which would  trigger such
conversion rights notwithstanding any provisions in the Organizational Documents
or agreements to which any Debtor is subject or to which any Debtor is party.


                                       13
<PAGE>

      6. Defaults. The following events shall be "Events of Default":

            (a) The  occurrence  of an  Event  of  Default  (as  defined  in the
      Debenture) under the Debenture;

            (b) Any  representation  or warranty of any Debtor in this Agreement
      shall prove to have been incorrect in any material respect when made;

            (c) The  failure by any  Debtor to  observe  or  perform  any of its
      obligations  hereunder for five (5) days after  delivery to such Debtor of
      notice of such  failure  by or on behalf of a Secured  Party  unless  such
      default is capable of cure but cannot be cured  within such time frame and
      such Debtor is using best efforts to cure same in a timely fashion; or

            (d) If any  provision  of this  Agreement  shall at any time for any
      reason be declared to be null and void, or the validity or  enforceability
      thereof  shall  be  contested  by any  Debtor,  or a  proceeding  shall be
      commenced  by  any  Debtor,  or  by  any  governmental   authority  having
      jurisdiction  over any Debtor,  seeking to  establish  the  invalidity  or
      unenforceability thereof, or any Debtor shall deny that any Debtor has any
      liability or obligation purported to be created under this Agreement.

      7. Duty To Hold In Trust.

            (a) Upon the  occurrence  of any  Event of  Default  and at any time
      thereafter,  each  Debtor  shall,  upon  receipt of any  revenue,  income,
      dividend, interest or other sums subject to the Security Interest, whether
      payable  pursuant to the Debenture or otherwise,  or of any check,  draft,
      note, trade acceptance or other instrument evidencing an obligation to pay
      any such sum,  hold the same in trust for the  Secured  Parties  and shall
      forthwith  endorse and transfer any such sums or instruments,  or both, to
      the Secured Parties,  pro-rata in proportion to their initial purchases of
      Debentures for application to the  satisfaction of the Obligations (and if
      any  Debenture is not  outstanding,  pro-rata in proportion to the initial
      purchases of the remaining Debentures).

            (b) If any Debtor shall become  entitled to receive or shall receive
      any securities or other property (including, without limitation, shares of
      Pledged Securities or instruments representing Pledged Securities acquired
      after the date hereof, or any options,  warrants,  rights or other similar
      property or certificates  representing a dividend,  or any distribution in
      connection  with any  recapitalization,  reclassification  or  increase or
      reduction of capital,  or issued in connection with any  reorganization of
      such Debtor or any of its direct or indirect  subsidiaries)  in respect of
      the Pledged Securities  (whether as an addition to, in substitution of, or
      in exchange for, such Pledged Securities or otherwise), such Debtor agrees
      to (i) accept the same as the agent of the Secured Parties;  (ii) hold the
      same in trust on behalf of and for the benefit of the Secured Parties; and
      (iii) to deliver any and all  certificates  or instruments  evidencing the
      same to Agent on or before the close of business on the fifth business day
      following the receipt  thereof by


                                       14
<PAGE>

      such  Debtor,  in the exact  form  received  together  with the  Necessary
      Endorsements,  to be held by Agent subject to the terms of this  Agreement
      as Collateral.

      8. Rights and Remedies Upon Default.

            (a) Upon the  occurrence  of any  Event of  Default  and at any time
      thereafter,  the Secured  Parties,  acting through any agent  appointed by
      them for  such  purpose,  shall  have the  right  to  exercise  all of the
      remedies  conferred  hereunder and under the  Debentures,  and the Secured
      Parties  shall have all the rights and  remedies of a secured  party under
      the UCC. Without limitation,  the Secured Parties shall have the following
      rights and powers:

                  (i)  The  Secured   Parties  shall  have  the  right  to  take
            possession of the Collateral and, for that purpose,  enter, with the
            aid and assistance of any person, any premises where the Collateral,
            or any part  thereof,  is or may be placed and remove the same,  and
            each Debtor shall  assemble the  Collateral and make it available to
            the  Secured  Parties  at places  which the  Secured  Parties  shall
            reasonably  select,  whether at such Debtor's premises or elsewhere,
            and make available to the Secured Parties, without rent, all of such
            Debtor's  respective  premises and facilities for the purpose of the
            Secured  Parties  taking  possession  of,  removing  or putting  the
            Collateral in saleable or disposable form.

                  (ii) Upon notice to the  Debtors by Agent,  all rights of each
            Debtor to exercise the voting and other  consensual  rights which it
            would  otherwise  be  entitled  to  exercise  and all rights of each
            Debtor  to  receive  the  dividends  and  interest  which  it  would
            otherwise be  authorized  to receive and retain,  shall cease.  Upon
            such  notice,  Agent shall have the right to receive  any  interest,
            cash  dividends  or other  payments  on the  Collateral  and, at the
            option of Agent,  to exercise in such Agent's  discretion all voting
            rights  pertaining  thereto.  Without limiting the generality of the
            foregoing,  Agent shall have the right (but not the  obligation)  to
            exercise  all rights with respect to the  Collateral  as it were the
            sole and absolute owners thereof, including,  without limitation, to
            vote and/or to exchange,  at its sole discretion,  any or all of the
            Collateral   in   connection   with   a   merger,    reorganization,
            consolidation,  recapitalization or other readjustment concerning or
            involving  the  Collateral  or any  Debtor  or any of its  direct or
            indirect subsidiaries.

                  (iii) The Secured  Parties shall have the right to operate the
            business  of each  Debtor  using the  Collateral  and shall have the
            right to assign, sell, lease or otherwise dispose of and deliver all
            or any  part  of the  Collateral,  at  public  or  private  sale  or
            otherwise,   either   with  or   without   special   conditions   or
            stipulations,  for cash or on credit or for future delivery, in such
            parcel or  parcels  and at such  time or times and at such  place or
            places,  and upon such terms and  conditions as the Secured  Parties
            may deem  commercially  reasonable,  all without (except as shall be
            required by applicable  statute and cannot be waived)  advertisement
            or demand upon or notice to any Debtor or right of  redemption  of a
            Debtor,  which


                                       15
<PAGE>

            are hereby expressly waived. Upon each such sale, lease,  assignment
            or other transfer of  Collateral,  the Secured  Parties may,  unless
            prohibited by applicable law which cannot be waived, purchase all or
            any part of the Collateral  being sold,  free from and discharged of
            all trusts,  claims, right of redemption and equities of any Debtor,
            which are hereby waived and released.

                  (iv) The  Secured  Parties  shall  have the right (but not the
            obligation)  to notify any account  debtors and any  obligors  under
            instruments  or  accounts to make  payments  directly to the Secured
            Parties and to enforce the  Debtors'  rights  against  such  account
            debtors and obligors.

                  (v) The Secured  Parties may (but are not obligated to) direct
            any financial intermediary or any other person or entity holding any
            investment  property to transfer the same to the Secured  Parties or
            their designee.

                  (vi)  The  Secured  Parties  may (but  are not  obligated  to)
            transfer any or all Intellectual  Property registered in the name of
            any Debtor at the United States  Patent and Trademark  Office and/or
            Copyright  Office  into  the  name  of the  Secured  Parties  or any
            designee or any purchaser of any Collateral.

            (b) The Agent may comply with any applicable law in connection  with
      a disposition  of Collateral  and such  compliance  will not be considered
      adversely  to  affect  the  commercial  reasonableness  of any sale of the
      Collateral.   The  Agent  may  sell  the  Collateral  without  giving  any
      warranties and may  specifically  disclaim such  warranties.  If the Agent
      sells any of the  Collateral on credit,  the Debtors will only be credited
      with payments  actually made by the  purchaser.  In addition,  each Debtor
      waives  any and all  rights  that it may  have to a  judicial  hearing  in
      advance of the  enforcement  of any of the  Agent's  rights  and  remedies
      hereunder,  including, without limitation, its right following an Event of
      Default to take immediate possession of the Collateral and to exercise its
      rights and remedies with respect thereto.

            (c) For the purpose of enabling the Agent to further exercise rights
      and remedies  under this  Section 8 or elsewhere  provided by agreement or
      applicable law, each Debtor hereby grants to the Agent, for the benefit of
      the Agent and the Secured Parties,  an irrevocable,  nonexclusive  license
      (exercisable  without  payment of royalty  or other  compensation  to such
      Debtor) to use, license or sublicense  following an Event of Default,  any
      Intellectual  Property now owned or hereafter acquired by such Debtor, and
      wherever the same may be located,  and including in such license access to
      all media in which any of the licensed items may be recorded or stored and
      to all computer software and programs used for the compilation or printout
      thereof.

      9. Applications of Proceeds. The proceeds of any such sale, lease or other
disposition of the Collateral  hereunder shall be applied first, to the expenses
of retaking,  holding, storing,  processing and preparing for sale, selling, and
the like  (including,  without  limitation,  any  taxes,  fees and  other  costs
incurred  in  connection  therewith)  of  the  Collateral,   to  the  reasonable
attorneys' fees and expenses  incurred by the Secured Parties in enforcing their
rights hereunder and in connection with collecting, storing and disposing of the
Collateral,  and then to  satisfaction


                                       16
<PAGE>

of the Obligations pro rata among the Secured Parties (based on then-outstanding
principal amounts of Debentures at the time of any such  determination),  and to
the payment of any other  amounts  required by applicable  law,  after which the
Secured  Parties shall pay to the applicable  Debtor any surplus  proceeds.  If,
upon the sale,  license or other  disposition  of the  Collateral,  the proceeds
thereof are  insufficient  to pay all  amounts to which the Secured  Parties are
legally entitled,  the Debtors will be liable for the deficiency,  together with
interest thereon, at the rate of 10% per annum or the lesser amount permitted by
applicable law (the "Default  Rate"),  and the reasonable  fees of any attorneys
employed  by the  Secured  Parties to  collect  such  deficiency.  To the extent
permitted by applicable law, each Debtor waives all claims,  damages and demands
against the Secured Parties arising out of the repossession,  removal, retention
or sale of the Collateral,  unless due solely to the gross negligence or willful
misconduct of the Secured Parties as determined by a final judgment (not subject
to further appeal) of a court of competent jurisdiction.

      10.  Securities Law Provision.  Each Debtor  recognizes  that Agent may be
limited  in its  ability  to  effect a sale to the  public of all or part of the
Pledged  Securities by reason of certain  prohibitions  in the Securities Act of
1933, as amended, or other federal or state securities laws  (collectively,  the
"Securities  Laws"),  and may be  compelled  to resort to one or more sales to a
restricted  group of  purchasers  who may be  required  to agree to acquire  the
Pledged Securities for their own account,  for investment and not with a view to
the distribution or resale thereof. Each Debtor agrees that sales so made may be
at prices and on terms less favorable than if the Pledged  Securities  were sold
to the public, and that Agent has no obligation to delay the sale of any Pledged
Securities for the period of time  necessary to register the Pledged  Securities
for sale to the public under the Securities  Laws.  Each Debtor shall  cooperate
with Agent in its attempt to satisfy any requirements  under the Securities Laws
(including,  without limitation,  registration thereunder if requested by Agent)
applicable to the sale of the Pledged Securities by Agent.

      11.  Costs  and  Expenses.  Each  Debtor  agrees  to  pay  all  reasonable
out-of-pocket  fees,  costs and expenses  incurred in connection with any filing
required  hereunder,  including  without  limitation,  any financing  statements
pursuant  to  the  UCC,   continuation   statements,   partial  releases  and/or
termination   statements  related  thereto  or  any  expenses  of  any  searches
reasonably required by the Secured Parties. The Debtors shall also pay all other
claims and charges which in the reasonable  opinion of the Secured Parties might
prejudice,  imperil or otherwise affect the Collateral or the Security  Interest
therein.  The Debtors  will also,  upon demand,  pay to the Secured  Parties the
amount of any and all reasonable  expenses,  including the  reasonable  fees and
expenses of its counsel and of any experts and agents, which the Secured Parties
may incur in connection  with (i) the  enforcement of this  Agreement,  (ii) the
custody  or  preservation  of,  or  the  sale  of,  collection  from,  or  other
realization upon, any of the Collateral, or (iii) the exercise or enforcement of
any of the rights of the Secured  Parties under the  Debentures.  Until so paid,
any  fees  payable  hereunder  shall be added  to the  principal  amount  of the
Debentures and shall bear interest at the Default Rate.

      12. Responsibility for Collateral.  The Debtors assume all liabilities and
responsibility  in connection with all Collateral,  and the Obligations shall in
no way be affected or diminished by reason of the loss,  destruction,  damage or
theft of any of the  Collateral or its  unavailability  for any reason.  Without
limiting the generality of the foregoing,  (a) neither the Agent nor any Secured
Party (i) has any duty  (either  before or after an Event of Default) to


                                       17
<PAGE>

collect  any  amounts in respect of the  Collateral  or to  preserve  any rights
relating to the Collateral,  or (ii) has any obligation to clean-up or otherwise
prepare the Collateral for sale, and (b) each Debtor shall remain  obligated and
liable  under each  contract  or  agreement  included  in the  Collateral  to be
observed  or  performed  by such  Debtor  thereunder.  Neither the Agent nor any
Secured Party shall have any obligation or liability  under any such contract or
agreement  by reason of or arising out of this  Agreement  or the receipt by the
Agent or any Secured Party of any payment relating to any of the Collateral, nor
shall the Agent or any Secured  Party be  obligated in any manner to perform any
of the  obligations  of any Debtor  under or  pursuant  to any such  contract or
agreement,  to make  inquiry  as to the  nature or  sufficiency  of any  payment
received by the Agent or any Secured Party in respect of the Collateral or as to
the  sufficiency  of any  performance  by any party  under any such  contract or
agreement,  to  present or file any  claim,  to take any  action to enforce  any
performance  or to  collect  the  payment  of any  amounts  which  may have been
assigned to the Agent or to which the Agent or any Secured Party may be entitled
at any time or times.

      13. Security Interest Absolute.  All rights of the Secured Parties and all
obligations  of the  Debtors  hereunder,  shall be absolute  and  unconditional,
irrespective of: (a) any lack of validity or  enforceability  of this Agreement,
the Debentures or any agreement  entered into in connection  with the foregoing,
or any portion hereof or thereof; (b) any change in the time, manner or place of
payment  or  performance  of,  or in  any  other  term  of,  all  or  any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from the Debentures or any other  agreement  entered into in connection with the
foregoing; (c) any exchange,  release or nonperfection of any of the Collateral,
or any release or amendment or waiver of or consent to departure  from any other
collateral for, or any guaranty,  or any other  security,  for all or any of the
Obligations; (d) any action by the Secured Parties to obtain, adjust, settle and
cancel in its sole discretion any insurance claims or matters made or arising in
connection  with the  Collateral;  or (e) any  other  circumstance  which  might
otherwise  constitute any legal or equitable defense available to a Debtor, or a
discharge of all or any part of the Security Interest granted hereby.  Until the
Obligations  shall  have  been paid and  performed  in full,  the  rights of the
Secured  Parties  shall  continue  even if the  Obligations  are  barred for any
reason, including, without limitation, the running of the statute of limitations
or bankruptcy.  Each Debtor expressly  waives  presentment,  protest,  notice of
protest,  demand, notice of nonpayment and demand for performance.  In the event
that at any time any transfer of any  Collateral or any payment  received by the
Secured Parties hereunder shall be deemed by final order of a court of competent
jurisdiction to have been a voidable  preference or fraudulent  conveyance under
the bankruptcy or insolvency laws of the United States, or shall be deemed to be
otherwise  due to any party other than the Secured  Parties,  then,  in any such
event, each Debtor's  obligations  hereunder shall survive  cancellation of this
Agreement, and shall not be discharged or satisfied by any prior payment thereof
and/or  cancellation  of this  Agreement,  but shall  remain a valid and binding
obligation  enforceable in accordance with the terms and provisions hereof. Each
Debtor  waives all right to require the Secured  Parties to proceed  against any
other person or entity or to apply any Collateral  which the Secured Parties may
hold at any time,  or to marshal  assets,  or to pursue any other  remedy.  Each
Debtor waives any defense arising by reason of the application of the statute of
limitations to any obligation secured hereby.


                                       18
<PAGE>

      14. Term of  Agreement.  This  Agreement and the Security  Interest  shall
terminate  on the date on which  all  payments  under the  Debentures  have been
indefeasibly  paid  in  full  and  all  other  Obligations  have  been  paid  or
discharged;  provided, however, that all indemnities of the Debtors contained in
this Agreement (including, without limitation, Annex B hereto) shall survive and
remain  operative and in full force and effect  regardless of the termination of
this Agreement.  Notwithstanding  anything herein to the contrary, the shares of
common  stock of CCI Group Inc.  pledged to the  Secured  Parties at the Closing
shall be returned to the  Company  and the  Security  Interest as to such shares
only  shall  terminate  on the  earlier  of (a) the date on  which  (i) the Able
Energy/All American  Transaction has been consummated,  (ii) the Able Energy/All
American  Transaction  Documents  have been fully  executed and delivered to the
Secured Parties and (iii) clauses (i)-(vii) of the "Equity Conditions",  as that
term is defined at page 3 of the Variable Rate Secured Convertible  Debenture to
be issued as part of the Able Energy/All American Transaction  Documents are met
at such time,  (b) the date that the Secured  Parties have converted into Common
Stock  more  than,  in  the  aggregate,  50%  of  the  principal  amount  of the
Debentures,  (c) the date that the  Company may  exercise  an Option  Redemption
under  Section  6(a) of the  Debenture  and the  proceeds  from the sale of such
shares are first applied to the redemption of the Debentures in full pursuant to
a duly authorized  Optional  Redemption Notice (the Company shall be required to
establish an escrow  account and procedures to ensure that all such proceeds are
paid to the  Secured  Parties  in  satisfaction  of the  obligations  under  the
Debentures  in  full)  or  (d)  the  Company  delivers  to the  Secured  Parties
substitute collateral of equal or greater value than the value of such shares as
determined in the sole and final discretion of the Agent.

      15. Power of Attorney; Further Assurances.

            (a) Each  Debtor  authorizes  the Secured  Parties,  and does hereby
      make,  constitute  and appoint the  Secured  Parties and their  respective
      officers,  agents,  successors or assigns with full power of substitution,
      as such Debtor's true and lawful attorney-in-fact, with power, in the name
      of the various  Secured  Parties or such Debtor,  to, after the occurrence
      and during the  continuance of an Event of Default,  (i) endorse any note,
      checks,  drafts,  money orders or other instruments of payment  (including
      payments  payable  under or in  respect  of any  policy of  insurance)  in
      respect of the  Collateral  that may come into  possession  of the Secured
      Parties;  (ii) to sign and endorse any financing statement pursuant to the
      UCC or any invoice,  freight or express bill,  bill of lading,  storage or
      warehouse receipts, drafts against debtors, assignments, verifications and
      notices in connection with accounts,  and other documents  relating to the
      Collateral;  (iii) to pay or discharge taxes, liens, security interests or
      other  encumbrances at any time levied or placed on or threatened  against
      the Collateral;  (iv) to demand, collect, receipt for, compromise,  settle
      and sue for monies due in respect of the  Collateral;  (v) to transfer any
      Intellectual  Property or provide  licenses  respecting  any  Intellectual
      Property; and (vi) generally, at the option of the Secured Parties, and at
      the expense of the Debtors,  at any time, or from time to time, to execute
      and deliver any and all documents and  instruments  and to do all acts and
      things which the Secured  Parties deem necessary to protect,  preserve and
      realize upon the Collateral and the Security  Interest  granted therein in
      order to effect the intent of this  Agreement  and the  Debentures  all as
      fully and  effectually  as the Debtors  might or could do; and each Debtor
      hereby  ratifies all that said attorney  shall


                                       19
<PAGE>

      lawfully do or cause to be done by virtue  hereof.  This power of attorney
      is coupled with an interest and shall be irrevocable  for the term of this
      Agreement  and  thereafter  as long  as any of the  Obligations  shall  be
      outstanding. The designation set forth herein shall be deemed to amend and
      supersede any inconsistent  provision in the  Organizational  Documents or
      other  documents or  agreements to which any Debtor is subject or to which
      any Debtor is a party.  Without  limiting the generality of the foregoing,
      after the  occurrence  and during the  continuance of an Event of Default,
      each  Secured  Party is  specifically  authorized  to execute and file any
      applications for or instruments of transfer and assignment of any patents,
      trademarks,  copyrights  or other  Intellectual  Property  with the United
      States Patent and Trademark Office and the United States Copyright Office.

            (b)  On  a  continuing  basis,  each  Debtor  will  make,   execute,
      acknowledge, deliver, file and record, as the case may be, with the proper
      filing and  recording  agencies in any  jurisdiction,  including,  without
      limitation, the jurisdictions indicated on Schedule C attached hereto, all
      such  instruments,  and take all such action as may  reasonably  be deemed
      necessary or advisable, or as reasonably requested by the Secured Parties,
      to perfect the Security  Interest granted hereunder and otherwise to carry
      out the  intent  and  purposes  of this  Agreement,  or for  assuring  and
      confirming  to the Secured  Parties the grant or perfection of a perfected
      security interest in all the Collateral under the UCC.

            (c) Each Debtor hereby  irrevocably  appoints the Secured Parties as
      such  Debtor's  attorney-in-fact,  with  full  authority  in the place and
      instead of such Debtor and in the name of such  Debtor,  from time to time
      in the Secured Parties' discretion,  to take any action and to execute any
      instrument  which the Secured  Parties may deem  necessary or advisable to
      accomplish the purposes of this  Agreement,  including the filing,  in its
      sole discretion,  of one or more financing or continuation  statements and
      amendments  thereto,  relative  to  any  of  the  Collateral  without  the
      signature  of  such  Debtor  where   permitted  by  law,  which  financing
      statements  may (but need not) describe the  Collateral as "all assets" or
      "all  personal  property" or words of like  import,  and ratifies all such
      actions  taken by the Secured  Parties.  This power of attorney is coupled
      with an interest and shall be  irrevocable  for the term of this Agreement
      and thereafter as long as any of the Obligations shall be outstanding.

      16.  Notices.  All  notices,  requests,  demands and other  communications
hereunder shall be subject to the notice provision of the Purchase Agreement (as
such term is defined in the Debentures).

      17.  Other  Security.  To the  extent  that  the  Obligations  are  now or
hereafter  secured by property  other than the  Collateral or by the  guarantee,
endorsement or property of any other person, firm,  corporation or other entity,
then the  Secured  Parties  shall have the  right,  in its sole  discretion,  to
pursue,  relinquish,  subordinate,  modify or take any other action with respect
thereto,  without in any way modifying or affecting any of the Secured  Parties'
rights and remedies hereunder.

      18.  Appointment  of Agent.  The  Secured  Parties  hereby  appoint  Lilac
Ventures Mater Fund Ltd. to act as their agent ("Lilac" or "Agent") for purposes
of exercising any and all


                                       20
<PAGE>

rights and remedies of the Secured Parties  hereunder.  Such  appointment  shall
continue  until  revoked in writing by a Majority in  Interest,  at which time a
Majority in Interest shall appoint a new Agent; provided,  that Lilac may not be
removed as Agent unless Lilac shall then hold less than $50,000 principal amount
of Debentures. The Agent shall have the rights,  responsibilities and immunities
set forth in Annex B hereto.

      19. Miscellaneous.

            (a) No  course  of  dealing  between  the  Debtors  and the  Secured
      Parties, nor any failure to exercise, nor any delay in exercising,  on the
      part of the Secured Parties,  any right,  power or privilege  hereunder or
      under the  Debentures  shall  operate as a waiver  thereof;  nor shall any
      single or partial exercise of any right,  power or privilege  hereunder or
      thereunder  preclude any other or further exercise thereof or the exercise
      of any other right, power or privilege.

            (b) All of the rights  and  remedies  of the  Secured  Parties  with
      respect to the Collateral, whether established hereby or by the Debentures
      or by any other  agreements,  instruments  or documents or by law shall be
      cumulative and may be exercised singly or concurrently.

            (c) This Agreement  constitutes the entire  agreement of the parties
      with respect to the subject matter hereof and is intended to supersede all
      prior  negotiations,  understandings  and agreements with respect thereto.
      Except as specifically  set forth in this Agreement,  no provision of this
      Agreement  may be  modified  or  amended  except  by a  written  agreement
      specifically referring to this Agreement and signed by the parties hereto.

            (d) In the  event  any  provision  of this  Agreement  is held to be
      invalid,  prohibited or  unenforceable in any jurisdiction for any reason,
      unless such provision is narrowed by judicial construction, this Agreement
      shall,  as  to  such  jurisdiction,  be  construed  as  if  such  invalid,
      prohibited or  unenforceable  provision had been more narrowly drawn so as
      not to be invalid,  prohibited or unenforceable.  If,  notwithstanding the
      foregoing,  any  provision  of  this  Agreement  is  held  to be  invalid,
      prohibited or unenforceable  in any  jurisdiction,  such provision,  as to
      such jurisdiction,  shall be ineffective to the extent of such invalidity,
      prohibition or unenforceability without invalidating the remaining portion
      of such  provision or the other  provisions of this  Agreement and without
      affecting the validity or  enforceability  of such  provision or the other
      provisions of this Agreement in any other jurisdiction.

            (e) No  waiver of any  breach or  default  or any right  under  this
      Agreement  shall be  considered  valid unless in writing and signed by the
      party giving such  waiver,  and no such waiver shall be deemed a waiver of
      any subsequent breach or default or right,  whether of the same or similar
      nature or otherwise.

            (f) This Agreement shall be binding upon and inure to the benefit of
      each party hereto and its successors and assigns.


                                       21
<PAGE>

            (g) Each  party  shall take such  further  action  and  execute  and
      deliver such further documents as may be necessary or appropriate in order
      to carry out the provisions and purposes of this Agreement.

            (h) All questions concerning the construction, validity, enforcement
      and  interpretation  of this Agreement  shall be governed by and construed
      and  enforced in  accordance  with the  internal  laws of the State of New
      York,  without regard to the principles of conflicts of law thereof.  Each
      Debtor  agrees  that  all  proceedings   concerning  the  interpretations,
      enforcement and defense of the transactions contemplated by this Agreement
      and  the  Debenture  (whether  brought  against  a  party  hereto  or  its
      respective  affiliates,   directors,  officers,  shareholders,   partners,
      members,  employees or agents) shall be commenced exclusively in the state
      and federal courts sitting in the City of New York,  Borough of Manhattan.
      Each Debtor hereby  irrevocably  submits to the exclusive  jurisdiction of
      the state and federal courts  sitting in the City of New York,  Borough of
      Manhattan for the  adjudication of any dispute  hereunder or in connection
      herewith or with any transaction  contemplated hereby or discussed herein,
      and hereby irrevocably waives, and agrees not to assert in any proceeding,
      any claim that it is not  personally  subject to the  jurisdiction  of any
      such court,  that such  proceeding  is improper.  Each party hereto hereby
      irrevocably  waives  personal  service of process and  consents to process
      being  served  in any  such  proceeding  by  mailing  a copy  thereof  via
      registered  or certified  mail or  overnight  delivery  (with  evidence of
      delivery)  to such party at the  address in effect for notices to it under
      this  Agreement  and agrees that such service  shall  constitute  good and
      sufficient service of process and notice thereof. Nothing contained herein
      shall be  deemed  to limit in any way any  right to serve  process  in any
      manner permitted by law. Each party hereto hereby  irrevocably  waives, to
      the fullest extent permitted by applicable law, any and all right to trial
      by  jury  in any  legal  proceeding  arising  out of or  relating  to this
      Agreement  or the  transactions  contemplated  hereby.  If any party shall
      commence a proceeding to enforce any  provisions of this  Agreement,  then
      the prevailing  party in such proceeding  shall be reimbursed by the other
      party for its  reasonable  attorney's  fees and other  costs and  expenses
      incurred  with the  investigation,  preparation  and  prosecution  of such
      proceeding.

            (i) This  Agreement  may be executed in any number of  counterparts,
      each of which when so executed  shall be deemed to be an original and, all
      of which taken together shall  constitute one and the same  Agreement.  In
      the event that any signature is delivered by facsimile transmission,  such
      signature  shall create a valid binding  obligation of the party executing
      (or on whose behalf such  signature  is  executed)  the same with the same
      force and effect as if such facsimile signature were the original thereof.

            (j) All  Debtors  shall  jointly  and  severally  be liable  for the
      obligations of each Debtor to the Secured Parties hereunder.

            (k) Each Debtor shall  indemnify,  reimburse  and hold  harmless the
      Secured  Parties and their  respective  partners,  members,  shareholders,
      officers,  directors,  employees and agents (collectively,  "Indemnitees")
      from  and  against  any  and all  losses,


                                       22
<PAGE>

      claims, liabilities, damages, penalties, suits, costs and expenses, of any
      kind or nature,  (including fees relating to the cost of investigating and
      defending  any of the  foregoing)  imposed  on,  incurred  by or  asserted
      against such  Indemnitee  in any way related to or arising from or alleged
      to arise from this  Agreement or the  Collateral,  except any such losses,
      claims,  liabilities,  damages, penalties, suits, costs and expenses which
      result from the gross  negligence or willful  misconduct of the Indemnitee
      as determined by a final,  nonappealable  decision of a court of competent
      jurisdiction. This indemnification provision is in addition to, and not in
      limitation of, any other indemnification provision in the Debentures,  the
      Purchase  Agreement  (as such term is  defined in the  Debentures)  or any
      other  agreement,  instrument or other  document  executed or delivered in
      connection herewith or therewith.

            (l) Nothing in this Agreement shall be construed to subject Agent or
      any Secured  Party to  liability  as a partner in any Debtor or any if its
      direct or indirect  subsidiaries  that is a partnership  or as a member in
      any Debtor or any of its direct or indirect subsidiaries that is a limited
      liability company,  nor shall Agent or any Secured Party be deemed to have
      assumed  any  obligations  under  any  partnership  agreement  or  limited
      liability company agreement,  as applicable,  of any such Debtor or any if
      its direct or indirect  subsidiaries  or  otherwise,  unless and until any
      such Secured Party  exercises its right to be substituted  for such Debtor
      as a partner or member, as applicable, pursuant hereto.

            (m) To the extent  that the grant of the  security  interest  in the
      Collateral  and the  enforcement  of the terms hereof require the consent,
      approval or action of any partner or member, as applicable,  of any Debtor
      or any direct or indirect  subsidiary of any Debtor or compliance with any
      provisions  of any of the  Organizational  Documents,  the Debtors  hereby
      grant such consent and approval and waive any such  noncompliance with the
      terms of said documents.

                            [SIGNATURE PAGES FOLLOW]

                                       23
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be duly executed on the day and year first above written.

ABLE ENERGY, INC.

By:__________________________________________
   Name:
   Title:

[SUBSIDIARY]

By:__________________________________________
   Name:
   Title:

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]


                                       24
<PAGE>

                     [SIGNATURE PAGE OF HOLDERS TO ABLE SA]

 Name of Investing Entity: __________________________
 Signature of Authorized Signatory of Investing entity: ________________________
 Name of Authorized Signatory: _________________________
 Title of Authorized Signatory: __________________________

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]


                                       25
<PAGE>

                                   SCHEDULE A

Principal Place of Business of Debtors:

Locations Where Collateral is Located or Stored:


                                       26
<PAGE>

                                   SCHEDULE B


                                       27
<PAGE>

                                   SCHEDULE C


                                       28
<PAGE>

                                   SCHEDULE D

                      Organizational Identification Numbers


                                       29
<PAGE>

                                   SCHEDULE E

                         Names; Mergers and Acquisitions



                                       30
<PAGE>

                                   SCHEDULE F

                              Intellectual Property



                                       31
<PAGE>

                                   SCHEDULE G

                                 Account Debtors


                                       32
<PAGE>

                                   SCHEDULE H

                               Pledged Securities


                                       33
<PAGE>

                                     ANNEX A
                                       to
                                    SECURITY
                                    AGREEMENT

                        FORM OF ADDITIONAL DEBTOR JOINDER

                   Security Agreement dated as of [_____ ___,
                         200__ made by Able Energy, Inc.
        and its subsidiaries party thereto from time to time, as Debtors
                               to and in favor of
        the Secured Parties identified therein (the "Security Agreement")

      Reference is made to the Security Agreement as defined above;  capitalized
terms used herein and not otherwise defined herein shall have the meanings given
to such terms in, or by reference in, the Security Agreement.

      The undersigned hereby agrees that upon delivery of this Additional Debtor
Joinder to the Secured Parties referred to above,  the undersigned  shall (a) be
an Additional Debtor under the Security  Agreement,  (b) have all the rights and
obligations of the Debtors under the Security Agreement as fully and to the same
extent as if the undersigned was an original signatory thereto and (c) be deemed
to have made the representations and warranties set forth in Section ___ therein
as of the date of execution  and  delivery of this  Additional  Debtor  Joinder.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,  THE UNDERSIGNED  SPECIFICALLY
GRANTS TO THE  SECURED  PARTIES A SECURITY  INTEREST IN THE  COLLATERAL  AS MORE
FULLY SET FORTH IN THE SECURITY  AGREEMENT  AND  ACKNOWLEDGES  AND AGREES TO THE
WAIVER OF JURY TRIAL PROVISIONS SET FORTH THEREIN.

      Attached  hereto are  supplemental  and/or  replacement  Schedules  to the
Security Agreement, as applicable.

      An  executed  copy of this  Joinder  shall  be  delivered  to the  Secured
Parties,  and the Secured Parties may rely on the matters set forth herein on or
after the date hereof. This Joinder shall not be modified, amended or terminated
without the prior written consent of the Secured Parties.

<PAGE>

      IN WITNESS WHEREOF, the undersigned has caused this Joinder to be executed
in the name and on behalf of the undersigned.

                                            [Name of Additional Debtor]

                                            By:
                                            Name:
                                            Title:

                                            Address:

Dated:

<PAGE>

                                    [ANNEX B
                                       to
                                    SECURITY
                                    AGREEMENT

                                    THE AGENT

            1.  Appointment.  The Secured  Parties (all  capitalized  terms used
herein and not otherwise defined shall have the respective  meanings provided in
the Security Agreement to which this Annex B is attached (the "Agreement")),  by
their  acceptance  of the benefits of the  Agreement,  hereby  designate  [_____
("[_____"  or  "Agent")  as the  Agent  to act as  specified  herein  and in the
Agreement. Each Secured Party shall be deemed irrevocably to authorize the Agent
to take such action on its behalf under the  provisions of the Agreement and any
other  Transaction  Document (as such term is defined in the  Debentures) and to
exercise such powers and to perform such duties  hereunder and thereunder as are
specifically  delegated  to or  required  of the Agent by the terms  hereof  and
thereof and such other powers as are reasonably  incidental  thereto.  The Agent
may perform any of its duties hereunder by or through its agents or employees.

            2.   Nature  of   Duties.   The  Agent   shall  have  no  duties  or
responsibilities except those expressly set forth in the Agreement.  Neither the
Agent  nor any of its  partners,  members,  shareholders,  officers,  directors,
employees  or agents  shall be liable for any  action  taken or omitted by it as
such under the Agreement or hereunder or in connection herewith or therewith, be
responsible  for the  consequence  of any  oversight  or  error of  judgment  or
answerable for any loss,  unless caused solely by its or their gross  negligence
or willful  misconduct as determined by a final judgment (not subject to further
appeal) of a court of competent  jurisdiction.  The duties of the Agent shall be
mechanical and  administrative in nature;  the Agent shall not have by reason of
the  Agreement or any other  Transaction  Document a fiduciary  relationship  in
respect of any Debtor or any Secured Party;  and nothing in the Agreement or any
other Transaction Document,  expressed or implied, is intended to or shall be so
construed  as to  impose  upon the  Agent  any  obligations  in  respect  of the
Agreement or any other Transaction Document except as expressly set forth herein
and therein.

            3. Lack of Reliance on the Agent. Independently and without reliance
upon the Agent, each Secured Party, to the extent it deems appropriate, has made
and  shall  continue  to  make  (i)  its own  independent  investigation  of the
financial  condition  and  affairs  of  the  Company  and  its  subsidiaries  in
connection with such Secured Party's investment in the Debtors, the creation and
continuance of the Obligations, the transactions contemplated by the Transaction
Documents,  and the taking or not taking of any action in connection  therewith,
and  (ii) its own  appraisal  of the  creditworthiness  of the  Company  and its
subsidiaries,  and of the value of the  Collateral  from  time to time,  and the
Agent shall have no duty or responsibility,  either initially or on a continuing
basis, to provide any Secured Party with any credit, market or other information
with respect thereto,  whether coming into its possession before any Obligations
are  incurred  or at any  time or  times  thereafter.  The  Agent  shall  not be
responsible  to the Debtors or any

<PAGE>

Secured  Party for any recitals,  statements,  information,  representations  or
warranties herein or in any document,  certificate or other writing delivered in
connection herewith, or for the execution, effectiveness, genuineness, validity,
enforceability,  perfection,  collectibility,  priority  or  sufficiency  of the
Agreement or any other Transaction  Document,  or for the financial condition of
the  Debtors or the value of any of the  Collateral,  or be required to make any
inquiry  concerning  either the  performance  or observance of any of the terms,
provisions or conditions of the Agreement or any other Transaction  Document, or
the financial  condition of the Debtors,  or the value of any of the Collateral,
or the existence or possible  existence of any default or Event of Default under
the Agreement, the Debentures or any of the other Transaction Documents.

            4.  Certain  Rights of the Agent.  The Agent shall have the right to
take any action with respect to the Collateral,  on behalf of all of the Secured
Parties. To the extent practical,  the Agent shall request instructions from the
Secured Parties with respect to any material act or action (including failure to
act) in connection  with the Agreement or any other  Transaction  Document,  and
shall  be  entitled  to act or  refrain  from  acting  in  accordance  with  the
instructions  of Secured  Parties  holding a  majority  in  principal  amount of
Debentures  (based on  then-outstanding  principal  amounts of Debentures at the
time of any such  determination);  if such instructions are not provided despite
the Agent's request  therefor,  the Agent shall be entitled to refrain from such
act or taking such  action,  and if such  action is taken,  shall be entitled to
appropriate indemnification from the Secured Parties in respect of actions to be
taken by the Agent;  and the Agent  shall not incur  liability  to any person or
entity  by reason of so  refraining.  Without  limiting  the  foregoing,  (a) no
Secured Party shall have any right of action  whatsoever  against the Agent as a
result of the Agent acting or  refraining  from acting  hereunder in  accordance
with the terms of the  Agreement  or any  other  Transaction  Document,  and the
Debtors  shall have no right to question or challenge  the  authority of, or the
instructions  given to, the Agent  pursuant to the  foregoing  and (b) the Agent
shall not be  required  to take any action  which the Agent  believes  (i) could
reasonably be expected to expose it to personal liability or (ii) is contrary to
this Agreement, the Transaction Documents or applicable law.

            5. Reliance. The Agent shall be entitled to rely, and shall be fully
protected  in  relying,  upon  any  writing,   resolution,   notice,  statement,
certificate,  telex, teletype or telecopier message, cablegram, radiogram, order
or other document or telephone message signed, sent or made by the proper person
or entity,  and, with respect to all legal  matters  pertaining to the Agreement
and the other Transaction  Documents and its duties  thereunder,  upon advice of
counsel  selected by it and upon all other matters  pertaining to this Agreement
and the other Transaction  Documents and its duties  thereunder,  upon advice of
other  experts  selected by it.  Anything to the contrary  notwithstanding,  the
Agent shall have no  obligation  whatsoever  to any Secured Party to assure that
the Collateral  exists or is owned by the Debtors or is cared for,  protected or
insured or that the liens granted  pursuant to the Agreement  have been properly
or sufficiently or lawfully created,  perfected,  or enforced or are entitled to
any particular priority.

<PAGE>

            6.  Indemnification.  To the extent that the Agent is not reimbursed
and  indemnified by the Debtors,  the Secured Parties will jointly and severally
reimburse and indemnify the Agent,  in proportion to their  initially  purchased
respective  principal  amounts  of  Debentures,  from  and  against  any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses or disbursements of any kind or nature  whatsoever which may be
imposed on,  incurred by or asserted  against the Agent in performing its duties
hereunder or under the Agreement or any other  Transaction  Document,  or in any
way  relating  to or  arising  out of the  Agreement  or any  other  Transaction
Document except for those determined by a final judgment (not subject to further
appeal) of a court of competent  jurisdiction  to have resulted  solely from the
Agent's own gross negligence or willful  misconduct.  Prior to taking any action
hereunder as Agent,  the Agent may require each Secured Party to deposit with it
sufficient sums as it determines in good faith is necessary to protect the Agent
for costs and expenses associated with taking such action.

            7. Resignation by the Agent.

            (a) The Agent may resign from the  performance  of all its functions
      and duties under the Agreement and the other Transaction  Documents at any
      time  by  giving  30  days'  prior  written  notice  (as  provided  in the
      Agreement) to the Debtors and the Secured Parties.  Such resignation shall
      take effect upon the  appointment of a successor Agent pursuant to clauses
      (b) and (c) below.

            (b) Upon any such notice of resignation, the Secured Parties, acting
      by a Majority in Interest, shall appoint a successor Agent hereunder.

            (c) If a  successor  Agent shall not have been so  appointed  within
      said 30-day  period,  the Agent shall then  appoint a successor  Agent who
      shall  serve as Agent  until such time,  if any,  as the  Secured  Parties
      appoint a successor  Agent as provided above. If a successor Agent has not
      been appointed within such 30-day period, the Agent may petition any court
      of competent  jurisdiction  or may  interplead the Debtors and the Secured
      Parties in a proceeding for the appointment of a successor  Agent, and all
      fees,  including,  but not limited to,  extraordinary fees associated with
      the filing of interpleader  and expenses  associated  therewith,  shall be
      payable by the Debtors on demand.

            8. Rights with respect to Collateral. Each Secured Party agrees with
all other  Secured  Parties  and the Agent (i) that it shall not,  and shall not
attempt to,  exercise any rights with  respect to its  security  interest in the
Collateral,  whether  pursuant to any other  agreement or otherwise  (other than
pursuant to this  Agreement),  or take or institute any action against the Agent
or any of the other Secured  Parties in respect of the  Collateral or its rights
hereunder (other than any such action arising from the breach of this Agreement)
and (ii) that  such  Secured  Party  has no other  rights  with  respect  to the
Collateral  other than as set forth in this Agreement and the other  Transaction
Documents.  Upon the  acceptance  of any  appointment  as Agent  hereunder  by a
successor  Agent,  such successor  Agent shall  thereupon  succeed to and become
vested with all the rights,

<PAGE>

powers, privileges and duties of the retiring Agent and the retiring Agent shall
be discharged  from its duties and  obligations  under the Agreement.  After any
retiring  Agent's  resignation or removal  hereunder as Agent, the provisions of
the  Agreement  including  this  Annex B shall  inure to its  benefit  as to any
actions taken or omitted to be taken by it while it was Agent.