Document:

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NO. PS-2

                        WARRANT TO PURCHASE COMMON STOCK

                                       OF

                                 PICK SAT, INC.

         This is to Certify That, FOR VALUE RECEIVED, GULFSAT COMMUNICATIONS
CORP., or assigns ("Holder"), is entitled to purchase, subject to the provisions
of this Warrant, from PICK Sat, Inc. a Delaware corporation ("Company"), such
number of fully paid, validly issued and nonassessable shares of Common Stock of
the Company ("Common Stock") equal to two (2%) percent of the aggregate of the
issued and outstanding common stock of the Company and all outstanding
derivative securities as of the date stated in (i) of the following sentence.The
exercise price of this Warrant shall be equal to:(i) fifty percent (50%) of the
offering price per share of the Common Stock on the date of any sale, initial
public offering or private placement resulting in a change of control of the
Company ("Sale of Control Event"), multiplied by a number of shares equal to two
percent (2%) of the aggregate of the issued and outstanding Common Stock and all
outstanding derivative securities of the Company as of the date of the Sale of
Control Event, if a Sale of Control Event occurs on or prior to December 31,
2000; or (ii) three hundred seventy thousand dollars ($370,000), for an
aggregate number of shares of Common Stock equal to two percent (2%) of the
aggregate of the issued and outstanding Common Stock and all outstanding
derivative securities of the Company as of December 31, 2000, if no Sale of
Control Event occurs on or prior to December 31, 2000.The price per share upon
exercise is equal to the amount in (i) or (ii), above, as applicable, divided by
a number of shares equal to two percent (2%) of the aggregate of the issued and
outstanding Common Stock and all outstanding derivative securities of the
Company as of the date of exercise. This Warrant shall be exercisable at any
time or from time to time until December 31, 2004, subject to adjustment as set
forth herein.The number of shares of Common Stock to be received upon the
exercise of this Warrant and the price to be paid for each share of Common Stock
may be adjusted from time to time as hereinafter set forth. The shares of Common
Stock deliverable upon such exercise, and as adjusted from time to time, are
hereinafter sometimes referred to as "Warrant Shares" and the exercise price of
a share of Common Stock in effect at any time and as adjusted from time to time
is hereinafter sometimes referred to as the "Exercise Price".

         (a) EXERCISE OF WARRANT; CANCELLATION OF WARRANT.

             (1) This Warrant may be exercised in whole or in part at any time
or from time to time on or after the date of issuance of this Warrant until
December 31, 2004, (the "Exercise Period"); provided, however, that if such day
is a day on which banking institutions in the State of New York are authorized
by law to close, then this Warrant may be exercised on the next succeeding day
which shall not be such a day. This Warrant may be exercised by presentation and
surrender hereof to the Company at its principal office, or at the office of its
stock transfer agent, if any, with the Purchase Form annexed hereto duly
executed and accompanied by payment of the Exercise Price for the number of
Warrant Shares specified in such form. As soon as practicable after each such
exercise of the Warrants, but not later than seven (7) days from the date of
such exercise, the Company shall issue and deliver to the Holder a certificate
or certificate for the Warrant Shares issuable upon such exercise, registered in
the name of the Holder or its designee. If this Warrant should be exercised in
part only, the Company shall, upon surrender of this Warrant for cancellation,
execute and deliver a new Warrant evidencing the rights of the Holder thereof to
purchase the balance of the Warrant Shares purchasable thereunder. Upon receipt
by the Company of this Warrant at its office, or by the stock transfer agent of
the Company at its office, in proper form for exercise, the Holder shall be
deemed to be the holder of record of the shares of Common Stock issuable upon
such exercise, notwithstanding that the stock transfer books of the Company
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shall then be closed or that certificates representing such shares of Common
Stock shall not then be physically delivered to the Holder.

             (2) At any time during the Exercise Period, the Holder may, at its
option, exchange this Warrant, in whole or in part (a "Warrant Exchange"), into
the number of Warrant Shares determined in accordance with this Section (a)(2),
by surrendering this Warrant at the principal office of the Company or at the
office of its stock transfer agent, accompanied by a notice stating such
Holder's intent to effect such exchange, the number of Warrant Shares to be
exchanged and the date on which the Holder requests that such Warrant Exchange
occur (the "Notice of Exchange"). The Warrant Exchange shall take place on the
date specified in the Notice of Exchange or, if later, the date the Notice of
Exchange is received by the Company (the "Exchange Date"). Certificates for the
shares issuable upon such Warrant Exchange and, if applicable, a new warrant of
like tenor evidencing the balance of the shares remaining subject to this
Warrant, shall be issued as of the Exchange Date and delivered to the Holder
within seven (7) days following the Exchange Date. In connection with any
Warrant Exchange, this Warrant shall represent the right to subscribe for and
acquire the number of Warrant Shares (rounded to the next highest integer) equal
to (i) the number of Warrant Shares specified by the Holder in its Notice of
Exchange (the "Total Number") less (ii) the number of Warrant Shares equal to
the quotient obtained by dividing (A) the product of the Total Number and the
existing Exercise Price by (B) the current market value of a share of Common
Stock. Current market value shall have the meaning set forth Section (c) below,
except that for purposes hereof, the date of exercise, as used in such Section
(c), shall mean the Exchange Date.

         (b) RESERVATION OF SHARES. The Company shall at all times reserve for
issuance and/or delivery upon exercise of this Warrant such number of shares of
its Common Stock as shall be required for issuance and delivery upon exercise of
the Warrants.

         (c) FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Holder an amount in cash equal to such fraction
multiplied by the current market value of a share, determined as follows:

             (1) If the Common Stock is listed on a national securities exchange
         or admitted to unlisted trading privileges on such exchange or listed
         for trading on the Nasdaq National Market, the current market value
         shall be the last reported sale price of the Common Stock on such
         exchange or market on the last business day prior to the date of
         exercise of this Warrant or if no such sale is made on such day, the
         average closing bid and asked prices for such day on such exchange or
         market; or

             (2) If the Common Stock is not so listed or admitted to unlisted
         trading privileges, but is traded on the Nasdaq SmallCap Market, the
         current market value shall be the average of the closing bid and asked
         prices for such day on such market and if the Common Stock is not so
         traded, the current market value shall be the mean of the last reported
         bid and asked prices reported by the National Quotation Bureau, Inc. on

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         the last business day prior to the date of the exercise of this
         Warrant; or

             (3) If the Common Stock is not so listed or admitted to unlisted
         trading privileges and bid and asked prices are not so reported, the
         current market value shall be an amount, not less than book value
         thereof as at the end of the most recent fiscal year of the Company
         ending prior to the date of the exercise of the Warrant, determined in
         such reasonable manner as may be prescribed by the Board of Directors
         of the Company.

         (d) EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other warrants of different denominations entitling the
holder thereof to purchase in the aggregate the same number of shares of Common
Stock purchasable hereunder. Upon surrender of this Warrant to the Company at
its principal office or at the office of its stock transfer agent, if any, with
the Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. This Warrant may be divided or combined
with other warrants which carry the same rights upon presentation hereof at the
principal office of the Company or at the office of its stock transfer agent, if
any, together with a written notice specifying the names and denominations in
which new Warrants are to be issued and signed by the Holder hereof. The term
"Warrant" as used herein includes any Warrants into which this Warrant may be
divided or exchanged. Upon receipt by the Company of evidence satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional contractual obligation on
the part of the Company, whether or not this Warrant so lost, stolen, destroyed,
or mutilated shall be at any time enforceable by anyone.

         (e) RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in the Warrant and
are not enforceable against the Company except to the extent set forth herein.

         (f) ANTI-DILUTION PROVISIONS. Subject to the provisions of Section l
hereof, the Exercise Price in effect at any time and the number and kind of
securities purchasable upon the exercise of the Warrants shall be subject to
adjustment from time to time upon the happening of certain events as follows:

             (1) In case the Company shall (i) declare a dividend or make a
         distribution on its outstanding shares of Common Stock in shares of
         Common Stock, (ii) subdivide or reclassify its outstanding shares of
         Common Stock into a greater number of shares, or (iii) combine or
         reclassify its outstanding shares of Common Stock into a smaller number
         of shares, the Exercise Price in effect at the time of the record date
         for such dividend or distribution or of the effective date of

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         such subdivision, combination or reclassification shall be adjusted so
         that it shall equal the price determined by multiplying the Exercise
         Price by a fraction, the denominator of which shall be the number of
         shares of Common Stock outstanding after giving effect to such action,
         and the numerator of which shall be the number of shares of Common
         Stock outstanding immediately prior to such action. Such adjustment
         shall be made successively whenever any event listed above shall occur.

             (2) In case the Company shall fix a record date for the issuance of
         rights, options or warrants to all holders of its Common Stock
         entitling them to subscribe for or purchase shares of Common Stock (or
         securities convertible into Common Stock) at a price (the "Subscription
         Price") (or having a conversion price per share) less than the current
         market price of the Common Stock (as defined in Subsection (5) below)
         on the record date mentioned below, or less than the Exercise Price on
         such record date, the Exercise Price shall be adjusted so that the same
         shall equal, the price determined by multiplying the Exercise Price in
         effect immediately prior to the date of issuance by a fraction, the
         numerator of which shall be the sum of the number of shares outstanding
         on the record date mentioned below and the number of additional shares
         of Common Stock which the aggregate offering price of the total number
         of shares of Common Stock so offered (or the aggregate conversion price
         of the convertible securities so offered) would purchase at the
         Exercise Price in effect immediately prior to the date of such
         issuance, and the denominator of which shall be the sum of the number
         of shares of Common Stock outstanding on the record date mentioned
         below and the number of additional shares of Common Stock offered for
         subscription or purchase (or into which the convertible securities so
         offered are convertible). Such adjustment shall be made successively
         whenever such rights or warrants are issued and shall become effective
         immediately after the record date for the determination of shareholders
         entitled to receive such rights or warrants; and to the extent that
         shares of Common Stock are not delivered (or securities convertible
         into Common Stock are not delivered) after the expiration of such
         rights or warrants the Exercise Price shall be readjusted to the
         Exercise Price which would then be in effect had the adjustments made
         upon the issuance of such rights or warrants been made upon the basis
         of delivery of only the number of shares of Common Stock (or securities
         convertible into Common Stock) actually delivered.

             (3) In case the Company shall hereafter distribute to the holders
         of its Common Stock evidences of its indebtedness or assets (excluding
         cash dividends or distributions and dividends or distributions referred
         to in Subsection (1) above) or subscription rights or warrants
         (excluding those referred to in Subsection (2) above), then in each
         such case the Exercise Price in effect thereafter shall be determined
         by multiplying the Exercise Price in effect immediately prior thereto
         by a fraction, the numerator of which shall be the total number of
         shares of Common Stock outstanding multiplied by the current market

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         price per share of Common Stock (as defined in Subsection (5) below),
         less the fair market value (as determined by the Company's Board of
         Directors) of said assets or evidences of indebtedness so distributed
         or of such rights or warrants, and the denominator of which shall be
         the total number of shares of Common Stock outstanding multiplied by
         such current market price per share of Common Stock. Such adjustment
         shall be made successively whenever such a record date is fixed. Such
         adjustment shall be made whenever any such distribution is made and
         shall become effective immediately after the record date for the
         determination of shareholders entitled to receive such distribution.

             (4) Whenever the Exercise Price payable upon exercise of each
         Warrant is adjusted pursuant to Subsections (1), (2), and (3) above,
         the number of Shares purchasable upon exercise of this Warrant shall
         simultaneously be adjusted by multiplying the number of Shares
         initially issuable upon exercise of this Warrant by the Exercise Price
         in effect on the date hereof and dividing the product so obtained by
         the Exercise Price, as adjusted.

             (5) For the purpose of any computation under Subsections (2) and
         (3) above, the current market price per share of Common Stock at any
         date shall be determined in the manner set forth in Section (c) hereof
         except that the current market price per share shall be deemed to be
         the higher of (i) the average of the prices for 30 consecutive business
         days before such date or (ii) the price on the business day immediately
         preceding such date.

             (6) No adjustment in the Exercise Price shall be required unless
         such adjustment would require an increase or decrease of at least one
         cent ($0.01) in such price; provided, however, that any adjustments
         which by reason of this Subsection (6) are not required to be made
         shall be carried forward and taken into account in any subsequent
         adjustment required to be made hereunder. All calculations under this
         Section (f) shall be made to the nearest cent or to the nearest
         one-hundredth of a share, as the case may be. Anything in this Section
         (f) to the contrary notwithstanding, the Company shall be entitled, but
         shall not be required, to make such changes in the Exercise Price, in
         addition to those required by this Section (f), as it shall determine,
         in its sole discretion, to be advisable in order that any dividend or
         distribution in shares of Common Stock, or any subdivision,
         reclassification or combination of Common Stock, hereafter made by the
         Company shall not result in any Federal Income tax liability to the
         holders of Common Stock or securities convertible into Common Stock
         (including Warrants).

             (7) In the event that at any time, as a result of an adjustment
         made pursuant to Subsection (1) above, the Holder of this Warrant
         thereafter shall become entitled to receive any shares of the Company,
         other than Common Stock, thereafter the number of such other shares so
         receivable upon exercise of this Warrant shall be subject to adjustment
         from time to time in a manner and on terms as nearly equivalent as

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         practicable to the provisions with respect to the Common Stock
         contained in Subsections (1) to (6), inclusive above.

             (8) Irrespective of any adjustments in the Exercise Price or the
         number or kind of shares purchasable upon exercise of this Warrant,
         Warrants theretofore or thereafter issued may continue to express the
         same price and number and kind of shares as are stated in the similar
         Warrants initially issuable pursuant to this Agreement.

         (g) OFFICER'S CERTIFICATE. Whenever the Exercise Price shall be
adjusted as required by the provisions of the foregoing Section, the Company
shall forthwith file in the custody of its Secretary or an Assistant Secretary
at its principal office and with its stock transfer agent, if any, an officer's
certificate showing the adjusted Exercise Price determined as herein provided,
setting forth in reasonable detail the facts requiring such adjustment,
including a statement of the number of additional shares of Common Stock, if
any, and such other facts as shall be necessary to show the reason for and the
manner of computing such adjustment. Each such officer's certificate shall be
made available at all reasonable times for inspection by the holder or any
holder of a Warrant executed and delivered pursuant to Section (a) and the
Company shall, forthwith after each such adjustment, mail a copy by certified
mail of such certificate to the Holder or any such holder.

         (h) NOTICES TO WARRANT HOLDERS. So long as this Warrant shall be
outstanding, (i) if the Company shall pay any dividend or make any distribution
upon the Common Stock or (ii) if the Company shall offer to the holders of
Common Stock for subscription or purchase by them any share of any class or any
other rights or (iii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then in any such case, the Company shall cause
to be mailed by certified mail to the Holder, at least fifteen days prior the
date specified in (x) or (y) below, as the case may be, a notice containing a
brief description of the proposed action and stating the date on which (x) a
record is to be taken for the purpose of such dividend, distribution or rights,
or (y) such reclassification, reorganization, consolidation, merger, conveyance,
lease, dissolution, liquidation or winding up is to take place and the date, if
any is to be fixed, as of which the holders of Common Stock or other securities
shall receive cash or other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation or
winding up.

         (i) RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the Company, or in case of any consolidation or merger of the
Company with or into another corporation (other than a merger with a subsidiary
in which merger the Company is the continuing corporation and which does not
result in any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the class issuable upon exercise of this
Warrant) or in case of any sale, lease or conveyance to another corporation of
the property of the Company as an entirety, the Company shall, as a condition
precedent to such transaction, cause effective provisions to be made so that the
Holder shall have the right thereafter by exercising this Warrant at any time
prior to the expiration of the Warrant, to purchase the kind and amount of
shares of stock and other securities and property receivable upon such

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reclassification, capital reorganization and other change, consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
which might have been purchased upon exercise of this Warrant immediately prior
to such reclassification, change, consolidation, merger, sale or conveyance. Any
such provision shall include provision for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Warrant. The foregoing provisions of this Section (i) shall similarly apply to
successive reclassifications, capital reorganizations and changes of shares of
Common Stock and to successive consolidations, mergers, sales or conveyances. In
the event that in connection with any such capital reorganization or
reclassification, consolidation, merger, sale or conveyance, additional shares
of Common Stock shall be issued in exchange, conversion, substitution or
payment, in whole or in part, for a security of the Company other than Common
Stock, any such issue shall be treated as an issue of Common Stock covered by
the provisions of Subsection (1) of Section (f) hereof.

         (j) REGISTRATION UNDER THE SECURITIES ACT OF 1933. The holder will have
such registration rights with respect to the Warrant Shares as may be granted to
all other holders of Warrants substantially similar to these Warrants as more
particularly set forth in the Investor Rights Agreement executed in connection
with the purchase of Series D Convertible Preferred Stock of the Company.

                                        PICK SAT, INC.

                                        By: /s/ Diego Leiva
                                            ------------------------------------
                                            Diego Leiva, Chairman of the Board

Dated: January 13, 2000

Attest:

/s/ Elliot H. Lutzker
--------------------------------------
Elliot H. Lutzker, Assistant Secretary

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                                                   PURCHASE FORM

                                                          Dated ________________

         The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing shares of Common Stock and hereby makes
payment of in payment of the actual exercise price thereof.

                                    ________

                     INSTRUCTIONS FOR REGISTRATION OF STOCK
                     --------------------------------------

Name ______________________________________
(Please typewrite or print in block letters)

Address ___________________________________

Signature _________________________________

                                 ASSIGNMENT FORM
                                 ---------------

         FOR VALUE RECEIVED, __________________________ hereby sells, assigns
and transfers unto

Name ______________________________________
(Please typewrite or print in block letters)

Address ___________________________________

the right to purchase Common Stock represented by this Warrant to the extent of
shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint Attorney, to transfer the same on the books of the
Company with full power of substitution in the premises.

Date _____________________

Signature ________________<PAGE>

                           GENERAL SECURITY AGREEMENT
                                 (Floating Lien)

         SECURITY AGREEMENT, dated as of      1998, between PICK Communications
Corp., a Nevada corporation with offices at Wayne Interchange Plaza II, Third
Floor, Wayne, New Jersey 07470 (the "Debtor"), and Commonwealth Associates, a
New York limited partnership with offices at 830 Third Avenue, New York, New
York 10022, as agent (the "Agent") for the investors (the "Investors") from time
to time set forth on Annex I hereto (the Agent, acting in such capacity, the
"Secured Party");

                                   WITNESSETH:

         WHEREAS, the Debtor and the Investors are parties to a series of 10%
senior subordinated secured notes issued by the Debtor in a private placement
pursuant to the terms of a Confidential Term Sheet dated July __, 1998 (herein,
as at any time amended, extended, restated, renewed or modified, the "Notes")
through the Agent, as placement agent; and

         WHEREAS, it is a condition to the willingness of the Investors to enter
into the Notes and make the loan evidenced thereby that the Debtor enter into
this Agreement and grant to the Secured Party, for the ratable benefit of the
Investors, the security interest provided for herein;

         NOW, THEREFORE, FOR VALUE RECEIVED, IT IS AGREED:

         Section 1. Terms. Unless otherwise defined herein, capitalized terms
used in this Agreement shall have the meaning specified therefor in the Notes.
As used herein the following terms shall have the meanings specified and shall
include in the singular number the plural and in the plural number the singular:

         "Assigned Agreements" shall mean all contracts and agreements of the
Debtor.

         "Collateral" means all of the Debtor's right, title and interest in and
under or arising out of each and all of the following:

                  All personal property and fixtures of the Debtor of any type
         or description, wherever located and now existing or hereafter arising
         or acquired, including but not limited to the following:

                  (i)      all of the Debtor's goods including, without
                           limitation:

                           (a) all inventory, including without limitation,
                           equipment held for lease, whether raw materials, in
                           process or finished, all material or equipment usable
                           in processing the same and all documents of title
                           covering any inventory (all of the foregoing,
                           "Inventory"), including without limitation that
                           located at the locations listed on Schedule I annexed
                           hereto;

<PAGE>

                           (b) all equipment (the "Equipment") employed in
                           connection with the Debtor's business, together with
                           all present and future additions, attachments and
                           accessions thereto and all substitutions therefor and
                           replacements thereof, including without limitation
                           that located at the locations listed on Schedule 1
                           annexed hereto;

                  (ii)     all of the Debtor's present and future accounts,
                           accounts receivable, general intangibles, contracts
                           and contract rights (herein sometimes referred to as
                           "Receivables"), including but not limited to the
                           Debtor's rights (including rights to payment) under
                           all Assigned Agreements, together with

                           (a) all claims, rights, powers or privileges and
                           remedies of the Debtor relating thereto or arising in
                           connection therewith including, without limitation,
                           all rights of the Debtor to make determinations, to
                           exercise any election (including, but not limited to,
                           election of remedies) or option or to give or receive
                           any notice, consent, waiver or approval, together
                           with full power and authority to demand, receive,
                           enforce, collect or receipt for any of the foregoing
                           or any property which is the subject of the Assigned
                           Agreements, to enforce or execute any checks, or
                           other instruments or orders, to file any claims and
                           to take any action which (in the opinion of the
                           Secured Party) may be necessary or advisable in
                           connection with any of the foregoing,

                           (b) all liens, security, guaranties, endorsements,
                           warranties and indemnities and all insurance and
                           claims for insurance relating thereto or arising in
                           connection therewith,

                           (c) all rights to property forming the subject matter
                           of the Receivables including, without limitation,
                           rights to stoppage in transit and rights to returned
                           or repossessed property,

                           (d) all writings relating thereto or arising in
                           connection therewith including without limitation,
                           all notes, contracts, security agreements,
                           guaranties, chattel paper and other evidence of
                           indebtedness or security, all powers-of- attorney,
                           all books, records, ledger cards and invoices, all
                           credit information, reports or memoranda and all
                           evidence of filings or registrations relating
                           thereto,

                           (e) all catalogs, computer and automatic machinery
                           software and programs, and the like pertaining to
                           operations by the Debtor in, on or about any of its
                           plants or warehouses, all sales data and other
                           information relating to sales or service of products
                           now or hereafter manufactured on or about any of its
                           plants, and all accounting information pertaining to
                           operations in, on or about any of its plants, and all
                           media in which or on which any of the information

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<PAGE>

                           or knowledge or data is stored or contained, and all
                           computer programs used for the compilation or
                           printout of such information, knowledge, records or
                           data, and

                           (f) all accounts, contract rights, general
                           intangibles and other property rights of any nature
                           whatsoever arising out of or in connection with the
                           foregoing, including without limitation, payments due
                           and to become due, whether as repayments,
                           reimbursements, contractual obligations, indemnities,
                           damages or otherwise;

                  (iii)    all other personal property of the Debtor of any
                           nature whatsoever, including, without limitation, all
                           accounts, bank accounts, deposits, credit balances,
                           contract rights, inventory, general intangibles,
                           goods, equipment, instruments, chattel paper,
                           machinery, furniture, furnishings, fixtures, tools,
                           supplies, appliances, plans and drawings, together
                           with all customer and supplier lists and records of
                           the business, and all property from time to time
                           described in any financing statement (UCC- 1) signed
                           by the Debtor naming the Agent as secured party; and

                  (iv)     all additions, accessions, replacements,
                           substitutions or improvements and all products and
                           proceeds including, without limitation, proceeds of
                           insurance, of any and all of the Collateral described
                           in clauses (i) through (iii) above.

         "Instrument" shall have the meaning specified in Article 3 of the
Uniform Commercial Code, as in effect from time to time in the State of New York
and shall also include any other writing which evidences a right to the payment
of money and is not itself a security agreement or lease and is of a type which
is in the ordinary course of business transferred by delivery with any necessary
endorsement or assignment .

         "Lien" means any mortgage, pledge, hypothecation, assignment, security
interest, deposit arrangement, encumbrance (including any easement, right of
way, zoning restriction and the like), lien (statutory or other) or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any financing lease involving substantially the same economic effect
as any of the foregoing and the filing of any financing statement under the
Uniform Commercial Code or comparable law of any jurisdiction).

         "Permitted Liens" means:

                  (a) Liens for taxes, assessments or other governmental charges
         or levies not at the time delinquent or thereafter payable without
         penalty or being contested in good faith by appropriate proceedings and
         for which adequate reserves in accordance with generally accepted
         accounting principles shall have been set aside on its books;

                                       -3-

<PAGE>

                  (b) Liens of carriers, warehousemen, mechanics, materialmen
         and landlords incurred in the ordinary course of business for sums not
         overdue or being contested in good faith by appropriate proceedings and
         for which adequate reserves shall have been set aside on its books;

                  (c) Liens (other than Liens arising under the Employee
         Retirement Income Security Act of 1974, as amended, or Section 412(n)
         of the Internal Revenue Code of 1986, as amended) incurred in the
         ordinary course of business in connection with workers' compensation,
         unemployment insurance or other forms of governmental insurance or
         benefits, or to secure performance of tenders, statutory obligations,
         leases and contracts (other than for borrowed money) entered into in
         the ordinary course of business or to secure obligations on surety or
         appeal bonds;

                  (d) judgment Liens in existence less than 30 days after the
         entry thereof or with respect to which execution has been stayed;

                  (e) ground leases in respect of real property on which
         facilities owned or leased by the Debtor or any of its subsidiaries are
         located;

                  (f) easements, rights-of-way, restrictions, minor defects or
         irregularities in title and other similar charges or encumbrances not
         interfering in any material respect with the business of the Debtor and
         its subsidiaries taken as a whole;

                  (g) any interest or title of a lessor secured by a lessor's
         interest under any lease of real property on which facilities owned or
         leased by the Debtor or any of its subsidiaries are located;

                  (h) leases or subleases granted to others not interfering in
         any material respect with the business of the Debtor and its
         subsidiaries taken as a whole; and

                  (i) a Lien on any asset securing indebtedness (including
         capitalized lease obligations) incurred or assumed for the purpose of
         financing the purchase price including capitalized lease payments in
         the nature thereof) of such asset, provided that such Lien attaches
         only to the asset acquired with the proceeds of such indebtedness and
         attaches concurrently with or within ten (10) days following the
         acquisition thereof

         "Person" means any natural person, corporation, firm, association,
partnership, joint venture, limited liability company, joint-stock company,
trust, unincorporated organization, government, governmental agency or
subdivision, or any other entity, whether acting in an individual, fiduciary or
other capacity.

         "Receivables" has the meaning specified therefor in clause (ii) of the
definition of Collateral.

                                       -4-

<PAGE>

         "Secured Obligations" means all obligations of the Debtor, whether for
fees, expenses or otherwise, now existing or hereafter arising under this
Agreement, the Notes, and any other document executed by Debtor in connection
with any of the foregoing.

         Section 2. Security Interests. As security for the payment and
performance of all Secured Obligations the Debtor does hereby grant and assign
to the Secured Party, for the ratable benefit of the Investors, a continuing
security interest in all of the Collateral, whether now existing or hereafter
arising or acquired and wherever located.

         Section 3. General Representations, Warranties and Covenants. The
Debtor represents, warrants and covenants, which representations, warranties and
covenants shall survive execution and delivery of this Agreement, as follows:

         (a) This Agreement is made with full recourse to the Debtor and
pursuant to and upon all the warranties, representations, covenants, and
agreements on the part of the Debtor contained herein, in the Notes and
otherwise made in writing in connection herewith or therewith.

         (b) Except for the security interest of the Secured Party therein, the
Debtor is, and as to Collateral acquired from time to time after the date hereof
the Debtor will be, the owner of all the Collateral free from any hen, security
interest, encumbrance or other right, title or interest of any Person (other
than Permitted Liens) and the Debtor shall defend the Collateral against all
claims and demands of all Persons at any time claiming the same or any interest
therein adverse to the Secured Party.

         (c) There is no financing statement (or similar statement or instrument
of registration under the law of any jurisdiction) now on file or registered in
any public office covering any interest of any kind in the Collateral, or
intended to cover any such interest, which has not been terminated or released
by the secured party named therein and so long as the Notes remain outstanding
or any of the Secured Obligations of the Debtor remain unpaid, the Debtor will
not execute and there will not be on file in any public office any financing
statement (or similar statement or instrument of registration under the law of
any jurisdiction) or statements relating to the Collateral, except (i) financing
statements filed or to be filed in respect of and covering the security interest
of the Secured Party hereby granted and provided for and (ii) with respect to
Permitted Liens,

         (d) The chief executive office and chief place of business of the
Debtor is located at the address of the Debtor listed on the signature page
hereof, and the Debtor will not move its chief executive office and chief place
of business except to such new location as the Debtor may establish in
accordance with the last sentence of this Section 3(d). The originals of all
Assigned Agreements and all documents (as well as all duplicates thereof)
evidencing all Receivables and all other contract rights or accounts and other
property of the Debtor and the only original books of account and records of the
Debtor relating thereto are, and will continue to be, kept at such chief
executive office or at such new location as the Debtor may establish in
accordance with the last sentence of this Section 3(d). The Debtor shall
establish no such new location until (i) it shall have given to the

                                       -5-

<PAGE>

Secured Party not less than 30 days prior written notice of its intention to do
so, clearly describing such new location and providing such other information in
connection therewith as the Secured Party may reasonably request, and (ii) with
respect to such new location, it shall have taken such action, satisfactory to
the Secured Party (including, without limitation, all action required by Section
7 hereof), to maintain the security interest of the Secured Party in the
Receivables intended to be granted at all times fully perfected and in full
force and effect.

         (e) Debtor has no Collateral located outside of the States of New
Jersey and Florida.

         (f) The name of the Debtor is as set forth on the signature page hereto
and the Debtor shall not change such name, conduct its business in any other
name or take title to the Collateral in any other name while this Agreement
remains in effect. The Debtor has never had any name, or conducted business
under any name in any jurisdiction, other than its name set forth on the
signature page hereto, during the past six years other than as set forth in
Schedule 2 annexed hereto.

         (g) At the Debtor's own expense, the Debtor will: (i) without limiting
the provisions of the Notes, keep the Collateral fully insured at all times with
financially sound and responsible insurance carriers against loss or damage by
fire and other risks, casualties and contingencies and in such manner and to the
same extent that like properties are customarily so insured by other entities
engaged in the same or similar businesses similarly situated and keep adequate
insurance at all times against liability on account of damage to persons and
properties and under all applicable workers' compensation laws, by insurers and
in amounts approved by the Secured Party, for the benefit of the Debtor and the
Secured Party, (ii) upon request by the Secured Party, promptly deliver the
insurance policies or certificates thereof to the Secured Party, and (iii) keep
the Collateral in good condition at all times (normal wear and tear excepted)
and maintain same in accordance with all manufacturer's specifications and
requirements. Upon any failure of the Debtor to comply with its obligations
pursuant to this Section 3(g), the Secured Party may at its option, and without
affecting any of its other rights or remedies provided herein or as a secured
party under the Uniform Commercial Code, procure the insurance protection it
deems necessary and/or cause repairs or modifications to be made to the
Collateral and the cost of either or both of which shall be a lien against the
Collateral added to the amount of the indebtedness secured hereby and payable on
demand with interest at a rate per annum equal to 18%.

         (h) The Debtor hereby assigns to the Secured Party all of Debtor's
right, title and interest in and to any and all moneys which may become due and
payable with respect to the Collateral under any policy insuring the Collateral,
including return of unearned premium, and shall cause any such insurance company
to make payment directly to the Secured Party for application tc amounts
outstanding under the Notes in accordance with the terms of the Notes and, to
the extent not provided therein, in such order as the Secured Party shall
determine.

         (i) The Debtor will not use the Collateral in violation of any statute
or ordinance or applicable insurance policy and will promptly pay all taxes and
assessments levied against the Collateral.

                                       -6-

<PAGE>

         (j) The Debtor will not sell, transfer, change the registration, if
any, dispose of, attempt to dispose of, substantially modify or abandon the
Collateral or any part thereof other than sales of Inventory in the ordinary
course of business and the disposition of obsolete or worn-out Equipment in the
ordinary course of business.

         (k) The Debtor will not assert against the Secured Party any claim or
defense which the Debtor may have against any seller of the Collateral or any
part thereof or against any other Person with respect to the Collateral or any
part thereof

         (1) The Debtor will indemnify and hold the Secured Party harmless from
and against any loss, liability, damage, costs and expenses whatsoever arising
from the Debtor's use, operation, ownership or possession of the Collateral or
any part thereof.

         (m) The Debtor will maintain the confidentiality of all customer lists
and not sell or otherwise dispose of such lists except that the Debtor shall
deliver copies thereof to the Secured Party upon its request, which may be made
at any time and from time to time after an Event of Default.

         (n) The Debtor will not enter into any agreement that is inconsistent
with the Debtor's obligations under this Agreement, without the prior written
consent of the Secured Party.

         Section 4. Special Provisions Concerning Assigned Agreements. The
Debtor represents, warrants and agrees as follows:

         (a) The Assigned Agreements constitute the legal, valid and binding
obligations of the Debtor and, to the best of its knowledge, the other parties
thereto, enforceable in accordance with their respective terms.

         (b) The Debtor will faithfully abide by, perform and discharge each and
every material obligation, covenant and agreement to be performed by the Debtor
under the Assigned Agreements.

         (c) At the request of the Secured Party, and at the sole cost and
expense of the Debtor, the Debtor will enforce or secure the performance of each
and every material obligation, covenant, condition and agreement contained in
the Assigned Agreements to be performed by the other parties thereto.

         (d) The Debtor will not modify, amend or agree to vary any of the
Assigned Agreements in any material respect or otherwise act or fail to act in a
manner likely (directly or indirectly) to entitle any party thereto to claim
that the Debtor is in default under the terms thereof

         (e) The Debtor will not terminate or permit the termination of any
Assigned Agreement, except in accordance with its terms.

                                       -7-

<PAGE>

         (f) Without the prior written consent of the Secured Party, the Debtor
will not waive or in any manner release or discharge any party to any Assigned
Agreement from any of the material obligations, covenants, conditions and
agreements to be performed by it under such Assigned Agreement including,
without limitation, the obligation to make all payments in the manner and at the
time and places specified.

         (g) If the Secured Party so requests after the occurrence of an Event
of Default, the Debtor will hold any payments received by it which are assigned
and set over to the Secured Party by this Agreement for and on behalf of the
Secured Party and turn them promptly over to the Secured Party forthwith in the
same form in which they are received (together with any necessary endorsement)
for application to amounts outstanding under the Notes in accordance with the
terms of the Notes and, to the extent not provided therein, in such order as the
Secured Party shall determine.

         (h) The Debtor will appear in and defend every action or proceeding
arising under, growing out of or in any manner connected with the Assigned
Agreements or the obligations, duties or liabilities of the Debtor and any
assignee thereunder.

         (i) Should the Debtor fail to make any payment or to do any act as
herein provided, the Secured Party may (but without obligation on the Secured
Party's part to do so and without notice to or demand on the Debtor and without
releasing the Debtor from any obligation hereunder) make or do the same in such
manner and to such extent as the Secured Party may deem necessary to protect the
security interests provided hereby, including specifically, without limiting the
general powers, the right to appear in and defend any action or proceeding
purporting to affect the security interests provided hereby and the Debtor, and
the Secured Party may also perform and discharge each and every obligation,
covenant and agreement of the Debtor contained in any Assigned Agreement and, in
exercising any such powers, pay necessary costs and expenses, employ counsel and
incur and pay reasonable attorneys' fees.

         (j) Upon the request of the Secured Party, the Debtor will send to the
Secured Party copies of all notices, documents and other papers furnished or
received by it with respect to any of the Assigned Agreements.

         Section 5. Special Provisions Concerning Receivables. (a) As of the
time when each Receivable arises, the Debtor shall be deemed to have warranted
as to each such Receivable that such Receivable and all papers and documents
relating thereto are genuine and in all respects what they purport to be, and
that all papers and documents relating thereto:

         (i)   will be signed by the account debtor named therein (or such
account debtor's duly authorized agent) or otherwise be binding on the account
debtor;

         (ii)  will represent the genuine, legal, valid and binding obligation
of the account debtor evidencing indebtedness unpaid and owed by such account
debtor arising out of the performance of labor or services or the sale and
delivery of merchandise or both;

                                       -8-

<PAGE>

         (iii) to the extent evidenced by writings, will be the only original
writings evidencing and embodying such obligation of the account debtor named
therein; and

         (iv)  will be in compliance and will conform with all applicable
federal, state and local laws (including applicable usury laws) and applicable
laws of any relevant foreign jurisdiction.

         (b) The Debtor will keep and maintain at the Debtor's own cost and
expense satisfactory and complete records of the Receivables, including, but not
limited to, records of all payments received, all credits granted thereon, all
merchandise returned and all other dealings therewith, and the Debtor will make
the same available to the Secured Party, at the Debtor's own cost and expense,
at any and all reasonable times upon demand of the Secured Party. The Debtor
shall, at the Debtor's own cost and expense, deliver the Receivables (including,
without limitation, all documents evidencing the Receivables) and such books and
records to the Secured Party or to its representatives upon its demand at any
time after the occurrence of an Event of Default. If the Secured Party shall so
request, the Debtor shall legend, in form and manner satisfactory to the Secured
Party, the Receivables and other books, records and documents of the Debtor
evidencing or pertaining to the Receivables with an appropriate reference to the
fact that the Receivables have been assigned to the Secured Party and that the
Secured Party has a security interest therein.

         (c) Except in the ordinary course of business prior to an Event of
Default, the Debtor will not rescind or cancel any indebtedness evidenced by any
Receivable or modify any term thereof or make any adjustment with respect
thereto, or extend or renew the same, or compromise or settle any dispute,
claim, suit or legal proceeding relating thereto, or sell any Receivable or
interest therein, without the prior written consent of the Secured Party, except
that the Debtor may grant discounts in connection with the prepayment of any
Receivable in an amount which is customary in the line of business in which the
Debtor is engaged and consistent with the Debtor's past practices.

         (d) The Debtor will duly fulfill all obligations on its part to be
fulfilled under or in connection with the Receivables and will do nothing to
impair the rights of the Secured Party in the Receivables.

         (e) The Debtor shall endeavor to collect or cause to be collected from
the account debtor named in each Receivable, as and when due (including, without
limitation, Receivables which are delinquent, such Receivables to be collected
in accordance with generally accepted lawful collection procedures) any and all
amounts owing under or on account of such Receivable, and apply forthwith (on a
daily basis) upon receipt thereof all such amounts as are so collected to the
outstanding balance of such Receivable. The costs and expenses (including
attorney's fees) of collection, whether incurred by the Debtor or the Secured
Party, shall be borne by the Debtor.

         (f) If any of the Receivables becomes evidenced by an Instrument (other
than a check received in payment of a Receivable and deposited in the ordinary
course of business), the Debtor will notify the Secured Party thereof, and upon
request by the Secured Party promptly deliver such Instrument to the Secured
Party appropriately endorsed to the order of the Secured Party as further
security for the satisfaction in fall of the Secured Obligations.

                                       -9-

<PAGE>

         (g) Upon request of the Secured Party, at any time when an Event of
Default shall exist, the Debtor shall promptly notify (in manner, form and
substance satisfactory to the Secured Party) all Persons who are at any time
obligated under any Receivable that the Secured Party possesses a security
interest in such Receivable and that all payments in respect thereof are to be
made to such account as the Secured Party directs.

         Section 6. Special Provisions Concerning Equipment. The Debtor will do
nothing to impair the rights of the Secured Party in the Equipment. The Debtor
shall cause the Equipment to at all times constitute and remain personal
property. The Debtor will at all times keep all Equipment insured with
financially responsible insurance companies in favor of the Secured Party, at
the expense of the Debtor, against such perils and in such amounts as are
customary for Persons in the same general line of business as the Debtor and
operating in similar geographic locations and markets. If the Debtor shall fail
to insure the Equipment to the Secured Party's satisfaction, or if the Debtor
shall fail so to endorse and deposit all policies or certificates with respect
thereto, the Secured Party shall have the right (but shall be under no
obligation) to procure such insurance and the Debtor agrees to reimburse the
Secured Party for all costs and expenses of procuring such insurance, together
with interest at a rate per annum equal to 18%. The Secured Party may apply any
proceeds of such insurance when received by it toward the payment of any of the
Secured Obligations, whether or not the same shall then be due. The Debtor
retains all liability and responsibility in connection with the Equipment and
the liability of the Debtor to pay the Secured Obligations shall in no way be
affected or diminished by reason of the fact that such Equipment may be lost,
destroyed, stolen, damaged or for any reason whatsoever unavailable to the
Debtor.

         Section 7. Financing Statements; Documents; Stamp Taxes. (a) The Debtor
will, at its own expense, make, execute, endorse, acknowledge, file and/or
deliver to the Secured Party from time to time such lists, descriptions and
designations of Inventory, warehouse receipts, bills of lading, documents of
title, vouchers, invoices, schedules, confirmatory assignments, conveyances,
financing statements, transfer endorsements, powers of attorney, certificates,
reports and other assurances or instruments and take such further steps relating
to the Collateral and other property or rights covered by the security interest
hereby granted, which the Secured Party deems appropriate or advisable to
perfect, preserve or protect its security interest in the Collateral. The Debtor
hereby constitutes the Secured Party its attorney-in-fact to execute and file in
the name and on behalf of the Debtor such additional financing statements as the
Secured Party may request, such acts of such attorney being hereby ratified and
confirmed; such power, being coupled with an interest, is irrevocable until the
Secured Obligations are paid in full. Further, to the extent permitted by
applicable law, the Debtor authorizes the Secured Party to file any such
financing statements without the signature of the Debtor. The Debtor will pay
all applicable filing fees and related expenses in connection with any such
financing statements.

         (b) The Debtor agrees to procure, pay for, affix to any and all
documents and cancel any documentary tax stamps required by and in accordance
with, applicable law and the Debtor will indemnify and hold the Secured Party
harmless against any liability (including interest and penalties) in respect of
such documentary stamp taxes.

                                      -10-

<PAGE>

         Section 8. Special Provisions Concerning Remedies and Sale. In addition
to any rights and remedies now or hereafter granted under applicable law and not
by way of limitation of any such rights and remedies, upon the occurrence of an
Event of Default the Secured Party shall have all of the rights and remedies of
a secured party under the Uniform Commercial Code as enacted in any applicable
jurisdiction in addition to the rights and remedies provided herein, in the
Notes and in any other agreement executed in connection with the Notes whereby
the Debtor has granted any Lien to the Secured Party. Without in any way
limiting the foregoing, upon the giving of notice to the Debtor of Secured
Party's intent to pursue any one or all of the following or any other remedies:

         (a) The Secured Party shall have all of the rights and remedies of a
secured party under the Uniform Commercial Code as enacted in any applicable
jurisdiction in addition to the rights and remedies provided herein, in the
Notes and any other document whereby the Debtor has granted any Lien to the
Secured Party. The Secured Party shall have the right, without further notice
to, or assent by, the Debtor, in the name of the Debtor or in the name of the
Secured Party or otherwise:

             (i) to ask for, demand, collect, receive, compound and give
         acquittance for the Receivables or any part thereof;

             (ii) to extend the time of payment of, compromise or settle for
         cash, credit or otherwise, and upon any terms and conditions, any of
         the Receivables;

             (iii) to endorse the name of the Debtor on any checks, drafts or
         other orders or instruments for the payment of moneys payable to the
         Debtor which shall be issued in respect of any Receivable;

             (iv) to file any claims, commence, maintain or discontinue any
         actions, suits or other proceedings deemed by the Secured Party
         necessary or advisable for the purpose of collecting or enforcing
         payment of any Receivable;

             (v) to make test verifications of the Receivables or any portion
         thereof;

             (vi) to notify any or all account debtors under any or all of the
         Receivables to make payment thereof directly to the Secured Party for
         the account of the Secured Party and to require the Debtor to forthwith
         give similar notice to the account debtors,

             (vii) to require the Debtor forthwith to account for and transmit
         to the Secured Party in the same form as received all proceeds (other
         than physical property) of collection of Receivables received by the
         Debtor and, until so transmitted, to hold the same in trust for the
         Secured Party and not commingle such proceeds with any other funds of
         the Debtor;

             (viii) to take possession of any or all of the Collateral and, for
         that purpose, to enter, with the aid and assistance of any Person or
         Persons and with or without legal process, any

                                      -11-

<PAGE>

         premises where the Collateral or any part thereof, are, or may be,
         placed or assembled, and to remove any of such Collateral;

             (ix) to execute any instrurnent and do all other things necessary
         and proper to protect and preserve and realize upon the Collateral and
         the other rights contemplated hereby;

             (x) upon notice to such effect, to require the Debtor to deliver,
         at the Debtor's expense, any or all Collateral to the Secured Party at
         a place designated by the Secured Party and after delivery thereof the
         Debtor shall have no further claim to or interest in the Collateral;
         and

             (xi) without obligation to resort to other security, at any time
         and from time to time, to sell, re-sell, assign and deliver all or any
         of the Collateral, in one or more parcels at the same or different
         times, and all right, title and interest, claim and demand therein and
         right of redemption thereof, at public or private sale, for cash, upon
         credit or for future delivery, and at such price or prices and on such
         terms as the Secured Party may determine, with the amounts realized
         from any such sale to be applied to the Secured Obligations in the
         manner determined by the Secured Party.

The Debtor hereby agrees that all of the foregoing may be effected without
demand, advertisement or notice (except as otherwise provided herein or as may
be required by law), all of which (except as otherwise provided) are hereby
expressly waived, to the extent permitted by law. The Secured Party shall not be
obligated to do any of the acts hereinabove authorized, but in the event that
the Secured Party elects to do any such act, the Secured Party shall not be
responsible to the Debtor except for its gross negligence or willful misconduct.

         (b) The Secured Party may take legal proceedings for the appointment of
a receiver or receivers (to which the Secured Party shall be entitled as a
matter of right) to take possession of the Collateral pending the sale thereof
pursuant either to the powers of sale granted by this Agreement or to a
judgment, order or decree made in any judicial proceeding for the foreclosure or
involving the enforcement of this Agreement. If, after the exercise of any or
all of such rights and remedies, any of the Secured Obligations shall remain
unpaid, the Debtor shall remain liable for any deficiency. After termination of
this Agreement and the Notes and the indefeasible payment in full of the Secured
Obligations, any proceeds of the Collateral received or held by the Secured
Party shall be turned over to the Debtor and the Collateral shall be reassigned
to the Debtor by the Secured Party without recourse to the Secured Party and
without any representations, warranties or agreements of any kind.

         (c) Upon any sale of any of the Collateral, whether made under the
power of sale hereby given or under judgment, order or decree in any judicial
proceeding for the foreclosure or involving the enforcement of this Agreement:

                                      -12-

<PAGE>

             (i) the Secured Party may, to the extent permitted by law, bid for
         and purchase the property being sold, and upon compliance with the
         terms of sale may hold, retain and possess and dispose of such property
         in its own absolute right without further accountability, and may, in
         paying the purchase money therefor, deliver any Note or claims for
         interest thereon and any other instruments evidencing the Secured
         Obligations or agree to the satisfaction of all or a portion of the
         Secured Obligations in lieu of cash in payment of the amount which
         shall be payable thereon, and the Notes and such instruments, in case
         the amounts so payable thereon shall be less than the amount due
         thereon, shall be returned to the Secured Party after being
         appropriately stamped to show partial payment;

             (ii) the Secured Party may make and deliver to the purchaser or
         purchasers a good and sufficient deed, bill of sale and instrument of
         assignment and transfer of the property sold;

             (iii) the Secured Party is hereby irrevocably appointed the true
         and lawful attorney-in- fact of the Debtor in its name and stead, to
         make all necessary deeds, bills of sale and instruments of assigmnent
         and transfer of the property thus sold and for such other purposes as
         are necessary or desirable to effectuate the provisions (including,
         without limitation, this Section 8) of this Agreement, and for that
         purpose it may execute and deliver all necessary deeds, bills of sale
         and instruments of assignment and transfer, and may substitute one or
         more Persons with like power, the Debtor hereby ratifying and
         confirming all that its said attorney, or such substitute or
         substitutes, shall lawfully do by virtue hereof, but if so requested by
         the Secured Party or by any purchaser, the Debtor shall ratify and
         confirm any such sale or transfer by executing and delivering to the
         Secured Party or to such purchaser all property, deeds, bills of sale,
         instruments or assignment and transfer and releases as may be
         designated in any such request;

             (iv) all right, title, interest, claim and demand whatsoever,
         either at law or in equity or otherwise, of the Debtor of, in and to
         the property so sold shall be divested; such sale shall be a perpetual
         bar both at law and in equity against the Debtor, its successors and
         assigns, and against any and all Persons claiming or who may claim the
         property sold or any part thereof from, through or under the Debtor,
         its successors or assigns;

             (v) the receipt of the Secured Party or of the officer thereof
         making such sale shall be a sufficient discharge to the purchaser or
         purchasers at such sale for his or their purchase money, and such
         purchaser or purchasers, and his or their assigns or personal
         representatives, shall not, after paying such purchase money and
         receiving such receipt of the Secured Party or of such officer
         therefor, be obliged to see to the application of such purchase money
         or be in any way answerable for any loss, misapplication or
         nonapplication thereof, and

             (vi) to the extent that it may lawfully do so, and subject to any
         legal requirement that the Secured Party act in a commercially
         reasonable manner, the Debtor agrees that it will not at any time
         insist upon, or plead, or in any manner whatsoever claim or take the
         benefit or advantage of, any appraisement, valuation, stay, extension
         or redemption laws, or any law

                                      -13-

<PAGE>

         perrnitting it to direct the order in which the Collateral or any part
         thereof shall be sold, now or at any time hereafter in force, which may
         delay, prevent or otherwise affect the performance or enforcement of
         this Agreement, the Notes or any other agreement executed in connection
         with the Notes whereby the Debtor has granted any Lien to the Secured
         Party, and the Debtor hereby expressly waives all benefit or advantage
         of any such laws and covenants that it will not hinder, delay or impede
         the execution of any power granted or delegated to the Secured Party in
         this Agreement, but will suffer and permit the execution of every such
         power as though no such laws were in force. In the event of any sale of
         Collateral pursuant to this Section, the Secured Party shall, at least
         10 days before such sale, give the Debtor written, telecopied or telex
         notice of its intention to sell, except that, if the Secured Party
         shall determine in its sole discretion that any of the Collateral
         threatens to decline speedily in value, any such sale may be made upon
         3 days' written, telecopied or telex notice to the Debtor.

         Section 9. Application of Moneys. (a) Except as otherwise provided
herein or in the Notes, all moneys which the Secured Party shall receive, in
accordance with the provisions hereof, shall be applied (to the extent thereof)
in the following manner: First, to the payment of all costs and expenses
incurred in connection with the administration and enforcement of, or the
preservation of any rights under, this Agreement or any of the reasonable
expenses and disbursements of the Secured Party (including, without limitation,
the fees and disbursements of its counsel and agents); Second, to the payment of
all Secured Obligations arising out of the Notes in accordance with the terms of
the Notes and, if not therein provided, in such order as the Secured Party may
determine; and Third, to the payment of all other Secured Obligations in such
order as the Secured Party may determine.

         (b) If after applying any amounts which the Secured Party has received
in respect of the Collateral any of the Secured Obligations remain unpaid, the
Debtor shall continue to be liable for any deficiency, together with interest.

         Section 10. Fees and Expenses, etc. Any and all fees, costs and
expenses of whatever kind or nature, including but not limited to the reasonable
attorneys' fees and legal expenses incurred by the Secured Party in connection
with this Agreement, the filing or recording of any documents (including all
taxes in connection therewith) in public offices, the payment or discharge of
any taxes, counsel fees, maintenance fees, fees and other costs relating to the
encumbrances or otherwise protecting, maintaining, preserving the Collateral, or
in defending or prosecuting any actions or proceedings arising out of or related
to the Collateral, shall be borne and paid by the Debtor on demand by the
Secured Party and until so paid shall be added to the principal amount of the
Secured Obligations and shall bear interest at a rate per annum equal to 18%. In
addition, the Debtor will pay, and indemnify and hold the Secured Party harmless
from and against, any and all liabilities, obligations, losses, damages
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the Collateral, including (without
limitation) claims of patent or trademark infringement and any claim of unfair
competition or anti-trust violation.

                                      -14-

<PAGE>

         Section 11. Miscellaneous. All notices, communications and
distributions hereunder shall be in writing (including telecopied communication)
and mailed, telecopied, personally delivered or delivered by Federal Express or
other reputable overnight courier service, if to the Debtor addressed to it at
its address set forth opposite its signature below, if to the Secured Party,
addressed to it at its address set forth opposite its signature below, or as to
either party at such other address as shall be designated by such party in a
written notice to such other party complying as to delivery with the terms of
this Section. All such notices and other communications shall be effective (i)
if mailed, three days after the date of deposit thereof with the U.S. Postal
Service, properly addressed with postage prepaid, (ii) if telecopied, upon
receipt by the addressee, (iii) if personally delivered, upon such delivery and
(iv) if delivered by overnight courier service, on the business day following
delivery thereof to such courier service in time for next-business-day delivery,
provided that in the case where the Secured Party is required to give only three
days' notice of a proposed sale of the Collateral such notice shall not be
deemed given until delivered to the chief executive office of the Debtor
provided for herein.

         (b) No delay on the part of the Secured Party in exercising any of its
rights, remedies, powers and privileges hereunder or partial or single exercise
thereof shall constitute a waiver thereof. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by the Debtor and the Secured Party. No
notice to or demand on the Debtor in any case shall entitle the Debtor to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of any of the rights of the Secured Party to any other or
further action in any circumstances without notice or demand.

         (c) The obligations of the Debtor hereunder shall remain in full force
and effect without regard to, and shall not be impaired by, (i) any bankruptcy,
insolvency, reorganization, arrangement, readjustment, composition, liquidation
or the like of the Debtor; (ii) any exercise or non-exercise, or any waiver of,
any right, remedy, power or privilege under or in respect of the Notes, this
Agreement or any other agreement executed in connection with the Notes whereby
the Debtor has granted any Lien to the Secured Party or any other agreement
executed in connection with any of the foregoing, the Secured Obligations or any
security for any of the Secured Obligations; or (iii) any amendment to or
modification of any of the foregoing; whether or not the Debtor shall have
notice or knowledge of any of the foregoing. The rights and remedies of the
Secured Party herein provided are cumulative and not exclusive of any rights or
remedies which the Secured Party would otherwise have.

         (d) This Agreement shall be binding upon the Debtor and its successors
and assigns and shall inure to the benefit of the Secured Party and its
successors and assigns, except that the Debtor may not transfer or assign any of
its obligations, rights or interest hereunder without the prior written consent
of the Secured Party and any such purported assignment by the Debtor shall be
void. All agreements, representations and warranties made herein shall survive
the execution and delivery of this Agreement.

                                      -15-

<PAGE>

         (e) The descriptive headings of the several sections of this Agreement
are inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.

         (f) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

         (g) All rights, remedies and powers provided by this Agreement may be
exercised only to the extent that the exercise thereof does not violate any
applicable provision of law, and the provisions hereof are intended to be
subject to all applicable mandatory provisions of law that may be controlling
and to be limited to the extent necessary so that they will not render this
Agreement invalid, unenforceable in whole or in part or not entitled to be
recorded, registered or filed under the provisions of any applicable law.

         (h) This Agreement and the rights and obligations of the parties
hereunder shall be construed in accordance with and be governed by the laws of
the State of New York except to the extent that matters of title, or creation,
perfection and priority of the security interests created hereby, or procedural
issues of foreclosure are required to be governed by the laws of the state in
which the Collateral, or part thereof, is located. EACH PARTY HERETO KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING, COUNTERCLAIM OR OTHER LITIGATION BASED ON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, THE NOTES OR ANY
FINANCING DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY SUCH PARTY. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE SECURED PARTY'S ENTERING INTO THIS AGREEMENT.

         (i) It is expressly agreed, anything herein, in the Notes or in any
other agreement or instrument executed in connection with the Notes to the
contrary notwithstanding, that the Debtor shall remain liable to perform all of
the obligations, if any, assumed by it with respect to the Collateral and the
Secured Party shall not have any obligations or liabilities with respect to any
Collateral by reason of or arising out of this Agreement, nor shall the Secured
Party be required or obligated in any manner to perform or fulfill any of the
obligations of the Debtor under or pursuant to any or in respect of any
Collateral.

         (j) This Agreement may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which counterparts taken
together shall be deemed to constitute one and the same instrument.

                                      -16-

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.

Addresses                                 PICK COMMUNICATIONS CORP.,
---------                                 as Debtor
Wayne Interchange Plaza II
Third Floor
Wayne, New Jersey 07470                   By: /s/ Robert S. Bingham
                                             -----------------------------------
                                             Name:  Robert S. Bingham
                                             Title: Vice President and
                                                    Chief Financial Officer

                                          COMMONWEALTH ASSOCIATES, as Agent,
                                          as Secured Party
830 Third Avenue
New York, New York 10022                  By: COMMONWEALTH MANAGEMENT CO., INC.,
                                          its general partner

                                          By: /s/ Joseph Wynne
                                             -----------------------------------
                                             Name:  Joseph Wynne
                                             Title: Chief Financial Officer
                                                    as Debtor

                                      -17-

<PAGE>

                                                                         Annex I

                                    INVESTORS

Name                                     Address
----                                     -------

                                       -1-

<PAGE>

                                                                      Schedule 1

             LOCATION OF CERTAIN INVENTORY AND EQUIPMENT COLLATERAL

Current place(s) of business of the Debtor:

Wayne Interchange Plaza II, Third Floor            Wayne,          Passaic,  NJ
---------------------------------------            -----------------------------
No. and Street                                     City            County  State

                                                   Jersey City,    Bergen    NJ
---------------------------------------            -----------------------------
No. and Street                                     City            County  State

                                                   Miami,          [Dade],   FL
---------------------------------------            -----------------------------
No. and Street                                     City            County  State

                                       -2-

<PAGE>

                                                                      Schedule 2

                          EXISTING FINANCING STATEMENTS

<TABLE>
<CAPTION>
                        Date of            Number of                              Description         Amount of
Secured                Financing           Financing             Location              of           Indebtedness
Party                  Statement           Statement               Filed           Collateral          Secured
-----                  ---------           ---------               -----           ----------          -------
<S>                       <C>                <C>                    <C>               <C>                <C>

</TABLE>

                           [to be completed by Debtor]

              OTHER NAMES UNDER WHICH DEBTOR HAS CONDUCTED BUSINESS

                                       -3-

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