Bank of America                                              Customer# 41-565672

                                                            Date: March 29, 2000

                               Security Agreement

Bank/Secured Party:                           Debtor(s)/Pledgor(s):

Bank of America, N.A.                               Bundy American Corporation
Banking Center:                                     10324 South Dolfield Drive
         10 Light Street                            Owings Mills, Maryland 21117
         Baltimore, Maryland 21202
                                                    County: Baltimore County
         County: Baltimore City

Debtor/Pledgor is: Corporation
Address is Debtor's Place of Business

Collateral (hereinafter defined) is located at: Debtor's address shown above.

1.  Security  Interest.  For good and  valuable  consideration,  the receipt and
adequacy of which are hereby acknowledged,  Debtor/Pledgor (hereinafter referred
to as "Debtor")  assigns and grants to Bank (also known as "Secured  Party"),  a
security interest and lien in the Collateral (hereinafter defined) to secure the
payment and the performance of the Obligation (hereinafter defined).

2.  Collateral.  A security  interest  is granted  in the  following  collateral
described in this Item 2 (the "Collateral"):

     A. Types of Collateral

     Accounts: Any and all accounts and other rights of Debtor

to the payment for goods sold or leased or for services  rendered whether or not
earned by performance,  including,  without  limitation,  contract rights,  book
debts, checks, notes, drafts, instruments,  chattel paper, acceptances,  and any
and all amounts due to Debtor  from a factor or other forms of  obligations  and
receivables, now existing or hereafter arising.

     B.  Substitutions,  Proceeds and Related Items. Any and all substitutes and
replacements for,  accessions,  attachments and other additions to, tools, parts
and equipment now or hereafter added to or used in connection with, and all cash
or  non-cash  proceeds  and  products  of, the  Collateral  (including,  without
limitation,   all  income,   benefits  and  property  receivable,   received  or
distributed which results from any of the Collateral, such as dividends payable

MD071                                  1                      Approved: 07/01/95
jt                                                             Revised: 08/30/99
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or distributable in cash, property or stock; insurance distributions of any kind
related to the Collateral,  including,  without  limitation,  returned premiums,
interest,  premium and principal payments;  redemption proceeds and subscription
rights;  and shares or other proceeds of conversions or splits of any securities
in the Collateral); any and all choses in action and causes of action of Debtor,
whether now existing or hereafter  arising,  relating  directly or indirectly to
the Collateral  (whether  arising in contract,  tort or otherwise and whether or
not  currently  in  litigation);   all  certificates  of  title,  manufacturer's
statements of origin,  other documents,  accounts and chattel paper, whether now
existing or  hereafter  arising  directly or  indirectly  from or related to the
Collateral;  all  warranties,  wrapping,  packaging,  advertising  and  shipping
materials used or to be uin connection with or related to the Collateral; all of
Debtor's books,  records,  data, plans,  manuals,  computer  software,  computer
tapes,  computer systems,  computer disks,  computer programs,  source codes and
object codes  containing any information,  pertaining  directly or indirectly to
the Collateral  and all rights of Debtor to retrieve data and other  information
pertaining directly or indirectly to the Collateral from third parties,  whether
now  existing  or  hereafter  arising;  and all  returned,  refused,  stopped in
transit,  or repossessed  Collateral,  any of which, if rby Debtor, upon request
shall be delivered immediately to Bank.

     C. Balances and Other  Property.  The balance of every  deposit  account of
Debtor  maintained  with Bank and any other claim of Debtor against Bank, now or
hereafter  existing,  liquidated or  unliquidated,  and all money,  instruments,
securities,  documents, chattel paper, credits, claims, demands, income, and any
other property, rights and interests of Debtor which at any time shall come into
the  possession  or  custody  or under the  control  of Bor any of its agents or
affiliates  for any  purpose,  and the  proceeds of any  thereof.  Bank shall be
deemed to have  possession  of any of the  Collateral in transit to or set apart
for it or an y of its agents or affiliates.

3.  Description of  Obligation(s).  The following  obligations  ("Obligation" or
"Obligations")  are  secured  by this  Agreement:  (a) All  debts,  obligations,
liabilities and agreements of Debtor to Bank, now or hereafter existing, arising
directly or indirectly  between Debtor and Bank whether  absolute or contingent,
joint or several, secured or unsecured, due or not due, contractual or tortious,
liquidated or  unliquidated,  arising by operation of law or otherwise,  and all
renewals,  extensions  or  rearrangement  of any of the  above;  (b)  All  costs
incurred by Bank to obtain,  preserve,  perfect and enforce this  Agreement  and
maintain,  preserve,  collect and  realize  upon the  Collateral;  (c) All debt,
obligations and liabilities of Rent-A-Wreck of America,  Inc.;  Rent-A-Wreck One

MD071                                  2                      Approved: 07/01/95
jt                                                             Revised: 08/30/99
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Way, Inc.;  Rent-A-Wreck  Leasing,  Inc.;  PRICELESS  Rent-A-Car,  Inc.;  and/or
Consolidated  American  Rental  Insurance  Company,  LTD to  Bank  of the  kinds
described  in this item 3., now  existing or  hereafter  arising;  (d) All other
costs and  attorney's  fees  incurred by Bank,  for which Debtor is obligated to
reimburse Bank in accordance  with the terms of the Loan Documents  (hereinafter
defined), together with interest at the maximum rate allowed by law, or if none,
25% per annum;  and (e) All  amounts  which may be owed to Bank  pursuant to all
other Loan Documents  executed  between Bank and any other Debtor.  If Debtor is
not the obligor of the  Obligation,  and in the event any amount paid to Bank on
any  Obligation  is  subsequently  recovered  from Bank in or as a result of any
bankruptcy,  insolvency or  fraudulent  conveyance  proceeding,  Debtor shall be
liable to Bank for the amounts so  recovered  up to the fair market value of the
Collateral  whether or not the  Collateral  has been  released  or the  security
interest  terminated.  In the  event the  Collateral  has been  released  or the
security interest  terminated,  the fair market value of the Collateral shall be
determined,  at Bank's option,  as of the date the Collateral was released,  the
security interest terminated, or said amounts were recovered.

4.  Debtor's  Warranties.  Debtor  hereby  represents  and  warrants  to Bank as
follows:

     A. Financing Statements. Except as may be noted by schedule attached hereto
and  incorporated  herein by  reference,  no  financing  statement  covering the
Collateral  is or will be on file in any public  office,  except  the  financing
statements relating to this security interest,  and no security interest,  other
than the one herein created,  has attached or been perfected in the Cor any part
thereof.

     B. Ownership. Debtor owns, or will use the proceeds of any loans by Bank to
become the owner of, the Collateral  free from any setoff,  claim,  restriction,
lien,  security  interest or encumbrance  except liens for taxes not yet due and
the security interest hereunder.

     C.  Fixtures  and  Accessions.  None of the  Collateral  is affixed to real
estate or is an accession to any goods,  or will become a fixture or  accession,
except as expressly set out herein.

MD071                                  3                      Approved: 07/01/95
jt                                                             Revised: 08/30/99
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     D.  Claims of Debtors on the  Collateral.  All  account  debtors  and other
obligors whose debts or obligations  are part of the Collateral have no right to
setoffs, counterclaims or adjustments, and no defenses in connection therewith.

     E. Environmental  Compliance.  The conduct of Debtor's business  operations
and the condition of Debtor's property does not and will not violate any federal
laws,  rules or ordinances  for  environmental  protection,  regulations  of the
Environmental  Protection  Agency and any  applicable  local or state law, rule,
regulation  or  rule of  common  law and  any  judicial  interpretation  thereof
relating  primarily to the  environment  or any  materials  defined as hazardous
materials or substances under any local,  state or federal  environmental  laws,
rules or  regulations,  and  petroleum,  petroleum  products,  oil and  asbestos
("Hazardous Materials").

     F. Power and Authority.  Debtor has full power and ato make this Agreement,
and all necessary consents and approvals of any persons, entities,  governmental
or  regulatory  authorities  and  securities  exchanges  have been  obtained  to
effectuate the validity of this Agreement.

5. Debtor's Covenants.  Until full payment and performance of aof the Obligation
and  termination  or expiration of any  obligation or commitment of Bank to make
advances or loans to Debtor, unless Bank otherwise consents in writing:

     A.  Obligation  and  This  Agreement.  Debtor  shall  perform  all  of  its
agreements herein and in any other agreements between it and Bank.

     B.  Ownership  and  Maintenance  of the  Collateral.  Debtor shall keep all
tangible  Collateral  in good  condition.  Debtor  shall  defend the  Collateral
against all claims and demands of all persons at any time  claiming any interest
therein  adverse to Bank.  Debtor shall keep the Collateral  free from all liens
and  security  interests  except  those for  taxes not yet due and the  security
interest hereby created.

     C. Insurance.  Debtor shall insure the Collateral with companies acceptable
to Bank.  Such  insurance  shall be in an amount  not less than the fair  market
value of the  Collateral  and  shall  be  against  such  casualties,  with  such
deductible  amounts as Bank  shall  approve.  All  insurance  policies  shall be
written for the bof Debtor and Bank as their  interests  may appear,  payable to
Bank as loss payee, or in other form  satisfactory to Bank, and such policies or

MD071                                  4                      Approved: 07/01/95
jt                                                             Revised: 08/30/99
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certificates  evidencing  the same shall be furnished  to Bank.  All policies of
insurance  shall provide for written nto Bank at least thirty (30) days prior to
cancellation. Risk of loss or damage is Debtor's to the extent of any deficiency
in any effective insurance coverage.

     D. Bank's Costs. Debtor shall pay all costs necessary to obtain,  preserve,
perfect,  defend and enforce the security  interest  created by this  Agreement,
collect  the  Obligation,   and  preserve,   defend,  enforce  and  collect  the
Collateral, including but not limited to taxes, assessments, insurance premiums,
repairs,  rent, storage costs and expenses of sales, legal expenses,  reasonable
attorney's  fees and other fees or expenses  for which  Debtor is  obligated  to
reimburse Bank in accordance with the terms of the Loan  Documents.  Whether the
Collateral is or is not in Bank's  possession,  and without any obligation to do
so and without  waiving  Debtor's  default for failure to make any such payment,
Bank at its option may pay any such costs and expenses,  discharge  encumbrances
on the Collateral,  and pay for insurance of the  Collateral,  and such payments
shall be a part of the  Obligation  and bear interest at the rate set out in the
Obligation. Debtor agrees to reimburse Bank on demand for any costs so incurred.

     E.  Information and Inspection.  Debtor shall (i) promptly furnish Bank any
information with respect to the Collateral requested by Bank; (ii) allow Bank or
its representatives to inspect the Collateral, at any time and wherever located,
and to inspect and copy, or furnish Bank or its representatives  with copies of,
all records  relating  to the  Collateral  and the  Obligation;  (iii)  promptly
furnish  Bank or its  representatives  such  information  as Bank may request to
identify the Collateral, at the time and in the form requested by Bank; and (iv)
deliver upon  request to Bank  shipping and  delivery  receipts  evidencing  the
shipment of goods and invoices  evidencing  the receipt of, and the payment for,
the Collateral.

     F.  Additional  Documents.  Debtor shall sign and deliver any papers deemed
necessary or desirable in the judgment of Bank to obtain,  maintain, and perfect
the security interest hereunder and to enable Bank to comply with any federal or
state law in order to obtain or perfect Bank's  interest in the Collateral or to
obtain proceeds of the Collateral.

     G. Parties Liable on the Collateral. Debtor shall preserve the liability of
all  obligors on any  Collateral,  shall  preserve  the priority of all security
therefor,.and  shall deliver to Bank the original  certificates  of title on all

MD071                                  5                      Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
motor vehicles or other titled vehicles constituting the Collateral.  Bank shall
have  no duty to  preserve  such  liability  or  security,  but may do so at the
expense of Debtor, without waiving Debtor's default.

     H. Records of the Collateral.  Debtor at all times shall maintain  accurate
books and records  covering the  Collateral.  Debtor  immediately  will mark all
books  and  records  with  an  entry  showing  the  absolute  assignment  of all
Collateral  to Bank,  and Bank is hereby  given the right to audit the books and
records of Debtor  relating to the Collateral at any time and from time to time.
The  amounts  shown as owed to Debtor on  Debtor's  books and on any  assignment
schedule will be the undisputed amounts owing and unpaid.

     I.  Disposition of the Collateral.  If disposition of any Collateral  gives
rise to an account, chattel paper or instrument, Debtor immediately shall notify
Bank,  and upon  request of Bank shall  assign or indorse  the same to Bank.  No
Collateral may be sold, ]eased, manufactured, processed or otherwise disposed of
by Debtor in any manner  without the prior written  consent of Bank,  except the
Collateral  sold,  leased,  manufactured,  processed or consumed in the ordinary
course of business.

     J. Accounts.  Each account held as Collateral  will represent the valid and
legally  enforceable  obligation  of third parties and shall not be evidenced by
any instrument or chattel paper.

     K. Notice/Location of the Collateral. Debtor shall give Bank written notice
of each office of Debtor in which records of Debtor  pertaining to accounts held
as Collateral  are kept, and each location at which the Collateral is or will be
kept,  and of any change of any such location.  If no such notice is given,  all
records of Debtor  pertaining to the Collateral and all Collateral of Debtor are
and shall be kept at the address marked by Debtor above.

     L. Change of Name/Status and Notice of Changes. Without the written consent
of Bank, Debtor shall not change its name, change its corporate status,  use any
trade name or engage in any business not  reasonably  related to its business as
presently  conducted.  Debtor shall notify Bank  immediately of (i) any material
change in the Collateral, (ii) a change in Debtor's residence or location, (iii)
a change in any matter warranted or represented by Debtor in this Agreement,  or
in any of the Loan  Documents or furnished to Bank  pursuant to this  Agreement,
and (iv) the occurrence of an Event of Default (hereinafter defined).

MD071                                  6                      Approved: 07/01/95
jt                                                             Revised: 08/30/99
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     M. Use and Removal of the  Collateral.  Debtor shall not use the Collateral
illegally.  Debtor shall not, unless Previously  indicated as a fixture,  permit
the  Collateral  to be affixed to real or  personal  property  without the prior
written  consent of Bank.  Debtor shall not permit any of the  Collateral  to be
removed from the locations specified herein without the prior written consent of
Bank, except for the sale of inventory in the ordinary course of business.

     N.  Possession  of the  Collateral.  Debtor  shall  deliver all  investment
securities and other instruments,  documents and chattel paper which are part of
the Collateral and in Debtor's  possession to Bank immediately,  or if hereafter
acquired,  immediately following  acquisition,  appropriately indorsed to Bank's
order, or with  appropriate,  duly executed powers.  Debtor waives  presentment,
notice of  acceleration,  demand,  notice of  dishonor,  protest,  and all other
notices with respect thereto.

     0. Consumer Credit. If any Collateral or proceeds  includes  obligations of
third parties to Debtor,  the  transactions  giving rise to the Collateral shall
conform in all respects to the applicable state or federal law including but not
limited to consumer  credit law.  Debtor shall hold harmless and indemnify  Bank
against any cost, loss or expense arising from Debtor's breach of this covenant.

     P. Power of  Attorney.  Debtor  appoints  Bank and any  officer  thereof as
Debtor's  attorney-in-fact  with full  power in  Debtor's  name and behalf to do
every act which Debtor is  obligated  to do or may be required to do  hereunder;
however  nothing in this  paragraph  shall be construed to obligate Bank to take
any action  hereunder nor shall Bank be liable ~o Debtor for failure to take any
action hereunder.  This appointment shall be deemed a power coupled wan interest
and shall not be terminable as long as the Obligation is  outstanding  and shall
not terminate on the disability or incompetence of Debtor.

     Q.  Waivers by  Debtor.  Debtor  waives  notice of the  creation,  advance,
increase, existence, extension or renewal of, and of any indulgence with respect
to, the Obligation; waives presentment, demand, notice of dishonor, and protest;
waives notice of the amount of the Obligation outstanding at any time, notice of
any change in financial condition of any person liable for the Obligation or any

MD071                                  7                      Approved: 07/01/95
jt                                                            Revised: 08/30/99
<PAGE>
part thereof,  notice of any Event of Default,  and all other notices respecting
the Obligation;  and agrees that maturity of the Obligation and any part thereof
may be  accelerated,  extended  or  renewed  one or  more  times  by Bank in its
discretion,  without  notice to Debtor.  Debtor waives any right to require that
any action be brought  against any other person or to require that resort be had
to any other security or to any balance of any deposit  account.  Debtor further
waives any right of  subrogation  or to enforce any right of action  against any
other Debtor until the Obligation is paid in full.

     R. Other  Parties and Other  Collateral.  No renewal or extension of or any
other indulgence with respect to the Obligation or any part thereof,  no release
of any  security,  no  release  of any person  (including  any maker,  indorser,
guarantor  or  surety)  liable on the  Obligation,  no delay in  enforcement  of
payment, and no delay or omission or lack of diligence or care in exercising any
right or power with  respect  to the  Obligation  or any  security  therefor  or
guaranty  thereof or under this  Agreement  shall in any manner impair or affect
the  rights of Bank  under  the law,  hereunder,  or under  any other  agreement
pertaining  to the  Collateral.  Bank  need not file  suit or assert a claim for
personal  judgment  against any person for any part of the Obligation or seek to
realize  upon any other  security  for the  Obligation,  before  foreclosing  or
otherwise realizing upon the Collateral.  Debtor waives any right to the benefit
of or quire or control application of any other sor proceeds thereof, and agrees
that Bank shall have no duty or obligation to Debtor to apply to the  Obligation
any such other security or proceeds thereof.

     S. Collection and Segregation of Accounts and Right to Notify.  Bank hereby
authorizes  Debtor to collect the  Collateral,  sto the direction and control of
Bank but Bank may, without cause or notice,  curtail or terminate said authority
at any time. Upon notice by Bank, whether oral or in writing, to Debtor,  Debtor
shall forthwith upon receipt of all checks,  drafts, cash, and other remittances
in payment of or on account of the  Collateral,  deposit the same in one or more
special accounts maintained with Bank over which Bank alone shall have the power
of  withdrawal.  The  remittance of the proceeds of such  Collateral  shall not,
however,  constitute  payment or liquidation of such Collateral until Bank shall
receive good funds for such  proceeds.  Funds  placed in such  special  accounts
shall be held by Bank as security for all Obligations  secured hereunder.  These
proceeds  shall be  deposited  in precisely  the form  received,  except for the
indorsement  of Debtor where  necessary  to permit  collection  of items,  which
indorsement  Debtor agrees to make,  and which  indorsement  Bank is also hereby
authorized, as attorney-in-fact,  to make on behalf of Debtor. In the event Bank
has notified Debtor to make deposits to a special account, pending such deposit,
Debtor agrees that it will not commingle any such checks,  drafts, cash or other

MD071                                  8                      Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
remittances  with any  funds or other  property  of  Debtor,  but will hold them
separate and apart  therefrom,  and upon an express trust for Bank until deposit
thereof is made in the special account.  Bank will, from time to time, apply the
whole or any part of the  Collateral  funds on deposit in this  special  account
against  such  Obligations  as are  secured  hereby  as  Bank  may  in its  sole
discretion  elect.  At the sole  election of Bank,  any portion of said funds on
deposit  in the  special  account  which  Bank  shall  elect not to apply to the
Obligations,  may be paid over by Bank to Debtor. At any time, whether Debtor is
or is nin default hereunder, Bank may notify persons obligated on any Collateral
to make  payments  directly to Bank and Bank may take control of all proceeds of
any Collateral.  Until Bank elects to exercise such rights,  Debtor, as agent of
Bank, shall collect and enforce all payments owed on the Collateral.

     T.  Compliance  with State and  Federal  Laws.  Debtor  will  maintain  its
existence,  good standing and qualification to do business,  where required, and
comply  with all laws,  regulations  and  governmental  requirements,  including
without limitation,  environmental laws applicable to it or any of its property,
business operations and transactions.

     U. Environmental Covenants. Debtor shall immediately advise Bank in writing
of  (i)  any,  and  all  enforcement,   cleanup,  remedial,  removal,  or  other
governmental or regulatory actions instituted,  completed or threatened pursuant
to any  applicable  federal,  state,  or local laws,  ordinances or  regulations
relating to any Hazardous Materials affecting Debtor's business operations;  and
(ii) all claims made or threatened by any third party against Debtor relating to
damages,  contribution,  cost recovery,  compensation,  loss or injury resulting
from any  Hazardous  Materials.  Debtor  shall  immediately  notify  Bank of any
remedial  action taken by Debtor with respect to Debtor's  business  operations.
Debtor will not use or permit any other party to use any Hazardous  Materials at
any of Debtor's places of business or at an property owned by Debtor except such
materials as are incidental to Debtor's  normal course of business,  maintenance
and  repairs  and  which  are  handled  in   compliance   with  all   applicable
environmental  laws.  Debtor  ato  permit  Bank,  its  agents,  contractors  and
employees  to enter and inspect any of Debtor's  places of business or any other
pof Debtor at any  reasonable  times  upon  three (3) days prior  notice for the

MD071                                  9                      Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
purposes of  conducting  an  environmental  investigation  and audit  (including
taking  physical  samples) to insure that Debtor is complying with this covenant
and  Debtor  shall   reimburse  Bank  on  demand  for  the  costs  of  any  such
environmental  investigation  and audit.  Debtor shall provide Bank, its agents,
contractors,  employees and representatives with access to and copies of any and
all data and documents relating to or dealing with any Hazardous Materials used,
generated,  manufactured,  stored or disposed of by Debtor's business operations
within five (5) days of the request therefor.

6. Rights and Powers of Bank.

     A. General. Bank, before or after default, without liability to Debtor may:
obtain from any person information regarding Debtor or Debtor's business,  which
information  any such  person  also may  furnish  without  liability  to Debtor;
require Debtor to give possession or control of any Collateral to Bank;  indorse
as Debtor's agent any instruments,  documents or chattel paper in the Collateral
or representing proceeds of the Collateral;  contact account debtors directly to
verify  information  furnished by Debtor;  take  control of proceeds,  including
stock received as dividends or by reason of stock splits; release the Collateral
in its possession to any Debtor,  temporarily or otherwise;  require  additional
Collateral; reject as unsatisfactory any property hereafter offered by Debtor as
Collateral;  set standards from time to time to govern what may be used as after
acquired  Collateral;  designate,  from time to time,  a certain  percent of the
Collateral as the loan value and require Debtor to maintain the Obligation at or
below such figure;  take control of funds generated by the  Collateral,  such as
cash dividends, interest and proceeds or refunds from insurance, and use same to
reduce any part of the  Obligation  and exercise all other rights which an owner
of such  Collateral  may  exercise,  except  the right to vote or dispose of the
Collateral  before  an  Event  of  Default;  at  any  time  transfer  any of the
Collateral  or evidence  thereof into its own name or that of its  nominee;  and
demand, collect, convert, redeem, receipt for, settle,  compromise,  adjust, sue
for, foreclose or realize upon the Collateral, in its own name or in the name of
Debtor,  as Bank may determine.  Bank shall not be liable for failure to collect
any account or instruments,  or for any act or omission on the part of Bank, its
officers, agents or employees, except for its or their own willful misconduct or
gross  negligence.  The foregoing  rights and powers of Bank will be in addition
to,  and not a  limitation  upon,  any  rights  and powers of Bank given by law,
elsewhere  in this  Agreement,  or  otherwise.  If Debtor  fails to maintain any

MD071                                  10                     Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
required  insurance,  to the extent permitted by applicable law Bank may (but is
not obligated to) purchase single interest insurance coverage for the Collateral
which  insurance  may at Bank's option (i) protect only Bank and not provide any
remuneration  or protection for Debtor  directly and (ii) provide  coverage only
after the Obligation has been declared das herein provided. The premiums for any
such  insurance  purchased by Bank shall be a part of the  Obligation  and shall
bear interest as provided in 3(d) hereof.

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

7. Default.

     A. Event of Default.  An event of default  ("Event of Default") shall occur
if: (i) there is a loss, theft, damage or destruction of any material portion of
the  Collateral  for which there is no insurance  coverage or for which,  in the
opinion of Bank, there is insufficient  insurance  coverage;  (ii) Debtor or any
other obligor on all or part of the Obligation shall fail to timely and properly
pay or observe,  keep or perform any term,  covenant,  agreement or condition in
this Agreement or in any other agreement between Debtor and Bank or between Bank
and any other  obligor on the  Obligation,  including,  but not  limited to, any
other note or instrument,  loan agreement,  security  agreement,  deed of trust,
mortgage,  promissory  note,  guaranty,  certificate,   assignment,  instrument,
document  or  other   agreement   concerning   or  related  to  the   Obligation
(collectively,  the "Loan Documents");  (iii) Debtor or such other obligor shall
fail to timely and properly pay or observe,  keep or perform any term, covenant,
agreement or condition in any agreement  between such party and any affiliate or
subsidiary  of Bank of America  Corporation;  (iv) Debtor or such other  obligor
shall fail to timely and  properly  pay or  observe,  keep or perform  any term,
covenant,  agreement or condition in any lease agreement  between such party and
any lessor  pertaining to premises at which any Collateral is located or stored;
or (v) Debtor or such other  obligor  abandons any leased  premises at which any
Collateral  is located or stored and the  Collateral is either moved without the
prior  written  consent  of  Bank or the  Collateral  remains  at the  abandoned
premises.

MD071                                  11                     Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
     B. Rights and Remedies.  If any Event of Default shall occur, then, in each
and every such case, Bank may, without presentment,  demand, or protest;  notice
of default,  dishonor,  demand, non- payment,  or protest;  notice of, intent to
accelerate all or any part of the  Obligation;  notice of acceleration of all or
any part of the  Obligation;  or notice of any other kind,  all of which  Debtor
hereby expressly  waives,  (except for any notice required under this Agreement,
any other Loan Document or  applicable  law);  at any time  thereafter  exercise
and/or enforce any of the following rights and remedies at Bank's option:

     i. Acceleration. The Obligation shall, at Bank's option, become immediately
due  and  payable,  and the  obligation,  if any,  of  Bank  to  permit  further
borrowings  under the Obligation  shall at Bank's option  immediately  cease and
terminate.

     ii.  Possession and Collection of the Collateral.  At its option:  (a) take
possession or control of, store, lease,  operate,  manage, sell, or instruct any
Agent  or  Broker  to sell  or  otherwise  dispose  of,  all or any  part of the
Collateral;  (b) notify all parties under any account or contract  right forming
all or any part of the  Collateral to make any payments  otherwise due to Debtor
directly  to Bank;  (c) in Bank's own name,  or in the name of  Debtor,  demand,
collect,  receive,  sue for, and give  receipts  and  releases  for, any and all
amounts due under such accounts and contract rights; (d) indorse as the agent of
Debtor any check, note, chattel paper,  documents, or instruments forming all or
any part of the Collateral; (e) make formal application for transfer to Bank (or
to any assignee of Bank or to any purchaser of any of the  Collateral) of all of
Debtor's permits, licenses, approvals,  agreements, and the like relating to the
Collateral or to Debtor's  business;  (f) take any other action which Bank deems
necessary or desirable to protect and realize upon its security  interest in the
Collateral;  and (g) in  addition  to the  foregoing,  and  not in  substitution
therefor,  exercise  any one or more of the rights and remedies  exercisable  by
Bank under any other  provision of this  Agreement,  under any of the other Loan
Documents, or as provided by applicable law (including,  without limitation, the
Uniform Commercial Code as in effect in Maryland (hereinafter referred to as the
"UCC")). In taking possession of the Collateral Bank may enter Debtor's premises
and otherwise proceed without legal process,  if this can be done without breach
of the peace. Debtor shall, upon Bank"s demand,  promptly make the Collateral or
other  security  available to Bank at a place  designated  by Bank,  which place

MD071                                  12                     Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
shall be reasonably  convenient  to both parties.  Bank shall not be liable for,
nor be prejudiced by, any loss, depreciation or other damages to the Collateral,
unless caused by Bank's  willful and  malicious  act. Bank shall have no duty to
take any action to preserve or collect the Collateral.

     iii.  Receiver.  Obtain the  appointment  of a receiver  for aor any of the
Collateral,  Debtor hereby  consenting to the appointment of such a receiver and
agreeing not to oppose any such appointment.

     iv. Right of Set Off. Without notice or demand to Debtor, set off and apply
against any and all of the Obligation any and all deposits  (general or special,
time or demand,  provisional or final) and any other  indebtedness,  at any time
held or owing by Bank or any of Bank's agents or affiliates to or for the credit
of the account of Debtor or any guarantor orIndorser of Debtor's Obligation.

Bank  shall be  entitled  to  immediate  possession  of all  books  and  records
evidencing  any  Collateral  or  pertaining  to  chattel  paper  covered by this
Agreement and it or its  representatives  shall have the authority to enter upon
-any premises upon which any of the same, or any Collateral, may be situated and
remove the same therefrom  without  liability.  Bank may surrender any insurance
policies in the  Collateral  and receive the unearned  premium  thereon.  Debtor
shall be entitled to any surplus and shall be liable to Bank for any deficiency.
The  proceeds  of  any  disposition  after  default  available  to  satisfy  the
Obligation  shall be applied to the  Obligation in such order and in such manner
as Bank in its discretion shall decide.

Debtor  specifically  understands and agrees that any sale by Bof all or part of
the  Collateral  pursuant to the terms of this Agreement may be effected by Bank
at times and in manners which could result in the proceeds of such sale as being
significantly and materially less than might have been received if such sale had
occurred at different times or in different manners,  and Debtor hereby releases
Bank  and  its  officers  and  representatives  from  and  against  any  and all
obligations and liabilities arising out of or related to the timing or manner of
any such sale.

If,  in the  opinion  of Bank,  there  is any  question  that a  public  sale or
distribution of any Collateral will violate any state or federal securities law,
Bank  may  offer  and  sell  such  Collateral  'in  a  transaction  exempt  from
registration  under federal securities law, and any such sale made in good faith
by Bank shall be deemed "commercially reasonable".

MD071                                  13                     Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
8. General

     A. Parties Bound. Bank's rights hereunder shall inure to the benefit of its
succ4ssors  and assigns.  In the event of any  assignment or transfer by Bank of
any  of the  Obligation  or the  Collateral,  Bank  thereafter  shall  be  fully
discharged from any responsibility with respect to the Collateral so assigned or
transferred,  but Bank shall  retain all  rights  and powers  hereby  given with
respect  to  any  of  the  Obligation  or the  Collateral  not  so  assigned  or
transferred.  All  representations,  warranties and agreements of Debtor if more
than one are  joint  and  several  and all shall be  binding  upon the  personal
representatives, heirs, successors and assigns of Debtor.

     B. Waiver.  No delay of Bank in exercising any power or right shall operate
as a waiver  thereof;  nor shall any single or partial  exercise of any power or
right  preclude other or further  exercise  thereof or the exercise of any other
power or right.  No waiver by Bank of any right  hereunder  or of any default by
Debtor shall be binding  upon Bank unless in writing,  and no failure by Bank to
exercise  any power or right  hereunder or waiver of any default by Debtor shall
operate as a waiver of any other or further  exercise  of such right or power or
of any further  default.  Each right,  power and remedy of Bank as provided  for
herein or in any of the Loan Documents, or which shall now or hereafter exist at
law or in equity or by statute or otherwise,  shall be cumulative and concurrent
and shall be in  addition  to every  other  such  right,  power or  remedy.  The
exercise or beginning of the exercise by Bank of any one or more of such rights,
powers or remedies shall not preclude the simultaneous or later exercise by Bank
of any or all other such rights, powers or remedies.

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

     D. Definitions. Unless the context indicates otherwise,  definitions in the
UCC apply to words and phrases in this Agreement;  if UCC definitions  conflict,
Article 9 definitions apply.

MD071                                  14                     Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
     E. Notices.  Notice shall be deemed reasonable if mailed postage prepaid at
least five (5) days before the related action (or if the UCC elsewhere specifies
a longer period, such longer period) to the address of Debtor given above, or to
such other  address as any party may  designate  by written  notice to the other
party. Each notice, request and demand shall be deemed given or made, if sent by
mail,  upon the earlier of the date of receipt or five (5) days after deposit in
the U.S. Mail, first class postage prepaid,  or if sent by any other means, upon
delivery.

     F.  Modifications.  No provision hereof shall be modified or limited except
by a written  agreement  expressly  referring  hereto and to the provisions * so
modified  or  limited  and  signed by Debtor  and Bank.  The  provisions  of the
Agreement  shall not be  modified  or  limited  by course of conduct or usage of
trade.

     G. Applicable Law and Partial Invalidity. This Agreement has been delivered
in the State of Maryland and shall be construed in  accordance  with the laws of
that  State.  Wherever  possible  each  provision  of this  Agreement  shall  be
interpreted  in such manner as to be effective and valid under  applicable  law,
but if any provision of this  Agreement  shall be prohibited by or invalid under
applicable  law,  such  provision  shall be  ineffective  to the  extent of such
prohibition or invalidity, without invalidating the remainder of such provisions
or  the   remaining   provisions   of  this   Agreement.   The   invalidity   or
unenforceability  of any  provision  of any  Loan  Document  to  any  person  or
circumstance  shall not affect the  enforceability or validity of such provision
as it may ato other persons or circumstances.

     H.  Financing  Statement.  To the extent  permitted  by  applicable  law, a
carbon,  photographic  or other  reproduction of this Agreement or any financing
statement covering the Collateral shall be sufficient as a financing statement.

     I.  WAIVER OF JURY  TRIAL.  DEBTOR  WAIVES  TRIAL BY JURY IN ANY  ACTION OR
PROCEEDING  TO  WHICH  DEBTOR  AND  BANK MAY BE  PARTIES,  ARISING  OUT OF OR IN
CONNECTION  WITH  OR IN ANY  WAY  PERTAINING  TO  THIS  AGREEMENT,  OR THE  LOAN
DOCUMENTS.  IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF
TRIAL BY JURY OF ALL CLAIMS  AGAINST ALL PARTIES TO SUCH ACTION OR  PROCEEDINGS,
INCLUDING  CLAIMS AGAINST  PARTIES WHO ARE NOT PARTIES TO THIS  AGREEMENT.  THIS
WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY DEBTOR.

     J.  Controlling  Document.  To the  extent  that  this  Security  Agreement
conflicts  with or is in any way  incompatible  with  any  other  Loan  Document
'concern I ng the  Obligation,  any promissory note shall control over any other
document,  and if such note does not address an issue,  then each other document
shall control to the extent that it deals most specifically with an issue,

MD071                                  15                     Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
     K.  Execution  Under Seal.  This  Agreement is being executed under seal by
Debtor(s).

     L. Additional Provisions. See Schedule "-" attached hereto and incorporated
hereunder for all purposes.

     M. NOTICE OF FINAL AGREEMENT. THIS WRITTEN SECURITY AGREEMENT AND THE OTHER
LOAN DOCUMENTS  REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

MD071                                  16                     Approved: 07/01/95
jt                                                             Revised: 08/30/99
<PAGE>
IN WITNESS  WHEREOF AND INTENDING TO CREATE AN INSTRUMENT  EXECUTED  UNDER SEAL,
the parties hereto have caused this Security Agreement to be duly executed under
sea] by  their  duly  authorized  representatives  as of the  date  first  above
written.

Bank/Secured Party:

Bank of America, N.A.

By: /s/ Patrick Moore

Name: Patrick Moore

Title: Vice President



Corporate or Partnership Debtor/Pledgor:

Bundy American Corporation

By: /s/ Kenneth Blum, Jr.(Seal)

Name: Kenneth Blum, Jr.
Title: President


----------------------------
Attest (If Applicable)

[Corporate Seal]

MD071                                  17                     Approved: 07/01/95
jt                                                             Revised: 08/30/99