<PAGE>   1


                                                                   EXHIBIT 10.18


<TABLE>
<S>                          <C>                                <C>
FINANCING STATEMENT -- FOLLOW INSTRUCTIONS CAREFULLY
This Financing Statement is presented for filing pursuant
to the Uniform Commercial Code and will remain effective,
with certain exceptions, for 5 years from date of filing.
--------------------------------------------------------------
A. NAME & TEL. # OF CONTACT AT FILER (OPTIONAL)




--------------------------------------------------------------
B. FILING OFFICE ACCT.# (optional)



--------------------------------------------------------------
C. RETURN COPY TO:  (Name and Mailing Address)



--------------------------------------------------------------
D. OPTIONAL DESIGNATION (If applicable):


[ ] LESSOR/LESSEE  [ ] CONSIGNOR/CONSIGNEE  [ ] NON-UCC FILING


------------------------------------------------------------------------------------------------------------------------------------
1.  DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (1a or 1b)
    --------------------------------------------------------------------------------------------------------------------------------
    1a. ENTITY'S NAME

          Bay Area Multimedia, Inc.
OR  --------------------------------------------------------------------------------------------------------------------------------
    1b. INDIVIDUAL'S LAST NAME                   FIRST NAME                     MIDDLE NAME                        SUFFIX


------------------------------------------------------------------------------------------------------------------------------------
1c.  MAILING ADDRESS                     CITY         STATE      COUNTRY       POSTAL CODE

     333 W. Santa Clara                San Jose        CA          USA           95113
------------------------------------------------------------------------------------------------------------------------------------
1d.  S.S. OR TAX I.D.#      OPTIONAL      1e. TYPE OF ENTITY    1f.  ENTITY'S STATE      1g.  ENTITY'S ORGANIZATIONAL I.D.#, if any
                        ADD'NL. INFO RE                              OR COUNTRY OF
                         ENTITY DEBTOR                                ORGANIZATION                                        [ ] NONE
====================================================================================================================================
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (2a or 2b)
    --------------------------------------------------------------------------------------------------------------------------------
    2a.  ENTITY'S NAME


OR  --------------------------------------------------------------------------------------------------------------------------------
    2b. INDIVIDUAL'S LAST NAME                   FIRST NAME                     MIDDLE NAME                        SUFFIX


------------------------------------------------------------------------------------------------------------------------------------
2c.  MAILING ADDRESS                             CITY                           STATE      COUNTRY       POSTAL CODE


------------------------------------------------------------------------------------------------------------------------------------
2d.  S.S. OR TAX I.D.#      OPTIONAL      2e. TYPE OF ENTITY    2f.  ENTITY'S STATE      2g.  ENTITY'S ORGANIZATIONAL I.D.#, if any
                         ADD'NL INFO RE                              OR COUNTRY OF
                         ENTITY DEBTOR                                ORGANIZATION                                        [ ] NONE
====================================================================================================================================
3. SECURED PARTY'S (ORIGINAL S/P or ITS TOTAL ASSIGNEE) EXACT FULL LEGAL NAME - insert only one secured party name (3a or 3b)
    --------------------------------------------------------------------------------------------------------------------------------
    3a.  ENTITY'S NAME

         Transcap Trade Finance
OR  --------------------------------------------------------------------------------------------------------------------------------
    3b. INDIVIDUAL'S LAST NAME                   FIRST NAME                     MIDDLE NAME                        SUFFIX


------------------------------------------------------------------------------------------------------------------------------------
3c.  MAILING ADDRESS                             CITY                           STATE      COUNTRY       POSTAL CODE

    900 Skokie Blvd.                            Northbrook                        IL        USA            60062
====================================================================================================================================
4.  This FINANCING STATEMENT covers the following types or items of property"

     See attached Exhibit "A".





====================================================================================================================================
5.  CHECK    [ ]    This FINANCING STATEMENT is signed by the Secured Party instead of the Debtor to perfect a security interest
    BOX             (a) in collateral already subject to a security interest in another jurisdiction when it was brought into this
  (if applicable)   state, or when the debtor's location was changed to this state, or (b) in accordance with other statutory
                    provisions [additional data may be required]

6.  REQUIRED SIGNATURE(S)

    Bay Area Multimedia, Inc.                    /s/ RAY MUSCI
====================================================================================================================================
7.  If filed in Florida (check one)

          Documentary              Documentary stamp
    [ ]  stamp tax paid      [ ]   tax not applicable
====================================================================================================================================
8.  [ ]  This FINANCING STATEMENT is to be filed [for record]
         (or recorded) in the REAL ESTATE RECORDS

         Attach Addendum                            (if applicable)

------------------------------------------------------------------------------------------------------------------------------------
9.  Check to REQUEST SEARCH CERTIFICATE(S) on Debtor(s)  [ADDITIONAL FEE]

    (optional)                  [ ] ALL DEBTORS      [ ] DEBTOR 1          [ ]  DEBTOR 2
====================================================================================================================================

</TABLE>



<PAGE>   2
                       EXHIBIT "A" TO FINANCING STATEMENT

     This Financing Statement covers (i) all merchandise, inventory and goods
and all additions, substitutions and replacements thereof, wherever located,
together with all goods, supplies, incidentals, packaging materials, labels,
materials and any other items used or usable in manufacturing, processing,
packaging or shipping same, in all stages of production, and all products and
proceeds of whatever sort, including specifically all "inventory" as such term
is defined in the Uniform Commercial Code, now or hereafter owned by Debtor;
(ii) all machinery and equipment, now or hereafter owned by Debtor, including,
but not limited to, all machinery, equipment, furnishings, movable trade
fixtures and vehicles now or hereafter owned by Debtor and all additions,
substitutions and replacements of any of the foregoing, wherever located,
together with all attachments, components, spare and replacement parts, related
computer software, maintenance and repair supplies and manuals, instructional
manuals, warranties, and equipment and accessories installed thereon or affixed
thereto; (iii) all accounts receivable, contract rights and other customer
obligations for the payment of money arising out of the Debtor's sale of goods
or rendering of services, now existing or hereafter arising; (iv) all
trademarks, copyrights, patents, contract rights and all general intangible
assets of Debtor now or hereafter existing; and (v) all proceeds and products of
the foregoing.

Debtor's facility at which the Collateral is located is:

______________________________

______________________________


<PAGE>   3



                             SECURITY AGREEMENT AND
                               FINANCING STATEMENT


     THIS SECURITY AGREEMENT AND FINANCING STATEMENT is made this 25 of February
2000, between TRANSCAP TRADE FINANCE, an Illinois general partnership (the
"SECURED PARTY"), and BAY AREA MULTIMEDIA, INC., a California corporation (the
"DEBTOR"), as follows:

BACKGROUND:

A.   On this date, the Secured Party and Debtor entered into a Master Purchase
     Order Assignment Agreement (the "Assignment Agreement").

B.   It is a condition to Secured Party's performance of its obligations under
     the Assignment Agreement that the Debtor execute and deliver this Agreement
     to secure performance and payment of the "Liabilities" (as hereinafter
     defined).

     THEREFORE, in consideration of the agreements described in this Agreement
and the Assignment Agreement, the parties agree as follows:

     1.   DEFINITIONS. In this Agreement, the following frequently used terms
are defined as set forth in this paragraph 1:

     (a)  Each term used in this Agreement which is defined in the Assignment
Agreement will have the same meaning herein as that ascribed to it in the
Assignment Agreement.

     (b)  The "LIABILITIES" are all payments and other obligations from time to
time due or owing to the Secured Party by the Debtor under the Assignment
Agreement, this Agreement and any agreement referred to in the Assignment
Agreement or this Agreement.

     (c)  The "PRIMARY COLLATERAL" means those assets of the Debtor set forth on
Exhibit "A" attached to and made part of this Agreement, whether now or
hereafter existing or acquired, together with all the proceeds thereof and
Debtor's interests therein.

     (d)  The "COMMON COLLATERAL" are those assets of Debtor set forth on
Exhibit "B" attached to and made part of this Agreement,
whether now or hereafter existing or acquired, together with all the proceeds
thereof and Debtor's interests therein which from time to time are also pledged
to a Senior Lender and as to which the Secured Party shall maintain a
subordinated security interest. If no Senior Lender is involved in the subject
transaction, Exhibit "B" shall be excluded from this Agreement and the Primary
Collateral and Common Collateral shall refer to the same assets.

     (e)  The "COLLATERAL" means the Primary Collateral and the Common
Collateral and the Secured Party's security interest in the Collateral is
referred to as the "LIEN".


<PAGE>   4


     (f)  The "SENIOR LIEN" is the security interest in the Common Collateral
maintained by a Senior Lender (if any).

     (g)  The "LOCATIONS" are Debtor's facilities set forth at the end of this
Agreement at which all or a portion of the Collateral will be located.

     2.   GRANT OF SECURITY INTEREST. As security for the performance and
payment of the Liabilities, the Debtor hereby assigns, grants, conveys,
mortgages, hypothecates, pledges, and sets over to the Secured Party a
continuing first priority security interest for the use and benefit of the
Secured Party in the Primary Collateral; and a security interest for the use and
benefit of the Secured Party in the Common Collateral which is subordinate only
to the Senior Lien, if any.

     3.   REPRESENTATIONS AND WARRANTIES. The Debtor represents, warrants, and
agrees that: (i) except with respect to the Senior Lien, no financing statement
or other lien notice covering any portion of the Collateral is on file in any
public office; (ii) the Debtor is and at all times will be the lawful owner of
all Collateral, free of all liens and claims whatsoever except the Senior Lien
and the Lien; (iii) the Debtor has full power and authority to execute this
Agreement and to perform the Debtor's obligations hereunder, and to subject the
Collateral to the Lien; (iv) all information with respect to Collateral set
forth in any schedule, certificate or other writing at any time heretofore, and
all other written information heretofore or hereafter furnished by the Debtor to
the Secured Party is and will be true and correct in all respects as of the date
furnished; (v) the Locations include the address at which any portion of the
Collateral is located and Debtor will immediately notify Secured Party of any
other location at which any portion of the Collateral is hereafter located; and
(vi) there is no litigation or regulatory complaint against the Debtor or
affecting or relating to the Collateral or any portion thereof which is pending
or threatened as of this date other than as set forth on Exhibit "E" of the
Assignment Agreement.

     4.   CERTIFICATES, SCHEDULES AND REPORTS. The Debtor will from time to
time, as the Secured Party may request, deliver to the Secured Party such
schedules and such certificates and reports respecting the Collateral to such
extent as the Secured Party may reasonably request. Any such schedule,
certificate or report shall be executed by an authorized officer of the Debtor
and shall be in such form and detail as the Secured Party may specify. The
Debtor shall immediately notify the Secured Party of the occurrence of any event
causing a material loss or depreciation in the value of any item of Collateral,
and the amount of such loss or depreciation.

     5.   AGREEMENTS OF THE DEBTOR. The Debtor (i) will, upon request of the
Secured Party, execute such financing statements and other documents (and pay
the cost of filing or recording the same), and do such other acts and things as
Secured Party may from time to time reasonably request to establish and maintain
valid perfected security interests in the Collateral; (ii) will keep all items
of Collateral at the Locations; (iii) will keep its records concerning all items
of Collateral at the Locations, which records will be of such character as will
enable Secured Party to determine at any time the status thereof; (iv) will
furnish the Secured Party such information concerning the Debtor and the
Collateral as the Secured Party may from time to time reasonably request; (v)
will permit the Secured Party or its designees, at all times, to inspect the
Collateral, and to inspect, audit and make copies of and extracts from all
records and all other papers in the possession of the Debtor, and



                                       2
<PAGE>   5


will, upon request of the Secured Party, deliver to the Secured Party all of
such records and papers that pertain to the Collateral; (vi) will, upon request
of the Secured Party, stamp on its records concerning the Collateral (and/or
enter in its computer records concerning the Collateral) a notation, in form
reasonably satisfactory to the Secured Party, of the security interests of the
Secured Party hereunder; (vii) except as consented to in writing by the Secured
Party, will not sell, lease, assign or create or permit to exist any lien on or
security interest in any item of Collateral to or in favor of anyone other than
the Secured Party and the Senior Lender(s); (viii) will at all times keep all
items of Collateral insured against loss, damage, theft and other risks, in such
amounts, by such companies, under such policies and in such form as may be
required pursuant to the Assignment Agreement, which policies shall contain a
so-called lender's loss payable (or comparable) clause, whereby a denial of
payment based on policy conditions will not prevent recovery by Secured Party,
and such policies or certificates thereof shall be deposited with the Secured
Party; (ix) furnish to the Secured Party no less than thirty (30) days prior to
the occurrence of any change in the Locations or in Debtor's name, notice in
writing of such change; and (x) will reimburse the Secured Party for all
expenses, including reasonable attorneys' fees and legal expenses incurred by
the Secured Party in seeking to collect or enforce any rights under this
Agreement or the Assignment Agreement.

     6.   REMEDIES. Whenever Debtor shall fail to perform any obligation in the
manner and at the time required by the Assignment Agreement or this Agreement,
or whenever the Debtor or any of them shall breach or default on a covenant made
by any Debtor pursuant to the Assignment Agreement or this Agreement
(collectively an "event of default"), the Secured Party may exercise any rights
and remedies available to it under the Assignment Agreement and applicable law.
The Debtor and each of them agrees, upon the occurrence of an event of default
and during the continuance thereof, if requested by the Secured Party, to
assemble, at the Debtor's expense, all or any part of the Collateral at a place
designated by the Secured Party. Without limiting the foregoing, upon an event
of default the Secured Party may, to the fullest extent permitted by applicable
law, without notice, advertisement, hearing or process of law of any kind, (i)
enter upon any premises where any of the Collateral may be located and take
possession of and remove such Collateral, (ii) sell any or all of the
Collateral, free of all rights and claims of the Debtor therein and thereto, at
any public or private sale, and (iii) bid for and purchase any or all of the
Collateral at any such sale. The Debtor and each of them hereby expressly
waives, to the fullest extent permitted by applicable law, any and all notices,
advertisements, hearings or process of law in connection with the exercise by
the Secured Party of any of its rights and remedies upon an event of default.
Any notification of the intended disposition of any of the Collateral required
by law shall be deemed reasonably and properly given if given. at least ten (10)
days before such disposition. Any proceeds of any disposition by the Secured
Party of any of the Collateral will be applied by the Secured Party.

     First, to the payment of the Secured Party's reasonable out-of-pocket
     expenses in connection with the Collateral or this Agreement and
     enforcement of the Secured Party's rights with respect thereto or
     hereunder, including reasonable attorney's fees and legal expenses;

     Second, toward the payment or satisfaction of the Liabilities in full; and

     Third, any surplus to be paid to the Debtor, its successors and assigns, or
     as a court of competent jurisdiction may direct.


                                       3
<PAGE>   6

     7.   RELATIONSHIP WITH SENIOR LENDER. If a Senior Lender is involved in the
instant transaction, the Secured Party and each Senior Lender have entered into
a Subordination Agreement of even date herewith which defines and sets forth the
respective rights and interests of the Secured Party and each Senior Lender in
connection with the Collateral.

     8.   MISCELLANEOUS. (a) The Secured Party shall be deemed to have exercised
reasonable care in the custody and preservation of any of the Collateral in its
possession if it takes such action for that purpose as the Debtor requests in
writing, but failure of the Secured Party to comply with any such request shall
not of itself be deemed a failure to exercise reasonable care, and no failure of
the Secured Party to preserve or protect any rights with respect to such
Collateral against prior parties, or to do any act with respect to the
preservation of such Collateral not so requested by the Debtor, shall be deemed
a failure to exercise reasonable care in the custody or preservation of such
Collateral.

     (b)  All notices required or permitted pursuant to this Agreement shall be
in writing and either personally delivered, sent by facsimile transmission
(provided evidence of transmission is maintained and the original of the
transmittal notice is sent by U.S. mail), or Federal Express or similar
overnight delivery service, to the Secured Party at its address set forth at the
end of this Agreement and to the Debtor at any one of the Locations. Notices
given in the manner prescribed herein shall be deemed given on the date sent or
transmitted (as the case may be). Either party may change its notice address by
notice to the other party in the manner prescribed herein.

     (c)  No delay on the part of the Secured Party in the exercise of any right
or remedy shall operate as a waiver thereof, and no single or partial exercise
by the Secured Party of any right or remedy shall preclude other or further
exercise thereof or the exercise of any other right or remedy.

     (d)  No amendment to, modification or waiver of, or consent with respect
to, any provision of this Agreement shall in any event be effective unless the
same shall be in writing and signed and delivered by the Secured Party, and then
any such amendment, modification, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.

     (e)  All obligations of the Debtor and all rights, powers and remedies of
the Secured Party expressed herein are in addition to all other rights, powers
and remedies possessed by Secured Party, including, without limitation, those
provided by applicable law or in any other written instrument or agreement
relating to any of the Liabilities or security therefor.

     (f)  The Agreement shall in all respects be a continuing agreement and
shall remain in full force and effect until final payment in full of all the
Liabilities.

     (g)  THIS AGREEMENT HAS BEEN DELIVERED AT CHICAGO, ILLINOIS, AND SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS,
SUBJECT, HOWEVER, TO THE UNIFORM COMMERCIAL CODE OF ANY APPLICABLE JURISDICTION.
WHENEVER POSSIBLE, EACH PROVISION OF THIS AGREEMENT SHALL BE INTERPRETED IN SUCH
MANNER AS TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT


                                       4
<PAGE>   7

IF ANY PROVISION OF THIS AGREEMENT SHALL BE HELD INVALID, ILLEGAL OR
UNENFORCEABLE UNDER APPLICABLE, LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE
EXTENT OF SUCH INVALIDITY, ILLEGALITY OR UNENFORCEABILITY, WITHOUT INVALIDATING
THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS AGREEMENT.

     (h)  THE DEBTOR IRREVOCABLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN
DIVISION, OR ANY COURT OF THE STATE OF ILLINOIS LOCATED IN COOK COUNTY, AND
WAIVES ANY AND ALL OBJECTIONS TO JURISDICTION OR VENUE THAT ANY SUCH PARTY MAY
HAVE UNDER THE LAWS OF THE STATE OF ILLINOIS OR OTHERWISE IN THOSE COURTS IN ANY
SUCH SUIT, ACTION, OR PROCEEDING. FURTHER, TO THE EXTENT PERMITTED BY LAW,
SERVICE OF PROCESS SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST
THE DEBTOR MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO ITS ADDRESS FOR NOTICE AS PROVIDED IN THIS AGREEMENT.

     (i)  DEBTOR AND SECURED PARTY ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT, ANY OTHER AGREEMENT RELATED HERETO OR WITH
RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY WOULD BE BASED UPON
DIFFICULT AND COMPLEX ISSUES, AND THEREFORE, THE PARTIES AGREE THAT ANY COURT
PROCEEDING ARISING OUT OF ANY SUCH CONTROVERSY WILL BE TRIED IN A COURT OF
COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

     (j)  This Agreement shall be binding upon, and shall inure to the benefit
of, the Secured Party and the Debtor and their respective successors and
assigns.

     (k)  At the option of the Secured Party, this Agreement, or a carbon,
photographic or other reproduction of this Agreement or of any Uniform
Commercial Code financing statement covering the Collateral or any portion
thereof, shall be sufficient as a Uniform Commercial Code financing statement
and may be filed as such.

     (1)  This Agreement is the Security Agreement referred to in the Assignment
Agreement.

     (m)  In the case of any irreconcilable conflict between the provisions of
this Agreement and the Assignment Agreement, the provisions of the Assignment
Agreement shall control.

     (n)  If more than one person or entity is included as a Debtor hereunder,
each of Debtor's obligations, covenants, warranties, and representations
hereunder is joint, several and mutually binding on each such party.

     (o)  This Agreement may be executed in one or more counterparts, each of
which taken together shall constitute one and the same instrument, admissible
into evidence. Delivery of an


                                       5
<PAGE>   8


executed counterpart of this Agreement by facsimile shall be equally as
effective as delivery of a manually executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by facsimile shall
also deliver a manually executed counterpart of this Agreement, but the failure
to deliver a manually executed counterpart shall not affect the validity,
enforceability, and binding effect of this Agreement.

     IN WITNESS WHEREOF, this Agreement has been duly signed at Northbrook,
Illinois on the day and year first above written.

                                   SECURED PARTY:

                                   TRANSCAP TRADE FINANCE

                                   By:  /s/ John Maselli
                                        -----------------------------
                                        Senior Credit Manager
                                        Transcap Associates, Inc. G.P.

                                   Address: 900 N. Skokie Blvd.
                                            Northbrook, IL 60062


                                   DEBTOR:

                                   BAY AREA MULTIMEDIA, INC.


                                   By:  /s/ RAY MUSCI
                                        -----------------------------

                                   Title:  President


                                   LOCATIONS:

                                        -----------------------------

                                        -----------------------------

                                        -----------------------------


                                       6
<PAGE>   9


                                   EXHIBIT "A"

                               PRIMARY COLLATERAL

     The "Collateral" with respect to which Secured Party's first priority
security interest applies shall be (i) all merchandise, inventory and goods and
all additions, substitutions and replacements thereof, wherever located,
together with all goods, supplies, incidentals, packaging materials, labels,
materials and any other items used or usable in manufacturing, processing,
packaging or shipping "Materials" and "Products" pursuant to "Accepted Purchase
Orders", as such terms are defined in a certain Master Purchase Order Purchase
Agreement dated ________________, 2000 between Secured Party and Debtor, and all
products and proceeds of whatever sort now or hereafter owned by Debtor and
related thereto; (ii) all accounts receivable, contract rights and other
customer obligations for the payment of money arising out of the sale of goods
pursuant to "Accepted Purchase Orders" now or hereafter existing; and (iii) all
proceeds and products of the foregoing.

     Debtor's facility at which the Collateral is located is:



------------------------------





                                     "A-1"

<PAGE>   10



                                   EXHIBIT "B"

                               COMMON COLLATERAL

     The "Collateral" with respect to which Secured Party's subordinated lien
applies shall be (i) all merchandise, inventory and goods and all additions,
substitutions and replacements thereof, wherever located, together with all
goods, supplies, incidentals, packaging materials, labels, materials and any
other items used or usable in manufacturing, processing, packaging or shipping
same, in all stages of production, and all products and proceeds of whatever
sort, including specifically all "inventory" as such term is defined in the
Code, now or hereafter owned by Debtor; (ii) all machinery and equipment, now or
hereafter owned by Debtor, including, but not limited to, all machinery,
equipment, furnishings, movable trade fixtures and vehicles now or hereafter
owned by Debtor and all additions, substitutions and replacements of any of the
foregoing, wherever located, together with all attachments, components, spare
and replacement parts, related computer software, maintenance and repair
supplies and manuals, instructional manuals, warranties, and equipment and
accessories installed thereon or affixed thereto; (iii) all accounts receivable,
contract rights and other customer obligations for the payment of money arising
out of the Debtor's sale of goods or rendering of services, now existing or
hereafter arising; (iv) all trademarks, copyrights, patents, contract rights and
all general. intangible assets of Debtor now or hereafter existing; and (v) all
proceeds and products of the foregoing, except such assets of the Debtor as are
described on Exhibit "A".

Debtor's facility at which the Collateral is located is:




------------------------------





                                     "B-1"