Exhibit 10.25
                               SECURITY AGREEMENT

         SECURITY  AGREEMENT (this "Security  Agreement"),  dated as of December
10, 1997,  among B.I.  FUNDING,  INC., a Delaware  corporation  (the "Grantor"),
WACHOVIA  BANK,  N.A.  ("Wachovia"),  as agent (the "Agent") for the Lenders (as
defined below) and Wachovia,  as collateral agent (the  "Collateral  Agent") for
the Secured Parties (as defined below).

                              W I T N E S S E T H:

         WHEREAS,  pursuant to a Loan  Agreement,  dated as of December 10, 1997
(together with all amendments and other modifications, if any, from time to time
thereafter made thereto,  the "Loan Agreement"),  among the Grantor, the various
lenders as are or may become parties thereto (the "Lenders") and the Agent,  the
Lenders have agreed to make certain credit facilities  available to the Grantor;
and

         WHEREAS,  it is a  condition  precedent  to the making of the  Advances
under the Loan  Agreement  that the Grantor  execute and deliver  this  Security
Agreement; and

         WHEREAS,  the Grantor has duly  authorized the execution,  delivery and
performance of this Security Agreement;

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Lenders
to make  Advances to the Grantor  pursuant  to the Loan  Agreement,  the Grantor
agrees, for the benefit of each Secured Party, as follows:

         SECTION 1. Definitions;  Terms Generally.  (a) Unless otherwise defined
herein or the context otherwise requires, terms used in this Security Agreement,
including  its preamble and recitals,  have the meanings  provided in Annex Z to
the Loan Agreement. (b) Unless otherwise defined herein or the context otherwise
requires,  terms for which meanings are provided in the U.C.C.  are used in this
Security Agreement, including its preamble and recitals, with such meanings. The
following terms,  when used in this Security  Agreement,  including its preamble
and recitals,  shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):

         "Account Collateral" is defined in clause (e) of Section 2.



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         "Agent" is defined in the preamble.

         "Agreements Collateral" is defined in clause (d) of Section 2.

         "Collateral" is defined in Section 2.

         "Collateral Agent" is defined in the preamble.

         "Concentration Bank Letter" is defined in Section 8.

         "Equipment" is defined in clause (c) of Section 2.

         "Indemnified Liabilities" is defined in Section 20.

         "Indemnitees" is defined in Section 20.

         "Lenders" is defined in the first recital.

         "Loan Agreement" is defined in the first recital.

         "Lockbox Bank Letters" is defined in Section 7.

         "Notes  Receivable" means those receivables for merchandise sold by the
Borrower which are converted  into a promissory  note after the last shipment of
merchandise has been made and the necessary  documentation has been executed and
returned to the Borrower and  pursuant to which six equal  monthly  payments are
made.

         "Receivables" is defined in clause (a) of Section 2.

         "Related Security" is defined in clause (b)(iii) of Section 2.

         "Secured Obligations" is defined in Section 3.

         "Secured  Party"  means,  as the context may require,  any Lender,  the
Agent, the Collateral Agent and each of their respective successors, transferees
and assigns.

         "Security Agreement" is defined in the preamble.

         "Specified Defaulted  Receivable" means (x) a Defaulted Receivable owed
by an Obligor  as to which  voluntary  or  involuntary  bankruptcy,  insolvency,
reorganization,  debt arrangement,  dissolution or similar proceedings have been
commenced,  or (y) any other Defaulted  Receivable,  provided that the aggregate
amount of Defaulted  Receivables  classified as Specified Defaulted  Receivables
pursuant to this clause (y) in any Fiscal Year shall not exceed $300,000 or such
larger amount (not to exceed $750,000) as the Agent shall approve in writing; it
being

         
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understood and agreed that the Agent may give such consent  without  consulting,
or receiving approval of, the Lenders.

         "State or Local Tax" is defined in Section 15.

         "Wachovia" is defined in the preamble.

         SECTION 2. Grant of  Security  Interest.  The Grantor  hereby  assigns,
pledges,  grants, conveys,  transfers,  delivers and sets over to the Collateral
Agent for its  benefit  and for the  ratable  benefit  of each  Secured  Party a
security  interest in all the  Grantor's  right,  title and  interest in, to and
under the following, whether now owned or hereafter acquired (collectively,  the
"Collateral"):

                  (a) all accounts, contract rights, chattel paper, instruments,
         general  intangibles and other obligations of any kind and indebtedness
         of any kind, now or hereafter  existing,  whether or not arising out of
         or in connection  with the sale or lease of goods or merchandise or the
         rendering of services or the purchase of  receivables of other persons,
         including  the right to payment of any interest,  sales taxes,  finance
         charges,  returned checks, late charges, other fees and charges and all
         other  obligations with respect  thereto,  and all rights in and to all
         security  agreements and other contracts securing or otherwise relating
         to any such accounts,  contract  rights,  chattel  paper,  instruments,
         general   intangibles   or   obligations   and  all  proceeds   thereof
         (collectively, the "Receivables");

         (b)      (i)  all  merchandise  (including  returned  merchandise),  if
         any, relating to the sale which gave rise to any Receivable;

                  (ii)  all  other  security  interests  or liens  and  property
         subject  thereto from time to time  purporting to secure payment of any
         Receivable, whether pursuant to the contract related to such Receivable
         or  otherwise,  together with all  financing  statements  signed by any
         Person describing any collateral securing such Receivable; and

                  (iii)  all  guarantees,  insurance  and  other  agreements  or
         arrangements  of whatever  character  from time to time  supporting  or
         securing  payment of any  Receivable  whether  pursuant to the contract
         related to such  Receivable or otherwise (the  Collateral  described in
         clause (b) being referred to herein as the "Related Security");

                  (c) all equipment in all its forms,  wherever located,  now or
         hereafter  existing  (including  all software,  data bases,  materials,
         books,  records,  magnetic tapes,  disks and cassettes  relating to the
         Receivables and all other equipment in which information concerning the
         Receivables and all other equipment in which information concerning the
         Receivables is stored),  and all parts thereof and  accessions  thereto
         (any  and  all  such   equipment,   parts  and  accessions   being  the
         "Equipment");



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                  (d) the Purchase  Agreement and the  Subordination  Agreement,
         Consent  and  Acknowledgment,  as the same may be amended or  otherwise
         modified from time to time,  including (i) all rights of the Grantor to
         receive  moneys  due  and to  become  due  under  or  pursuant  to such
         agreements, whether payable as fees, expenses, costs or otherwise, (ii)
         all  rights  of the  Grantor  to  receive  proceeds  of any  insurance,
         indemnity,  warranty or guaranty with respect to such agreements, (iii)
         claims of the Grantor  for  damages  arising out of or for breach of or
         default under such agreements,  (iv) the right of the Grantor to amend,
         waive or terminate such agreements, to perform thereunder and to compel
         performance and otherwise exercise all remedies  thereunder and (v) all
         other rights,  remedies,  powers,  privileges and claims of the Grantor
         under or in connection with such agreements  (whether  arising pursuant
         to such  agreements or otherwise  available to the Grantor at law or in
         equity), including the rights of the Grantor to enforce such agreements
         and to  give or  withhold  any and  all  consents,  requests,  notices,
         directions,  approvals,  extensions  or waivers  under or in connection
         therewith (the  Collateral  described in this clause (d) being referred
         to herein as the "Agreements Collateral");

                  (e)      all the following (the "Account Collateral"):

                           (i)  each  Lockbox  Account,   all  funds  and  other
                  evidences  of payment held  therein and all  certificates  and
                  instruments,  if  any,  from  time  to  time  representing  or
                  evidencing any of the Lockbox  Accounts or any funds and other
                  evidences of payment held therein;

                           (ii) the Concentration  Account,  all funds and other
                  evidences  of payment held  therein and all  certificates  and
                  instruments,  if  any,  from  time  to  time  representing  or
                  evidencing  the  Concentration  Account or any funds and other
                  evidences of payment held therein;

                           (iii) all interest of the Grantor in each  Collection
                  Account, all funds and other evidences of payment held therein
                  and all  certificates  and  instruments,  if any, from time to
                  time representing or evidencing any of the Collection Accounts
                  or any funds and other evidences of payment held therein;

                           (iv) any operating  account or other  accounts of the
                  Grantor,  all funds  held  therein  and all  certificates  and
                  instruments,  if  any,  from  time  to  time  representing  or
                  evidencing  any  such  operating  account  or any  funds  held
                  therein;

                           (v) all Permitted  Investments  and all  certificates
                  and instruments  from time to time  representing or evidencing
                  the Permitted Investments;

                           (vi) all notes,  certificates  of  deposit  and other
                  instruments  from  time to time  hereafter  delivered  to,  or
                  otherwise possessed by, the Collateral Agent for and on behalf
                  of the  Grantor in  substitution  for or in addition to any of
                  the then-existing Account Collateral; and


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                           (vii) all interest,  dividends, cash, instruments and
                  other  property  from  time to time  received,  receivable  or
                  otherwise distributed in respect of or in exchange for any and
                  all of the then-existing Account Collateral;

                  (f)(i) all  Collections  and all other  payments  and proceeds
         received by the Grantor in respect of the  Receivables  and the Related
         Security in the form of cash, checks,  wire transfers or other forms of
         payment  in  effect  from  time to time or  otherwise  accepted  by the
         Grantor,  including  all  payments  recovered  by the Grantor  from the
         Sellers as  indemnity  payments  pursuant to the terms of the  Purchase
         Agreement and including amounts recovered from other persons (including
         amounts  recovered  from other persons in connection  with  Receivables
         previously  written off as uncollectible) in connection with any of the
         above, (ii) all earnings received by the Collateral Agent in respect of
         Permitted  Investments  made with  amounts  on  deposit  in the  Escrow
         Account, the Collection Deposit Account and the Collection Account "B",
         and (iii) all other earnings on Permitted Investments; and

                  (g) all  proceeds  of or payments in respect of any and all of
         the foregoing  Collateral  (including proceeds that constitute property
         of the types  described  in clauses  (a)  through (f) above and, to the
         extent not otherwise included, all payments under insurance (whether or
         not the Collateral Agent is the loss payee in respect thereof),  or any
         indemnity, warranty or guaranty, payable by reason of loss or damage to
         or otherwise with respect to any of the Collateral.

provided,  that upon the payment of cash constituting the Collateral or proceeds
thereof in  accordance  with the  provisions  of the  Facility  Agreement to any
Person other than the  Collateral  Agent,  the Agent or any Secured  Party,  the
amounts so paid shall be released  from the lien of the  Collateral  Agent under
this Security Agreement and shall no longer constitute Collateral hereunder.

         SECTION 3.  Security  for  Obligation;  Release  of  Certain  Defaulted
Receivables.  (a) This  Security  Agreement  secures  the payment in full of all
obligations  of the Grantor now or  hereafter  existing  under each  Transaction
Document  to which a  Secured  Party is a party  and the  Notes,  in each  case,
whether  for  principal,   interest,  fees,  expenses  or  otherwise  (all  such
obligations of the Grantor being the "Secured Obligations").

         (b) Promptly  following the Grantor's  request,  the  Collateral  Agent
shall  promptly  take all  actions  reasonably  necessary  to  release  from the
Collateral one or more Specified  Defaulted  Receivables if, at the time of such
release,  all of  the  following  conditions  are  satisfied:  (i)  neither  the
Scheduled  Maturity  Date nor the  Amortization  Commencement  Date  shall  have
occurred, (ii) after giving effect to such release, no Borrowing Base Deficiency
will exist and no other Amortization Event or Unmatured  Amortization Event will
exist, (iii) the Servicer shall have provided the documentation for such release
to the Collateral Agent, and such  documentation  shall be in form and substance
reasonably  satisfactory to the Collateral Agent, (iv) no payments in respect of
any Receivable so released shall be deposited in the Collection


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Accounts, and information regarding any Receivable so released shall be excluded
from all reports  subsequently  delivered to the Agent or the Liquidity  Lenders
pursuant to the  Transaction  Documents,  and (v) such release  shall be without
recourse  to the  Collateral  Agent or  warranty  of any kind by the  Collateral
Agent.

         SECTION 4. Delivery of Collateral. All certificates or instruments,  if
any,  representing or evidencing the Collateral  shall be delivered to, and held
by or on  behalf  of,  the  Collateral  Agent  pursuant  hereto  and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments  of  transfer  or  assignment  in blank,  all in form and  substance
satisfactory  to the  Collateral  Agent;  provided,  however,  that prior to the
Amortization  Period with respect to Notes Receivable in an aggregate amount not
in excess of $2,000,000  such Notes  Receivable  have not been  delivered to the
Collateral  Agent,  but shall be delivered to the  Collateral  Agent at any time
upon request  therefor.  The Collateral  Agent shall have the right, at any time
after the  occurrence of an  Amortization  Event in its  discretion  and without
notice  to the  Grantor,  to  transfer  to or to  register  in the  name  of the
Collateral  Agent  or any  of its  nominees  any  or all of the  Collateral.  In
addition,  the  Collateral  Agent  shall have the right at any time to  exchange
certificates   or  instruments   representing   or  evidencing   Collateral  for
certificates or instruments of smaller or larger denominations.

         SECTION 5. Servicing of Receivables.  The Collateral  Agent consents to
the  appointment  of BII as  Servicer  of the  Receivables  pursuant  to, and in
accordance  with the terms of, the Facility  Agreement.  Upon the occurrence and
during the  continuance of any event referred to in Section 2.11 of the Facility
Agreement,  the Collateral Agent shall, without any further action by any party,
have the rights granted to the Agent  specified in Sections 2.12 and 2.13 of the
Facility  Agreement and the rights granted to the Grantor  specified in Sections
5.01(r) and 6.02 of the Purchase Agreement.

         SECTION 6.  Collection  Procedures.  (a) As  provided  in the  Purchase
Agreement,  the Facility Agreement and the Lockbox Bank Letters, each Collection
shall be deposited  into a Lockbox  Account and shall be  transferred  from such
Lockbox  Account to the  Concentration  Account with the Requisite  Frequency in
same day funds;  provided,  however,  that Collections may, at the option of the
applicable Obligor, be deposited directly into the Concentration Account by wire
transfer from an account of such Obligor.

         (b) As provided in the Purchase  Agreement,  the Facility Agreement and
the  Concentration  Bank  Letter,  amounts  deposited in or  transferred  to the
Concentration  Account shall be transferred  with the Requisite  Frequency along
with all other evidences of payment. The Grantor acknowledges and agrees that it
shall not have any right to withdraw any funds or other  evidences of payment on
deposit in any  Collection  Account,  the  Concentration  Account or any Lockbox
Account except as otherwise expressly provided in this Security Agreement or the
Lockbox Bank Letters.




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         (c) As provided in the Purchase  Agreement,  all Collections  otherwise
received  by the  Servicer  or the  Grantor  shall be  deposited  by it into the
Concentration Account as soon as possible after receipt thereof, but in no event
later than the Business Day after such receipt.

         (d) The Grantor  represents,  warrants,  covenants  and agrees that all
Collections  shall be collected,  processed  and  deposited  pursuant to, and in
accordance with the terms of this Security  Agreement and Sections 2.06 and 3.01
of the Facility Agreement.

         (e) The Grantor  represents,  warrants,  covenants  and agrees that the
Grantor  will not make or maintain  any  deposits in any bank  account,  deposit
account or trust account with any financial  institution  other than the Lockbox
Accounts,  Concentration Account and Collection Accounts as provided for by this
Security  Agreement  and other than one  operating  account  funded  solely with
amounts disbursed as operating expenses pursuant to Section 3.01 of the Facility
Agreement.  The  Grantor  shall  provide the  Collateral  Agent with the account
number and location of such account, and any other information as the Collateral
Agent may  reasonably  request with  respect  thereto,  and such  account  shall
constitute Collateral hereunder. The Grantor represents, warrants, covenants and
agrees that it will have no bank  accounts,  deposit  accounts or trust accounts
other than the Lockbox Accounts and the Concentration Account and such operating
account. The Grantor represents, warrants, covenants and agrees that no new bank
accounts or deposit  accounts will be  established  unless and until the Grantor
has received the prior written consent of the Collateral Agent.

         (f) The  Grantor  represents,  warrants,  covenants  and agrees that no
location  other than the Lockbox  Accounts and, with respect to wire  transfers,
the  Concentration  Account has been established for the deposit of Collections.
The Grantor represents,  warrants, covenants and agrees that no new location for
the deposit of Collections will be established  unless and until the Grantor has
received the prior written consent of the Collateral Agent.

         (g) The Grantor agrees to instruct,  or cause the Servicer to instruct,
all  Persons to make  payments  in respect of  Receivables  pursuant  to, and in
accordance  with the terms of, this  Security  Agreement and Section 2.06 of the
Facility Agreement.

         (h) The Grantor  agrees to pay all fees for the services of the Lockbox
Banks, Concentration Bank and Collection Bank.

         SECTION 7. Lockbox Accounts.  (a) The Grantor has established or caused
to be  established  with the  Lockbox  Banks the  Lockbox  Accounts  into  which
Collections (except as provided in Sections 6 and 10 of this Security Agreement)
will be deposited from time to time.

         (b) The Grantor has heretofore  delivered to the Collateral Agent fully
executed  letter  agreements  in the form of Annex A hereto (the  "Lockbox  Bank
Letters") from each Lockbox Bank.




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         (c) The Grantor shall instruct, or cause the Servicer to instruct, each
Lockbox Bank to transfer  with the  Requisite  Frequency (in same day funds) all
available  funds  on  deposit  in  any  Lockbox  Account  on  such  day  to  the
Concentration  Account along with any  evidences of payment on deposit  therein;
provided,  however,  that  to  the  extent  any  Lockbox  Account  is  also  the
Concentration Account, such transfer shall be deemed made upon deposit therein.

         (d) In the event the Grantor (with the consent of the Collateral Agent,
such consent not to be unreasonably  withheld) or any Lockbox Bank shall,  after
the  date  hereof,  terminate  the  Lockbox  Bank  Letter  with  respect  to the
maintenance of any Lockbox Account with any Lockbox Bank for any reason,  or, in
the event (i) an Amortization Event or Potential  Amortization Event shall occur
and be  continuing  or (ii)  there has been a  failure  by the  Lockbox  Bank to
perform any of its obligations under the applicable Lockbox Bank Letter and such
failure could adversely  affect the Collateral  Agent's  interest in any Account
Collateral  or the  Collateral  Agent's  rights,  or  ability  to  exercise  any
remedies,  under this Security Agreement or any other Transaction  Document,  if
the Collateral Agent shall demand such termination, the Grantor agrees to notify
(and,  if the Grantor  fails to so notify,  the Grantor  irrevocably  grants the
Collateral  Agent the  authority  to notify)  all Persons  that were  depositing
Collections  into such  terminated  Lockbox  Account or Lockbox Bank to make all
future  deposits  to another  Lockbox  Bank with which the Grantor has a Lockbox
Bank Letter that has not been terminated by the Grantor, by such Lockbox Bank or
by demand from the Collateral Agent; provided,  however, that, if the Collateral
Agent shall demand  termination of all Lockbox  Accounts of the Grantor with all
Lockbox  Banks,  the Grantor  agrees to notify (and,  if the Grantor fails to so
notify,  the Grantor  irrevocably  grants the Collateral  Agent the authority to
notify)  all  Persons to make all future  payments  directly  to the  Collection
Deposit Account or any other account designated by the Collateral Agent.

         (e) The Grantor represents, warrants, covenants and agrees that (i) the
Collateral  Agent is  authorized  to receive mail  delivered to any Lockbox Bank
with respect to any Lockbox  Account and (ii) a form of standing  delivery order
has been filed by the Grantor with the United States Postal Service  authorizing
the Collateral  Agent to receive mail delivered to Lockbox Banks with respect to
any Lockbox Account.

         (f) The  Collateral  Agent shall have sole and exclusive  dominion over
and control of each Lockbox  Account and the Grantor and the Servicer  shall not
have any dominion over or control of any Lockbox  Account,  other than the right
to  authorize  transfers  to the  Concentration  Account as set forth herein and
pursuant to the terms hereof.

         (g) The  Grantor  agrees  that  the  Collateral  Agent  shall  have the
unconditional  right  at any  time,  whether  or not an  Amortization  Event  or
Potential  Amortization Event has occurred,  (i) to instruct any Lockbox Bank to
transfer,  in same day funds,  all  available  funds on  deposit in any  Lockbox
Account to the  Concentration  Account or to any  Collection  Account or (ii) to
instruct any Lockbox Bank to thereafter transfer automatically at least as often
as once  each  day that is a  Business  Day for  such  Lockbox  Bank and for the
Concentration  Bank or Collection  Bank, as the case may be, and in any event at
the open of business on the Business Day



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following each such day of deposit,  in same day funds,  all available  funds on
deposit in any Lockbox Account to the Concentration Account or to any Collection
Account  along  with any  evidences  of payment  on  deposit  therein.  Any such
instructions  may be revoked only upon the written  direction of the  Collateral
Agent.

         SECTION 8.  Concentration  Account.  (a) The Grantor has established or
caused to be established with the Concentration  Bank the Concentration  Account
into  which  all  Collections  deposited  into  each  Lockbox  Account  will  be
transferred  and into  which  Collections  will be  deposited  by wire  transfer
directly from Persons from time to time.

         (b) The Grantor has  heretofore  delivered  to the  Collateral  Agent a
fully executed letter agreement in the form of Annex B (the  "Concentration Bank
Letter") from the Concentration Bank.

         (c) The Grantor shall instruct, or cause the Servicer to instruct,  the
Concentration Bank to transfer with the Requisite  Frequency (in same day funds)
all  available  funds  on  deposit  in the  Concentration  Account  on such  day
(including all funds transferred from any Lockbox Account pursuant to clause (a)
of Section 6 on such day) to the Collection Deposit Account along with any other
evidences  of payment on deposit  therein;  provided,  however,  that during any
Amortization  Period  such  funds  and  other  evidences  of  payment  shall  be
transferred at such times to the Collection Account "B".

         (d) In the event the Grantor (with the consent of the Collateral Agent,
such consent not to be unreasonably  withheld) or the Concentration  Bank shall,
after the date hereof,  terminate the Concentration  Bank Letter for any reason,
or if in the event (i) an  Amortization  Event or Potential  Amortization  Event
shall have  occurred and be  continuing  or (ii) there has been a failure by the
Concentration  Bank to perform its obligations  hereunder and such failure could
adversely affect the Collateral  Agent's  interest in any Account  Collateral or
the Collateral  Agent's rights, or ability to exercise any remedies,  under this
Security  Agreement or any other Transaction  Document,  if the Collateral Agent
shall demand such termination, the Grantor agrees to notify (and, if the grantor
fails to so notify,  the Grantor  irrevocably  grants the  Collateral  Agent the
authority  to notify) all Persons  that were  depositing  Collections  into such
terminated  Concentration  Account  or  Concentration  Bank to make  all  future
deposits  directly  to the  Collection  Deposit  Account  or any  other  account
designated by the Collateral Agent.

         (e) The Grantor represents, warrants, covenants and agrees that (i) the
Collateral  Agent is authorized to receive mail  delivered to the  Concentration
Bank with  respect  to the  Concentration  Account  and (ii) a form of  standing
delivery order will be filed within 30 days of the Effective Date by the Grantor
with the United  States  Postal  Service  authorizing  the  Collateral  Agent to
receive  mail  delivered  to  the   Concentration   Bank  with  respect  to  the
Concentration Account.

         (f) The  Collateral  Agent shall have sole and exclusive  dominion over
and control of the Concentration  Account and the Grantor and the Servicer shall
not have any dominion over or



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control  of the  Concentration  Account,  other  than  the  right  to  authorize
transfers to the Collection Deposit Account or the Collection Account "B" as set
forth  herein and  pursuant to the terms of this  Agreement  and the  applicable
Lockbox Letter Agreements.

         (g) The  Grantor  agrees  that  the  Collateral  Agent  shall  have the
unconditional  right  at any  time,  whether  or not an  Amortization  Event  or
Potential  Amortization  Event has occurred,  (i) to instruct the  Concentration
Bank to  transfer,  in same day  funds,  all  available  funds on deposit in the
Concentration  Account  to any  Collection  Account  or  (ii)  to  instruct  the
Concentration  Bank to thereafter  transfer  automatically  at least as often as
once  each  day  that  is a  Business  Day for the  Concentration  Bank  and the
Collection  Bank,  and in any event at the open of business on the  Business Day
following each such day of transfer or deposit into the  Concentration  Account,
in same day funds, all available funds on deposit in the  Concentration  Account
to any  Collection  Account  along  with any  evidences  of  payment  on deposit
therein. Any such instructions may be revoked only upon the written direction of
the Collateral Agent.

         SECTION  9.  Collection   Accounts.   (a)  The  Collateral   Agent  has
established or caused to be established  with the Collection Bank the Collection
Deposit Account into which all Collections  will be transferred (i) prior to the
commencement of any Amortization Period, from the Concentration Account and (ii)
during any Amortization  Period, from the Collection Account "B", and into which
Collections  will be  otherwise  deposited as provided  hereunder  and under the
other Transaction Documents.

         (b) The  Collateral  Agent has  established or caused to be established
with the Collection Bank the Collection  Account "B" into which (i) prior to the
commencement of any Amortization  Period,  Collections that are not with respect
to  any  Receivable  purchased  pursuant  to  the  Purchase  Agreement  will  be
transferred from the Collection Deposit Account and (ii) during any Amortization
Period, Collections will be transferred from the Concentration Account, and into
which  Collections will be otherwise  deposited as provided  hereunder and under
each other Transaction Document.

         (c)  Each  Collection  Account  shall  be  designated  with  the  title
"Wachovia Bank, N.A." ("Wachovia"),  as Collateral Agent for the Secured Parties
pursuant to the Security Agreement,  dated as of December 10, 1997, between B.I.
Funding, Inc. and Wachovia, as Collateral Agent for the Secured Parties".

         (d) The  Collateral  Agent shall have sole and exclusive  dominion over
and control of each  Collection  Account and the Grantor and the Servicer  shall
not have any dominion over or control of any Collection Account.

         (e) In the event the  Collection  Bank  shall,  after the date  hereof,
terminate any  Collection  Account for any reason,  or if the  Collateral  Agent
shall  terminate any Collection  Account,  the Grantor agrees to notify (and, if
the Grantor fails to so notify,  the Grantor  irrevocably  grants the Collateral
Agent the authority to notify) all Persons that were depositing



                                       10

<PAGE>



Collections into such terminated  Collection  Account or Collection Bank to make
all future deposits directly to any account designated by the Collateral Agent.

         (f) In the event that the short-term ratings of the Collection Bank are
reduced below A-1 by S&P and P-1 by Moody's, the Collateral Agent will establish
segregated  trust  accounts  with  the  Collection  Bank  with  respect  to  the
Collection Deposit Account and Collection Account "B".

         SECTION 10.  Permitted  Investments.  (a) Monies held in the Collection
Accounts will be invested and the proceeds of investments shall be reinvested by
the Collateral Agent in Permitted  Investments pursuant to the written direction
of the  Grantor  or its  designee  and all  earnings  will be  deposited  in the
Collection  Deposit  Account and shall  constitute  Collections.  The Collateral
Agent  will  not be  responsible  or  liable  for any  loss  resulting  from the
investment  performance of any investment or  reinvestment of monies held in any
Collection  Account in Permitted  Investments or from the sale or liquidation of
any Permitted Investments in accordance with this Security Agreement.

         (b) The Collateral  Agent may liquidate any Permitted  Investment  when
required to make an application pursuant to Section 11 or 19. The Grantor agrees
to use its best efforts to schedule the maturity of such  Permitted  Investments
so as to avoid the necessity of liquidating any Permitted  Investment.  All such
Permitted Investments shall be made in the name of, and shall be payable to, the
Collateral Agent.

         SECTION 11.  Application of Collections.  (a) The Grantor  acknowledges
and agrees that all Collections  shall be paid directly to the Collateral  Agent
at such times as the  Servicer  shall be  obligated to remit such amounts to the
Grantor  pursuant  to,  and in  accordance  with  the  terms  of,  the  Facility
Agreement.

         (b)  All  Collections  transferred  or  otherwise  deposited  into  the
Collection  Deposit  Account  or  into  the  Collection  Account  "B"  shall  be
transferred to another  Collection  Account or provided by the Collateral  Agent
for  application  or  payment  as  provided  in  Section  3.01  of the  Facility
Agreement.

         SECTION 12. Grantor Remains Liable.  Notwithstanding anything herein or
in any other document to the contrary, (i) the Grantor shall remain liable under
the Agreements  Collateral to the extent set forth therein to perform all of its
duties  and  obligations  thereunder  to the  same  extent  as if this  Security
Agreement had not been executed,  (ii) the exercise by the  Collateral  Agent of
any of the rights hereunder shall not release the Grantor from any of its duties
or obligations under the Agreements  Collateral and (iii) neither the Collateral
Agent nor any holder of Secured  Obligations shall have any duty,  obligation or
liability under the Agreements  Collateral by reason of this Security Agreement,
nor shall the Collateral Agent or any holder of Secured Obligations be obligated
to perform any of the duties or obligations of the Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.




                                       11

<PAGE>



         SECTION 13. Representations and Warranties.  The Grantor represents and
warrants to each Secured Party as set forth in this Section 13:

         (a) Location of Collateral,  etc. As of the Closing Date, (i) the chief
place of business and chief executive offices of the Grantor are located at 2775
Highway 40, Suite 522,  Verdi,  Nevada  89439-1449,  (ii) the offices  where the
Grantor keeps all of the documents,  agreements,  books and records  relating to
the  Receivables  are located at the  locations  specified  on Schedule V to the
Purchase  Agreement  and (iii) the  Equipment  of the Borrower is located at the
locations specified in Schedule I hereto.

         (b)  Ownership,  No  Liens,  etc.  The  Grantor  is the sole  legal and
beneficial  owner of the Collateral,  free and clear of any Liens except for the
security  interest created  pursuant to this Security  Agreement in favor of the
Collateral  Agent and for Prior Liens.  The Collateral  will at all times remain
free and clear of any Liens except for the security interest created pursuant to
this Security  Agreement in favor of the Collateral Agent.  Except for financing
statements as to which  releases have been provided to the Agent pursuant to the
Loan Agreement,  no effective financing statement or other instrument similar in
effect  covering all or any part of the  Collateral  is on file in any recording
office,  except such as may have been filed (i) in favor of the Collateral Agent
relating to this Security Agreement or (ii) with respect to the Receivables,  in
favor of the Grantor.  The Grantor has no trade names and,  within the last five
years,  the Grantor has not been known by any legal name  different from the one
set forth on the  signature  page  hereto  and has not been the  subject  of any
merger or other  corporate  reorganization.  Other than the Notes  Receivable or
chattel  paper,  none of the  Receivables  is evidenced by a promissory  note or
other instrument which has not been delivered to the Collateral Agent.

         (c) Validity.  The pledge of the  Collateral  pursuant to this Security
Agreement  creates a valid and perfected first priority security interest in the
Collateral (except (i) prior to the Amortization  Period,  with respect to Notes
Receivables in an aggregate  amount not in excess of $2,000,000,  which have not
been delivered to the Collateral  Agent as provided in Section 4, for so long as
and to the extent such Notes Receivable have not been so delivered and (ii) with
respect to the perfection  and priority of the security  interest in the Related
Security),  securing  the  payment of the  Secured  Obligations  as  provided in
Section 3. All filings and other actions  requested by the  Collateral  Agent to
perfect or protect such security interest have been duly taken.

         (d) Authorization,  Approval, etc. No authorization,  consent, approval
or other action by, and no notice to or filing with, any Governmental  Authority
is required  (i) for the grant by the Grantor of the security  interest  granted
hereby or for the execution,  delivery or performance of this Security Agreement
by the Grantor,  (ii) for the  perfection  of, or the exercise by the Collateral
Agent of, the  Collateral  Agent's  rights  and  remedies  provided  for in this
Security Agreement or (iii) to ensure the legality, validity,  enforceability or
admissibility  in evidence of this  Security  Agreement in any  jurisdiction  in
which any of the Collateral is located other than financing  statements referred
to in Article III of the Purchase  Agreement,  which  financing  statements have
been filed in all applicable jurisdictions.



                                       12

<PAGE>




         (e) Chattel Paper. (i) Except as contemplated by clauses (ii) and (iii)
below,  the  Grantor  will  ensure  that the  original  copies of chattel  paper
evidencing all Receivables,  including any purchase agreements,  are kept at the
locations specified for such purpose on Schedule V to the Purchase Agreement.

         (ii) Except as  contemplated  by clause (iii)  below,  if (A) there has
occurred  following  the date of this  Agreement,  a change in  applicable  law,
regulation  or  judicial  interpretation  of, or any other  event,  and (B) as a
result of such change in law or event,  the Agent or the Collateral Agent inform
the Grantor in writing that in its opinion the keeping of the original copies of
chattel paper in a single location is necessary in order to ensure the validity,
enforceability  and priority of the Liens created by the Purchase  Agreement and
this  Security  Agreement,  the  Grantor  will direct the  Sellers,  pursuant to
Section  5.01(n) of the Purchase  Agreement,  to move the original copies of all
chattel paper evidencing all Receivables  (including any purchase agreements) to
a single  location  satisfactory  to the  Agent  and the  Collateral  Agent  and
thereafter ensure that all such original copies are kept at such location.

         (iii)  Immediately upon the request of the Collateral Agent at any time
after the occurrence of an Amortization  Event, the Grantor will take possession
of all chattel paper evidencing  Receivables (including any purchase agreements)
pursuant  to Section  5.01(n) of the  Purchase  Agreement  and  deliver all such
chattel paper to the Collateral Agent.

         (iv) The Grantor will take any action, and cause any action to be taken
by the Sellers, at its or their expense,  reasonably requested by the Collateral
Agent or the Agent,  that may be necessary or desirable to protect or more fully
evidence the security  interest of the  Collateral  Agent for the benefit of the
Secured Parties in any chattel paper.

         (f) Possession and Control.  The Grantor,  or the Servicer on behalf of
the Grantor,  has sole and exclusive  dominion over and control of the Equipment
and the  Collateral  Agent has sole dominion over and exclusive  control of each
Lockbox Account and the Concentration Account.

         SECTION 14. Further Assurances. (a) The Grantor agrees that at any time
and from time to time, at the expense of the Grantor,  the Grantor will promptly
execute and deliver all further instruments and documents,  and take all further
action that may be necessary or desirable in the Grantor's  reasonable  judgment
or that the Collateral Agent may request,  to perfect and protect the assignment
and security interest granted or purported to be granted hereby or to enable the
Collateral Agent to exercise and enforce its rights and remedies  hereunder with
respect to any Collateral.  Without  limiting the generability of the foregoing,
the Grantor will (i) whether or not so requested by the Collateral  Agent if any
Collateral shall be evidenced by a promissory note or other instrument,  deliver
and  pledge to the  Collateral  Agent  hereunder  such note or  instrument  duly
endorsed and accompanied by duly executed instruments of transfer or assignment,
all in form and substance satisfactory to the Collateral Agent (other than Notes
Receivable  and chattel paper,  which shall be pledged but not delivered  unless
requested by the



                                       13

<PAGE>



Collateral  Agent) and (ii)  execute  and file such  financial  or  continuation
statements, or amendments thereto, and such other instruments or notices, as may
be  necessary  or desirable  in the  Grantor's  reasonable  judgment or that the
Collateral  Agent may  request,  to protect  and  preserve  the  assignment  and
security interest granted or purported to be granted hereby.

         (b) The Grantor hereby  authorizes the Collateral  Agent to file one or
more financing or continuation statements,  and amendments thereto,  relative to
all or any part of the  Collateral  without  the  signature  of the  Grantor.  A
carbon,  photographic or other  reproduction  of this Security  Agreement or any
financing  statement  covering  the  Collateral  or any  part  thereof  shall be
sufficient  as a financing  statement  where  permitted by  applicable  law. The
Collateral  Agent will promptly  send the Grantor any financing or  continuation
statements  thereto that it files  without the  signature of the Grantor  except
that, in the case of filings of copies of this  Security  Agreement as financing
statements,  the  Collateral  Agent will promptly send the Grantor the filing or
recordation information with respect thereto.

         (c) The Grantor will furnish to the Collateral  Agent from time to time
statements and schedules  further  identifying and describing the Collateral and
such other reports in connection with the Collateral as the Collateral Agent may
reasonably request, all in reasonable detail.

         SECTION 15. Additional  Covenants.  (a) The Grantor agrees that it will
not (i) sell, assign (by operation of law or otherwise) or otherwise dispose of,
or grant any option with respect to, any of the Collateral, except in accordance
with the  Policies,  or (ii)  create  or  permit  to exist any Lien upon or with
respect to any of the Collateral, except for the security interest created under
this Security Agreement in favor of the Collateral Agent.

         (b) The  Grantor  shall  keep its  chief  place of  business  and chief
executive  office  and the  office  where it keeps its  records  concerning  the
Collateral at the locations  therefor  specified in clause (a) of Section 13 or,
upon 30 days'  prior  written  notice to the  Collateral  Agent,  at such  other
location in a  jurisdiction  where all action  required by Section 14 shall have
been taken with respect to the Collateral and completed and be in full force and
effect  and,  if such  jurisdiction  (or any  political  subdivision  or  taxing
authority  thereof or therein) would, or there is a reasonable  possibility that
it would, impose any taxes on the Grantor or any of the Secured Parties,  any of
their respective assets  (including the  Receivables),  operations or activities
(any such tax, a "State or Local  Tax")  (other than any State or Local Tax that
would have been imposed on the Grantor or a Secured  Party,  as the case may be,
even if such  relocation had not occurred) the Agent,  on behalf of the Lenders,
shall  be  satisfied  in its  sole  discretion  with  the  State  or  Local  Tax
consequences  to the  Grantor and the Secured  Parties of such  relocation.  The
Grantor will hold and preserve such records and will permit  representatives  of
the  Collateral  Agent at any time during normal  business  hours to inspect and
make copies of and abstracts from such records.

         (c) Upon the occurrence and during the  continuance of an  Amortization
Event,  the Grantor agrees that the Collateral Agent shall have the right at any
time and from time to time to notify Obligors with respect to any Receivables or
Obligors under the Agreements  Collateral of the assignment of such  Receivables
or Agreements Collateral, as the case may be, to the



                                       14

<PAGE>



Collateral Agent and to direct that payments of all amounts due or to become due
to the Grantor  thereunder  be made directly to the  Collateral  Agent and, upon
such notification,  and at the expense of the Grantor,  the Collateral Agent may
enforce  collection of any such  Receivables  or the  Agreements  Collateral and
adjust,  settle or compromise the amount or payment thereof,  in the same manner
and to the same extent as the Grantor might have done.

         (d) Any proceeds of Collateral when first received by the Grantor shall
be deposited,  or caused to be  deposited,  by the Grantor in precisely the form
received (with all necessary  endorsements) (i) prior to the commencement of any
Amortization  Period,  in the  Collection  Deposit  Account  and (ii) during any
Amortization  Period,  in the  Collection  Account  "B". All  Collateral  in the
possession of the Grantor, the Sellers or the Servicer shall be held in trust by
the Grantor, the Sellers and the Servicer for the Collateral Agent and shall not
be commingled with the Grantor's,  the Sellers' or the Servicer's other funds or
properties.

         (e) The Grantor will not, and will not permit the Servicer to,  without
the Collateral Agent's prior written consent, grant any extension of the time of
payment of any of the  Collateral,  compromise,  compound or settle the same for
less than the full  amount  thereof or  release,  wholly or  partly,  any Person
liable for the payment thereof, except in accordance with the Policies.

         (f) The Grantor will, at its own cost and expense,  maintain,  or cause
to be maintained, satisfactory and complete records of the Collateral, including
a record of all payments  received  and all credits  granted with respect to the
Collateral and all other dealings with the Collateral. The Grantor will mark, or
cause  to be  marked,  conspicuously  with  a  legend,  in  form  and  substance
satisfactory to the Collateral Agent, (i) all books, records,  computer tapes or
disks,  and credit files pertaining to the Collateral and (ii) all file cabinets
or other storage  facilities where  information is maintained  pertaining to the
Collateral,  to evidence  this  Security  Agreement  and the  security  interest
granted hereby.  The amount  represented by the Grantor to the Collateral  Agent
from time to time as owing by Persons in respect of the Receivables will at such
time be, in all material  respects,  the correct  amount  actually owing by such
Persons thereunder.

         (g)  The  Grantor  will  comply  in  all  material  respects  with  all
applicable statutes, rules and regulations with respect to the Collateral or any
part thereof.

         (h)  The  Grantor  will  pay  promptly  when  due all  material  taxes,
assessments and governmental charges or levies imposed upon the Collateral or in
respect of its income or profits therefrom and all claims of any kind (including
claims for labor,  materials and  supplies),  except that no such amount need be
paid, if (i) such nonpayment does not involve any danger of the sale, forfeiture
or loss of any of the  Collateral  or any interest  therein,  (ii) the charge or
levy is being  contested in good faith by appropriate  proceedings and (iii) the
Grantor shall have set aside on its books adequate  reserves in accordance  with
GAAP with respect thereto.




                                       15

<PAGE>



         (i) The  Grantor  will  (i)  perform  and  observe  all the  terms  and
provisions  of the  Agreements  Collateral  to be  performed  or observed by it,
maintain  the  Agreements  Collateral  in full  force and  effect,  enforce  the
Agreements  Collateral in accordance  with its terms and take all such action to
such end as may be from time to time requested by the Collateral Agent, provided
that compliance with such request is not likely to have an adverse effect on the
amount of the Collections or the timing of the receipt thereof, and (ii) furnish
to the  Collateral  Agent  promptly upon receipt  thereof copies of all notices,
requests and other  documents  received by the Grantor  under or pursuant to the
Agreements Collateral, and from time to time (A) furnish to the Collateral Agent
such  information and reports  regarding the Collateral as the Collateral  Agent
may reasonably request and (B) upon request of the Collateral Agent, make to any
counterparty  to  the  Agreements  Collateral  such  demands  and  requests  for
information  and  reports or for action as the Grantor is entitled to make under
the Agreements Collateral.

         (j) The  Grantor  will  not (i)  cancel  or  terminate  the  Agreements
Collateral or consent to or accept any cancellation or termination thereof, (ii)
supplement,  amend or otherwise  modify the  Agreements  Collateral  or give any
consent, waiver or approval thereunder, (iii) waive any default under, breach of
or  timely  performance  of  observance  of any  covenant  or  agreement  in the
Agreements Collateral or (iv) take any other action not required by the terms of
the Agreements Collateral, in each case if such action would impair the value of
the interest or rights of the Grantor thereunder or would impair the interest or
rights of the Collateral Agent.

         (k)  The  Grantor  will  advise  the  Collateral  Agent  promptly,   in
reasonable  detail,  (i)  of  any  Lien  made  or  asserted  against  any of the
Collateral and (ii) of the occurrence of any event that is reasonably  likely to
have a material  adverse  effect on the aggregate  value of the Collateral or on
the security interest granted hereby.

         (l) The  Collateral  Agent  will at all times  have sole and  exclusive
dominion  over and control of each  Collection  Account and the Grantor will not
have  any  and  will at no time  assert  any  dominion  over or  control  of any
Collection Account.

         SECTION 16.  Collateral Agent Appointed  Attorney-in-Fact.  The Grantor
irrevocably appoints the Collateral Agent the Grantor's  attorney-in-fact,  with
full  authority  in the place and  stead of the  Grantor  and in the name of the
Grantor or otherwise, from time to time in the Collateral Agent's discretion, to
take any action and to execute any instrument that the Collateral Agent may deem
necessary or advisable to accomplish  the purposes of this  Security  Agreement,
including to ask, demand,  collect,  sue for, recover,  compromise,  receive and
give  acquittances  and  receipts  for  moneys due and to become due under or in
connection  with the Collateral;  to receive,  endorse and collect all drafts or
other  instruments  and  documents  made  payable to the  Grantor in  connection
therewith or representing any payment, dividend or other distribution in respect
of the Collateral or any part thereof;  and to give full discharge for the same,
and  if,  in  the  Collateral  Agent's  judgment,  there  exists  any  event  or
circumstance  that  may  have a  material  adverse  effect  on the  value of the
Collateral   or  any  part   thereof,   the   Collateral   Agent  may,  as  such
attorney-in-fact,   file  any  claims  or  take  any  action  or  institute  any
proceedings  that the Collateral Agent may deem to be necessary or desirable for
the collection thereon or to enforce



                                       16

<PAGE>



compliance  with the terms and  conditions  of the  Agreements  Collateral.  The
Grantor  hereby  acknowledges,  consents  and agrees  that the power of attorney
granted  pursuant to this  Section is  irrevocable  and coupled with an interest
until all of the Secured  Obligations  have been paid in full and all  Liquidity
Commitments have been terminated.

         SECTION 17.  Collateral Agent May Perform.  The Collateral Agent may at
any time itself perform, or cause performance of, any Agreements Collateral.

         SECTION 18. Collateral Agent Has No Duty;  Reasonable Care. (a) Neither
the Collateral Agent nor any of its respective  directors,  officers,  agents or
employees  shall be liable for any action  taken or omitted to be taken by it or
them under or in  connection  with this  Security  Agreement,  except for its or
their own gross negligence or willful misconduct.

         (b) The powers  conferred on the Collateral  Agent hereunder are solely
to protect the Collateral  Agent's interest in the Collateral for the benefit of
the  holders  of  Secured  Obligations  and shall not  impose  any duty upon the
Collateral  Agent to  exercise  any such  powers.  Except  for the  exercise  of
reasonable  care  in the  custody  and  preservation  of any  Collateral  in its
possession  and  accounting for moneys  actually  received by it hereunder,  the
Collateral Agent shall not have any duty as to any Collateral.

         (c) The Collateral  Agent shall be deemed to have exercised  reasonable
care in the custody and  preservation of the Collateral in its possession if the
Collateral is accorded  treatment  substantially  equal to that which it accords
its own property,  it being  understood that the Collateral Agent shall not have
any responsibility for (i) taking any necessary steps to preserve rights against
any  parties  with  respect  to any  Collateral  or (ii) the  collection  of any
proceeds  of any  Collateral  or by reason of any  invalidity,  lack of value or
uncollectability  of  any  of the  payments  received  by it  from  Obligors  or
otherwise.

         SECTION 19. Remedies upon Default. If any Amortization Event shall have
occurred and be continuing:

         (a) The Collateral  Agent may,  without notice to the Grantor except as
required  by law and at any  time or from  time  to  time,  charge,  set off and
otherwise apply all or any part of the Secured  Obligations  against any Lockbox
Account, the Concentration Account or any Collection Account.

         (b) The Collateral Agent may exercise in respect of the Collateral,  in
addition  to any and all  other  rights  and  remedies  provided  for  herein or
otherwise  available to it, all the rights and remedies of a secured  party upon
default under the UCC, including,  without limitation, the right to (i) identify
and engage a successor  Servicer to act as servicer  for the  Receivables,  (ii)
engage consultants to advise on the Policies and other matters in respect of the
Receivables  and (iii)  without  notice except as specified  below,  solicit and
accept  bids for and  sell the  Collateral  or any part  thereof  in one or more
parcels at public or private sale, at any exchange,  broker's board or at any of
the Collateral  Agent's offices or elsewhere,  for cash, on credit or for future
delivery,



                                       17

<PAGE>



and  upon  such  other  terms as the  Collateral  Agent  may  deem  commercially
reasonable.  The  Grantor  agrees  that,  to the extent  notice of sale shall be
required by law, at least 10  Business  Days'  notice to the Grantor of the time
and place of any public sale or the time after  which any private  sale is to be
made shall constitute reasonable notification. The Collateral Agent shall not be
obligated  to make any sale of  Collateral  regardless  of notice of sale having
been given.  The  Collateral  Agent may adjourn any public or private  sale from
time to time by announcement at the time and place fixed therefor, and such sale
may,  without further  notice,  be made at the time and place to which it was so
adjourned.

         (c) The Collateral Agent may exercise,  at the Grantor's  expense,  any
and all rights and  remedies  of the  Grantor  under or in  connection  with the
Agreements  Collateral or otherwise in respect of the Collateral,  including any
and all rights of the  Grantor  to demand or  otherwise  require  payment of any
amount under, or performance of any provision of, the Agreements Collateral. The
Collateral  Agent agrees that prior to the occurrence of an Amortization  Event,
it will not  exercise  the rights  provided to the  Grantor  pursuant to Section
5.01(r)(iv) of the Purchase Agreement.

         (d) All payments  received by the Grantor under or in  connection  with
the  Agreements  Collateral  shall be  received  in trust for the benefit of the
Collateral Agent,  shall be segregated from other funds of the Grantor and shall
be forthwith paid over to the  Collateral  Agent in the same form as so received
(with any necessary endorsement).

         (e) Any cash held by the  Collateral  Agent as Collateral  and all cash
proceeds  received by the Collateral Agent in respect of any sale of, collection
from,  or  other  realization  upon all or any  part of the  Collateral  will be
provided by the  Collateral  Agent to the Agent for  application  as provided in
Article III of the Facility Agreement.

         SECTION 20. Indemnity and Expense.  (a) Whether or not the transactions
contemplated  hereby  shall  be  consummated,   the  Grantor  hereby  agrees  to
indemnify,  pay and hold the Collateral Agent, the Agent, each Lender,  and each
other holder of the Secured Obligations, and the officers, directors, employees,
agents and affiliates of such Person (collectively,  the "Indemnitees") harmless
from  and  against  any  and  all  liabilities,  obligations,  losses,  damages,
penalties,  actions,  judgments, suits, claims, costs, expenses or disbursements
of  any  kind  and  nature   whatsoever   (including  the  reasonable  fees  and
disbursements   of  counsel  for  such   Indemnitees  in  connection   with  any
investigative,  administrative or judicial  proceeding  commenced or threatened,
whether or not such Indemnitee shall be designated a party thereto) which may be
imposed on, incurred by or asserted  against that Indemnitee in any way relating
to or arising out of this Security Agreement,  the other Transaction  Documents,
or  any  other  documents   contemplated  by  or  referred  to  therein  or  the
transactions  contemplated thereby or the enforcement of any of the terms hereof
or of any such other documents or otherwise arising or relating in any manner to
the  transactions   contemplated  hereunder  and  thereunder  (the  "Indemnified
Liabilities");  provided,  however, that the Grantor shall not be liable for any
of the  foregoing to the extent they arise from the gross  negligence or willful
misconduct of the  Indemnitee.  To the extent that the undertaking to indemnify,
pay and hold harmless set forth in


                                       18

<PAGE>



this Section may be  unenforceable  because it is violative of any law or public
policy,  the Grantor shall  contribute the maximum portion which it is permitted
to pay and satisfy under  applicable law, to the payment and satisfaction of all
Indemnified  Liabilities  incurred  by  the  Indemnitees  or any  of  them.  The
provisions  of this Section 20 shall  survive and remain  operative  and in full
force and effect  regardless  of whether  or not the  transactions  contemplated
hereby are consummated or such  consummation  is delayed,  and regardless of the
repayment of the Advances and the termination of this Security  Agreement or any
other Transaction  Document,  the invalidity or  unenforceability of any term or
provision of this Security  Agreement or any other  Transaction  Document or any
agreement referred to therein,  or any investigation made by or on behalf of the
Secured  Parties.  All  amounts  due under this  Section 20 shall be  additional
Obligations  under the Loan  Agreement  and shall be payable  on written  demand
therefor.  The  indemnity set forth in this Section 20 shall in no event include
any indemnification for any taxes (except to the extent that indemnification for
taxes would be required under the provisions of any other Transaction Document).

         (b) The Grantor  will,  upon demand,  pay to the  Collateral  Agent the
amount of any and all costs and  expenses,  including  the  reasonable  fees and
expenses of its counsel and of any experts and agents, that the Collateral Agent
may incur in connection with (i) the administration of this Security  Agreement,
(ii) the custody or preservation  of, or the sale of,  collection from, or other
realization  upon, any of the  Collateral,  (iii) the exercise or enforcement of
any of the rights of the  Collateral  Agent  hereunder,  (iv) the failure by the
Grantor to perform or  observe  any of the  provisions  hereof or (v) any action
taken by the Collateral Agent pursuant to Section 14 or 17.

         (c) The  provisions  of this Section 20 are in  furtherance  and not in
limitation of the Grantor's obligations under Sections 11.3 and 11.4 of the Loan
Agreement.

         SECTION 21. Further  Indemnification.  Without limiting the obligations
of the Grantor  under  Section  20, the Grantor  shall pay any current or future
stamp or  documentary  taxes or any other excise or property  taxes,  charges or
similar  levies  which  arise  from  any  payment  made  hereunder  or from  the
execution,  delivery or  registration  of, or  otherwise  with  respect to, this
Security Agreement or any other Transaction Document.

         SECTION 22. Continuing Security Interest. This Security Agreement shall
create a continuing  security interest in the Collateral and shall (i) remain in
full force and effect  until,  but only  until,  the  payment in full (after the
termination of the Liquidity  Commitments) of the Secured  Obligations,  (ii) be
binding  upon the  Grantor  and its  successors  and  assigns  and (iii)  inure,
together with the rights and remedies of the Collateral Agent hereunder,  to the
benefit of the Collateral  Agent,  each holder of Secured  Obligations and their
respective successors,  transferees and assigns. Without limiting the generality
of the foregoing clause (iii), each holder of Secured  Obligations may assign or
otherwise  transfer all or any portion of its rights and  obligations  under the
applicable  Transaction  Documents  to any other  Person,  and such other Person
shall  thereupon  become vested with all the benefits in respect thereof granted
to such



                                       19

<PAGE>



transferor  herein or otherwise,  in each case, in accordance  with the terms of
such Transaction Document.

         SECTION  23.  Transaction  Document.   This  Security  Agreement  is  a
Transaction  Document  executed pursuant to the Loan Agreement and shall (unless
otherwise expressly indicated herein) be construed,  administered and applied in
accordance with the terms and provisions thereof.

         SECTION 24. Notices. All notices and other  communications  provided to
any  party  hereto  under  this  Security  Agreement  shall  be in  writing  and
addressed,  delivered or  transmitted  to such party at its address or facsimile
number  set  forth  below  its  signature  hereto or at such  other  address  or
facsimile  number as may be  designated  by such  party in a notice to the other
parties. Any notice, if mailed and properly addressed with postage prepaid or if
properly  addressed and sent by prepaid courier  service,  shall be deemed given
when received;  any notice,  if transmitted by facsimile,  shall be deemed given
when transmitted upon receipt of electronic confirmation of transmission.

         SECTION  25.   Survival  of  Agreement.   All  covenants,   agreements,
representations   and  warranties   made  by  the  Grantor  herein  and  in  the
certificates  or other  instruments  prepared or delivered in connection with or
pursuant to this Security Agreement shall be considered to have been relied upon
by the Secured  Parties  and shall  survive the  execution  and  delivery of the
Transaction  Documents,  regardless  of any  investigation  made by the  Secured
Parties or on their behalf.

         SECTION 26.  Binding  Effect.  This  Security  Agreement  shall  become
effective  when it shall have been  executed by the  Grantor and the  Collateral
Agent,  and  thereafter  shall be binding  upon and inure to the  benefit of the
Grantor,  the Collateral Agent and each holder of Secured  Obligations and their
respective  successors  and assigns,  except that the Grantor shall not have the
right to assign or delegate its rights or duties hereunder.

         SECTION 27. Waivers;  Amendment. (a) No failure or delay on the part of
the Collateral Agent or any Secured Party in exercising any power or right under
this Security Agreement shall operate as a waiver thereof,  nor shall any single
or partial  exercise  of any such power or right  preclude  any other or further
exercise  thereof or the  exercise of any other power or right.  No notice to or
demand on the  Grantor in any case  shall  entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by the Collateral Agent or
any  Secured  Party  under  this  Security  Agreement  shall,  except  as may be
otherwise  stated in such  waiver  or  approval,  be  applicable  to  subsequent
transactions.  No waiver or  approval  hereunder  shall  require  any similar or
dissimilar waiver or approval thereafter to be granted hereunder.

         (b) Neither this Security  Agreement  nor any  provision  hereof may be
waived,  amended or modified  except  pursuant to an agreement or  agreements in
writing entered into by the Grantor and the Collateral Agent. Each Secured Party
shall be bound by any  waiver,  amendment  or  modification  authorized  by this
Section.



                                       20

<PAGE>



         SECTION 28.  Severability.  Any  provision of this  Security  Agreement
which is prohibited  or  unenforceable  in any  jurisdiction  shall,  as to such
provision  and  such  jurisdiction,   be  ineffective  to  the  extent  of  such
prohibition or unenforceability without invalidating the remaining provisions of
this  Security  Agreement or affecting  the validity or  enforceability  of such
provision in any other jurisdiction.

         SECTION 29. Headings.  The various headings of this Security  Agreement
are  inserted  for  convenience  only  and  shall  not  affect  the  meaning  or
interpretation of this Security Agreement or any provisions hereof or thereof.

         SECTION  30.  Execution  in  Counterparts,   Effectiveness,  etc.  This
Security   Agreement   may  be  executed  by  the  parties   hereto  in  several
counterparts,  each of which shall be deemed to be an original  and all of which
shall  constitute  together  but one  and  the  same  agreement.  This  Security
Agreement shall become effective when counterparts  hereof executed on behalf of
each party hereto (or notice thereof satisfactory to the Collateral Agent) shall
have been received by the  Collateral  Agent and notice  thereof shall have been
given by the Collateral Agent to the Grantor and each Lender.

         SECTION 31. Governing Law; Entire  Agreement.  THIS SECURITY  AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK,  EXCEPT TO THE EXTENT THAT THE VALIDITY OR  PERFECTION OF THE SECURITY
INTEREST  HEREUNDER  OR  REMEDIES  HEREUNDER,   IN  RESPECT  OF  ANY  PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE STATE OF NEW
YORK. This Security  Agreement  constitutes the entire  understanding  among the
parties  hereto with respect to the subject  matter  hereof and  supersedes  any
prior agreements, written or oral, with respect thereto.

         SECTION 32.  Jurisdiction; Consent to Service of Process.  ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST THE BORROWER WITH RESPECT TO THIS
AGREEMENT OR ANY NOTE MAY BE BROUGHT IN ANY STATE OR (TO THE
EXTENT PERMITTED BY LAW) FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF
NEW YORK AND BY EXECUTION AND DELIVERY OF THIS  AGREEMENT  THE BORROWER  ACCEPTS
FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. THE
BORROWER DESIGNATES AND APPOINTS CT CORPORATION SYSTEM, 1633 BROADWAY, NEW YORK,
NEW YORK  10019,  AND SUCH OTHER  PERSONS AS MAY  HEREAFTER  BE  SELECTED BY THE
BORROWER  IRREVOCABLY  AGREEING IN WRITING TO SERVE,  AS ITS AGENT TO RECEIVE ON
ITS BEHALF,  SERVICE OF ALL PROCESS IN ANY SUCH  PROCEEDINGS  IN ANY SUCH COURT,
SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY THE BORROWER


                                       21

<PAGE>



TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT.  A COPY OF SUCH PROCESS SO
SERVED  SHALL BE  MAILED BY  REGISTERED  MAIL TO THE  BORROWER  SO SERVED AT ITS
ADDRESS PROVIDED IN THE APPLICABLE  SIGNATURE PAGE HERETO,  EXCEPT THAT,  UNLESS
OTHERWISE  PROVIDED BY  APPLICABLE  LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT
AFFECT THE  VALIDITY  OF  SERVICE  OF  PROCESS.  IF ANY AGENT  APPOINTED  BY THE
BORROWER REFUSES TO ACCEPT SERVICE, THE BORROWER HEREBY AGREES THAT SERVICE UPON
IT BY MAIL SHALL CONSTITUTE  SUFFICIENT NOTICE.  NOTHING HEREIN SHALL AFFECT THE
RIGHT TO SERVE NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER  PERMITTED  BY LAW OR SHALL LIMIT THE RIGHT OF ANY LENDER,  THE
AGENT OR THE COLLATERAL AGENT TO BRING  PROCEEDINGS  AGAINST THE BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION.

         SECTION 33. Waiver of Jury Trial. THE COLLATERAL AGENT, THE GRANTOR AND
EACH OTHER PARTY HERETO HEREBY KNOWINGLY,  VOLUNTARILY AND  INTENTIONALLY  WAIVE
ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY  LITIGATION  BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS SECURITY AGREEMENT
OR ANY  COURSE  OF  CONDUCT,  COURSE OF  DEALING,  STATEMENTS  (WHETHER  ORAL OR
WRITTEN) OR ACTIONS OF THE  COLLATERAL  AGENT,  THE GRANTOR AND EACH OTHER PARTY
HERETO.  THE  GRANTOR  ACKNOWLEDGES  AND AGREES  THAT IT HAS  RECEIVED  FULL AND
SUFFICIENT  CONSIDERATION  FOR THIS  PROVISION  AND  THAT  THIS  PROVISION  IS A
MATERIAL  INDUCEMENT FOR THE COLLATERAL AGENT AND EACH OTHER PARTY HERETO (OTHER
THAN THE GRANTOR) ENTERING INTO THIS SECURITY AGREEMENT.





                                       22

<PAGE>



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

                               B.I. FUNDING, INC.


                                By:       /s/Mary Ellen Ramsayer
                                     Name:   Mary Ellen Ramsayer
                                     Title:  Assistant Secretary

                                Address:      2775 Highway 40
                                              Suite 522
                                              P.O. Box 1449
                                              Verdi, Nevada 89439-1449

                                Facsimile No:         702-345-6166

                                Telephone No:         702-345-6100

                                Attention:            General Counsel


                              WACHOVIA BANK, N.A., as Collateral Agent and Agent


                                By:           William E. Covington
                                Title:        Senior Vice President

                                Address:      191 Peachtree Street, GA-423
                                              Atlanta, GA 30303

                                Facsimile No:         (404) 332-4005

                                Telephone No:         (404) 332-4363

                                Attention:            Deborah Williams
                                                      Asset Backed  Finance


                                       23

<PAGE>



                                     Annex A


                             [Lockbox Bank Letters]





<PAGE>


                                   Schedule I


         Location of Equipment of the Borrower

         2775 Highway 40, Suite 522
         Verdi, Nevada  89439-1449