Document:

<PAGE>   1

                               SECURITY AGREEMENT

     This Security Agreement is made as of August 1, 1997 by and among J.L.B. of
Nevada, Inc., a Nevada corporation ("JLB"), Credit Store, Inc., a Delaware
corporation ("CSI") and Credit Store Mortgage, Inc., a Delaware corporation, New
Beginnings Corp., a South Dakota corporation, Consumer Debt Acquisitions, Inc.,
a South Dakota corporation, Sleepy Hollow Associates, Inc., a Delaware
corporation, Service One Holdings Inc., a Delaware corporation, Service One
International Corporation, a South Dakota corporation, American Credit Alliance,
Inc., a Nevada corporation, Service One Receivables Acquisition Corporation, a
Nevada corporation, The Credit Store, Inc., a South Dakota corporation, Service
One Commercial Corporation, a Delaware corporation, and Soiland Company, a South
Dakota corporation (collectively referred to herein as the "CSI Subsidiaries").

     WHEREAS, CSI has requested that JLB loan CSI up to Thirty Million Dollars
($30,000,000.00) pursuant to the terms of the two Promissory Notes attached
hereto as Exhibit A and Exhibit B (the "Promissory Notes"); and

     WHEREAS, to provide security to JLB for CSI's obligations under the terms
of the Promissory Notes and as consideration for JLB's agreement to make future
loans to CSI under the terms of the Promissory Notes, JLB has requested that CSI
and the CSI Subsidiaries grant JLB a security interest in all of their assets;
<PAGE>   2

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
and promises herein contained, the parties hereto HEREBY AGREE as follows:

         1. GRANT OF SECURITY INTEREST. In order to secure the payment by CSI of
all amounts due to JLB with respect to the Promissory Notes, each of CSI and the
CSI Subsidiaries hereby grants to JLB a security interest in all of its assets,
including the stock of its subsidiaries and all of its goods, equipment,
inventory, accounts, deposit accounts, general intangibles, contract rights,
chattel paper, documents, instruments, investment property, investments in other
entities and money (the "Assets"), and all proceeds (including insurance
proceeds) and products of the Assets. Each of CSI and the CSI Subsidiaries
hereby represents and covenants that (a) all of the Assets are located at 3401
North Louise Avenue, Sioux Falls, South Dakota 57107 except for the Assets set
forth on Exhibit C, which are located in Elmsford, New York, (b) neither CSI nor
any of the CSI Subsidiaries will relocate, sell or pledge any of the Assets
without the consent of JLB, (c) the Assets are owned by CSI and the CSI
Subsidiaries free and clear of all liens and encumbrances except as set forth on
Exhibit D hereto, (d) set forth on Exhibit E hereto is a complete list
reflecting the number of shares of stock of each CSI Subsidiary issued and
outstanding as of the date hereof and the owner of such shares, and (e) no
additional shares of capital stock of the CSI Subsidiaries shall be issued until
the repayment of the Promissory Notes in full.

                                     - 2 -
<PAGE>   3

         2. REMEDIES, TERMINATION. The failure by CSI to pay, when due, the
principal, any interest, or any other sum payable under either of the Promissory
Notes, and continuance of such failure for five (5) business days after the date
on which such principal, installment of interest, or other sum is due (whether
upon maturity of a Promissory Note, upon any installment payment date, upon
acceleration, or otherwise) shall constitute an event of default (an "Event of
Default"). Upon such an Event of Default, JLB may exercise any and all of the
remedies available to a secured creditor under the Uniform Commercial Code of
the State of South Dakota. CSI agrees to pay JLB's costs of collection arising
out of an Event of Default, including reasonable attorneys' fees. This Security
Agreement shall terminate when all amounts due to JLB with respect to the
Promissory Notes have been received by JLB.

         3. FINANCING STATEMENTS AND OTHER INSTRUMENTS. Each of CSI and the CSI
Subsidiaries agrees to cooperate fully in the preparation and execution of any
and all financing statements that JLB deems necessary or helpful to the
perfection, maintenance or continuation of the security interest in the Assets
granted by this Security Agreement, and to that effect each of CSI and the CSI
Subsidiaries expressly agrees to execute one or more financing statements in a
form satisfactory to JLB, who is authorized to file a financing statement in any
location deemed necessary or advisable to perfect JLB's security interest in the
Assets or proceeds.

                                     - 3 -
<PAGE>   4

     Each of CSI and the CSI Subsidiaries also agrees to cooperate fully with
JLB in executing additional financing statements, amendments to financing
statements and the like as may be deemed necessary or advisable by JLB in order
to maintain and continue the security interest in the Assets created by this
Security Agreement.

     Each of CSI and the CSI Subsidiaries shall deliver to JLB, within ten (10)
days of the date of this Security Agreement, any and all stock certificates
representing issued and outstanding shares of stock of any of the CSI
Subsidiaries held by such entity, together with stock powers executed in blank.

         4. GOVERNING LAW. This Security Agreement and its interpretation shall
be governed by the internal laws of the State of South Dakota, without reference
to its conflict-of-laws rules.

         5. ENTIRE AGREEMENT. This Security Agreement, together with the
Promissory Notes, constitutes the entire agreement of the parties concerning the
subject matter hereof and may not be modified except by a writing signed by the
parties hereto. This Security Agreement supersedes any and all prior security
agreements between or among any of the parties hereto.

                                     - 4 -
<PAGE>   5

     IN WITNESS WHEREOF, the parties hereto have caused their authorized
officers to execute this Security Agreement as of the day and year first above
written.

                                J.L.B. OF NEVADA, INC.

                                By:     /s/ Jay L. Botchman
                                    -------------------------------------
                                       Name:   Jay L. Botchman
                                       Title:  President

                                CREDIT STORE, INC.

                                By:     /s/ Kevin T. Riordan
                                    -------------------------------------
                                       Name:   Kevin T. Riordan
                                       Title:  President

                                CREDIT STORE MORTGAGE, INC.

                                By:     /s/ Robert M. Stata
                                    -------------------------------------
                                       Name:   Robert M. Stata
                                       Title:  President

                                NEW BEGINNINGS CORP.

                                By:     /s/ Kevin T. Riordan
                                    -------------------------------------
                                       Name:   Kevin T. Riordan
                                       Title:  President

                                CONSUMER DEBT ACQUISITIONS, INC.

                                By:     /s/ Kevin T. Riordan
                                    -------------------------------------
                                       Name:   Kevin T. Riordan
                                       Title:  President

                                     - 5 -
<PAGE>   6

                                SLEEPY HOLLOW ASSOCIATES, INC.

                                By:     /s/ Robert D. Maum
                                    -------------------------------------
                                       Name:   Robert D. Maum
                                       Title:  President

                                SERVICE ONE HOLDINGS INC.

                                By:     /s/ Kevin T. Riordan
                                    -------------------------------------
                                       Name:   Kevin T. Riordan
                                       Title:  President

                                SERVICE ONE INTERNATIONAL
                                    CORPORATION

                                By:     /s/ Kevin T. Riordan
                                    -------------------------------------
                                       Name:   Kevin T. Riordan
                                       Title:  President

                                AMERICAN CREDIT ALLIANCE, INC.

                                By:     /s/ Kevin T. Riordan
                                    -------------------------------------
                                       Name:   Kevin T. Riordan
                                       Title:  President

                                SERVICE ONE RECEIVABLES
                                    ACQUISITION CORPORATION

                                By:     /s/ Kevin T. Riordan
                                    -------------------------------------
                                       Name:   Kevin T. Riordan
                                       Title:  President

                                     - 6 -
<PAGE>   7

                                THE CREDIT STORE, INC.

                                By:     /s/ Kevin T. Riordan
                                    -------------------------------------
                                       Name:   Kevin T. Riordan
                                       Title:  President

                                SERVICE ONE COMMERCIAL
                                    CORPORATION

                                By:     /s/ Kevin T. Riordan
                                    -------------------------------------
                                       Name:   Kevin T. Riordan
                                       Title:  President

                                SOILAND COMPANY

                                By:     /s/ Kevin T. Riordan
                                    -------------------------------------
                                       Name:   Kevin T. Riordan
                                       Title:  President

                                     - 7 -<PAGE>   1

                               FIRST AMENDMENT TO
                               SECURITY AGREEMENT

     This First Amendment to Security Agreement is made as of October 23, 1997
by and among J.L.B. of Nevada, Inc., a Nevada corporation ("JLB"), Credit Store,
Inc., a Delaware corporation ("CSI") and Credit Store Mortgage, Inc., a Delaware
corporation, New Beginnings Corp., a South Dakota corporation, Consumer Debt
Acquisitions, Inc., a South Dakota corporation, Sleepy Hollow Associates, Inc.,
a Delaware corporation, Service One Holdings Inc., a Delaware corporation,
Service One International Corporation, a South Dakota corporation, American
Credit Alliance, Inc., a Nevada corporation, Service One Receivables Acquisition
Corporation, a Nevada corporation, The Credit Store, Inc., a South Dakota
corporation, Service One Commercial Corporation, a Delaware corporation, and
Soiland Company, a South Dakota corporation (collectively referred to herein as
the "CSI Subsidiaries").

     WHEREAS, the parties hereto entered into a Security Agreement dated as of
August 1, 1997 (the "Security Agreement") pursuant to which CSI and the CSI
Subsidiaries granted JLB a security interest in all of their assets to secure
certain indebtedness of CSI to JLB;

     WHEREAS, CSI has requested that JLB loan CSI up to Five Million Dollars
($5,000,000.00) pursuant to the terms of the Promissory Note attached hereto as
Exhibit A (the "Promissory Note"); and

     WHEREAS, to provide security to JLB for CSI's obligations under the terms
of the Promissory Note and as consideration for JLB's agreement to make future
loans to CSI under
<PAGE>   2

the terms of the Promissory Note, JLB has requested that CSI and the CSI
Subsidiaries agree that JLB's current security interest in all of their assets
shall secure all debt evidenced by the Promissory Note;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
and promises herein contained, the parties hereto HEREBY AGREE as follows:

     1.  GRANT OF SECURITY INTEREST.  In order to secure the payment by CSI of
all amounts due to JLB with respect to the Promissory Note, each of CSI and the
CSI Subsidiaries hereby agrees that the debt evidenced by the Promissory Note
shall be secured by the security interest currently held by JLB in all of its
assets pursuant to the terms of the Security Agreement, including the stock of
its subsidiaries and all of its goods, equipment, inventory, accounts, deposit
accounts, general intangibles, contract rights, chattel paper, documents,
instruments, investment property, investments in other entities and money (the
"Assets"), and all proceeds (including insurance proceeds) and products of the
Assets.

     2.  REMEDIES, TERMINATION.  The failure by CSI to pay, when due, the
principal, any interest, or any other sum payable under the Promissory Note, and
continuance of such failure for five (5) business days after the date on which
such principal, installment of interest, or other sum is due (whether upon
maturity of a Promissory Note, upon any installment payment date, upon
acceleration, or otherwise) shall constitute an event of default (an "Event of
Default"). Upon such an Event of Default, JLB may exercise any and all of the
remedies available to a secured creditor under the Uniform Commercial Code of
the State of South Dakota. CSI agrees to pay JLB's costs of collection arising
out of an Event of Default, including reasonable attorneys' fees.

                                     - 2 -
<PAGE>   3

     3.  FINANCING STATEMENTS AND OTHER INSTRUMENTS.  Each of CSI and the
CSI Subsidiaries agrees to cooperate fully in the preparation and execution of
any and all financing statements that JLB deems necessary or helpful to the
perfection, maintenance or continuation of the security interest in the Assets
granted by this Amendment, and to that effect each of CSI and the CSI
Subsidiaries expressly agrees to execute one or more financing statements in a
form satisfactory to JLB, who is authorized to file a financing statement in any
location deemed necessary or advisable to perfect JLB's security interest in the
Assets or proceeds.

     Each of CSI and the CSI Subsidiaries also agrees to cooperate fully with
JLB in executing additional financing statements, amendments to financing
statements and the like as may be deemed necessary or advisable by JLB in order
to maintain and continue the security interest in the Assets created by this
Amendment.

     4.  GOVERNING LAW.  This Amendment and its interpretation shall be
governed by the internal laws of the State of South Dakota, without reference to
its conflict-of-laws rules.

     5.  ENTIRE AGREEMENT.  This Amendment, together with the Security
Agreement and the Promissory Note, constitutes the entire agreement of the
parties concerning the subject matter hereof and may not be modified except by a
writing signed by the parties hereto.

                                     - 3 -
<PAGE>   4

     IN WITNESS WHEREOF, the parties hereto have caused their authorized
officers to execute this Amendment as of the day and year first above written.

                                        J.L.B. OF NEVADA, INC.

                                        By:  /s/  Jay L. Botchman
                                            ------------------------------------
                                               Name:   Jay L. Botchman
                                               Title:  President

                                        CREDIT STORE, INC.

                                        By:  /s/  Kevin T. Riordan
                                            ------------------------------------
                                               Name:   Kevin T. Riordan
                                               Title:  President

                                        CREDIT STORE MORTGAGE, INC.

                                        By:  /s/  Robert M. Stata
                                            ------------------------------------
                                               Name:   Robert M. Stata
                                               Title:  President

                                        NEW BEGINNINGS CORP.

                                        By:  /s/  Kevin T. Riordan
                                            ------------------------------------
                                               Name:   Kevin T. Riordan
                                               Title:  President

                                     - 4 -
<PAGE>   5

                                        CONSUMER DEBT ACQUISITIONS, INC.

                                        By:  /s/  Kevin T. Riordan
                                            ------------------------------------
                                               Name:   Kevin R. Riordan
                                               Title:  President

                                        SLEEPY HOLLOW ASSOCIATES, INC.

                                        By:  /s/  Robert D. Maum
                                            ------------------------------------
                                               Name:   Robert D. Maum
                                               Title:  President

                                        SERVICE ONE HOLDINGS INC.

                                        By:  /s/  Kevin T. Riordan
                                            ------------------------------------
                                               Name:   Kevin T. Riordan
                                               Title:  President

                                        SERVICE ONE INTERNATIONAL
                                            CORPORATION

                                        By:  /s/  Kevin T. Riordan
                                            ------------------------------------
                                               Name:   Kevin T. Riordan
                                               Title:  President

                                     - 5 -
<PAGE>   6

                                        AMERICAN CREDIT ALLIANCE, INC.

                                        By:  /s/  Kevin T. Riordan
                                            ------------------------------------
                                               Name:   Kevin T. Riordan
                                               Title:  President

                                        SERVICE ONE RECEIVABLES
                                            ACQUISITION CORPORATION

                                        By:  /s/  Kevin T. Riordan
                                            ------------------------------------
                                               Name:   Kevin T. Riordan
                                               Title:  President

                                        THE CREDIT STORE, INC.

                                        By:  /s/  Kevin T. Riordan
                                            ------------------------------------
                                               Name:   Kevin T. Riordan
                                               Title:  President

                                        SERVICE ONE COMMERCIAL
                                            CORPORATION

                                        By:  /s/  Kevin T. Riordan
                                            ------------------------------------
                                               Name:   Kevin T. Riordan
                                               Title:  President

                                     - 6 -
<PAGE>   7

                                        SOILAND COMPANY

                                        By:  /s/  Kevin T. Riordan
                                            ------------------------------------
                                               Name:   Kevin T. Riordan
                                               Title:  President

                                     - 7 -

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