<PAGE>   1


                                                                   EXHIBIT 10.69


                      [LYON CREDIT CORPORATION LETTERHEAD]

December 15, 1998                                A Subsidiary of Credit Lyonnais


Mr. Alan Redhead
President
CALIFORNIA BEACH RESTAURANTS, INC.
17383 Sunset Boulevard, Suite 140
Pacific Palisades, CA 90272


RE: LOAN PROPOSAL


Dear Alan:

Lyon Credit Corporation ("Lender") is pleased to present to California Beach
Restaurants, Inc. ("Borrower") the below outlined loan proposal. The terms and
conditions of our proposal are as follows:

- TRANSACTION:          The transaction shall be structured under a Master Loan
                        & Security Agreement ("Agreement"). The Agreement will
                        allow for multiple fundings documented as separate
                        schedules to the Agreement, with minimum takedowns of
                        $500,000.

- LENDER:               Lyon Credit Corporation

- BORROWER:             CALIFORNIA BEACH RESTAURANTS, INC.

- LOAN AMOUNT:          $1,500,000

- COLLATERAL:           Borrower shall grant to LCC a first priority security
                        interest (blanket UCC-1 filing) in the following
                        property (the "Equipment"): Various new furniture,
                        fixtures and equipment located at Borrower's
                        Gladstone's 4 Fish Restaurant; (detailed list to be
                        compiled later), including together with all parts,
                        accessories, attachments, substitutions, repairs,
                        improvements and replacements and any and all rights
                        thereunder and proceeds there of, including without
                        limitation insurance proceeds.

- RATE:                 8.33%



<PAGE>   2
Loan Proposal
December 15, 1998
Page Two

o  LOAN EXPIRATION: March 31, 1999.

o  INTEREST RATE/INDEX: (Fixed upon loan commencement). The interest rate to be
   used will be based upon an index prior to funding the Transaction. Such index
   to be the yield-to-maturity of the five (5) year Treasury Note as published
   in the Wall Street Journal and an Adder. For purposes of this proposal, the
   REFERENCE YIELD IS 4.33% AND THE ADDER IS 400 BASIS POINTS. The
   yield-to-maturity of the Reference Yield in effect on the day prior to any
   Transaction funding will be the yield used along with the Adder to determine
   the applicable interest rate on any promissory note.

o  LOAN AMORTIZATION: The Loan, shall be fully amortized over a term of sixty
   (60) months, to be paid in equal monthly payments, in arrears.

o  TRANSACTION COSTS: Borrower agrees that all transaction costs including all
   appraisals, legal, recording, filing and other expenses related to the
   Transaction will be for the account of Borrower, such expenses not to exceed
   $2,000.00 without the prior written approval of Borrower.

o  PRE-PAYMENT: Year 1, 5%; Year 2, 4%; Year 3, 3%; Year 4, 2%; Year 5, 1%, of
   outstanding principal.

o  MISCELLANEOUS: Prior to funding the Transaction, Lender will need evidence
   of the following: 1) that Borrower or Guarantor has successfully received an
   equity contribution satisfactory to Lender in a minimum amount of $1.5
   million and 2) that no letter of credit requirement will exist under the
   existing Concession Agreement between Borrower and the County of Los Angeles.

o  INSURANCE: Prior to any funding, Borrower must provide Lender, at Borrower's
   expense, satisfactory evidence of insurance (as to amount, terms and
   insurer) covering Collateral against all risks of physical damage with
   Lender named as loss payee. Such insurance shall provide for a minimum of 30
   days notice prior to cancellation or any material change.

o  PROGRESS PAYMENTS: Lender shall advance funds in partial payment of
   equipment upon Borrower's execution of appropriate documentation. Progress
   Payments shall be payable on a monthly basis and will be based on Prime
   Lending Rate, as published in The Wall Street Journal, plus 1%.

o  EXPIRATION: This proposal and all of its terms shall expire on December 31,
   1998, if Lender has not received your acceptance hereof by such date.

<PAGE>   3
Loan Proposal
December 15, 1998
Page Three


o PROPOSAL FEE: By signing below, Borrower acknowledges the terms and
conditions of this proposal and agrees to pay a Proposal Fee of $15,000.00.
Upon receipt of the executed proposal letter and accompanying Proposal Fee,
Lender shall commence the investment approval process. The Proposal Fee will be
refundable to Borrower less all applicable Transaction Costs within 30 days of
either the latter of the last funding on this Transaction or upon Loan
Expiration.

In the event that this Transaction is not approved by Lender, the Proposal Fee
will be refunded to Borrower less applicable Transaction Costs. If this
Transaction is approved and any portion of its is not funded by Lender by Loan
Expiration, a portion of the Proposal Fee will be deemed as earned by Lender on
a pro-rated basis. For purposes of calculation, the amount(s) funded under the
various note(s) shall be the numerator and the loan approval amount stated in
Lender's approval letter shall be the denominator. The resulting percentage
amount shall be multiplied by the total Proposal Fee to calculate the amount of
the Proposal Fee to be refunded to Borrower (less applicable transaction
expenses). Any remaining balance shall be deemed as earned by Lender.

This proposal is based upon final acceptance from Lender's executive committee.
Approval by Lender's executive committee will be evidenced by issuance of an
approval letter covering the Transaction. Any such approval shall be subject to
the completion of documentation as Lender may, in its sole discretion, require
and the occurrence of no material adverse change in business, financial
condition or prospects of Borrower or Guarantor.

Alan, I look forward to hearing from your regarding the above stated proposal.
Please do not hesitate to call with any additional questions which you may have
at (949) 477-5550.

Sincerely,                              AGREED TO AND ACCEPTED BY:
Lyon Credit Corporation                 CALIFORNIA BEACH RESTAURANTS, INC.

/s/ JOHN D. WHEELING                    By: /s/ SAM CHILAKOS
---------------------------------          ----------------------------------
John S. Wheeling
Account Officer                         Title: Vice President, Finance
                                               ------------------------------

                                        Date: December 22, 1998
                                              -------------------------------

<PAGE>   4

                      [LYON CREDIT CORPORATION LETTERHEAD]


February 1, 1999





Alan Redhead
President
California Beach Restaurants, Inc.
17383 Sunset Boulevard, Suite 140
Pacific Palisades, CA 90272


Subject: Loan Commitment -- $1,200,000


Dear Mr. Redhead:

Lyon Credit Corporation ("LCC") ("Lender") has approved a loan request for
California Beach Restaurants, Inc. ("Borrower"), substantially as outlined in
its Loan Proposal dated December 15, 1998, subject to the following additional
terms and conditions.

1.   Loan Amount -- $1,200,000.
2.   UCC Search.
3.   Insurance.
4.   Copy of Borrower's executed Concession/Lease Agreement with the County of
     Los Angeles prior to funding.
5.   Final signed copy of Borrower's term sheet on the Convertible Subordinated
     Note Offering for a minimum of $1.5 million prior to any funding.
6.   Certification from Borrower's CFO or President, prior to any fundings,
     that the "net worth test" as defined in the Concession Lease Agreement has
     been satisfied.
7.   Collateral inspection.
8.   Landlord Waiver.
9.   Fixture Filing.

If you have any questions concerning this approval, please call me at (714)
477-5540.


Sincerely,


/s/ RAYMOND A. ORPHAN
    -------------------------------
    Raymond A. Orphan
    Vice President
<PAGE>   5
                                 PROMISSORY NOTE

$821,564.75                                                       April 27, 1999


     THIS PROMISSORY NOTE is executed and delivered effective as of the date
written above by the undersigned (collectively, the "Maker") to LYON CREDIT
CORPORATION, a Delaware corporation ("Holder").

     1.   LOAN. FOR VALUE RECEIVED, the Maker promises to pay to Holder, or
order, the principal sum of EIGHT HUNDRED TWENTY ONE THOUSAND FIVE HUNDRED SIXTY
FOUR AND 75/100 ($ 821,564.75 ), with interest on all unpaid principal from the
date such principal sum is disbursed to or on behalf of Maker by Holder, at the
rate of ONE percent ( 1.0 %) plus the prime lending rate published in The Wall
Street Journal until maturity.

     2.   DEMAND. This note shall be due and payable, in full, upon demand by
Holder. Payment shall include all principal together with all interest accrued
thereon.

     3.   PAYMENTS. Payment shall be applied first to interest and the remainder
to principal. Principal and interest shall be paid in lawful money of the United
States of America. Payments shall be made at 1266 East Main Street, Stamford,
Connecticut, or elsewhere as Holder may designate. Interest may be calculated on
a daily basis using a 360-day year. Maker agrees that the rate of interest
contracted for in this note shall, for purposes of applicable law, include the
interest rates stated herein and any other charges, costs, fees and other
expenses which are to be paid by Maker to or for the benefit of Holder to the
extent that the same are deemed to be interest, all of which Maker hereby agrees
to pay. In no event will the total of interest rates charged hereunder be
greater than that permitted by applicable federal or state law.

     4.   DEFAULTS BY MAKER. A default shall occur if: (i) Maker fails to pay
this note when declared due by Holder or (ii) Maker or any of them becomes a
bankrupt or debtor in or under any state or federal insolvency proceeding.

     5.   DEFAULT REMEDIES. If a default occurs, then without notice, at the
election of Holder, the entire principal sum and all accrued interest which is
unpaid shall immediately be due and payable. In any event, upon any default
occurring or at maturity by acceleration or upon demand, all principal and
accrued interest shall bear interest at the after-default rate of fifteen
percent (15%) per annum from the date of default until this note is paid in
full.

     6.   RESERVATION OF RIGHTS. Failure of Holder to exercise any election
hereunder shall not constitute any waiver of any rights, remedies, options or
elections of Holder in the event of any subsequent default or otherwise.

     7.   FEES AND COSTS. If any default shall occur, Maker promises to pay all
of the following costs and fees if incurred by or on behalf of Holder: (i)
reasonable attorneys' fees, (ii) all costs and expenses of collection,
enforcement or interpretation, whether or not suit is filed, and (iii) all costs
of suit, each of which are to be determined and awarded by a court and not by a
jury. "Suit" includes proceedings in courts of original, appellate and
bankruptcy jurisdiction.

     8.   WAIVERS BY MAKER. To the maximum extent allowed by applicable law,
Maker expressly waives: (i) diligence, demand, dishonor, protest, presentment,
and grace of any kind, and any notice of the foregoing, and any notices of
nonpayment, default or acceleration, (ii) any and all rights of homestead and
exemption, and (iii) any release or discharge arising from any extension of time
or change in terms of payment or otherwise in this note, or from any change,
addition to or alteration of any instrument securing this note, or from any
other cause whatsoever other than payment in full.

     9.   PARTIES BOUND. "Maker" means the undersigned (individually or
collectively and jointly and severally) and all co-makers, endorsers, payors,
obligors, sureties and guarantors of this note and anyone who may become liable
for payment or performance of the same, and their respective successors and
assigns, jointly and

<PAGE>   6

severally, and if married, both as a community and as a sole and separate
obligation. "Holder" means the original payee of this note and its successors
and assigns as owners and holder of this note.

     10.  CHOICE OF LAW. This note shall be governed by and construed and
enforced under applicable federal law and by the laws of the State of
Connecticut.


     11.  SECURITY. This note is secured by a security interest in certain
collateral, and may be secured by other, additional security interests in other
collateral or by a lien or liens on real property owned by Maker.

                                        California Beach Restaurants, Inc.
                                            as Maker


                                        By: /s/ Samuel E. Chilakos
                                            ------------------------------------
                                        Title: Vice President Finance

                                        Witness/Attest:

                                        By: /s/ Martin Sniewski
                                            ------------------------------------
                                        Name: Martin Sniewski

                                        Title:
                                            ------------------------------------
<PAGE>   7

                                    GUARANTY

     THIS GUARANTY (the "Guaranty") is made and delivered by Sea View
Restaurants, Inc. a California corporation (the "Guarantor") for the benefit of
Lyon Credit Corporation (the "Guaranteed Party") to induce Guaranteed Party to
enter into that certain Security Agreement No. 30-00095 with California Beach
Restaurants, (the "Obligor") dated as of even date herewith (the "Security
Agreement").

                                   WITNESSETH

1.   GUARANTY.

a)   Guarantor (and each of them if there are more than one) for valuable
     consideration, the receipt whereof is hereby acknowledged, jointly and
     severally irrevocable guarantees due and punctual payment and performance
     to Guaranteed Party at its office at 1266 East Main Street, Stamford,
     Connecticut 06902, or at such other place as Guaranteed Party shall from
     time to time advise in writing, on demand, in lawful money of the United
     States, of any and all Indebtedness (as defined below) of Obligor no matter
     how acquired by Guaranteed Party.

b)   For the purposes of this Guaranty, "Indebtedness" shall include, but is not
     limited to, Indebtedness of Obligor as defined in the Security Agreement,
     any and all advances, loans, debts, lease obligations, performance
     obligations, notes, security agreements and liabilities of Obligor,
     heretofore, now, or hereafter made, entered into, incurred, created or
     owing, whether voluntary or involuntary and however arising, whether due or
     not due, absolute or contingent, liquidated or unliquidated, determined or
     undetermined, and whether Obligor may be liable individually or jointly
     with others, or whether recovery upon such Indebtedness may be or hereafter
     become barred by any statute of limitations, or whether such Indebtedness
     may be or hereafter become otherwise unenforceable. This Guaranty is a
     guaranty of payment and performance and not of collection.

c)   This Guaranty is a continuing guaranty relating to any Indebtedness,
     including Indebtedness arising under successive transactions which shall
     either continue the Indebtedness, renew it from time to time after it has
     been satisfied or create new Indebtedness.

d)   The obligations hereunder are joint and several, independent of the
     obligations of Obligor or the obligations of any other persons or
     guarantors who may be liable to Guaranteed Party in whole or in part for
     the Indebtedness, and a separate action or actions may be brought and
     prosecuted against Guarantor or any of them (if there are more than one)
     whether action is brought against Obligor alone or whether Obligor be
     joined in any such action or actions, and Guarantor waives the benefit of
     any statute of limitations affecting its liability hereunder or the
     enforcement thereof.

2.   OBLIGATIONS UNCONDITIONAL. Guarantor's obligations hereunder shall be
unconditional (and shall not be subject to any defense, setoff, counterclaim or
recoupment whatsoever) irrespective of the genuineness, validity, regularity or
enforceability of the Indebtedness or the Security Agreement or any conduct of
Obligor and/or Guaranteed Party which might constitute a legal or equitable
discharge of a surety, guarantor or guaranty and shall remain in full force and
effect without regard to any circumstance whatsoever (whether or not Guarantor
shall have any knowledge or notice thereof), including, without limitation: (i)
any failure, omission or delay on the part of Obligor or Guaranteed Party to
conform or comply with any term of the Security Agreement; (ii) any waiver,
consent, extension, indulgence, compromise, release or other action or inaction
under or in respect of the Security Agreement or any obligation or liability of
Obligor or Guaranteed Party, or any exercise or non-exercise of any right,
remedy, power or privilege under or in respect to any such instrument or
agreement or any such obligation or liability; (iii) any bankruptcy, insolvency,
reorganization, arrangement, readjustment, liquidation or similar proceeding
with respect to Obligor or Guaranteed Party or any of their respective
properties, or any action taken by any trustee or receiver or by any court in
any such proceeding; (iv) any merger or consolidation of Obligor or Guarantor
into or with any other corporation or any sale, lease or transfer of all or any
of the assets of Obligor or Guarantor to any other entity; or (v) any change in
the ownership of Obligor. The obligations of Guarantor set forth herein
constitute full recourse obligations of Guarantor enforceable against him to the
full extent of all his assets and properties. Without limiting the generality of
the foregoing, Guarantor agrees that (i) repeated and successive demands may be
made and recoveries may be had hereunder as and when, from time to time, Obligor
shall default under or fail to comply with the terms of the Security Agreement
and that notwithstanding the recovery hereunder for or in respect of any given
default or failure to so comply by Obligor under the Security Agreement, this
Guaranty shall remain in force and effect and shall apply to each and every
subsequent default, and (ii) in the event that any Indebtedness is paid by
Obligor, and thereafter all or any part of such payment is recovered from
Guaranteed Party to whom paid, as a preferential or fraudulent transfer under
the Federal Bankruptcy Code, any applicable state insolvency law, or any other
similar Federal or state law now or hereafter in effect, the

<PAGE>   8

liability of Guarantor hereunder with respect to such Indebtedness so paid and
recovered shall continue and remain in full force and effect as if, to the
extent of such recovery, such payment had not been made. If (i) an event
permitting the exercise of remedies under the Security Agreement shall at any
time have occurred and be continuing and (ii) such exercise, or any consequences
thereof provided in the Security Agreement shall at any time be prevented by
reason of the pendency against Obligor of a case or proceeding under the
bankruptcy or insolvency law, Guarantor agrees that, solely for purposes of this
Guaranty and its obligations hereunder, the Security Agreement shall be deemed
to have been declared in default and all amounts thereunder shall be deemed to
be due and payable, with all the attendant consequences as provided in the
Security Agreement, as if declaration of default and the consequence thereof had
been accomplished in accordance with the terms thereof, and Guarantor shall
forthwith pay any amounts guaranteed hereunder.

3.   REPRESENTATIONS AND WARRANTIES. Guarantor hereby represents and warrants
that

a)   Guarantor is duly organized and validly existing in good standing under the
     laws of the State of and has all requisite corporate power and authority to
     enter into and perform its obligations provided under this Guaranty,

b)   this Guaranty has been duly authorized by all necessary corporate action,
     and has been duly executed and delivered by Guarantor and is a legal, valid
     and binding obligation of Guarantor, enforceable in accordance with its
     terms except as the enforceability thereof may be limited by applicable
     bankruptcy, insolvency, reorganization, moratorium or other similar laws
     affecting the enforcement of creditors rights generally and general
     principles of equity, regardless of whether such enforceability is
     considered in a proceeding in equity or at law,

c)   the execution and delivery by Guarantor of this Guaranty is not, and the
     performance by it of its obligations hereunder will not be, inconsistent
     with Guarantor's other activities, do not and will not contravene any law,
     governmental rule or regulation, judgment or order applicable to Guarantor,
     and do not and will not contravene any provision of, or constitute a
     default under, its certificate of incorporation or by laws or any
     indenture, mortgage, contract or other instrument to which Guarantor is a
     party or by which it is bound,

d)   no consent or approval of, giving of notice to, registration with, or
     taking of any other action in respect to or by, any Federal, national,
     state or local governmental authority or agency or other entity is required
     with respect to the execution, delivery and performance by Guarantor of
     this Guaranty, or if any such approval, notice, registration or action is
     required, it has been duly given or obtained,

e)   there are no suits or proceedings pending or threatened in any court or
     before any commission, board or other administrative agency against or
     affecting Guarantor, which will have a material adverse effect on the
     ability of Guarantor to fulfill its obligations under this Guaranty.

3A.  EXISTENCE, ETC. Guarantor agrees that, so long as this Guaranty is in
effect, Guarantor shall (i) preserve and maintain its corporate existence, (ii)
preserve and maintain all of its material rights, privileges and franchises,
except where the failure to preserve and maintain any such right, privilege or
franchise would not materially and adversely affect the ability of Guarantor to
perform its obligations under this Guaranty, and (iii) comply with all the
requirements of all applicable laws, rules, regulations and orders of
governmental or regulatory authorities except where the failure to comply with
any such requirement would not materially and adversely affect the ability of
Guarantor to perform its obligations under this Guaranty.

4.   CERTAIN RIGHTS AND POWERS OF GUARANTEED PARTY.

a)   Guarantor authorizes Guaranteed Party, without notice or consent and
     without affecting, impairing or discharging in whole or in part its
     liability hereunder, from time to time to (i) renew, modify, amend,
     compromise, extend, accelerate, discharge or otherwise change the time for
     payment of, or otherwise change the terms or provisions of the Indebtedness
     or any part thereof, including increase or decrease of the rate of interest
     thereon; (ii) take and hold security for the payment of this Guaranty or
     the Indebtedness guaranteed, and exchange, enforce, waive, and release any
     such security; (iii) apply such security and direct the order or manner of
     sale thereof as Guaranteed Party in its discretion may determine; and (iv)
     release or substitute in whole or in part any one or more of the endorsers,
     Guarantor or anyone else who may be partially or wholly liable for any part
     of the Indebtedness. Guaranteed Party may without notice assign this
     Guaranty in whole or in part. At the option of Guaranteed Party and upon
     notice to Guarantor, Guarantor may be joined in an action or proceeding
     commenced by Guaranteed Party against Obligor in respect of any
     Indebtedness.

b)   Guaranteed Party shall have a lien and security interest upon and a right
     of setoff against all moneys, securities and other property of Guarantor
     now or hereafter in the possession of Guaranteed Party whether held in a
     special account, for safekeeping or otherwise; and every lien and security
     interest and right of setoff may be exercised without demand upon Guarantor
     or notice by Guaranteed Party. No lien or right of setoff may be deemed to
     have

<PAGE>   9

     been waived by any act or conduct on the part of Guaranteed Party or by any
     neglect to exercise such right of setoff or to enforce such lien or
     security interest or by any delay in so doing, and every right of setoff,
     lien or security interest and shall continue in full force and effect until
     such right of setoff, lien or security interest is specifically waived or
     released by an instrument in writing executed by Guaranteed Party.

c)   Any Indebtedness of Obligor now or hereafter held by or owing to Guarantor
     is hereby subordinated to the Indebtedness of Obligor to Guaranteed Party;
     and such Indebtedness of Obligor to Guarantor, if Guaranteed Party so
     requests, shall be collected, enforced and received by Guarantor as trustee
     for Guaranteed Party and be paid over to Guaranteed Party on account of the
     Indebtedness of Obligor to Guaranteed Party but without reducing or
     affecting in any manner the liability of Guarantor under the other
     provisions of this Guaranty. In the event of any distribution, division or
     application, partial or complete, voluntary or involuntary, by operation of
     law or otherwise, of all or any part of the assets of Obligor or the
     proceed thereof to the creditors of Obligor, or upon any Indebtedness of
     Obligor, by reason of dissolution, liquidation or other winding up of
     Obligor or its business, or compromise or settlement with its creditors, or
     any sale, receivership, insolvency or bankruptcy proceeding or assignment
     for the benefit of creditors, or any proceeding by or against Obligor for
     any relief under any provisions of the Federal Bankruptcy Code, any
     applicable state insolvency law, or any other similar Federal or state law
     now or hereafter in effect, then and in any such event any payment or
     distribution of any kind or character, which shall be payable or
     deliverable with respect to any and all Indebtedness due to Guarantor by
     Obligor, shall be paid or delivered directly to Guaranteed Party for
     application on any Indebtedness to Guaranteed Party until such Indebtedness
     shall have been first and fully paid. Guarantor hereby sells, assigns,
     transfers and sets over to Guaranteed Party all of its rights to any and
     all such distributions.

5.   WAIVER OF DEMANDS, NOTICES AND CERTAIN RIGHTS OF GUARANTOR. Guarantor
waives any right to require Guaranteed Party to (a) proceed with or exhaust
remedies against Obligor; (b) proceed against or exhaust any security held from
Obligor or Guarantor; (c) pursue any other remedy available to Guaranteed Party
whatsoever; or (d) proceed against any other persons or guarantors who may be
liable to Guaranteed Party in whole or in part for the Indebtedness. Guarantor
waives any defense arising by reason of any disability or other defense of
Obligor or by reason of the cessation or modification from any cause whatsoever
of the liability of Obligor. Guarantor shall have no right to subrogation, and
waives any right to enforce any remedy which Guaranteed Party now has or may
hereafter have against Obligor, and waives any benefit of, and any right to
participate in any security now or hereafter held by Guaranteed Party. Guarantor
waives diligence, all presentments, demands for performance, notices of
non-performance, default, protests, notices of protest, notices of dishonor,
notices of acceptance of this Guaranty and of the existence, creation, or
incurring of new, changes, modified, increased or additional Indebtedness, all
other notices of every and any kind. Guarantor hereby further agrees that no
payment or performance hereunder by Guarantor shall give rise to any claim of
Guarantor against Guaranteed Party.

a)   Where there is but a single Obligor, or where a single Guarantor executes
     this Guaranty, then all words used herein in the plural shall be deemed to
     have been used in the singular where the context and construction so
     require; and when there is more than one Obligor named herein, or when this
     Guaranty is executed by more than one Guarantor, the words "Obligor" and
     "Guarantor" respectively shall mean all and any one or more of them.

b)   Guarantor agrees to pay on demand to Guaranteed Party all costs and
     expenses of collection (including, without limitation, the fees and
     disbursements of counsel) incident to the enforcement, protection on
     preservation of any right or claim of Guaranteed Party under this Guaranty
     against Guarantor as a result of breach of this Guaranty by Guarantor.

c)   If any provision of this Guaranty shall contravene or be invalid under
     applicable law or regulation (including Federal law and regulation), such
     contravention or invalidity shall not affect the entire Guaranty, the
     provisions held to be invalid to be deemed deleted or modified and the
     Guaranty interpreted and construed as though such invalid provision or
     provisions were not part hereof or conformed thereto.

d)   Guaranteed Party may give notice to Guarantor or make a request of
     Guarantor in the U.S. mail, first class postage prepaid, addressed to
     Guarantor at its address below, or an address furnished by Guarantor to
     Guaranteed Party. All notices to be given by Guarantor hereunder shall be
     deemed adequately given if sent by registered or certified mail to
     Guaranteed Party at the address of Guaranteed Party stated herein, or at
     such other place as Guaranteed Party may designate to Guarantor in writing.

e)   This Guaranty shall be binding upon successors and assigns of Guarantor,
     but no assignment hereof, or of any right to any funds due or to become due
     under this Guaranty, shall in any event relieve Guarantor of its
     obligations hereunder.

<PAGE>   10

f)   This Guaranty constitutes the entire agreement of the parties with respect
     to the subject matter hereof. ANY VARIATION OR MODIFICATION OF THIS
     GUARANTY AND ANY WAIVER OF ANY OF ITS PROVISIONS SHALL NOT BE VALID UNLESS
     IN WRITING AND SIGNED BY AN AUTHORIZED OFFICER OR MANAGER OF GUARANTEED
     PARTY.

g)   GUARANTOR WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY LITIGATION ARISING
     HEREFROM OR IN RELATION HERETO.

h)   THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
     LAWS OF THE STATE OF NEW YORK.

     IN WITNESS WHEREOF, Guarantor (and each of them if there are more than
one), has caused this Guaranty to be executed and delivered by its officer
hereunder duly authorized independent of any other party and not relying upon or
in consideration of the execution hereof by any other party, this 27th day of
April, 1999.

                                        Sea View Restaurants, Inc.

                                        Guarantor


                                        By: /s/ Samuel E. Chilakos
                                            ------------------------------------

                                        Name: Samuel E. Chilakos

                                        Title: Vice President, Finance


                                        By: /s/ Martin Sniewski
                                            ------------------------------------

                                        Name: Martin Sniewski

                                        Title:
                                               ---------------------------------

                                        ----------------------------------------
                                        (Seal)

<PAGE>   11

                               SECURITY AGREEMENT

                                                 Security Agreement No. 30-00095


     THIS SECURITY AGREEMENT (the "Security Agreement"), dated as of March 15,
1999 made by and between LYON CREDIT CORPORATION, a Delaware corporation, with
an office address at 1266 East Main Street, Stamford, Connecticut 06902-3546
(together with its successors and assigns, if any, "Secured Party") and
California Beach Restaurants, a Corporation with its residence, mailing address
and principal place of business at 17383 Sunset Blvd., Suite 140, Pacific
Palisades, CA 90272 ("Borrower");

                                   WITNESSETH:

1.   GRANT OF SECURITY INTEREST: To secure payment on each Note made by Borrower
in the form attached hereto as Exhibit "A" together with any extensions or
renewals thereof, and any amendments or modifications thereto (each, a "Note",
and collectively, the "Notes"), and also to secure any other indebtedness,
obligation, or liability of the Borrower to the Secured Party, whether direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising and no matter how acquired by Secured Party, including, but
not limited to, all future advances or loans which may be made at the option of
the Secured Party to or on behalf of Borrower (all the foregoing hereinafter
called the "Indebtedness"), Borrower hereby grants and conveys to the Secured
Party a first security interest in, and mortgages to the Secured Party, each
unit of property (such unit, an "Item") described in a Schedule in the form
attached hereto as Exhibit "B" (a "Schedule") and accepted by Borrower in any
Delivery and Acceptance Certificate in the form attached to such Schedule (a
"Certificate"), all products and proceeds thereof, if any, all additions,
attachments, accessories and accessions thereto and any and all substitutions,
replacements or exchanges thereto, and any and all insurance and/or other
proceeds thereof, including, but not limited to, every permitted lease or
sublease, howsoever designated, covering all or any part thereof (all or any of
the foregoing hereinafter collectively called the "Collateral").

     TO HAVE AND TO HOLD the Collateral with the power and authority and subject
to the terms and conditions set forth in this Security Agreement.

2.   REPAYMENT: Borrower will duly and punctually pay the Indebtedness secured
by this Security Agreement in accordance with the terms of the Notes and this
Security Agreement. Payments of Indebtedness shall be made to Secured Party at
its office address stated above, except as otherwise directed by Secured Party,
and shall not be prorated for any cause or reason except as herein may be
specifically provided. Payments shall be due periodically as specified in the
applicable Note, except that in the event any month in which a payment is due
does not contain a numbered day equal to such payment day specified, payment
shall be made on the last day of such month. If any payment is not made within
ten (10) days after due date, Borrower agrees to pay a late charge of five cents
(5cents) per dollar on, and in addition to, the amount of such payment, but not
exceeding the lawful maximum, if any.

3.   OBLIGATIONS ABSOLUTE: The obligations of Borrower under this Security
Agreement shall be absolute and unconditional under all circumstances
whatsoever, including, but not limited to, the existence of any claim, set-off,
defense, counterclaim or recoupment to any present or future claim of Borrower
against Secured Party under this Security Agreement or otherwise, against the
manufacturer or seller of any of the Collateral or against any other person or
entity for whatever reason. This Security Agreement shall not terminate, nor
shall the obligations of Borrower be affected, by reason of any defect in title
to, damage to or any loss or destruction of, the Collateral from whatsoever
cause, or the interference with the use thereof by any person or entity, or the
invalidity or unenforceability or lack of due authorization in respect of this
Security Agreement or any lack of right, power or authority of the

<PAGE>   12

Secured Party to enter into this Security Agreement, or any failure of Secured
Party to perform any obligation of Secured Party or Borrower or any other person
or entity under this Security Agreement or any instrument or document executed
in connection herewith, or for any other cause, whether similar or dissimilar to
the foregoing, any present or future law or regulation to the contrary
notwithstanding, it being the express intention of Secured Party and Borrower
that all payments by Borrower shall be, and continue to be, payable in all
events unless the obligation to pay the same shall be terminated pursuant to the
express provisions of this Security Agreement.

4.   REPRESENTATIONS AND WARRANTIES: Borrower represents and warrants as of the
date of this Security Agreement that:

     a)   Borrower is a Corporation duly organized and validly existing in good
          standing under the laws of its state of organization and has the
          [Corporate, Partnership] power to enter into and perform its
          obligations under this Security Agreement,

     b)   this Security Agreement has been duly authorized, executed and
          delivered by Borrower and, assuming due authorization, execution and
          delivery by Secured Party, is a legal, valid and binding obligation of
          Borrower, enforceable in accordance with its terms except as may be
          limited by applicable bankruptcy, insolvency, reorganization,
          moratorium or other similar laws affecting the rights of creditors
          generally, and general principles of equity, regardless of whether
          such enforceability is considered in a proceeding in equity or at law,

     c)   the execution and delivery by Borrower of this Security Agreement is
          not, and the performance by it of its obligations hereunder will not
          be, inconsistent with Borrower's [articles or certificate of
          incorporation or by-laws] [partnership agreement], do not and will not
          contravene any law, governmental rule or regulation, judgment or order
          applicable to Borrower, and do not and will not contravene any
          provision of, or constitute a default under, any indenture, mortgage,
          contract or other instrument to which Borrower is a party or by which
          it is bound,

     d)   no consent or approval of, giving of notice to, registration with, or
          taking of any other action in respect to or by, any federal, state or
          local governmental authority or agency or other entity is required
          with respect to the execution, delivery and performance by Borrower of
          this Security Agreement, or if any such approval, notice, registration
          or action is required, it has been duly given or obtained,

     e)   there are no suits or proceedings pending or threatened in court or
          before any commission, board or other administrative agency against or
          affecting Borrower, which will have a material adverse effect on the
          ability of Borrower to fulfill its obligations under this Security
          Agreement,

     f)   each financial statement and other related information furnished to
          Secured Party by Borrower has been prepared in accordance with
          generally accepted accounting principles and, since the date of the
          most recent financial statement so delivered, there has been no
          material adverse change (as that term is defined in paragraph 12 (k)
          below),

     g)   this Security Agreement shall be effective against all creditors of
          Borrower under applicable law, including, without limitations,
          fraudulent conveyance and bulk transfer laws, and

     h)   the Collateral will at all times be used solely in the conduct of the
          business of Borrower and be and remain in the possession and control
          of Borrower.

     i)   Borrower shall be "Year 2000 Compliant" by January 1, 2000. For
          purposes of this paragraph, "Year 2000 Compliant" means that all
          software, embedded microchips and other processing capabilities
          utilized by, and material to the business operations or

<PAGE>   13

          financial condition of Borrower are able to interpret, store,
          transmit, receive and manipulate data on and involving all calendar
          dates in and after the Year 2000. From time to time, at the request of
          the Lender, Borrower shall provide to Lender such information as is
          requested regarding the status of its efforts to become Year 2000
          compliant.

5.   LIENS: Borrower is the lawful owner of the Collateral. Borrower shall keep
the Collateral free and clear from all liens, charges, encumbrances and security
interests of any kind ("Liens"), except for

     (i)  the Lien of Secured Party, as provided in this Security Agreement,

     (ii) Liens for taxes either not yet due or being contested by Borrower in
          good faith with due diligence and by appropriate proceedings, so long
          as such proceedings do not, in the opinion of Secured Party, involve
          any material danger of sale, forfeiture or loss of Collateral or any
          part thereof or title thereto or interest therein,

     (iii) inchoate materialmen's, mechanics', workmen's, repairmen's,
          employees', carriers', warehousemen's or other like Liens arising in
          the ordinary course of business of Borrower and not delinquent and
          Borrower shall be maintaining adequate reserves therefor. Secured
          Party shall, at its own cost and expense, promptly take such action as
          may be necessary to discharge duly all Secured Party's Liens upon full
          payment and satisfaction of all Indebtedness.

6.   USE AND OPERATION:

     (a)  Borrower shall not assign, sublet, mortgage, hypothecate or alter any
          of the Collateral or any interest in this Security Agreement, nor
          shall Borrower remove any of the Collateral from the specified place
          of Collateral location, without the prior written consent of Secured
          Party, and any attempt so to assign, sublet, mortgage, hypothecate,
          alter or remove any of the Collateral without the prior written
          consent of the Secured Party shall be void and without effect.

     (b)  Borrower will not, without the prior written consent of Secured Party,
          affix or install any accessory, equipment, or device on any Collateral
          if such addition will impair the originally intended function or use
          of any such Collateral or its value in place. Borrower agrees that
          each Item of Collateral shall prior to its installation be personal
          property under applicable law. Borrower agrees to take such action as
          shall be required by Secured Party from time to time to protect the
          rights and interests of Secured Party in each such item. Borrower will
          not, without the prior written consent of Secured Party and subject to
          such conditions as Secured Party may impose for its protection, affix
          or install any Collateral to or in any other personal property.
          Secured Party and Borrower agree that each Item of Collateral and
          every part thereof is severed from any real property and, even if
          physically attached to any real property, it is the intention of
          Secured Party and Borrower that such Item

          (i)  shall retain the character of personal property,

          (ii) shall be removable,

          (iii) shall be treated as personal property with respect to the rights
               of all persons and entities,

          (iv) shall not become part of any real property, and

          (v)  by virtue of its nature as personal property, shall not be
               affected in any way by any instrument dealing with any real
               property.

<PAGE>   14

Borrower represents that it has not entered into, and agrees that it will not
enter into, any agreement or other arrangement which prohibits or restricts in
any manner the right of Secured Party or Borrower to sever Items of Collateral
from the real property on which they are located, to sever Items of Collateral
from any other equipment or personal property to which such Items are attached
or to remove Items of Collateral from the place where they are then located.

7.   MAINTENANCE AND SERVICE:

     (a)  Items of Collateral shall be used only in the manner for which they
          were designed and intended and Borrower will at its sole expense at
          all times maintain Collateral in good operating order, repair,
          condition and appearance and keep Collateral protected from the
          elements, ordinary wear and tear excepted. Borrower will, at all
          times, operate and maintain each Item of Collateral in accordance with

          (i)  the standards applied by Borrower with respect to similar
               equipment owned or leased by it and

          (ii) prudent operating and maintenance standards and manufacturer's
               requirements. Borrower will not use or operate any Item of
               Collateral in violation of applicable laws and regulations
               (including all applicable environmental and occupational safety
               laws).

     (b)  Any alterations or modifications with respect to Collateral that may
          at any time prior to full repayment of the Indebtedness secured hereby
          be required to comply with any applicable law or any governmental rule
          or regulation shall be made by Borrower as required and at the sole
          expense of Borrower.

8.   REPORTS:

          (i)  Borrower agrees that Secured Party shall not be responsible for
               any loss or damage to Borrower, its customers or any other third
               parties caused by the Collateral, any failure thereof or defect
               therein, or otherwise. Nevertheless, Borrower will immediately
               notify Secured Party in reasonable detail of each accident
               arising out of any alleged or apparent improper manufacturing,
               functioning or operation of any Collateral;

          (ii) Borrower will notify Secured Party in writing within ten (10)
               days after any day in which any Lien shall attach to any
               Collateral not expressly permitted hereby of the full particulars
               thereof and of the then location of such Collateral on such day;

          (iii) Borrower will notify Secured Party forthwith in writing of the
               location of any Collateral moved by Borrower from the place where
               delivered to Borrower or from the location specified in this
               Security Agreement or any subsequent agreement executed by the
               parties and Borrower will not change or discontinue its place or
               places of business and/or residence and/or name;

          (iv) Borrower will within ninety (90) days of the close of each of its
               fiscal years deliver to Secured Party Borrower's balance sheet
               and profit and loss statement prepared in accordance with
               generally accepted accounting principles and, to the extent
               available, certified to by a recognized firm of certified public
               accountants. Borrower will deliver to Secured Party, within sixty
               (60) days of the close of each of its fiscal quarters, Borrower's
               quarterly financial report (which shall be in reasonable detail)
               prepared in accordance with generally accepted accounting
               principles and certified to by the chief financial officer of
               Borrower; and

<PAGE>   15

          (v)  Borrower will permit Secured Party to inspect and examine
               Collateral at such times and from time to time during normal
               business hours as Secured Party may wish (and at such other times
               as may be mutually agreeable) and without any requirement for
               advance notice, provided that such examination and inspection
               shall not unreasonably interfere with Borrower's normal business
               operations.

9.   RISK OF LOSS:

     a)   Borrower is solely responsible for the entire risk of use and
          operation, and for each and every cause or hazard, and all loss and
          damage to any and all Collateral whether arising through operation or
          otherwise. In the event of damage to any Item of Collateral, Borrower,
          at its cost and expense, shall promptly repair the Item, restoring it
          to its previous condition or the condition in which it was required to
          be assuming Borrower had met all its obligations for maintenance of
          the Collateral. Upon the occurrence of an Event of Loss (defined
          below) with respect to any Item, Borrower shall prepay to Secured
          Party an amount of Indebtedness under the Note relating to the
          Schedule hereto in which such Item is described equal to the sum of

          (i)  all interest theretofore accruing, and unpaid thereon, with
               respect to such Item, plus

          (ii) the unpaid principal balance of the Note with respect such item,
               plus

          (iii) an amount equal to two (2%) percent of the unpaid principal
               balance of the Note with respect to such Item.

Provided Borrower is not in breach or default of this Security Agreement, any
proceeds of insurance received by Secured Party with respect to any such loss
shall be paid to Borrower to the extent necessary to reimburse Borrower costs
incurred and paid by Borrower in repairing damaged Equipment or as a credit
against total amount payable by Borrower with respect to the Collateral
involved, as the case may be, all as provided in this Security Agreement.

     b)   For the Purpose hereof "Event of Loss" shall mean, with respect to any
          Item of Collateral, if such Item is

          (i)  destroyed, condemned, irreparably damaged or damaged beyond
               economic repair,

          (ii) requisitioned for use by a governmental entity for an indefinite
               period or stated period extending beyond a period in excess of
               ninety (90) consecutive days or the final installment payment
               date stated on the applicable Note, whichever is earlier,

          (iii) the subject of an insurance settlement with respect to such Item
               of Collateral on the basis of a constructive total loss,

          (iv) stolen or lost and not recovered within thirty (30) days,

          (v)  the subject of a condemnation or requisition of title by a
               governmental entity, or

          (vi) prohibited by applicable law from being used by Borrower for a
               period of ninety (90) consecutive days or the final installment
               payment date on the applicable Note, whichever is earlier.

10.  INSURANCE:

     (a)  Borrower, at its own cost and expense shall obtain, maintain and shall
          keep the Collateral insured against all risks of loss or damage from
          every cause whatsoever in an amount not less than the greater of
          actual cash value or the aggregate amount of all unpaid

<PAGE>   16

          Indebtedness as at any time, without deductible and without
          co-insurance (except as Secured Party may approve in writing).
          Borrower shall also obtain and maintain, in accordance with industry
          standards, until repayment in full of the Indebtedness, public
          liability insurance covering liability for bodily injury, including
          death, and property damage resulting from the purchase, ownership,
          leasing, maintenance, use or operation of the Collateral in an amount
          of at least $1,000,000 [WITH RESPECT TO EACH SEPARATE SCHEDULE
          HERETO], or in such greater amounts as Secured Party may from time to
          time require. Secured Party shall be the sole named loss-payee with
          respect to damage or loss to the Collateral and shall be a named
          additional insured on the public liability insurance. All insurance
          shall be with insurers and in form satisfactory to Secured Party;
          shall provide for at least thirty (30) days advance written notice to
          Secured Party before any cancellation or material modification
          thereof; shall waive any claim for premium against Secured Party; and
          shall not be invalidated or the insurer's liability to or for or on
          behalf of Secured Party be diminished or affected by any breach of
          warranty or representation or other act or omission of the Borrower.
          Upon request, Borrower shall deliver to Secured Party the original
          policy or policies of insurance, certificates of insurance or other
          evidence satisfactory to Secured Party evidencing the insurance
          required hereby. Secured Party may, at its option, apply proceeds of
          insurance, in whole or in part, to

          (A)  repair or replace Collateral or any portion thereof, or (B)
          satisfy any obligation of Borrower to Secured Party hereunder.

     (b)  Secured Party is authorized, but under no duty, to obtain such
          insurance upon failure of the Borrower to do so. Borrower shall give
          immediate written notice to the Secured Party and to insurers of loss
          or damage to the Collateral and shall promptly file proofs of loss
          with insurers. Borrower hereby irrevocably appoints the Secured Party
          as attorney-in-fact, coupled with an interest, for the Borrower in
          obtaining, adjusting and canceling any such insurance and endorsing
          settlement drafts and hereby assigns to the Secured Party all sums
          which may become payable under such insurance, including return
          premiums and dividends, as additional security for the Indebtedness.

11.  EXPENSES; INDEMNIFICATION:

     (a)  Expenses. Borrower shall pay to Secured Party on demand any and all
          expenses, including reasonable attorneys' fees and legal expenses,
          which are incurred by Secured Party (i) in the prosecution or defense
          of any action arising out of or connected with the subject matter of
          this Security Agreement, the Indebtedness, the Collateral or any of
          Secured Party's rights therein, and (ii) in connection with the
          custody, preservation, protection, use, operation, preparation for
          sale or sale of any Collateral, the incurring of all of which are
          hereby authorized to the extent Secured Party deems the same
          advisable.

     (b)  Indemnification. Borrower hereby agrees to indemnify Secured Party and
          its affiliates, and their respective directors, officers, employees,
          agents, counsel and other advisors (each an "Indemnified Person")
          against, and hold each of them harmless from, any and all liabilities,
          obligations, losses, claims, damages, penalties, actions, judgments,
          suits, costs, expenses or disbursements of any kind or nature
          whatsoever, including reasonable attorneys' fees and legal expenses,
          to an Indemnified Person, which may be imposed on, incurred by, or
          asserted against any Indemnified Person, in any way relating to or
          arising out of the Collateral, this Security Agreement or the
          transactions contemplated hereby or any action taken or omitted to be
          taken by it hereunder (the "Indemnified Liabilities"); provided that
          Borrower shall not be liable to a particular Indemnified Person for
          any portion of such Indemnified Liabilities to the extent such
          Indemnified Person is found by

<PAGE>   17

          a final decision of a court of competent jurisdiction to have resulted
          from such Indemnified Person's gross negligence or willful misconduct.
          If and to the extent that the foregoing indemnification is for any
          reason held unenforceable, Borrower agrees to make the maximum
          contribution to the payment and satisfaction of each of the
          Indemnified Liabilities which is permissible under applicable law.

12.  DEFAULT; REMEDIES: If any of the following (herein an "Event of Default")
shall occur:

     (a)  Borrower shall default in the payment of Indebtedness to Secured Party
          or in making any other payment hereunder or under any Note when due,
          and such default shall continue for a period of ten (10) days without
          its cure by Borrower, or

     (b)  Borrower shall default in the payment when due of any obligations of
          Borrower, whether or not to Secured Party, arising independently of
          this Security Agreement or any Note, and such default shall continue
          for a period of ten (10) days without its cure by Borrower, or

     (c)  Borrower shall default in the performance of any other covenant
          contained herein (including any Schedule hereto), any Certificate in
          respect hereof or any Note or any other document entered into in
          connection with this Security Agreement and such default shall
          continue for fifteen (15) days after written notice thereof to
          Borrower by Secured Party, or

     (d)  Borrower shall breach any of its insurance obligations under paragraph
          10 hereof,

     (e)  any representation or warranty made by Borrower in this Security
          Agreement or any other documents entered into in connection with this
          Security Agreement shall prove to be incorrect in any material respect
          when any such representation or warranty was made or given, or

     (f)  Borrower shall become insolvent or make an assignment for the benefit
          of creditors, or

     (g)  Borrower shall apply for or consent to the appointment of a receiver,
          trustee or liquidator for a substantial part of its property or such
          receiver, trustee or liquidator is appointed without the application
          or consent of Borrower, or

     (h)  a petition shall be filed by or against Borrower under the Federal
          bankruptcy laws (including, without limitation, a petition for
          reorganization, arrangement or extension) or under any other
          insolvency law or law providing for the relief of debtors, if such
          petition is not dismissed within thirty (30) days, or

     (i)  there is, without the prior consent of Secured Party, a change in
          control (defined to be a change in the possession, directly or
          indirectly, of the power to direct or cause the direction of the
          management and policies of Borrower, whether through the ownership of
          voting securities, by contract or otherwise), or

     (j)  there is a material adverse change (defined to be a decrease of at
          least one-third (1/3) of net worth, as determined in accordance with
          generally accepted accounting principles) in Borrower's or any
          guarantor's financial condition;

then, to or more the extent permitted by applicable law, Secured Party shall
have the right to exercise any one of the following remedies one or more times:

     A)   declare this Security Agreement in default, such declaration being
          applicable to all Schedules hereunder except as specifically excepted
          by Secured Party;

     B)   declare the entire amount of unpaid total Indebtedness immediately due
          and payable;

<PAGE>   18

     C)   declare due and payable in addition to any unpaid Indebtedness due on
          or before Secured Party declares this Security Agreement in default,
          as liquidated damages for loss of a bargain and not as a penalty, an
          amount calculated in accordance with the provisions of paragraph 9 as
          though the Collateral had suffered an Event of Loss, as of the date
          that Secured Party declares this Security Agreement in default;

     D)   declare due and payable the amount of any indemnification hereunder if
          then determinable, with interest as provided herein;

     E)   upon notice to any lessees or sublessees permitted pursuant to
          paragraph 6(a) to obtain and retain all rentals thereafter due, paid
          and/or payable;

     F)   without demand or legal process enter into premises where the
          Collateral may be found and take possession of and remove the same,
          whereupon all rights of Borrower in the Collateral shall terminate
          absolutely, and either

          (i)  retain all prior payments of Indebtedness and sell the Collateral
               at public or private sale, with or without having the Collateral
               at the sale, at which sale Secured Party may purchase all or any
               of the Collateral, the proceeds of such sale, less expenses of
               retaking, storage, repairing and reselling, and reasonable
               attorneys' fees incurred by Secured Party, to be applied to the
               payment of the unpaid total Indebtedness, Borrower remaining
               liable for the balance of said unpaid total Indebtedness, and any
               surplus thereafter remaining to be for the account of Borrower
               (except as otherwise provided under applicable law) or

          (ii) retain the Collateral and all prior payments of Indebtedness, in
               satisfaction of the remaining unpaid Indebtedness;

     G)   pursue any other remedy then available to Secured Party at law or in
          equity. Borrower hereby covenants and agrees to notify Secured Party
          immediately of the occurrence of any default specified in this
          paragraph 12.

13.  REMEDIES CUMULATIVE: Time of performance of Borrower's obligations
hereunder is of the essence. All remedies of Secured Party hereunder are
cumulative, and may, to the extent permitted by law, be exercised concurrently
or separately, and the exercise of any one remedy shall not be deemed to be an
election of such remedy to the exclusion of any other remedy or to preclude the
exercise of any other remedy at any other time. Failure on the part of the
Secured Party to exercise, or delay in exercising, any right or remedy hereunder
or Secured Party's failure at any time to restrict performance by Borrower of
any of the provisions hereof shall not operate as a waiver thereof; nor shall
any single or partial exercise by Secured Party of any right or remedy hereunder
preclude any other further exercise thereof or the exercise of any other right
or remedy.

14.  ASSIGNMENT: Borrower acknowledges, and understands that Secured Party may
assign this Security Agreement, any Schedule or Certificate or any Note to a
bank or any other lending institution or any other person, organization or
agency, and Borrower shall

          (a)  recognize any such assignment,

          (b)  accept the lawful demands of such assignee,

          (c)  surrender assigned Collateral only to such assignee,

          (d)  pay all Indebtedness payable hereunder and do any and all things
               required of Borrower hereunder, notwithstanding any default of
               the Secured Party or the existence of any claim, defense or
               offset between Borrower and Secured Party, and

<PAGE>   19

          (e)  not require any assignee of the Security Agreement to perform any
               duty, covenant or condition required to be performed by Secured
               Party under the terms of this Security Agreement provided that
               Secured Party shall remain liable for such performance. The
               obligations of Borrower shall not be subject, as against any such
               assignee or transferee, to any defense, set-off or counterclaim
               available to Borrower against Secured Party and any such defense,
               set-off or counterclaim may be asserted only against Secured
               Party.

15.  FILINGS:

(a)  Borrower agrees to execute any instrument or instruments necessary or
expedient for filing, recording, perfecting, or notifying of the interest of
Secured Party upon request of, and as determined by, Secured Party. Borrower
hereby specifically authorizes Secured Party to file financing statements not
signed by Borrower or to execute same for and on behalf of Borrower as
Borrower's attorney-in-fact, irrevocably and coupled with an interest, for such
purposes. A carbon, photographic or other reproduction of the Security Agreement
or a financing statement shall be sufficient as a financing statement for filing
purposes.

(b)  Without limiting the foregoing paragraph (a), Borrower hereby acknowledges
and agrees that the normal practice of Secured Party is to electronically file
financing statements through computerized filing services such as CSC- The
United States Corporation Company ("Filing Service"). The Filing Service
pursuant to a Power of Attorney delivered by Secured Party will execute the
financing statement on behalf of both Borrower (and Secured Party where
applicable or where desired by Secured Party as not all states require execution
of Secured Party on financing statements). The names of Borrower and Secured
Party, addresses, and collateral description on the computerized financing
statement filing shall be the same as on the financing statement executed by
Borrower but the format and spacing may vary in non-material ways. Borrower
acknowledges that the original financing statement executed by Borrower shall be
retained in the collateral files of Secured Party but may be filed by Secured
Party should it deem it necessary. In connection with the foregoing process,
Borrower hereby authorizes and appoints Secured Party and the applicable Filing
Service as Borrower's agent and attorney-in-fact, irrevocably and coupled with
an interest for the execution and filing of the financing statements and fully
acknowledges and agrees and has initialed this paragraph as additional
affirmation as to the full enforceability of this power of attorney for such
purposes.

     BORROWER
              -------------
                        INT.

16.  MISCELLANEOUS:

          (a)  In case of failure of Borrower to comply with any provision of
               this Security Agreement, Secured Party shall have the right, but
               shall not be obligated, to effect such compliance in whole or in
               part, and all moneys spent and expenses and obligations incurred
               or assumed by Secured Party in effecting such compliance
               (including but not limited to, attorneys' fees and costs incurred
               in attempting to effect compliance against Borrower and/or
               others) shall constitute additional Indebtedness hereby secured
               due to Secured Party five (5) days after the date Secured Party
               sends notice to Borrower requesting payment. Secured Party's
               effecting such compliance shall not be waiver of Borrower's
               default. Interest on any payments made by Secured Party hereunder
               on amounts due after Secured Party declares default under
               paragraph 12 and interest on any overdue payment under paragraph
               11 shall be at the default rate prescribed in the Note, (or, if
               there is more than one Note, at the highest among the default
               rates prescribed in such Notes), but not to exceed the maximum
               lawful rate. Any

<PAGE>   20

               provisions in this Security Agreement, any Schedule hereto or
               Certificate in respect hereof which are in conflict with any
               statute, law or rule applicable shall be deemed omitted, modified
               or altered to conform thereto.

          (b)  If any provision of this Security Agreement shall contravene or
               be invalid under applicable law or regulation (including federal
               law and regulation), such contravention or invalidity shall not
               affect the entire Security Agreement, the provisions held to be
               invalid to be deemed deleted or modified and the Security
               Agreement interpreted and construed as though such invalid
               provision or provisions were not part hereof or conformed
               thereto.

          (c)  Any notice, report or other communication required or permitted
               to be given or made under this Security Agreement by one of the
               parties hereto to the other shall be in writing and shall be
               deemed to have been sufficiently given or made for all purposes
               if (i) sent by facsimile, or (ii) sent by U.S. mail, first class,
               postage prepaid, addressed to such other party at its respective
               address as set forth herein or to such other address as the
               addressee shall theretofore furnish in writing to the addressor.
               All such notices, reports and other communications shall be
               effective when received.

          (d)  This Security Agreement, any addendum hereto attached and signed
               by Secured Party and Borrower, any Schedule hereto and any
               Certificate in respect hereof, constitute the entire agreement of
               the parties with respect to the subject matter hereof. THIS
               SECURITY AGREEMENT, ANY VARIATION OR MODIFICATION OF THIS
               SECURITY AGREEMENT, ANY WAIVER OF ANY OF ITS PROVISIONS OR
               CONDITIONS AND ALL SCHEDULES SHALL NOT BE VALID UNLESS IN WRITING
               AND SIGNED BY AN AUTHORIZED OFFICER OR MANAGER OF SECURED PARTY.

          (e)  BORROWER WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY LITIGATION
               ARISING HEREFROM OR IN RELATIONS HERETO.

          (f)  THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
               ACCORDANCE WITH, THE LAWS OF THE STATE OF CONNECTICUT, WITHOUT
               REGARD TO CONFLICT OF LAW PRINCIPLES.

          (g)  BORROWER IRREVOCABLY (A) AGREES THAT ANY LEGAL OR EQUITABLE
               PROCEEDING AGAINST IT OR RELATING TO THIS SECURITY AGREEMENT OR
               ANY TRANSACTION CONTEMPLATED HEREBY OR THE SUBJECT MATTER HEREOF
               MAY BE INSTITUTED IN THE U.S. DISTRICT COURT FOR THE DISTRICT OF
               CONNECTICUT OR, IN THE EVENT THAT COURT LACKS JURISDICTION, ANY
               CONNECTICUT STATE COURT IN THE COUNTY OF FAIRFIELD, (B) WAIVES
               ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAY OF
               VENUE OF ANY PROCEEDING BROUGHT IN SUCH COURT, (C) SUBMITS ITSELF
               GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH
               COURT FOR PURPOSES OF ANY PROCEEDING, WITH RESPECT TO ITS PERSON
               AND PROPERTY, AND (D)WAIVES PERSONAL SERVICE OF PROCESS AND
               AGREES THAT SERVICE MAY BE MADE BY PERSONAL DELIVERY OR BY
               MAILING BY CERTIFIED MAIL, POSTAGE PREPAID, ADDRESSED TO BORROWER
               AT ITS ADDRESS.

     IN WITNESS WHEREOF, the parties hereto have executed this Security
Agreement as of the date first above written.

<PAGE>   21

                                        California Beach Restaurants,

                                        as Borrower


                                        By: /s/ Samuel E. Chilakos
                                            ------------------------------------

                                        Name: Samuel E. Chilakos
                                             -----------------------------------

                                        Title: Vice President, Finance
                                              ----------------------------------


LYON CREDIT CORPORATION,

as Secured Party


By: /s/ Stephen B. Peterson
    -----------------------------------

Name: Stephen B. Peterson
     ----------------------------------

Title: Assistant Vice President
      ---------------------------------
<PAGE>   22

                               SECURITY AGREEMENT

                                             Security Agreement No. ____________

        THIS SECURITY AGREEMENT (the "Security Agreement"), dated as of __ April
27, 1999 made by and between LYON CREDIT CORPORATION, a corporation organized
and existing under the laws of the State of Delaware, with an office address at
1266 East Main Street, Stamford, Connecticut 06902-3546 (together with its
successors and assigns, if any, "Secured Party") and Sea View Restaurants, Inc.
dba: Gladstones 4 Fish, corporation organized and existing under the laws of the
State of California with its residence, mailing address and principal place of
business at 17383 Sunset Blvd., Pacific Palisades, CA 90272 ("Guarantor");

                                   WITNESSETH:

1. GRANT OF SECURITY INTEREST: The security interest granted below is given (i)
to secure payment on each Note made by California Beach Restaurants, Inc.
("Borrower") in the original stated principal amount of $1,200,000.00 together
with any extensions or renewals thereof, and any amendments or modifications
thereto (each, a "Note", and collectively, the "Notes"), (ii) to secure the
obligations of Guarantor under and in connection with that certain Guaranty,
dated as of _____________ _______, 1999, guaranteeing the payment and
performance of the Note, Security Agreement, dated on even date therewith,
executed by Borrower for the benefit of Secured Party ("Borrower Security
Agreement") and the "Indebtedness" as further described in the Borrower Security
Agreement, and all related documentation ("Loan Documents"), and (iii) also to
secure any other indebtedness, obligation, or liability of the Guarantor to the
Secured Party, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising and no matter how acquired by
Secured Party, including, but not limited to, all future advances or loans which
may be made at the option of the Secured Party to or on behalf of Borrower
and/or Guarantor [all the foregoing in (i), (ii), and (iii) hereinafter called
the "Indebtedness"], Guarantor hereby grants and conveys to the Secured Party a
first security interest in, and mortgages to the Secured Party, any and all
furniture, equipment, fixtures, trade fixtures, furnishings, and all other
tangible personal property now owned or hereafter acquired by Guarantor,
together with all products and proceeds thereof, if any, all additions,
attachments, accessories and accessions thereto and any and all substitutions,
replacements or exchanges thereto, and any and all insurance and/or other
proceeds thereof, including, but not limited to, every permitted lease or
sublease, howsoever designated, covering all or any part thereof (all or any of
the foregoing hereinafter collectively called the "Collateral"). The purpose of
the Security Agreement is to ensure that Secured Party has a first lien security



                                       1
<PAGE>   23

interest in any and all furniture, equipment, fixtures, trade fixtures,
furnishings, and all other tangible personal property, now owned or hereafter
acquired, used in and in connection with the operation of that certain
restaurant entitled Gladstones 4 Fish, located at 17300 Pacific Coast Highway,
Pacific Palisades, California 90272

        TO HAVE AND TO HOLD the Collateral with the power and authority and
subject to the terms and conditions set forth in this Security Agreement.

2. PAYMENT: Guarantor will duly and punctually pay the Indebtedness secured by
this Security Agreement in accordance with the terms of the Guaranty. In no
event shall any payments be refunded to Guarantor.

3. OBLIGATIONS ABSOLUTE: The obligations of Guarantor under this Security
Agreement shall be absolute and unconditional under all circumstances
whatsoever, including, but not limited to, the existence of any claim, set-off,
defense, counterclaim or recoupment to any present or future claim of Guarantor
against Secured Party under this Security Agreement or otherwise, against the
manufacturer or seller of any of the Collateral or against any other person or
entity for whatever reason. This Security Agreement shall not terminate, nor
shall the obligations of Guarantor be affected, by reason of any defect in title
to, damage to or any loss or destruction of, the Collateral from whatsoever
cause, or the interference with the use thereof by any person or entity, or the
invalidity or unenforceability or lack of due authorization in respect of this
Security Agreement or any lack of right, power or authority of the Secured Party
to enter into this Security Agreement, or any failure of Secured Party to
perform any obligation of Secured Party or Guarantor or any other person or
entity under this Security Agreement or any instrument or document executed in
connection herewith, or for any other cause, whether similar or dissimilar to
the foregoing, any present or future law or regulation to the contrary
notwithstanding, it being the express intention of Secured Party and Guarantor
that all payments by Guarantor shall be, and continue to be, payable in all
events unless the obligation to pay the same shall be terminated pursuant to the
express provisions of this Security Agreement.

4. REPRESENTATIONS AND WARRANTIES: Guarantor represents and warrants as of the
date of this Security Agreement that:

    a)  Guarantor is a corporation duly organized and validly existing in good
        standing under the laws of its state of organization and has the
        requisite power to enter into and perform its obligations under this
        Security Agreement,

    b)  this Security Agreement has been duly authorized, executed and



                                       2
<PAGE>   24

        delivered by Guarantor and, assuming due authorization, execution and
        delivery by Secured Party, is a legal, valid and binding obligation of
        Guarantor, enforceable in accordance with its terms except as may be
        limited by applicable bankruptcy, insolvency, reorganization, moratorium
        or other similar laws affecting the rights of creditors generally, and
        general principles of equity, regardless of whether such enforceability
        is considered in a proceeding in equity or at law,

    c)  the execution and delivery by Guarantor of this Security Agreement is
        not, and the performance by it of its obligations hereunder will not be,
        inconsistent with Guarantor's (articles or certificate of incorporation
        or by-laws), do not and will not contravene any law, governmental rule
        or regulation, judgment or order applicable to Guarantor, and do not and
        will not contravene any provision of, or constitute a default under, any
        indenture, mortgage, contract or other instrument to which Guarantor is
        a party or by which it is bound,

    d)  no consent or approval of, giving of notice to, registration with, or
        taking of any other action in respect to or by, any federal, state or
        local governmental authority or agency or other entity is required with
        respect to the execution, delivery and performance by Guarantor of this
        Security Agreement, or if any such approval, notice, registration or
        action is required, it has been duly given or obtained,

    e)  there are no suits or proceedings pending or threatened in court or
        before any commission, board or other administrative agency against or
        affecting Guarantor, which will have a material adverse effect on the
        ability of Guarantor to fulfill its obligations under this Security
        Agreement,

    f)  each financial statement and other related information furnished to
        Secured Party by Guarantor has been prepared in accordance with
        generally accepted accounting principles and, since the date of the most
        recent financial statement so delivered, there has been no material
        adverse change (as that term is defined in paragraph 12 (k) below),

    g)  this Security Agreement shall be effective against all creditors of
        Guarantor under applicable law, including, without limitations,
        fraudulent conveyance and bulk transfer laws, and

    h)  the Collateral will at all times be used solely in the conduct of the
        business of Guarantor and be and remain in the possession and control of
        Guarantor.



                                       3
<PAGE>   25

5. LIENS: Unless owned by Borrower, Guarantor is the lawful owner of the
Collateral. Guarantor shall keep the Collateral free and clear from all liens,
charges, encumbrances and security interests of any kind ("Liens") , except for

        a)      the Lien of Secured Party, as provided in this Security
                Agreement or in the Borrower Security Agreement,

        b)      Liens for taxes either not yet due or being contested by
                Guarantor in good faith with due diligence and by appropriate
                proceedings, so long as such proceedings do not, in the opinion
                of Secured Party, involve any material danger of sale,
                forfeiture or loss of Collateral or any part thereof or title
                thereto or interest therein,

        c)      inchoate materialmen's, mechanics', workmen's, repairmen's,
                employees', carriers', warehousemen's or other like Liens
                arising in the ordinary course of business of Guarantor and not
                delinquent and Guarantor shall be maintaining adequate reserves
                therefor. Secured Party shall, at its own cost and expense,
                promptly take such action as may be necessary to discharge duly
                all Secured Party's Liens upon full payment and satisfaction of
                all Indebtedness.

6.      USE AND OPERATION:

        a)      Guarantor shall not assign, sublet, mortgage, hypothecate or
                alter any of the Collateral or any interest in this Security
                Agreement, nor shall Guarantor remove any of the Collateral from
                the specified place of Collateral location, without the prior
                written consent of Secured Party, and any attempt so to assign,
                sublet, mortgage, hypothecate, alter or remove any of the
                Collateral without the prior written consent of the Secured
                Party shall be void and without effect.

        b).     Guarantor will not, without the prior written consent of Secured
                Party, affix or install any accessory, equipment, or device on
                any Collateral if such addition will impair the originally
                intended function or use of any such Collateral or its value in
                place. Guarantor agrees that each Item of Collateral shall prior
                to its installation be personal property under applicable law.
                Guarantor agrees to take such action as shall be required by
                Secured Party from time to time to



                                       4
<PAGE>   26

                protect the rights and interests of Secured Party in each such
                Item. Guarantor will not, without the prior written consent of
                Secured Party and subject to such conditions as Secured Party
                may impose for its protection, affix or install any Collateral
                to or in any other personal property. Secured Party and
                Guarantor agree that each Item of Collateral and every part
                thereof is severed from any real property and, even if
                physically attached to any real property, it is the intention of
                Secured Party and Guarantor that such Item



                i.      shall retain the character of personal property,

                ii.     shall be removable,

                iii.    shall be treated as personal property with respect to
                        the rights of all persons and entities,

                iv.     shall not become part of any real property, and

                v.      by virtue of its nature as personal property, shall not
                        be affected in any way by any instrument dealing with
                        any real property.

Guarantor represents that it has not entered into, and agrees that it will not
enter into, any agreement or other arrangement which prohibits or restricts in
any manner the right of Secured Party or Guarantor to sever Items of Collateral
from the real property on which they are located, to sever Items of Collateral
from any other equipment or personal property to which such Items are attached
or to remove Items of Collateral from the place where they are then located.

7.      MAINTENANCE AND SERVICE:

        a)      Items of Collateral shall be used only in the manner for which
                they were designed and intended and Guarantor will at its sole
                expense at all times maintain Collateral in good operating
                order, repair, condition and appearance and keep Collateral
                protected from the elements, ordinary wear and tear excepted.
                Guarantor shall, if at any time requested to do so by Secured
                Party, affix in a prominent position on



                                       5
<PAGE>   27

                each Item of Collateral plates, tags or other identifying labels
                showing the interest of Secured Party in the Collateral.
                Guarantor will, at all times, operate and maintain each Item of
                Collateral in accordance with

                        i.      the standards applied by Guarantor with respect
                                to similar equipment owned or leased by it and

                        ii.     prudent operating and maintenance standards and
                                manufacturer's requirements. Guarantor will not
                                use or operate any Item of Collateral in
                                violation of applicable laws and regulations
                                (including all applicable environmental and
                                occupational safety laws).

        b)      Any alterations or modifications with respect to Collateral that
                may at any time prior to full repayment of the Indebtedness
                secured hereby be required to comply with any applicable law or
                any governmental rule or regulation shall be made by Guarantor
                as required and at the sole expense of Guarantor.

8.      REPORTS:

        a)      Guarantor agrees that Secured Party shall not be responsible for
                any loss or damage to Guarantor, its customers or any other
                third parties caused by the Collateral, any failure thereof or
                defect therein, or otherwise. Nevertheless, Guarantor will
                immediately notify Secured Party of each accident arising out of
                any alleged or apparent improper manufacturing, functioning or
                operation of any Collateral, the time, place and nature of the
                accident and damage, the names and addresses of parties
                involved, persons injured, witnesses and owners of property
                damaged, and such other information as may be known, and
                promptly advise Secured Party of all correspondence, papers,
                notices and documents whatsoever received by Guarantor in
                connection with any claim or demand involving or relating to
                improper manufacturing, operation or functioning of any
                Collateral or charging Secured Party with liability;



        b)      Guarantor will notify Secured Party in writing within ten (10)
                days after any day in which any Lien shall attach to any
                Collateral not expressly permitted hereby of the full
                particulars thereof and of the then location of such Collateral
                on such day;



                                       6
<PAGE>   28

        c)      Guarantor will notify Secured Party forthwith in writing of the
                location of any Collateral moved by Guarantor from the place
                where delivered to Guarantor or from the location specified in
                this Security Agreement or any subsequent agreement executed by
                the parties and Guarantor will not change or discontinue its
                place or places of business and/or residence and/or name;

        d)      Guarantor will within ninety (90) days of the close of each of
                its fiscal years deliver to Secured Party Guarantor's balance
                sheet and profit and loss statement prepared in accordance with
                generally accepted accounting principles and, to the extent
                available, certified to by a recognized firm of certified public
                accountants. Guarantor will deliver to Secured Party, within
                sixty (60) days of the close of each of its fiscal quarters,
                Guarantor's quarterly financial report (which shall be in
                reasonable detail) prepared in accordance with generally
                accepted accounting principles and certified to by the chief
                financial officer of Guarantor; and



        e)      Guarantor will permit Secured Party to inspect and examine
                Collateral at such times and from time to time during normal
                business hours as Secured Party may wish (and at such other
                times as may be mutually agreeable) and without any requirement
                for advance notice, provided that such examination and
                inspection shall not unreasonably interfere with Guarantor's
                normal business operations.

9.      RISK OF LOSS:

        a)      Guarantor is solely responsible for the entire risk of use and
                operation, and for each and every cause or hazard, and all loss
                and damage to any and all Collateral whether arising through
                operation or otherwise. In the event of damage to any Item of
                Collateral, Guarantor, at its cost and expense, shall promptly
                repair the Item, restoring it to its previous condition or the
                condition in which it was required to be assuming Guarantor had
                met all its obligations for maintenance of the Collateral. Upon
                the occurrence of an Event of Loss (defined below) with respect
                to any Item, Guarantor shall prepay to Secured Party an amount
                of Indebtedness under the Note relating to the Schedule hereto
                in which such Item is described equal to the sum of



                                       7
<PAGE>   29

                i.      all interest theretofore accruing, and unpaid thereon,
                        with respect to such Item, plus

                ii.     the unpaid principal balance of the Note with respect
                        such item, plus

                iii.    an amount equal to two (2%) percent of the unpaid
                        principal balance of the Note with respect to such Item.

Provided Guarantor is not in breach or default of this Security Agreement, any
proceeds of insurance received by Secured Party with respect to any such loss
shall be paid to Guarantor to the extent necessary to reimburse Guarantor costs
incurred and paid by Guarantor in repairing damaged Equipment or as a credit
against total amount payable by Guarantor with respect to the Collateral
involved, as the case may be, all as provided in this Security Agreement.

        (b)     For the Purpose hereof "Event of Loss" shall mean, with respect
                to any Item of Collateral, if such Item is

                i.      destroyed, condemned, irreparably damaged or damaged
                        beyond economic repair,

                ii.     requisitioned for use by a governmental entity for an
                        indefinite period or stated period extending beyond a
                        period in excess of ninety (90) consecutive days or the
                        final installment payment date stated on the applicable
                        Note, whichever is earlier,

                iii.    the subject of an insurance settlement with respect to
                        such Item of Collateral on the basis of a constructive
                        total loss,

                iv.     stolen or lost and not recovered within thirty (30)
                        days,

                v.      the subject of a condemnation or requisition of title by
                        a governmental entity, or



                                       8
<PAGE>   30

                vi.     prohibited by applicable law from being used by
                        Guarantor for a period of ninety (90) consecutive days
                        or the final installment payment date on the applicable
                        Note, whichever is earlier.

10.     INSURANCE:

        (a)     Guarantor, at its own cost and expense shall obtain, or shall
                cause Borrower, at Borrower's own cost and expense, to (i)
                maintain and keep the Collateral insured against all risks of
                loss or damage from every cause whatsoever in an amount not less
                than the greater of actual cash value or the aggregate amount of
                all unpaid Indebtedness as at any time, without deductible and
                without co-insurance (except as Secured Party may approve in
                writing) and (ii) obtain and maintain, until repayment in full
                of the Indebtedness public liability insurance covering
                liability for bodily injury, including death, and property
                damage resulting from the purchase, ownership, leasing,
                maintenance, use or operation of the Collateral in an amount of
                at least $1,000,000, or in such greater amounts as Secured Party
                may from time to time require. Secured Party shall be the sole
                named loss-payee with respect to damage or loss to the
                Collateral and shall be a named additional insured on the public
                liability insurance. All insurance shall be with insurers and in
                form satisfactory to Secured Party; shall provide for at least
                thirty (30) days advance written notice to Secured Party before
                any cancellation or material modification thereof; shall waive
                any claim for premium against Secured Party; and shall not be
                invalidated or the insurer's liability to or for or on behalf of
                Secured Party be diminished or affected by any breach of
                warranty or representation or other act or omission of the
                Guarantor. Guarantor shall deliver to Secured Party the original
                policy or policies of insurance, certificates of insurance or
                other evidence satisfactory to Secured Party evidencing the
                insurance required hereby along with proof satisfactory to
                Secured Party of the payment of the premium therefor. Secured
                Party may, at its option, apply proceeds of insurance, in whole
                or in part, to (A) repair or replace Collateral or any portion
                thereof, or (B) satisfy any obligation of Guarantor to Secured
                Party hereunder.



        (b)     Secured Party is authorized, but under no duty, to obtain such
                insurance upon failure of the Guarantor to do so. Guarantor
                shall



                                       9
<PAGE>   31

                give immediate written notice to the Secured Party and to
                insurers of loss or damage to the Collateral and shall promptly
                file proofs of loss with insurers. Guarantor hereby irrevocably
                appoints the Secured Party as attorney-in-fact, coupled with an
                interest, for the Guarantor in obtaining, adjusting and
                canceling any such insurance and endorsing settlement drafts and
                hereby assigns to the Secured Party all sums which may become
                payable under such insurance, including return premiums and
                dividends, as additional security for the Indebtedness.

11. INDEMNIFICATION: Guarantor hereby agrees to indemnify, save and keep
harmless Secured Party, its agents, employees, successors and assigns, from and
against any and all losses, damages (including indirect, special or
consequential), penalties, injuries, claims, actions and suits including,
without limitation, legal expenses, of whatsoever kind and nature (including,
without limitation, costs and expenses incurred by Secured Party in defending
claims or suits brought against it by Guarantor in violation of or contrary to
the provisions of this Security Agreement), in contract or tort, including, but
in no way limited to, Secured Party's strict liability in tort, unless and
except to the extent Secured Party's gross negligence or willful misconduct is
the proximate cause of any such loss, damage, penalty, injury claim, action, or
suit, and Guarantor shall at its own expense defend any and all such actions,
arising out of the selection, modification, purchase, ownership, acceptance or
rejection of any Item of Collateral and the delivery, possession, maintenance,
use, condition (including, without limitation, latent and other defects, whether
or not discoverable by Secured Party or Guarantor, and any claim for patent,
trademark or copyright infringement), or operation of any Item of Collateral by
whomsoever used or operated or arising out of or resulting from the condition of
any Item of Collateral sold or disposed of after use by Guarantor, any lessee,
sublessee or employees of Guarantor. The indemnities and assumptions of
liability herein provided for shall continue in full force and effect
notwithstanding the termination of this Security Agreement whether by expiration
of time, operation or law or otherwise. GUARANTOR AGREES THAT SECURED PARTY
SHALL NOT BE LIABLE TO GUARANTOR FOR ANY CLAIM CAUSED DIRECTLY OR INDIRECTLY BY
THE INADEQUACY OF ANY ITEM OF COLLATERAL FOR ANY PURPOSE OR ANY DEFICIENCY OR
DEFECT THEREIN OR THE USE OR MAINTENANCE THEREOF OR ANY REPAIRS, SERVICING OR
ADJUSTMENTS THERETO OR ANY DELAY IN PROVIDING OR FAILURE TO PROVIDE ANY THEREOF
OR ANY INTERRUPTION OR LOSS OF SERVICE OR USE THEREOF OR ANY LOSS OF BUSINESS,
ALL OF WHICH SHALL BE THE SOLE RISK AND RESPONSIBILITY OF GUARANTOR.

12. DEFAULT; REMEDIES: If any of the following (herein an "Event of Default")
shall occur:



                                       10
<PAGE>   32

        (a)     Borrower shall default in the payment of Indebtedness to Secured
                Party or in making any other payment hereunder or under any Note
                when due, and such default shall continue for a period of ten
                (10) days without its cure by Borrower, or Guarantor shall
                default in the payment or performance of any of its obligations
                under the Guaranty after demand is made by Secured Party under
                the Guaranty, or

        (b)     Guarantor shall default in the payment when due of any
                obligations of Guarantor, whether or not to Secured Party,
                arising independently of this Security Agreement or any Note,
                and such default shall continue for a period of ten (10) days
                without its cure by Guarantor, or

        (c)     Guarantor shall default in the performance of any other covenant
                contained herein or in the Guaranty or any other document
                entered into in connection with this Security Agreement and such
                default shall continue for five (5) days after written notice
                thereof to Guarantor by Secured Party, or

        (d)     Guarantor shall breach any of its insurance obligations under
                paragraph 10 hereof,

        (e)     any representation or warranty made by Guarantor in this
                Security Agreement or any other documents entered into in
                connection with this Security Agreement shall prove to be
                incorrect in any material respect when any such representation
                or warranty was made or given, or

        (f)     Guarantor shall become insolvent or make an assignment for the
                benefit of creditors, or

        (g)     Guarantor shall apply for or consent to the appointment of a
                receiver, trustee or liquidator for a substantial part of its
                property or such receiver, trustee or liquidator is appointed
                without the application or consent of Guarantor, or

        (h)     a petition shall be filed by or against Guarantor under the
                Federal



                                       11
<PAGE>   33

                bankruptcy laws (including, without limitation, a petition for
                reorganization, arrangement or extension) or under any other
                insolvency law or law providing for the relief of debtors, or

        (i)     Secured Party shall deem the Collateral or the Indebtedness
                insecure, or

        (j)     there is, without the prior consent of Secured Party, a change
                in control (defined to be a change in the possession, directly
                or indirectly, of the power to direct or cause the direction of
                the management and policies of Guarantor, whether through the
                ownership of voting securities, by contract or otherwise), or

        (k)     there is a material adverse change (defined to be a decrease of
                at least one-third (1/3) of net worth, as determined in
                accordance with generally accepted accounting principles) in
                Guarantor's or any guarantor's financial condition, or

        (l)     there occurs any Event of Default under the Borrower Security
                Agreement or a breach, event of default, or default, however
                such terms are defined (but after giving any applicable grace
                and/or notice of opportunity to cure period, if any, provided
                thereunder) under the Loan Documents;

then, to the extent permitted by applicable law, Secured Party shall have the
right to exercise any one or more of the following remedies one or more times:

        A)      declare this Security Agreement in default, such declaration
                being applicable to all Schedules hereunder except as
                specifically excepted by Secured Party;

        B)      declare the entire amount of unpaid total Indebtedness
                immediately due and payable;

        C)      declare due and payable in addition to any unpaid Indebtedness
                due on or before Secured Party declares this Security Agreement
                in default, as liquidated damages for loss of a bargain and not
                as a penalty, an amount calculated in accordance with the
                provisions of paragraph 9 as though the Collateral had suffered
                an Event of Loss, as of the date that Secured Party declares
                this Security Agreement in default;



                                       12
<PAGE>   34

        D)      declare due and payable the amount of any indemnification
                hereunder if then determinable, with interest as provided
                herein;

        E)      upon notice to any lessees or sublessees permitted pursuant to
                paragraph 6(a) to obtain and retain all rentals thereafter due,
                paid and/or payable;

        F)      without demand or legal process enter into premises where the
                Collateral may be found and take possession of and remove the
                same, whereupon all rights of Guarantor in the Collateral shall
                terminate absolutely, and either

                        (i) retain all prior payments of Indebtedness and sell
                        the Collateral at public or private sale, with or
                        without notice to Guarantor, with or without having the
                        Collateral at the sale, at which sale Secured Party may
                        purchase all or any of the Collateral, the proceeds of
                        such sale, less expenses of retaking, storage, repairing
                        and reselling, and reasonable attorneys' fees incurred
                        by Secured Party, to be applied to the payment of the
                        unpaid total Indebtedness, Guarantor remaining liable
                        for the balance of said unpaid total Indebtedness, and
                        any surplus thereafter remaining to be for the account
                        of Guarantor (except as otherwise provided under
                        applicable law) or

                        (ii) retain the Collateral and all prior payments of
                        Indebtedness, in satisfaction of the remaining unpaid
                        Indebtedness;

        G)      pursue any other remedy then available to Secured Party at law
                or in equity. Guarantor hereby covenants and agrees to notify
                Secured Party immediately of the occurrence of any default
                specified in this paragraph 12.

13. REMEDIES CUMULATIVE: Time of performance of Guarantor's obligations
hereunder is of the essence. All remedies of Secured Party hereunder are
cumulative, and may, to the extent permitted by law, be exercised concurrently
or separately, and the exercise of any one remedy shall not be deemed to be an
election of such remedy to the exclusion of any other remedy or to preclude the
exercise of any other remedy at any other time. Failure on the part of the
Secured Party to exercise, or delay in exercising, any right or remedy hereunder
or Secured Party's failure at any time to restrict performance by Guarantor of
any of the provisions hereof shall not operate as a waiver thereof; nor shall
any single or partial exercise by Secured Party of any right or remedy hereunder



                                       13
<PAGE>   35

preclude any other further exercise thereof or the exercise of any other right
or remedy.

14. ASSIGNMENT: Guarantor acknowledges, and understands that Secured Party may
assign this Security Agreement, any Schedule or Certificate or any Note to a
bank or any other lending institution or any other person, organization or
agency, and Guarantor shall

        (a)     recognize any such assignment,

        (b)     accept the lawful demands of such assignee,

        (c)     surrender assigned Collateral only to such assignee,

        (d)     pay all Indebtedness payable hereunder and do any and all things
                required of Guarantor hereunder, notwithstanding any default of
                the Secured Party or the existence of any claim, defense or
                offset between Guarantor and Secured Party, and

        (e)     not require any assignee of the Security Agreement to perform
                any duty, covenant or condition required to be performed by
                Secured Party under the terms of this Security Agreement
                provided that Secured Party shall remain liable for such
                performance. The obligations of Guarantor shall not be subject,
                as against any such assignee or transferee, to any defense,
                set-off or counterclaim available to Guarantor against Secured
                Party and any such defense, set-off or counterclaim may be
                asserted only against Secured Party.

15.     FILINGS:

        (a)     Guarantor agrees to execute any instrument or instruments
                necessary or expedient for filing, recording, perfecting, or
                notifying of the interest of Secured Party upon request of, and
                as determined by, Secured Party. Guarantor hereby specifically
                authorizes Secured Party to file financing statements not signed
                by Guarantor or to execute same for and on behalf of Guarantor
                as Guarantor's agent and attorney-in-fact, irrevocably and
                coupled with an interest, for such purposes. A carbon,
                photographic or other reproduction of the Security Agreement or
                a



                                       14
<PAGE>   36

                financing statement shall be sufficient as a financing statement
                for filing purposes.



        (b)     Without limiting the foregoing paragraph (a), Guarantor hereby
                acknowledges and agrees that the normal practice of Secured
                Party is to electronically file financing statements through
                computerized filing services such as Lexis Document Services
                ("Filing Service"). The Filing Service pursuant to a Power of
                Attorney delivered by Secured Party will execute the financing
                statements (whether one or more as applicable) on behalf of both
                Guarantor (and Secured Party where applicable or where desired
                by Secured Party as not all states require execution of Secured
                Party on financing statements). The names of Guarantor and
                Secured Party, addresses, and collateral description on the
                computerized financing statement filings shall be the same as on
                the financing statements executed by Guarantor but the format
                and spacing may vary in non-material ways. Guarantor
                acknowledges that the original financing statements executed by
                Guarantor shall be retained in the collateral files of Secured
                Party but may be filed by Secured Party should it deem it
                necessary. In connection with the foregoing process, Guarantor
                hereby authorizes and appoints Secured Party and the applicable
                Filing Service as Guarantor's agent and attorney-in-fact,
                irrevocably and coupled with an interest for the execution and
                filing of the financing statements and fully acknowledges and
                agrees and has initialed this paragraph as additional
                affirmation as to the full enforceability of this power of
                attorney for such purposes.



                     GUARANTOR ___________

                                  INT.

16.     NOTES:

    (a) Upon written notice by Secured Party to Guarantor that Secured Party
        intends to transfer any Note, Guarantor shall, in exchange for the Note
        to be transferred, promptly execute a new note in the amount of the
        exchanged Note, naming the transferee as payee thereunder, and deliver
        to same to such transferee.

    (b) If any Note shall become mutilated or shall be destroyed, lost or
        stolen,



                                       15
<PAGE>   37

        Guarantor shall, upon the written request of payee under of such Note,
        execute and deliver in replacement thereof, the new Note payable in the
        same amount and dated the same date as the Note so mutilated, destroyed,
        lost or stolen.

17.     MISCELLANEOUS:

    (a) In case of failure of Guarantor to comply with any provision of this
        Security Agreement, Secured Party shall have the right, but shall not be
        obligated, to effect such compliance in whole or in part, and all moneys
        spent and expenses and obligations incurred or assumed by Secured Party
        in effecting such compliance (including but not limited to, attorneys'
        fees and costs incurred in attempting to effect compliance against
        Guarantor and/or others) shall constitute additional Indebtedness hereby
        secured due to Secured Party five (5) days after the date Secured Party
        sends notice to Guarantor requesting payment. Secured Party's effecting
        such compliance shall not be waiver of Guarantor's default. Interest on
        any payments made by Secured Party hereunder on amounts due after
        Secured Party declares default under paragraph 12 and interest on any
        overdue payment under paragraph 11 shall be at the default rate
        prescribed in the Note, (or, if there is more than one Note, at the
        highest among the default rates prescribed in such Notes), but not to
        exceed the maximum lawful rate. Any provisions in this Security
        Agreement, any Schedule hereto or Certificate in respect hereof which
        are in conflict with any statute, law or rule applicable shall be deemed
        omitted, modified or altered to conform thereto.



    (b) If any provision of this Security Agreement shall contravene or be
        invalid under applicable law or regulation (including federal law and
        regulation), such contravention or invalidity shall not affect the
        entire Security Agreement, the provisions held to be invalid to be
        deemed deleted or modified and the Security Agreement interpreted and
        construed as though such invalid provision or provisions were not part
        hereof or conformed thereto.

    (c) Secured Party may give notice to Guarantor or make a request of
        Guarantor by depositing such notice or request in the U.S. mail, first
        class postage prepaid, addressed to the Guarantor at its address above,
        an address furnished by Guarantor to Secured Party, a mailing address of
        Guarantor or a place of business of Guarantor. All notices required to
        be given by Guarantor hereunder shall be deemed adequately given if sent



                                       16
<PAGE>   38

        by registered or certified mail to Secured Party at the address of
        Secured Party stated herein, or at such other place as Secured Party may
        designate to Guarantor in writing.



    (d) This Security Agreement, any addendum hereto attached and signed by
        Secured Party and Guarantor, any Schedule hereto and any Certificate in
        respect hereof, constitute the entire agreement of the parties with
        respect to the subject matter hereof. THIS SECURITY AGREEMENT, ANY
        VARIATION OR MODIFICATION OF THIS SECURITY AGREEMENT, ANY WAIVER OF ANY
        OF ITS PROVISIONS OR CONDITIONS AND ALL SCHEDULES SHALL NOT BE VALID
        UNLESS IN WRITING AND SIGNED BY AN AUTHORIZED OFFICER OR MANAGER OF
        SECURED PARTY.

    (e) GUARANTOR WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY LITIGATION ARISING
        HEREFROM OR IN RELATION HERETO

    (f) THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
        ACCORDANCE WITH, THE LAWS OF THE STATE OF CONNECTICUT, WITHOUT REGARD TO
        CONFLICT OF LAW PRINCIPLES

    (g) GUARANTOR SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
        PROCEEDING RELATING TO THIS AGREEMENT OR ANY NOTE, OR FOR RECOGNITION
        AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NONEXCLUSIVE
        GENERAL JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN THE STATE
        OF CONNECTICUT AND APPELLATE COURTS FROM ANY THEREOF; CONSENTS THAT ANY
        SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY
        OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
        ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING
        WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM
        THE SAME; AND AGREES THAT SERVICE MAY BE MADE ON GUARANTOR IN ANY SUCH
        PROCEEDING BY DELIVERING A COPY OF PROCESS TO GUARANTOR AT GUARANTOR'S
        ABOVE ADDRESS, SUCH SERVICE TO BE EFFECTIVE UPON RECEIPT.



    (h) This Security Agreement supplements and is in addition to the Borrower
        Security Agreement, and it shall not, and is not in anyway meant to,
        limit, impair, replace, or in anyway negate any of the obligations of
        Borrower under the Security Agreement, it being understood that the
        obligations of



                                       17
<PAGE>   39

        Guarantor as to the Collateral and the representations, warranties,
        covenants, and agreements set forth hereunder are joint and several with
        the Borrower's obligations. All rights and remedies as to both parties
        shall be cumulative, and exercise of one or more remedies as to one
        party shall in no way limit the exercise of one or more remedies against
        the other party.


        IN WITNESS WHEREOF, the parties hereto have executed this Security
Agreement as of the date first above written.

                                            Sea View Restaurants, Inc.
                                            dba: Gladstones 4 Fish
                                            as Guarantor

                                            By: /s/ Samuel E. Chilakos
                                               ---------------------------------
                                            Printed Name: Samuel E. Chilakos
                                                         -----------------------
                                            Title:  Vice President, Finance
                                                  ------------------------------
        Affix Corporate Seal here

                                            Attest/Witness:

                                            By: /s/ Martin Sniewski
                                               ---------------------------------
                                            Printed Name: Martin Sniewski
                                                         -----------------------
                                            Title:
                                                  ------------------------------

LYON CREDIT CORPORATION
as Secured Party

By: /s/ Stephen B. Peterson
   ---------------------------------
Printed Name: Stephen B. Peterson
             -----------------------
Title: Assistant Vice President
      ------------------------------



                                       18