<PAGE>   1
                                                                     EXHIBIT 4.4

Record and return to:
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: Michael Sloyer, Esq.

                         STERLING PULP CHEMICALS, INC.,

                                    Grantor,

                                       to

                  THE CIT GROUP/BUSINESS CREDIT, INC. ("CIT")
   as the Administrative Agent under the Credit Agreement referred to below
    (together with its successors and assigns from time to time acting as
Administrative Agent under such Credit Agreement, the "Administrative Agent")

                                       and

                      U.S. BANK TRUST NATIONAL ASSOCIATION

  as Georgia co-agent (together with its successors and assigns from time to
time acting as Georgia co-agent, the "Georgia Agent," with the Administrative
  Agent and the Georgia Agent herein collectively referred to as "Grantee")

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

                  LEASEHOLD DEED TO SECURE DEBT, ASSIGNMENT AND
                               SECURITY AGREEMENT

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

                            Dated as of July 23, 1999

          This instrument affects certain real and personal property
                          located in Lowndes County,
                                State of Georgia.

This instrument was prepared by the above named attorney.

Notice: This instrument contains inter alia obligations which may provide for:

            (a)   a variable rate of interest and/or

            (b)   future and/or revolving credit advances or readvances, which
                  when made, shall have the same priority as advances or
                  readvances made on the date hereof whether or not (i) any
                  advances or readvances were made on the date hereof and (ii)
                  any indebtedness is outstanding at the time any advance or
                  re-advance is made.
<PAGE>   2
                                TABLE OF CONTENTS

                                                                           Page
                                    ARTICLE I

                     COVENANTS AND AGREEMENTS OF THE Grantor

    SECTION 1.1.    Payment of Secured Obligations...........................4
    SECTION 1.2.    Title to Collateral, etc. ...............................5
    SECTION 1.3.    Title Insurance..........................................5
    SECTION 1.3.1.  Title Insurance Policy...................................5
    SECTION 1.3.2.  Title Insurance Proceeds.................................5
    SECTION 1.4.    Recordation..............................................5
    SECTION 1.5.    Payment of Impositions, etc. ............................6
    SECTION 1.6.    Insurance and Legal Requirements.........................6
    SECTION 1.7.    Security Interests, etc. ................................6
    SECTION 1.8.    Permitted Contests.......................................7
    SECTION 1.9.    Leases...................................................7
    SECTION 1.10.   Compliance with Instruments..............................7
    SECTION 1.11.   Maintenance and Repair, etc. ............................8
    SECTION 1.12.   Alterations, Additions, etc. ............................8
    SECTION 1.13.   Acquired Property Subject to Security Title/Security
                      Interest...............................................8
    SECTION 1.14.   Assignment of Rents, Proceeds, etc. .....................8
    SECTION 1.15.   No Claims Against the Grantee............................9
    SECTION 1.16.   Indemnification..........................................9
    SECTION 1.17.   No Credit for Payment of Taxes..........................10
    SECTION 1.18.   Intentionally Omitted...................................10
    SECTION 1.19.   No Transfer of the Property.............................10
    SECTION 1.20.   Security Agreement......................................10
    SECTION 1.21.   Representations and Warranties..........................11
    SECTION 1.22.   Grantor's Covenants.....................................11

                                   ARTICLE II

                 INSURANCE; DAMAGE, DESTRUCTION OR TAKING, ETC.

    SECTION 2.1.    Insurance...............................................11
    SECTION 2.1.1.  Risks to be Insured.....................................11
    SECTION 2.1.2.  Policy Provisions.......................................12
    SECTION 2.1.3.  Delivery of Policies, etc. .............................12
    SECTION 2.1.4.  Separate Insurance......................................13
    SECTION 2.2.    Damage, Destruction or Taking; Grantor to Give Notice;
                      Assignment of Awards..................................13
<PAGE>   3
    SECTION 2.3.    Application of Proceeds and Awards......................13
    SECTION 2.4.    Total Taking and Total Destruction......................15

                                   ARTICLE III

                        EVENTS OF DEFAULT; REMEDIES, ETC.

    SECTION 3.1.    Events of Default; Acceleration.........................15
    SECTION 3.2.    Legal Proceedings; Foreclosure..........................16
    SECTION 3.3.    Power of Sale...........................................16
    SECTION 3.4.    Uniform Commercial Code Remedies........................17
    SECTION 3.5.    Grantee Authorized to Execute Deeds, etc. ..............17
    SECTION 3.6.    Purchase of Collateral by Grantee.......................17
    SECTION 3.7.    Receipt a Sufficient Discharge to Purchaser.............17
    SECTION 3.8.    Waiver of Appraisement, Valuation, etc. ................17
    SECTION 3.9.    Sale a Bar Against Grantor..............................18
    SECTION 3.10.   Secured Obligations to Become Due on Sale...............18
    SECTION 3.11.   Application of Proceeds of Sale and Other Moneys........18
    SECTION 3.12.   Appointment of Receiver.................................19
    SECTION 3.13.   Possession, Management and Income.......................19
    SECTION 3.14.   Right of Grantee to Perform Grantor's Covenants, etc....19
    SECTION 3.15.   Subrogation.............................................19
    SECTION 3.16.   Remedies, etc., Cumulative..............................19
    SECTION 3.17.   Provisions Subject to Applicable Law....................20
    SECTION 3.18.   No Waiver, etc. ........................................20
    SECTION 3.19.   Compromise of Actions, etc. ............................20

                                   ARTICLE IV

                                   DEFINITIONS

    SECTION 4.1.    Terms Defined in this Deed..............................21
    SECTION 4.2.    Use of Defined Terms....................................22
    SECTION 4.3.    Credit Agreement Definitions............................22
<PAGE>   4
                                    ARTICLE V

                                  MISCELLANEOUS

    SECTION 5.1.    Further Assurances; Financing Statements................22
    SECTION 5.1.1.  Further Assurances......................................23
    SECTION 5.1.2.  Financing Statements....................................23
    SECTION 5.2.    Additional Security.....................................23
    SECTION 5.3.    Satisfaction; Partial Release, etc. ....................23
    SECTION 5.3.1.  Satisfaction............................................23
    SECTION 5.3.2.  Partial Release, etc. ..................................24
    SECTION 5.4.    Notices, etc............................................24
    SECTION 5.5.    Waivers, Amendments, etc................................24
    SECTION 5.6.    Cross-References........................................24
    SECTION 5.7.    Headings................................................24
    SECTION 5.8.    Currency................................................24
    SECTION 5.9.    Governing Law...........................................24
    SECTION 5.10.   Successors and Assigns, etc.............................24
    SECTION 5.11.   Waiver of Jury Trial; Submission to Jurisdiction........24
    SECTION 5.12.   Severability; Conflicts.................................25
    SECTION 5.13.   Loan Document...........................................25
    SECTION 5.14.   Usury Savings Clause....................................25
    SECTION 5.15.   Future Advances.........................................26
    SECTION 5.16.   Georgia Co-Agent........................................26

Schedule 1-A        Legal Description of the Land
Schedule 1-B        Legal Description of the Land
Schedule 2          Permitted Encumbrances

<PAGE>   5
                         LEASEHOLD DEED TO SECURE DEBT,
                        ASSIGNMENT AND SECURITY AGREEMENT

      THIS LEASEHOLD DEED TO SECURE DEBT, ASSIGNMENT AND SECURITY AGREEMENT,
dated as of July 23, 1999 (this "Deed"), made by STERLING PULP CHEMICALS, INC.,
a Georgia corporation (the "Grantor"), having an address at 1200 Smith Street,
Suite 1900, Houston, Texas 77002-4312, to THE CIT GROUP/BUSINESS CREDIT, INC.
("CIT"), a corporation, having an address at 1211 Avenue of the Americas, 22nd
Floor, New York, New York 10036, as the Administrative Agent under the Credit
Agreement referred to below (together with its successors and assigns from time
to time acting as Administrative Agent under such Credit Agreement, the
"Administrative Agent"), and U.S. BANK TRUST NATIONAL ASSOCIATION, a banking
association, having an address at GAAT 3384, 3384 Peachtree Road NE, Atlanta,
Georgia 30326, as Georgia co-agent (together with its successors and assigns
from time to time acting as Georgia co-agent, the "Georgia Agent," with the
Administrative Agent and the Georgia Agent herein collectively referred to as
"Grantee").

                         W I T N E S S E T H   T H A T:

      WHEREAS, the Grantor is on the date of delivery hereof the owner of an
easement or leasehold estate as indicated herein or on Schedule 1 hereto to the
parcel of land (and any easements or other rights or interests) described in
Schedule 1 hereto (the "Land") and of the Improvements (such term and other
capitalized terms used in this Deed having the respective meanings specified or
referred to in Article IV);

      WHEREAS, pursuant to the terms, conditions and provisions of the Revolving
Credit Agreement, dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among Sterling Chemicals, Inc., Sterling Canada, Inc., Sterling Pulp Chemicals
U.S., Inc., Grantor, Sterling Fibers, Inc., Sterling Chemicals Energy, Inc. and
Sterling Chemicals International, Inc., as Borrowers (collectively, the
"Borrowers"), various financial institutions, as the Lenders, DLJ Capital
Funding, Inc., as the Syndication Agent, The CIT Group/Business Credit, Inc. as
the Administrative Agent, and Credit Suisse First Boston, as the Documentation
Agent, the Lenders and the Issuer have agreed to make Loans to, and to issue
Letters of Credit for the account of, the Borrowers in the maximum original
principal amount of One Hundred Fifty Five Million Dollars ($155,000,000) (such
Loans and Letters of Credit are hereinafter referred to collectively as the
"Credit Extensions").

      WHEREAS, the Credit Extensions consist of, inter alia, Fixed Assets Loans
in a maximum principal amount not to exceed Seventy Million Dollars
($70,000,000) having a Stated Maturity Date of July 23, 2004; and

      WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Deed.

                                   G R A N T:

      NOW, THEREFORE, for and in consideration of the premises, and of the
mutual covenants herein contained, and in order to induce the Fixed Assets
Lenders to make the Fixed Assets Loans pursuant to the Credit Agreement, and in
order to secure the full, timely and proper payment and performance of and
compliance with each and every one of the Secured Obligations (as hereinafter
defined), the Grantor hereby irrevocably grants, bargains, sells, sets over,
warrants, aliens, demises, releases, hypothecates, pledges, assigns, transfers
and conveys to the Grantee and its successors, successors-in-title and assigns,
forever, all of the following (the "Collateral"):
<PAGE>   6
            (a) Real Estate. All of Grantor's estate, interest, rights,
      privileges and benefits (including, without limitation, any option to
      purchase fee simple title) existing under or created by that certain
      Indenture of Lease by and between Valdosta-Lowndes County Industrial
      Authority (as Lessor) and Sterling Pulp Chemicals US, Inc. (as Lessee)
      dated October 1, 1995, and recorded in Deed Book 1331, Page 27, Lowndes
      County, Georgia Records, with a Memorandum of Lease Agreement dated as of
      October 1, 1995, being recorded in Deed Book 1240, page 1, aforesaid
      records, as assigned by Sterling Pulp Chemicals US, Inc. to Grantor by
      instrument dated August 6, 1996, and recorded in Deed Book 1333, Page 123,
      and rerecorded in Deed Book 1349, Page 83, aforesaid records
      (collectively, the "Authority Lease") covering and affecting the Land, and
      all of Grantor's interest in and to all of the Land and all additional
      lands and estates therein now owned or hereafter-acquired by the Grantor
      for use or development with the Land or any portion thereof, together with
      all and singular the tenements, rights, easements, hereditaments, rights
      of way, privileges, liberties, appendages and appurtenances now or
      hereafter belonging or in any way pertaining to the Land and such
      additional lands and estates therein (including, without limitation, all
      rights relating to storm and sanitary sewer, water, gas, electric, railway
      and telephone services); all development rights, air rights, riparian
      rights, water, water rights, water stock, all rights in, to and with
      respect to any and all oil, gas, coal, minerals and other substances of
      any kind or character underlying or relating to the Land and such
      additional lands and estates therein and any interest therein; all estate,
      claim, demand, right, title or interest of the Grantor in and to any
      street, road, highway or alley, vacated or other, adjoining the Land or
      any part thereof and such additional lands and estates therein; all strips
      and gores belonging, adjacent or pertaining to the Land or such additional
      lands and estates; and any after-acquired property (herein collectively
      referred to as the "Real Estate");

            (b) Improvements. All of Grantor's right, title and interest in and
      to all buildings, structures and other improvements and any additions and
      alterations thereto or replacements thereof, now or hereafter built,
      constructed or located upon the Real Estate; and, to the extent that any
      of the following items of property constitutes fixtures under applicable
      laws, all furnishings, fixtures, fittings, appliances, apparatus,
      equipment, machinery, building and construction materials and other
      articles of every kind and nature whatsoever and all replacements thereof,
      now or hereafter affixed or attached to, placed upon or used in any way in
      connection with the complete and comfortable use, enjoyment, occupation,
      operation, development and/or maintenance of the Real Estate or such
      buildings, structures and other improvements, including, but not limited
      to, partitions, furnaces, boilers, oil burners, radiators and piping,
      plumbing and bathroom fixtures, refrigeration, heating, ventilating, air
      conditioning and sprinkler systems, other fire prevention and
      extinguishing apparatus and materials, vacuum cleaning systems, gas and
      electric fixtures, incinerators, compactors, elevators, engines, motors,
      generators and all other articles of property which are considered
      fixtures under applicable law (such buildings, structures and other
      improvements and such other property are herein collectively referred to
      as the "Improvements"; the Real Estate and the Improvements are herein
      collectively referred to as the "Property");

            (c) Goods. All of Grantor's right, title and interest in and to all
      building materials, construction materials, appliances (including, without
      limitation, stoves, ranges, ovens, disposals, refrigerators, water
      fountains and coolers, fans, heaters, dishwashers, clothes washers and
      dryers, water heaters, hood and fan combinations, kitchen equipment,
      laundry equipment, kitchen cabinets and other similar equipment), stocks,
      supplies, blinds, window shades, drapes, carpets, floor coverings,
      manufacturing equipment and machinery, office equipment, growing plants
      and shrubberies, control devices, equipment (including window cleaning,
      building cleaning, swimming pool, recreational, monitoring, garbage, pest
      control and other equipment), motor vehicles, tools, furnishings,
      furniture, lighting, non-structural additions to the Real Estate and

                                      -2-
<PAGE>   7
      Improvements and all other tangible property of any kind or character,
      together with all replacements thereof, now or hereafter located on or in
      or used or useful in connection with the complete and comfortable use,
      enjoyment, occupation, operation, development and/or maintenance of the
      Property, regardless of whether or not located on or in the Property or
      located elsewhere for purposes of storage, fabrication or otherwise
      (herein collectively referred to as the "Goods");

            (d) [intentionally omitted];

            (e) Leases. All rights of the Grantor in, to and under all leases
      (other than the Authority Lease), licenses, occupancy agreements,
      concessions and other arrangements, oral or written, now existing or
      hereafter entered into, whereby any Person agrees to pay money or any
      other consideration for the use, possession or occupancy of, or any estate
      in, the Property or any portion thereof or interest therein (herein
      collectively referred to as the "Leases"), and the right, subject to
      applicable law, upon the occurrence of any Event of Default hereunder, to
      receive and collect the Rents (as hereinafter defined) paid or payable
      thereunder;

            (f) Plans. All rights of the Grantor in and to all plans and
      specifications, designs, drawings and other information, materials and
      matters heretofore or hereafter prepared relating to the Improvements or
      any construction on the Real Estate (herein collectively referred to as
      the "Plans");

            (g) Permits. All rights of the Grantor, to the extent assignable,
      in, to and under all permits, franchises, licenses, approvals and other
      authorizations respecting the use, occupation and operation of the
      Property and every part thereof and respecting any business or other
      activity conducted on or from the Property, and any product or proceed
      thereof or therefrom, including, without limitation, all building permits,
      certificates of occupancy and other licenses, permits and approvals issued
      by governmental authorities having jurisdiction (herein collectively
      referred to as the "Permits");

            (h) Contracts. All right, title and interest of the Grantor, to the
      extent assignable, in and to all certificates, warranties, appraisals,
      engineering, environmental, soils, insurance and other reports and
      studies, books, records, correspondence, files and advertising materials,
      and other documents, now or hereafter obtained or entered into, as the
      case may be, pertaining to the construction, use, occupancy, possession,
      operation, management, leasing, maintenance and/or ownership of the
      Property and all right, title and interest of the Grantor therein (herein
      collectively referred to as the "Contracts");

            (i) Leases of Furniture, Furnishings and Equipment. All right, title
      and interest of the Grantor as lessee in, to and under any leases of
      furniture, furnishings, equipment and any other Goods now or hereafter
      installed in or at any time used in connection with the Property;

            (j) Rents. All rents, issues, profits, royalties, avails, income and
      other benefits derived or owned, directly or indirectly, by the Grantor
      from the Property, including, without limitation, all rents and other
      consideration payable by tenants, claims against guarantors, and any cash
      or other securities deposited to secure performance by tenants, under the
      Leases (herein collectively referred to as "Rents");

            (k) Proceeds. All proceeds of the conversion, voluntary or
      involuntary of any of the foregoing into cash or liquidated claims,
      including, without limitation, proceeds of insurance and condemnation
      awards (herein collectively referred to as "Proceeds"); and

                                      -3-
<PAGE>   8
            (l) Other Property. All other property and rights of the Grantor of
      every kind and character relating to the Property, and all proceeds and
      products of any of the foregoing, provided however, the Collateral shall
      not include any general intangibles or other rights arising under any
      contracts, instruments, licenses, or other documents as to which the grant
      of a lien and/or security interest would constitute a violation of a valid
      and enforceable restriction in favor of a third party on such grant,
      unless and until any required consents shall have been obtained;

      AND, without limiting any of the other provisions of this Deed, the
Grantor expressly grants to the Grantee, as secured party, a security interest
in all of those portions of the Collateral which are or may be subject to the
State Uniform Commercial Code provisions applicable to secured transactions,
subject, however, to the Permitted Encumbrances;

      TO HAVE AND TO HOLD the Collateral to the use, benefit and behoof of the
Grantee, its successors, successors-in-title and assigns, forever, subject,
however, to the Permitted Encumbrances. This Deed is intended to operate and is
to be construed as a deed passing the title to the Collateral to Grantee and is
made under those provisions of the existing laws of the State relating to deeds
to secure debt and not as a mortgage, and is given to secure the payment of the
Secured Obligations.

      FURTHER to secure the full, timely and proper payment and performance of
the Secured Obligations, the Grantor hereby covenants and agrees with and
warrants to the Grantee as follows:

                                    ARTICLE I

                     COVENANTS AND AGREEMENTS OF THE GRANTOR

      SECTION 1.1. Payment of Secured Obligations. (i) The Grantor agrees that:

            (a) Grantor will duly and punctually pay and perform or cause to be
      paid and performed the Fixed Assets Loans (some or all of which Fixed
      Assets Loans are evidenced by Fixed Assets Notes ) at the time and in
      accordance with the Loan Documents pertaining to the Fixed Assets Loans,
      which Fixed Assets Loans shall not exceed the maximum principal amount of
      Seventy Million and 00/100 Dollars ($70,000,000) and all of which Fixed
      Assets Loans have a Stated Maturity Date of July 23, 2004, and

            (b) when and as due and payable from time to time in accordance with
      the terms of this Deed or of any other Loan Documents pertaining to the
      Fixed Assets Loans, pay and perform, or cause to be paid and performed,
      all other Secured Obligations.


      SECTION 1.2. Title to Collateral, etc. The Grantor represents and warrants
to and covenants with the Grantee that:

            (a) except as otherwise permitted by the terms of the Credit
      Agreement, as of the date hereof and at all times hereafter while this
      Deed is outstanding, the Grantor (1) is and shall be the absolute owner of
      the legal and beneficial title to the applicable interest in the Property
      and to all other property included in the Collateral, and (2) has and
      shall have good and sufficient easement or leasehold estate, as currently
      represented in the granting clause as of the date hereof, to the Property,
      subject in each case only to this Deed, the liens expressly permitted
      pursuant to the terms of the Credit Agreement and the encumbrances set
      forth in Schedule 2 hereto (collectively, the "Permitted Encumbrances");

                                      -4-
<PAGE>   9
            (b) the Grantor has good and lawful right, power and authority to
      execute this Deed and to convey, transfer, assign, set over and grant the
      security title to and a security interest in the Collateral, all as
      provided herein;

            (c) this Deed has been duly executed, acknowledged and delivered on
      behalf of the Grantor, all consents and other actions required to be taken
      by the officers, directors, shareholders and partners, as the case may be,
      of the Grantor have been duly and fully given and performed and this Deed
      constitutes the legal, valid and binding obligation of the Grantor,
      enforceable against the Grantor in accordance with its terms; and

            (d) the Grantor, at its expense, will warrant and defend to the
      Grantee and any purchaser under the power of sale herein or at any
      foreclosure sale such title to the Collateral and the first security title
      and first priority perfected security interest of this Deed thereon and
      therein against all claims and demands and will maintain, preserve and
      protect such security title and security interest and will keep this Deed
      a valid, direct first security title of record on the Property and a first
      priority perfected security interest in the Collateral other than the
      Property, subject only to the Permitted Encumbrances.

      SECTION 1.3. Title Insurance.

      SECTION 1.3.1. Title Insurance Policy. Concurrently with the execution and
delivery of this Deed, the Grantor, at its expense, has obtained and delivered
to the Grantee a loan policy or policies of title insurance in an amount, and in
form and substance, reasonably satisfactory to the Grantee naming the Grantee as
the insured, insuring the title to and the first security title of this Deed on
the Property, with endorsements reasonably requested by the Grantee. The Grantor
has duly paid in full all premiums and other charges due in connection with the
issuance of such policy or policies of title insurance.

      SECTION 1.3.2. Title Insurance Proceeds. All proceeds received by and
payable to the Grantee for any loss under the loan policy or policies of title
insurance delivered to the Grantee pursuant to Section 1.3.1, or under any
policy or policies of title insurance delivered to the Grantee in substitution
therefor or replacement thereof, shall be the property of the Grantee and shall
be applied by the Grantee in accordance with the provisions of Section 2.3.

      SECTION 1.4. Recordation. The Grantor, at its expense, will at all times
cause this Deed and any instruments amendatory hereof or supplemental hereto and
any instruments of assignment hereof or thereof (and any appropriate financing
statements or other instruments and continuations thereof), and each other
instrument delivered in connection with the Fixed Assets Loans, the Credit
Agreement or any other Loan Document pertaining to the Fixed Assets Loans and
intended thereunder to be recorded, registered and filed, to be kept recorded,
registered and filed, in such manner and in such places, and will pay all such
recording, registration, filing fees, taxes and other charges, and will comply
with all such statutes and regulations as may be required by law in order to
establish, preserve, perfect and protect the security title and security
interest of this Deed as a valid, direct first security title on the Property
and first priority perfected security interest in the Collateral other than the
Property, subject only to the Permitted Encumbrances. The Grantor will pay or
cause to be paid, and will indemnify the Grantee in respect of, all taxes
(including interest and penalties) at any time payable in connection with the
filing and recording of this Deed and any and all supplements and amendments
hereto.

      SECTION 1.5. Payment of Impositions, etc. Subject to Section 1.8 (relating
to permitted contests), the Grantor will pay or cause to be paid before the same
would become delinquent and before any fine, penalty, interest or cost may be
added for non-payment, all taxes, assessments, water and sewer rates, charges,
license fees, inspection fees and other governmental levies or payments, of
every kind and

                                      -5-
<PAGE>   10
nature whatsoever, general and special, ordinary and extraordinary, unforeseen
as well as foreseen, which at any time may be assessed, levied, confirmed,
imposed or which may become a lien upon the Collateral, or any portion thereof,
or which are payable with respect thereto, or upon the rents, issues, income or
profits thereof, or on the occupancy, operation, use, possession or activities
thereof, whether any or all of the same be levied directly or indirectly or as
excise taxes or as income taxes, and all taxes, assessments or charges which may
be levied on the Secured Obligations, or the interest thereon (collectively, the
"Impositions"). The Grantor will deliver to the Grantee, upon request, copies of
official receipts or other satisfactory proof evidencing such payments.

      SECTION 1.6.  Insurance and Legal Requirements.  Subject to Section 1.8
(relating to permitted contests), the Grantor, at its expense, will comply in
all material respects, or cause compliance in all material respects with

            (a) all provisions of any insurance policy covering or applicable to
      the Collateral or any part thereof, all requirements of the issuer of any
      such policy, and all orders, rules, regulations and other requirements of
      the National Board of Fire Underwriters (or any other body exercising
      similar functions) applicable to or affecting the Collateral or any part
      thereof or any use or condition of the Collateral or any part thereof
      (collectively, the "Insurance Requirements"); and

            (b) all laws, including Environmental Laws, statutes, codes, acts,
      ordinances, orders, judgments, decrees, injunctions, rules, regulations,
      permits, licenses, authorizations, directions and requirements of all
      governments, departments, commissions, boards, courts, authorities,
      agencies, officials and officers, foreseen or unforeseen, ordinary or
      extraordinary, which now or at any time hereafter may be applicable to the
      Collateral or any part thereof, or any of the adjoining sidewalks, curbs,
      vaults and vault space, if any, streets or ways, or any use or condition
      of the Collateral or any part thereof (collectively, the "Legal
      Requirements");

noncompliance of which could reasonably be expected to cause a Material Adverse
Effect whether or not compliance therewith shall require structural changes in
or interference with the use and enjoyment of the Collateral or any part
thereof.

      SECTION 1.7. Security Interests, etc. The Grantor will not directly or
indirectly create or permit or suffer to be created or to remain, and will
promptly discharge or cause to be discharged, any deed to secure debt, deed of
trust, mortgage, encumbrance or charge on, pledge of, security interest in or
conditional sale or other title retention agreement with respect to or any other
lien or security interest or security title on or in the Collateral or any part
thereof or the interest of the Grantor or the Grantee therein, or any Proceeds
thereof or Rents or other sums arising therefrom, other than (a) Permitted
Encumbrances, and (b) liens of mechanics, materialmen, suppliers or vendors or
rights thereto incurred in the ordinary course of the business of the Grantor
for sums not yet due or any such liens or rights thereto which are at the time
being contested as permitted by Section 1.8. The Grantor will not postpone the
payment of any sums for which liens of mechanics, materialmen, suppliers or
vendors or rights thereto have been incurred (unless such liens or rights
thereto are at the time being contested as permitted by Section 1.8), for more
than 60 days after the completion of the action giving rise to such liens or
rights thereto.

      SECTION 1.8. Permitted Contests. The Grantor at its expense may contest,
or cause to be contested, by appropriate legal proceedings conducted in good
faith and with due diligence, the amount or validity or application, in whole or
in part, of any Imposition, Legal Requirement or Insurance Requirement or lien
of a mechanic, materialman, supplier or vendor, provided that, (a) in the case
of an unpaid Imposition, lien, encumbrance or charge, such proceedings shall
suspend the collection thereof

                                      -6-
<PAGE>   11
from the Grantor, the Grantee, and the Collateral (including any rent or other
income therefrom) and shall not materially interfere with the payment of any
such rent or income, (b) neither the Collateral nor any rent or other income
therefrom nor any part thereof or interest therein would be in any material
danger of being sold, forfeited, lost, impaired or interfered with, (c) in the
case of a Legal Requirement, neither the Grantor nor the Grantee would be in
material danger of any civil or criminal liability for failure to comply
therewith, (d) the Grantor shall have furnished such security, if any, as may be
required in the proceedings or as may be reasonably requested by the Grantee,
(e) the non-payment of the whole or any part of any Imposition will not result
in the delivery of a tax deed to the Collateral or any part thereof because of
such non-payment, (f) the payment of any sums required to be paid with respect
to any of the Fixed Asset Notes or under this Deed (other than any unpaid
Imposition, lien, encumbrance or charge at the time being contested in
accordance with this Section 1.8) shall not be interfered with or otherwise
affected, (g) in the case of any Insurance Requirement, the failure of the
Grantor to comply therewith shall not affect the validity of any insurance
required to be maintained by the Grantor under Section 2.1, and (h) that
adequate reserves, determined in accordance with GAAP, shall have been set aside
on the Grantor's books.

      SECTION 1.9. Leases. The Grantor represents and warrants to the Grantee
that, as of the date hereof, there are no written or oral leases or other
agreements of any kind or nature relating to the occupancy of any portion of the
Property by any Person other than the Grantor other than the Permitted
Encumbrances. Except as is permitted by the Credit Agreement, the Grantor will
not enter into any such written or oral lease or other agreement with respect to
any portion of the Property without first obtaining the written consent of the
Grantee.

      SECTION 1.10. Compliance with Instruments. The Grantor at its expense will
promptly comply in all material respects with all rights of way or use,
privileges, franchises, servitudes, licenses, easements, tenements,
hereditaments and appurtenances forming a part of the Property and all
instruments creating or evidencing the same, in each case, to the extent
compliance therewith is required of the Grantor under the terms thereof. Except
as is permitted by the Credit Agreement, the Grantor will not take any action
which may result in a forfeiture or termination of the rights afforded to the
Grantor under any such instruments and will not, without the prior written
consent of the Grantee, amend any of such instruments in any manner adverse to
the Fixed Assets Lenders in any material respect.

      SECTION 1.11. Maintenance and Repair, etc. Subject to the provisions of
Section 1.12, the Grantor will keep or cause to be kept all presently and
subsequently erected or acquired Improvements and the sidewalks, curbs, vaults
and vault space, if any, located on or adjoining the same, and the streets and
the ways adjoining the same, in good and substantial order and repair and in
such a fashion that neither the value nor utility of the Collateral will be
diminished, and, at its sole cost and expense, will promptly make or cause to be
made all necessary and appropriate repairs, replacements and renewals thereof,
whether interior or exterior, structural or nonstructural, ordinary or
extraordinary, foreseen or unforeseen, so that its business carried on in
connection therewith may be properly conducted at all times. The Grantor at its
expense will do or cause to be done all shoring of foundations and walls of any
building or other Improvements on the Property and (to the extent permitted by
law) of the ground adjacent thereto, and every other act necessary or
appropriate for the preservation and safety of the Property by reason of or in
connection with any excavation or other building operation upon the Property and
upon any adjoining property, whether or not the Grantor shall, by any Legal
Requirement, be required to take such action or be liable for failure to do so.

      SECTION 1.12. Alterations, Additions, etc. So long as no Event of Default
shall have occurred and be continuing, the Grantor shall have the right at any
time and from time to time to make or cause to be made reasonable alterations of
and additions to the Property or any part thereof, provided that any alteration
or addition: (a) shall not change the general character or the use of the
Property or reduce the

                                      -7-
<PAGE>   12
fair market value thereof below its value immediately before such alteration or
addition, or impair the usefulness of the Property; (b) is effected with due
diligence, in a good and workmanlike manner and in compliance in all material
respects with all Legal Requirements and Insurance Requirements; (c) subject to
Section 1.8 is promptly and fully paid for, or caused to be paid for, by the
Grantor; and (d) is made, in case the estimated cost of such alteration or
addition exceeds U.S. $1,000,000, under the supervision of a qualified architect
or engineer or another professional.

      SECTION 1.13. Acquired Property Subject to Security Title/Security
Interest. Subject to the Permitted Encumbrances and except as otherwise
permitted by the Credit Agreement, all property at any time acquired by the
Grantor and provided or required by this Deed to be or become subject to the
security title and security interest hereof, whether such property is acquired
by exchange, purchase, construction or otherwise, shall forthwith become subject
to the security title and security interest of this Deed without further action
on the part of the Grantor or the Grantee. The Grantor, at its expense, will
execute and deliver to the Grantee (and will record and file as provided in
Section 1.4) an instrument supplemental to this Deed reasonably satisfactory in
substance and form to the Grantee, whenever such an instrument is necessary
under applicable law to subject to the security title and security interest of
this Deed all right, title and interest of the Grantor in and to all property
provided or required by this Deed to be subject to the security title and
security interest hereof.

      SECTION 1.14. Assignment of Rents, Proceeds, etc. The assignment, grant
and conveyance of the Leases, Rents, Proceeds and other rents, income, proceeds
and benefits of the Collateral contained in the granting clause of this Deed
constitutes an absolute, present and irrevocable assignment, grant and
conveyance, provided, however, that a revocable license is hereby given to the
Grantor, so long as no Event of Default has occurred and be continuing
hereunder, to collect, receive and apply such Rents, Proceeds and other rents,
income, proceeds and benefits as they become due and payable, but not further in
advance thereof than is customary, and in accordance with all of the other
terms, conditions and provisions hereof, of the Loan Documents, and of the
Leases, contracts, agreements and other instruments with respect to which such
payments are made or such other benefits are conferred. Upon the occurrence and
continuance of an Event of Default, such license shall terminate immediately and
automatically, without notice to the Grantor or any other Person except as
required by law, and shall not be reinstated upon a cure of such Event of
Default without the express written consent of the Grantee. Such assignment
shall be fully effective without any further action on the part of the Grantor
or the Grantee and the Grantee shall be entitled, at its option, upon the
occurrence and continuance of an Event of Default hereunder, to collect, receive
and apply all Rents, Proceeds and all other rents, income, proceeds and benefits
from the Collateral, including all right, title and interest of the Grantor in
any escrowed sums or deposits or any portion thereof or interest therein,
whether or not the Grantee takes possession of the Collateral or any part
thereof. The Grantor further grants to the Grantee the right, at the Grantee's
option, upon the occurrence and continuance of an Event of Default hereunder,
to:

            (a) enter upon and take possession of the Property for the purpose
      of collecting Rents, Proceeds and said rents, income, proceeds and other
      benefits;

            (b) dispossess by the customary summary proceedings any tenant,
      purchaser or other Person defaulting in the payment of any amount when and
      as due and payable, or in the performance of any other obligation, under
      any Lease, contract or other instrument to which said Rents, Proceeds or
      other rents, income, proceeds or benefits relate;

            (c) let or convey the Collateral or any portion thereof or any
      interest therein; and

                                      -8-
<PAGE>   13
            (d) apply Rents, Proceeds and such rents, income, proceeds and other
      benefits, after the payment of all necessary fees, charges and expenses,
      on account of the Secured Obligations in accordance with Section 3.11.

      SECTION 1.15. No Claims Against the Grantee. Nothing contained in this
Deed shall constitute any consent or request by the Grantee, express or implied,
for the performance of any labor or the furnishing of any materials or other
property in respect of the Property or any part thereof, or be construed to
permit the making of any claim against the Grantee in respect of labor or
services or the furnishing of any materials or other property or any claim that
any lien based on the performance of such labor or the furnishing of any such
materials or other property is prior to the security title and security interest
of this Deed. ALL CONTRACTORS, SUBCONTRACTORS, VENDORS AND OTHER PERSONS DEALING
WITH THE PROPERTY, OR WITH ANY PERSONS INTERESTED THEREIN, ARE HEREBY REQUIRED
TO TAKE NOTICE OF THE PROVISIONS OF THIS SECTION.

      SECTION 1.16. Indemnification. The Grantor will protect, indemnify, save
harmless and defend the Grantee, the Fixed Assets Lenders, and each of their
respective officers, directors, shareholders, employees, representatives and
agents (collectively, the "Indemnified Parties" and individually, an
"Indemnified Party"), from and against any and all liabilities, obligations,
claims, damages, penalties, causes of action, costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses) imposed upon or
incurred by or asserted against any Indemnified Party by reason of (a) ownership
of an interest in this Deed, any other Loan Document pertaining to the Fixed
Assets Loans or the Property, (b) any accident, injury to or death of persons or
loss of or damage to or loss of the use of property occurring on or about the
Property or any part thereof or the adjoining sidewalks, curbs, vaults and vault
spaces, if any, streets, alleys or ways, (c) any use, non-use or condition of
the Property or any part thereof or the adjoining sidewalks, curbs, vaults and
vault spaces, if any, streets, alleys or ways, (d) any failure on the part of
the Grantor to perform or comply with any of the terms of this Deed or any Loan
Document pertaining to the Fixed Assets Loans, (e) performance of any labor or
services or the furnishing of any materials or other property in respect of the
Collateral or any part thereof made or suffered to be made by or on behalf of
the Grantor, (f) any negligence or tortious act on the part of the Grantor or
any of its agents, contractors, lessees, licensees or invitees, (g) any work in
connection with any alterations, changes, new construction or demolition of or
additions to the Property, or (h) (i) any Hazardous Material on, in, under or
affecting all or any portion of the Property, the groundwater, or any
surrounding areas, (ii) any misrepresentation, inaccuracy or breach of any
warranty, covenant or agreement contained or referred to in Sections 1.21 and
1.22, (iii) any violation or claim of violation by the Grantor of any
Environmental Laws, or (iv) the imposition of any lien for damages caused by or
the recovery of any costs for the cleanup, release or threatened release of any
Hazardous Material, except to the extent that any of the matters described in
subsections (a)-(h) arise out of the gross negligence or willful misconduct of
any Indemnified Party. If any action or proceeding be commenced, to which action
or proceeding any Indemnified Party is made a party by reason of the execution
of this Deed or any other Loan Document pertaining to the Fixed Assets Loans, or
in which it becomes necessary to defend or uphold the lien of this Deed, all
sums paid by the Indemnified Parties, for the expense of any litigation to
prosecute or defend the rights and lien created hereby or otherwise, shall be
paid by the Grantor to such Indemnified Parties, as the case may be, as
hereinafter provided. The Grantor will pay and save the Indemnified Parties
harmless against any and all liability with respect to any intangible personal
property tax or similar imposition of the State or any subdivision or authority
thereof now or hereafter in effect, to the extent that the same may be payable
by the Indemnified Parties in respect of this Deed, any Loan Document pertaining
to the Fixed Assets Loans or any Secured Obligation. All amounts payable to the
Indemnified Parties under this Section 1.16 shall be deemed indebtedness secured
by this Deed and any such amounts which are not paid within ten (10) days after
written demand therefor by any Indemnified Party shall bear interest at the rate
provided for in Section 3.2.2 of the Credit Agreement from the date of such
demand. In case any action, suit or proceeding is brought against any
Indemnified Party by reason

                                      -9-
<PAGE>   14
of any such occurrence, the Grantor, upon request of such Indemnified Party,
will, at the Grantor's expense, resist and defend such action, suit or
proceeding or cause the same to be resisted or defended by counsel designated by
the Grantor and approved by such Indemnified Party. The obligations of the
Grantor under this Section 1.16 shall survive any cancellation and surrender of
this Deed.

      SECTION 1.17. No Credit for Payment of Taxes. The Grantor shall not be
entitled to any credit against the Secured Obligations by reason of the payment
of any tax on the Property or any part thereof or by reason of the payment of
any other Imposition, and shall not apply for or claim any deduction from the
taxable value of the Property or any part thereof by reason of this Deed.

      SECTION 1.18.  Intentionally Omitted

      SECTION 1.19. No Transfer of the Property. Except as is provided in the
Credit Agreement, and except for the Permitted Encumbrances, the Grantor shall
not, without the prior written consent of the Grantee, which consent may be
granted or withheld in the sole and absolute discretion of the Grantee (i) sell,
convey, assign or otherwise transfer the Property or any portion of the
Grantor's interest therein or (ii) further encumber the Property or permit the
Property to become encumbered by any lien, claim, security title, security
interest or other indebtedness of any kind or nature other than the Permitted
Encumbrances.

      SECTION 1.20 Security Agreement. With respect to the items of personal
property and fixtures referred to and described in the granting clause of this
Deed and included as part of the Collateral, this Deed is hereby made and
declared to be a security agreement encumbering each and every item of personal
property and fixtures now or hereafter owned by Grantor and included herein as a
part of the Collateral, in compliance with the provisions of the Uniform
Commercial Code as enacted in the State. In this respect, Grantor, as "Debtor",
expressly grants to Grantee, as "Secured Party", a security interest in and to
all of the property now or hereafter owned by Grantor which constitutes the
personal property and fixtures hereinabove referred to and described in this
Deed, including all extensions, accessions, additions, improvements,
betterments, renewals, replacements and substitutions thereof or thereto, and
all proceeds from the sale or other disposition thereof. Grantor agrees to
execute and deliver to Grantee, upon Grantee's request, any other security
agreement and financing statements, as well as extensions, renewals, and
amendments thereof, in such form as Grantee may reasonably require to perfect a
security interest with respect to said items. Grantor shall pay all costs of
filing such financing statements and any extensions, renewals, amendments and
releases thereof, and shall pay all reasonable costs and expenses of any record
searches for financing statements Grantee may reasonably require. Except as is
provided in the Credit Agreement, and except for the Permitted Encumbrances,
without the prior written consent of Grantee, Grantor shall not create or suffer
to be created pursuant to the Uniform Commercial Code any other security
interest in the above-described personal property and fixtures, including any
replacements and additions thereto. Upon the occurrence and continuance of an
Event of Default under this Deed, the Grantee shall have and shall be entitled
to exercise any and all of the rights and remedies (i) as prescribed in this
Deed, or (ii) as prescribed by general law, or (iii) as prescribed by the
specific statutory provisions now or hereafter enacted and specified in said
Uniform Commercial Code, all at Grantee's sole election. Grantor and Grantee
agree that the filing of any financing statements in the records normally having
to do with personal property shall not in any way affect the agreement of
Grantor and Grantee that everything located in, on or about, or used or intended
to be used with or in connection with the use, operation or enjoyment of, the
Collateral, which is described or reflected as a fixture in this Deed, is, and
at all times and for all purposes and in all proceedings, both legal and
equitable, shall be, regarded as part of the Real Estate conveyed hereby.
Grantor warrants that Grantor's name, identity and address are as set forth
herein. The mailing address of the Grantee from which information may be
obtained concerning the security interest created herein is also set forth
herein.

                                      -10-
<PAGE>   15
      SECTION 1.21. Representations and Warranties. In order to induce the
Grantee to enter into this Deed, the Credit Agreement and the other Loan
Documents pertaining to the Fixed Assets Loans, the Grantor agrees that all of
the representations and warranties of Grantor set forth in the Credit Agreement
are incorporated into this Deed by reference as if fully set forth herein.

      SECTION 1.22. Grantor's Covenants. In order to induce the Grantee to enter
into this Deed, the Credit Agreement and the other Loan Documents, the Grantor
agrees that all of the covenants of Grantor set forth in the Credit Agreement
are incorporated into this Deed by reference as if fully set forth herein.

      SECTION 1.23. Attornment. Grantee hereby acknowledges and agrees that the
security title and security interest granted herein are subject to the rights of
certain lessees under the Leases as disclosed in the Credit Agreement and will
be subject to the rights of lessees under any Leases entered into by Grantor
after the date hereof which are permitted as Permitted Real Estate Liens
pursuant to the Credit Agreement, subject to the express rights contained in the
applicable Lease. The rights of the tenants under the Leases to the leased
premises shall not be adversely affected by the exercise by Grantee of any of
its rights hereunder, nor shall any such tenant be in any way deprived of its
rights under the applicable Lease except in accordance with the terms of such
Lease. In the event that Grantee succeeds to the interest of Grantor under a
Lease, such Lease shall not be terminated or affected thereby except as set
forth therein, and any sale of the applicable leased premises by Grantee or
pursuant to the judgment of any court in an action to enforce the remedies
provided for in this Deed shall be made subject to such Lease and the rights of
such tenant expressly set forth thereunder. If Grantee succeeds to the interests
of Grantor in and to the applicable leased premises or under such Lease or
enters into possession of such leased premises, the Grantee, and such tenants,
shall be bound to each other under all of the express terms, covenants and
conditions of such Lease, as if the Grantee was originally the Grantor as lessor
thereunder.

                                   ARTICLE II

                 INSURANCE; DAMAGE, DESTRUCTION OR TAKING, ETC.

      SECTION 2.1. Insurance.

      SECTION 2.1.1. Risks to be Insured. The Grantor will, at its expense,
maintain or cause to be maintained with insurance carriers approved by the
Grantee (a) insurance with respect to the Improvements against loss or damage by
fire, lightning and such other risks as are included in standard "all-risk"
policies, in amounts sufficient to prevent the Grantor and the Grantee from
becoming a co-insurer of any partial loss under the applicable policies, but in
any event in amounts not less than the then full insurable value (actual
replacement value) of the Improvements, as determined by the Grantor in
accordance with generally accepted insurance practice and approved by the
Grantee or, at the request of the Grantee, as determined at the Grantor's
expense by the insurer or insurers or by an expert approved by the Grantee, (b)
comprehensive public liability, including bodily injury and product liability
and property damage, insurance, with personal injury endorsements, applicable to
the Property in such amounts as are customarily carried by Persons operating
similar properties in the same general locality, but in any event with a
combined single limit of not less than Twenty Million Dollars ($20,000,000) per
occurrence, (c) explosion insurance in respect of any steam and pressure boilers
and similar apparatus located in the Property in such amounts as are usually
carried by persons operating similar properties in the same general locality,
but in any event in an amount not less than Twenty Million Dollars
($20,000,000), (d) business interruption insurance (including added expense
coverage) against all insurable perils for a period of not fewer than twelve
(12) months (subject to a reasonable aggregate deductible not exceeding ten (10)
days per any occurrence), (e) worker's compensation insurance to the full extent
required by applicable law for all employees of the Grantor engaged in any work
on or about the Property and

                                      -11-
<PAGE>   16
employer's liability insurance with a limit of not less than Ten Million Dollars
($10,000,000) for each occurrence, (f) all-risk, builders' risk insurance with
respect to the Property during any period during which there is any construction
work being performed, against loss or damage by fire or other risks, including
vandalism, malicious mischief and sprinkler leakage, as are included in
so-called "extended coverage" clauses at the time available and (g) such other
insurance with respect to the Property in such amounts and against such
insurable hazards as the Grantee from time to time may reasonably require by
written notice to the Grantor.

      SECTION 2.1.2. Policy Provisions. All insurance maintained by the Grantor
pursuant to Section 2.1.1 shall (a) (except for worker's compensation insurance)
list the Grantee as an additional insured as its interests may appear, (b)
(except for worker's compensation and public liability insurance) provide that
the proceeds for any losses shall be adjusted by the Grantor subject to the
approval of the Grantee in the event the proceeds shall exceed $1,000,000, and
shall be payable to the Grantee, to be held and applied as provided in Section
2.3, (c) include effective waivers by the insurer of all rights of subrogation
against any named insured, the indebtedness secured by this Deed and the
Property and all claims for insurance premiums against the Grantee, (d) (except
for worker's compensation and public liability insurance) provide that any
losses shall be payable notwithstanding (i) any act, failure to act or
negligence of or violation of warranties, declarations or conditions contained
in such policy by any named insured, (ii) the occupation or use of the Property
for purposes more hazardous than permitted by the terms thereof, (iii) any
foreclosure or other action or proceeding taken by the Grantee pursuant to any
provision of this Deed, or (iv) any change in title or ownership of the
Property, (e) provide that no cancellation, reduction in amount or material
change in coverage thereof or any portion thereof shall be effective until at
least thirty (30) days after receipt by the Grantee of written notice thereof,
(f) provide that any notice under such policies shall be simultaneously
delivered to the Grantee, and (g) be satisfactory in all other reasonable
respects to the Grantee. Any insurance maintained pursuant to this Section 2.1
may be evidenced by blanket insurance policies covering the Property and other
properties or assets of the Grantor, provided that any such policy shall specify
the portion, if less than all, of the total coverage of such policy that is
allocated to the Property and shall in all other respects comply with the
requirements of this Section 2.1.

      SECTION 2.1.3. Delivery of Policies, etc. The Grantor will deliver to the
Grantee, promptly upon request, (a) certificates of all policies evidencing all
insurance required to be maintained under Section 2.1.1 (or, in the case of
blanket policies, certificates thereof by the insurers together with a
counterpart of each blanket policy), and (b) evidence as to the payment of all
premiums due thereon (with respect to public liability insurance policies, all
installments for the current year due thereon to such date), provided that the
Grantee shall not be deemed by reason of its custody of such policies to have
knowledge of the contents thereof. The Grantor will also deliver to the Grantee
prior to the expiration of any policy a binder or certificate of the insurer
evidencing the replacement thereof and when the new policy is issued a
certificate of the new policy (or, in the case of a replacement blanket policy,
a certificate thereof of the insurer together with a counterpart of the blanket
policy). In the event the Grantor shall fail to effect or maintain any insurance
required to be effected or maintained pursuant to the provisions of this Section
2.1, the Grantor will indemnify the Grantee against damage, loss or liability
resulting from all risks for which such insurance should have been effected or
maintained.

      SECTION 2.1.4. Separate Insurance. The Grantor will not take out separate
insurance concurrent in form or contributing in the event of loss with that
required to be maintained pursuant to this Section 2.1.

                                      -12-
<PAGE>   17
      SECTION 2.2. Damage, Destruction or Taking; Grantor to Give Notice;
Assignment of Awards. In case of

            (a) any material damage to or destruction of the Collateral or any
      material part thereof, or

            (b) any taking, whether for permanent or temporary use, of all or
      any material part of the Collateral or any material interest therein or
      material right accruing thereto, as the result of the exercise of the
      right of condemnation or eminent domain, or a change of grade affecting
      the Collateral or any portion thereof (a "Taking"), or the commencement of
      any proceedings or negotiations which may result in a Taking,

the Grantor will promptly give written notice thereof to the Grantee, generally
describing the nature and extent of such damage or destruction and the Grantor's
best estimate of the cost of restoring the Collateral, or the nature of such
proceedings or negotiations and the nature and extent of the Taking which might
result therefrom, as the case may be. The Grantee shall be entitled to all
insurance proceeds payable on account of such damage or destruction and to all
awards or payments allocable to the Collateral on account of such Taking up to
the amount of the Secured Obligations, and the Grantor hereby irrevocably
assigns, transfers and sets over to the Grantee all rights of the Grantor to any
such proceeds, awards or payments and irrevocably authorizes and empowers the
Grantee, at its option, in the name of the Grantor or otherwise, to file and
prosecute what would otherwise be the Grantor's claim for any such proceeds,
award or payment and to collect, receipt for and retain the same for disposition
in accordance with Section 2.3. The Grantor will pay all reasonable costs and
expenses incurred by the Grantee in connection with any such damage, destruction
or Taking and seeking and obtaining any insurance proceeds, awards or payments
in respect thereof.

      SECTION 2.3. Application of Proceeds and Awards. The Grantee may, at its
option, apply all amounts recovered under any insurance policy required to be
maintained by the Grantor hereunder and all awards received by it on account of
any Taking in any one or more of the following ways:

            (a) to the payment of the reasonable costs and expenses incurred by
      the Grantee in obtaining any such insurance proceeds or awards, including
      the fees and expenses of attorneys and insurance and other experts and
      consultants, the costs of litigation, arbitration, mediation,
      investigations and other judicial, administrative or other proceedings and
      all other out-of-pocket expenses;

            (b) to the payment of the principal of the Fixed Asset Loans and any
      interest (including post-petition interest payable in any proceedings for
      bankruptcy under applicable law ("Post-Petition Interest") to the extent
      such interest is a Secured Obligation) accrued and unpaid thereon, without
      regard to whether any portion or all of such amounts shall be matured or
      unmatured; and, in case such amount shall be insufficient to pay in full
      all such amounts, then such amount shall be applied, first, to the payment
      of all amounts of interest (including Post-Petition Interest to the extent
      such interest is a Secured Obligation) accrued on the Fixed Asset Loans
      and unpaid, second, to the payment of all amounts of principal at the time
      outstanding;

            (c) to the payment of, or the application to, any Secured Obligation
      (other than as provided in clause (b) above);

            (d) to fulfill any of the other covenants contained herein, in the
      Credit Agreement pertaining to the Fixed Assets Loans, or in any other
      Loan Document pertaining to the Fixed Assets Loans, as the Grantee may
      determine in its sole discretion;

                                      -13-
<PAGE>   18
            (e) to the Grantor for application to the cost of restoring the
      Collateral and the replacement of Goods destroyed, damaged or taken; or

            (f) to the Grantor.

      Notwithstanding the foregoing provisions of this Section 2.3 to the
contrary (but subject to the provisions of Section 2.4), and if each of the
following conditions is satisfied, the Grantee, upon request of the Grantor,
shall apply insurance proceeds or condemnation awards received by it to the
restoration or replacement of the Collateral, to the extent necessary for the
restoration or replacement thereof:

                  (i)  there shall then exist no uncured Event of Default;

                  (ii) the Grantor shall furnish to the Grantee a certificate of
            an architect or engineer reasonably acceptable to the Grantee
            stating (x) that the Collateral is capable of being restored, prior
            to the maturity of the Credit Agreement, to substantially the same
            condition as existed prior to the casualty or Taking, (y) the
            aggregate estimated direct and indirect costs of such restoration
            and (z) as to any Taking, that the property taken in such Taking, or
            sold under threat thereof, is not necessary to the Grantor's
            customary use or occupancy of the Property or Grantor otherwise
            provides Grantee adequate assurance that the Collateral can be
            restored or is not necessary to Grantor's customary use or occupancy
            of the Property; and

                  (iii) in the event that the estimated cost of restoration set
            forth in the certificate of such architect or engineer (and such
            revisions to such estimate as are from time to time made) exceeds
            the net insurance proceeds or condemnation awards actually received
            from time to time, the Grantor shall deposit the amount of such
            excess with the Grantee.

      In the event that such insurance proceeds or condemnation awards are to be
utilized in the restoration of the Collateral, the Grantee shall disburse such
Proceeds and the additional amounts deposited by the Grantor for such
restoration after receipt of a written request for disbursement, on not fewer
than five (5) nor more than twelve (12) Business Days notice and, to the extent
applicable, in accordance with the Grantee's customary construction loan
procedures and conditions. In the event that such insurance or condemnation
awards are to be utilized to replace the Collateral so destroyed or taken, the
Grantee shall disburse such Proceeds after receipt of a written request for
disbursement, on not fewer than five (5) Business Days nor more than twelve (12)
Business Days notice simultaneously with the acquisition of such replacement
property by the Grantor. In the event that, after the restoration or replacement
of the Collateral, any insurance or condemnation awards shall remain, such
amount shall be paid to the Grantor. Insurance proceeds and condemnation awards
shall be invested in the manner reasonably requested by the Grantor and approved
by the Grantee, and all interest earned thereon shall be applied as provided in
this Section 2.3. If, prior to the receipt by the Grantee of such insurance
proceeds or condemnation awards, the Collateral shall have been sold on
foreclosure, the Grantee shall have the right to receive said insurance proceeds
or condemnation awards to the extent of any deficiency found to be due upon such
sale, with legal interest thereon, whether or not a deficiency judgment shall
have been sought or recovered or denied, and the reasonable attorneys' fees,
costs and disbursements incurred by the Grantee in connection with the
collection of such award or payment.

      SECTION 2.4. Total Taking and Total Destruction. In the event of a Total
Destruction or a Total Taking, the Grantee shall apply all amounts recovered
under any insurance policy referred to in Section 2.1.1 and all awards received
by it on account of any such Taking as follows:

                                      -14-
<PAGE>   19
            (a) first, to the payment of the reasonable costs and expenses
      incurred by the Grantee in obtaining any such insurance proceeds or
      awards, including the fees and expenses of attorneys and insurance and
      other experts and consultants, the costs of litigation, arbitration,
      mediation, investigations and other judicial, administrative or other
      proceedings and all other out-of-pocket expenses;

            (b) second, to the payment of the principal of the Fixed Assets
      Loans and any interest (including Post-Petition Interest to the extent
      such interest is a Secured Obligation) accrued and unpaid thereon, without
      regard to whether any portion or all of such amounts shall be matured or
      unmatured; and, in case such amount shall be insufficient to pay in full
      all such amounts, then such amount shall be applied, first, to the payment
      of all amounts of interest (including Post-Petition Interest to the extent
      such interest is a Secured Obligation) accrued on the Fixed Assets Loans
      and unpaid, and second, to the payment of all amounts of principal at the
      time outstanding;

            (c) third, to the payment of, or the application to, any Secured
      Obligation (other than as provided in clause (b) above);

            (d) fourth, to fulfill any of the other covenants contained herein
      as the Grantee may determine; and

            (e) fifth, the balance, if any, to the Grantor.


                                   ARTICLE III

                        EVENTS OF DEFAULT; REMEDIES, ETC.

      SECTION 3.1. Events of Default; Acceleration. If an "Event of Default"
(pursuant to and as defined in the Credit Agreement) shall have occurred and be
continuing, then and in any such event the Grantee may at any time thereafter
(unless all Events of Default shall theretofore have been remedied and all costs
and expenses, including, without limitation, attorneys' fees and expenses
incurred by or on behalf of the Grantee, shall have been paid in full by the
Grantor) declare, by written notice to the Grantor, the Fixed Assets Loans and
all other Secured Obligations to be due and payable immediately or on a date
specified in such notice (provided that, upon the occurrence of any Event of
Default described in Section 8.1.9 of the Credit Agreement, the Fixed Assets
Loans and all other Secured Obligations shall automatically become due and
payable), and on such date the same shall be and become due and payable,
together with interest accrued thereon, without presentment, demand, protest or
notice, all of which the Grantor hereby waives. The Grantor will pay on demand
all costs and expenses, including, without limitation, attorneys' fees and
expenses, incurred by or on behalf of the Grantee in enforcing this Deed, or any
other Loan Document evidencing or securing the Fixed Assets Loans, or occasioned
by any default hereunder or thereunder.

      SECTION 3.2. Legal Proceedings; Judicial Foreclosure. If an Event of
Default shall have occurred and be continuing, the Grantee at any time may, at
its election, proceed at law or in equity or otherwise to enforce the payment
and performance of the Secured Obligations in accordance with the terms hereof
and thereof and to foreclose the security title of this Deed as against all or
any part of the Collateral and to have the same sold under the judgment or
decree of a court of competent jurisdiction. The Grantee shall be entitled to
recover in such proceedings all costs incident thereto, including attorneys'
fees and expenses in such amounts as may be fixed by the court.

                                      -15-
<PAGE>   20
      SECTION 3.3. Power of Sale. If an Event of Default shall have occurred and
be continuing, Grantee, at its option, may sell the Collateral or any part of
the Collateral at one or more public sale or sales before the door of the
courthouse of the county in which the Land or any part of the Land is situated,
to the highest bidder for cash, in order to pay the Secured Obligations, and all
expenses of sale and of all proceedings in connection therewith, including
attorney's fees, after advertising the time, place and terms of sale once a week
for four (4) weeks immediately preceding such sale (but without regard to the
number of days) in a newspaper in which Sheriff's sales are advertised in said
county. At any such public sale, Grantee may execute and deliver to the
purchaser a conveyance of the Collateral or any part of the Collateral, and to
this end, Grantor hereby constitutes and appoints Grantee the agent and
attorney-in-fact of Grantor to make such sale and conveyance, and thereby to
divest Grantor of all right, title and equity that Grantor may have in and to
the Collateral and to vest the same in the purchaser or purchasers at such sale
or sales, and all the acts and doings of said agent and attorney-in-fact are
hereby ratified and confirmed and any recitals in said conveyance or conveyances
as to facts essential to a valid sale shall be binding upon Grantor. The
aforesaid power of sale and agency hereby granted are coupled with an interest
and are irrevocable by death or otherwise, are granted as cumulative of the
other remedies provided hereby or by law for collection of the Secured
Obligations and shall not be exhausted by one exercise thereof but may be
exercised until full payment of all of the Secured Obligations. In the event of
any sale under this Deed by virtue of the exercise of the powers herein granted,
or pursuant to any order in any judicial proceeding or otherwise, the Collateral
may be sold as an entirety or in separate parcels and in such manner or order as
Grantee in its sole discretion may elect. One or more exercises of the powers
herein granted shall not extinguish nor exhaust such powers, until the entire
Collateral is sold or the Secured Obligations paid in full. If the Secured
Obligations are now or hereafter further secured by any chattel mortgages,
pledges, contracts of guaranty, assignments of lease or other security
instruments, Grantee may at its option exhaust the remedies granted under any of
said security instruments either concurrently or independently, and in such
order as Grantee may determine. Upon any public foreclosure sale or sales of all
or any portion of the Collateral under the power herein granted, Grantee may bid
for and purchase the Collateral and shall be entitled to apply all or any part
of the Secured Obligations as a credit to the purchase price. In the event of
any such public foreclosure sale or sales under the power herein granted,
Grantor shall be deemed a tenant holding over and shall forthwith deliver
possession to the purchaser or purchasers at such sale or be summarily
dispossessed according to provisions of law applicable to tenants holding over.

      SECTION 3.4. Uniform Commercial Code Remedies. If an Event of Default
shall have occurred and be continuing, the Grantee may exercise from time to
time and at any time any rights and remedies available to it under applicable
law upon default in the payment of indebtedness, including, without limitation,
any right or remedy available to it as a secured party under the Uniform
Commercial Code of the State. The Grantor shall, promptly upon request by the
Grantee, assemble the Collateral, or any portion thereof generally described in
such request, and make it available to the Grantee at such place or places
designated by the Grantee and reasonably convenient to the Grantee or the
Grantor. If the Grantee elects to proceed under the Uniform Commercial Code of
the State to dispose of portions of the Collateral, the Grantee, at its option,
may give the Grantor notice of the time and place of any public sale of any such
property, or of the date after which any private sale or other disposition
thereof is to be made, by sending notice by registered or certified first class
mail, postage prepaid, to the Grantor at least ten (10) days before the time of
the sale or other disposition. If any notice of any proposed sale, assignment or
transfer by the Grantee of any portion of the Collateral or any interest therein
is required by law, the Grantor conclusively agrees that ten (10) days notice to
the Grantor of the date, time and place (and, in the case of a private sale, the
terms) thereof is reasonable.

      SECTION 3.5. Grantee Authorized to Execute Deeds, etc. The Grantor
irrevocably appoints the Grantee (which appointment is coupled with an interest
and is irrevocable by death or otherwise) the true and lawful attorney-in-fact
of the Grantor, in its name and stead and on its behalf, for the purpose of

                                      -16-
<PAGE>   21
effectuating any sale, assignment, transfer or delivery for the enforcement
hereof, whether pursuant to power of sale, foreclosure or otherwise, to execute
and deliver all such deeds, bills of sale, assignments, releases and other
instruments as may be designated in any such request.

      SECTION 3.6. Purchase of Collateral by Grantee. The Grantee may be a
purchaser of the Collateral or of any part thereof or of any interest therein at
any public sale thereof, whether pursuant to power of sale, foreclosure or
otherwise, and the Grantee may apply upon the purchase price thereof the
indebtedness secured hereby owing to the Grantee. Such purchaser shall, upon any
such purchase, acquire good title to the properties so purchased, free of the
security interest and security title of this Deed and free of all rights of
redemption in the Grantor.

      SECTION 3.7. Receipt a Sufficient Discharge to Purchaser. Upon any sale
of the Collateral or any part thereof or any interest therein, whether pursuant
to power of sale, foreclosure or otherwise, the receipt of the Grantee or the
officer making the sale under judicial proceedings shall be a sufficient
discharge to the purchaser for the purchase money, and such purchaser shall not
be obliged to see to the application thereof.

      SECTION 3.8. Waiver of Appraisement, Valuation, etc. The Grantor hereby
waives, to the fullest extent it may lawfully do so, the benefit of all
appraisement, valuation, stay, extension and redemption laws now or hereafter in
force and all rights of marshaling in the event of any sale of the Collateral or
any part thereof or any interest therein.

      SECTION 3.9. Sale a Bar Against Grantor. Any sale of the Collateral or
any part thereof or any interest therein under or by virtue of this Deed,
whether pursuant to power of sale, foreclosure or otherwise, shall forever be a
bar against the Grantor.

      SECTION 3.10. Secured Obligations to Become Due on Sale. Except as
otherwise provided in the Credit Agreement, upon any sale of the Collateral or
any portion thereof or interest therein by virtue of the exercise of any remedy
by the Grantee under or by virtue of this Deed, whether pursuant to power of
sale, foreclosure or otherwise in accordance with this Deed or by virtue of any
other remedy available at law or in equity or by statute or otherwise, at the
option of the Grantee, any sums or monies due and payable pursuant to the Credit
Agreement pertaining to the Fixed Assets Loans, the Loan Documents pertaining to
the Fixed Assets Loans and in connection with the Fixed Assets Loans and/or the
Secured Obligations shall, if not previously declared due and payable,
immediately become due and payable, together with interest accrued thereon, and
all other indebtedness which this Deed by its terms secures.

      SECTION 3.11. Application of Proceeds of Sale and Other Moneys. Except
as otherwise provided in the Credit Agreement or herein, the proceeds of any
sale of the Collateral or any part thereof or any interest therein under or by
virtue of this Deed, whether pursuant to power of sale, foreclosure or
otherwise, and all other moneys at any time held by the Grantee as part of the
Collateral, shall be applied in such order of priority as the Grantee shall
determine in its sole and absolute discretion including, without limitation, as
follows:

            (a) first, to the payment of the reasonable costs and expenses of
      such sale (including, without limitation, the cost of evidence of title
      and the costs and expenses, if any, of taking possession of, retaining
      custody over, repairing, managing, operating, maintaining and preserving
      the Collateral or any part thereof prior to such sale), all reasonable
      costs and expenses incurred by the Grantee or any other Person in
      obtaining or collecting any insurance proceeds, condemnation awards or
      other amounts received by the Grantee, all reasonable costs and expenses
      of any receiver of the Collateral or any part thereof, and any Impositions
      or other charges or expenses

                                      -17-
<PAGE>   22
      prior to the security interest or security title of this Deed, which the
      Grantee may consider it necessary or desirable to pay;

            (b) second, to the payment of any Secured Obligation (other than
      those set forth in Section 3.11(c) below);

            (c) third, to the payment of all amounts of principal of and
      interest (including Post-Petition Interest to the extent such interest is
      a Secured Obligation) at the time due and payable under the Credit
      Agreement pertaining to the Fixed Assets Loans at the time outstanding
      (whether due by reason of maturity or by reason of any prepayment
      requirement or by declaration or acceleration or otherwise), including
      interest at the rate provided for in the Credit Agreement on any overdue
      principal and (to the extent permitted under applicable law) on any
      overdue interest; and, in case such moneys shall be insufficient to pay in
      full such principal and interest, then, first, to the payment of all
      amounts of interest (including Post-Petition Interest to the extent such
      interest is a Secured Obligation) at the time due and payable and, second,
      to the payment of all amounts of principal at the time due and payable
      under the Fixed Assets Loans; and

            (d) fourth, the balance, if any, held by the Grantee after payment
      in full of all amounts referred to in subdivisions Sections 3.11(a), (b)
      and (c) above, shall, unless a court of competent jurisdiction may
      otherwise direct by final order not subject to appeal, be paid to or upon
      the direction of the Grantor.

      SECTION 3.12. Appointment of Receiver. If an Event of Default shall have
occurred and be continuing, the Grantee shall, as a matter of right, without
notice, and without regard to the adequacy of any security for the indebtedness
secured hereby or the solvency of the Grantor, be entitled to the appointment of
a receiver for all or any part of the Collateral, whether such receivership be
incidental to a proposed sale of the Collateral or otherwise, and the Grantor
hereby consents to the appointment of such a receiver and will not oppose any
such appointment.

      SECTION 3.13. Possession, Management and Income. If an Event of Default
shall have occurred and be continuing, in addition to, and not in limitation of,
the rights and remedies provided in Section 1.14, the Grantee, upon five (5)
days written notice to the Grantor, may enter upon and take possession of the
Collateral or any part thereof by force, summary proceeding, ejectment or
otherwise and may remove the Grantor and all other Persons and any and all
property therefrom and may hold, operate, maintain, repair, preserve and manage
the same and receive all earnings, income, Rents, issues and Proceeds accruing
with respect thereto or any part thereof. The Grantee shall be under no
liability for or by reason of any such taking of possession, entry, removal or
holding, operation or management, except that any amounts so received by the
Grantee shall be applied to pay all costs and expenses of so entering upon,
taking possession of, holding, operating, maintaining, repairing, preserving and
managing the Collateral or any part thereof, and any Impositions or other
charges prior to the security title and security interest of this Deed which the
Grantee may consider it necessary or desirable to pay, and any balance of such
amounts shall be applied as provided in Section 3.11.

      SECTION 3.14. Right of Grantee to Perform Grantor's Covenants, etc. If
the Grantor shall fail to make any payment or perform any act required to be
made or performed hereunder or under the Credit Agreement pertaining to the
Fixed Assets Loans or any other Loan Document pertaining to the Fixed Assets
Loans, the Grantee, without notice to or demand upon the Grantor and without
waiving or releasing any obligation or Event of Default, may (but shall be under
no obligation to) at any time thereafter make such payment or perform such act
for the account and at the expense of the Grantor, and may enter upon the
Collateral for such purpose and take all such action thereon as, in the
Grantee's opinion, may be necessary or appropriate therefor. No such entry and
no such action shall be deemed an

                                      -18-
<PAGE>   23
eviction of any lessee of the Property or any part thereof. All sums so paid by
the Grantee and all costs and expenses (including, without limitation,
attorneys' fees and expenses) so incurred, together with interest thereon at the
rate provided for in Section 3.2.2 of the Credit Agreement from the date of
payment or incurring, shall constitute additional indebtedness under the Credit
Agreement secured by this Deed and shall be paid by the Grantor to the Grantee
on demand.

      SECTION 3.15. Subrogation. To the extent that the Grantee, on or after
the date hereof, pays any sum due under any provision of any Legal Requirement
or any instrument creating any lien or security title prior or superior to the
lien or security title of this Deed, or the Grantor or any other Person pays any
such sum with the proceeds of the Fixed Assets Loans, the Grantee shall have and
be entitled to a lien or security title on the Collateral equal in priority to
the lien or security title discharged, and the Grantee shall be subrogated to,
and receive and enjoy all rights and liens or security titles possessed, held or
enjoyed by, the holder of such lien or security title, which shall remain in
existence and benefit the Grantee in securing the Secured Obligations.

      SECTION 3.16. Remedies, etc., Cumulative. Each right, power and remedy
of the Grantee provided for in this Deed, the Credit Agreement or any other Loan
Document pertaining to the Fixed Assets Loans, or now or hereafter existing at
law or in equity or by statute or otherwise shall be cumulative and concurrent
and shall be in addition to every other right, power or remedy provided for in
this Deed, the Credit Agreement or any other Loan Document pertaining to the
Fixed Assets Loans, or now or hereafter existing at law or in equity or by
statute or otherwise, and the exercise or beginning of the exercise by the
Grantee of any one or more of the rights, powers or remedies provided for in
this Deed, the Credit Agreement, or any other Loan Document pertaining to the
Fixed Assets Loans, or now or hereafter existing at law or in equity or by
statute or otherwise shall not preclude the simultaneous or later exercise by
the Grantee of any or all such other rights, powers or remedies.

      SECTION 3.17. Provisions Subject to Applicable Law. All rights, powers
and remedies provided in this Deed may be exercised only to the extent that the
exercise thereof does not violate any applicable provisions of law and are
intended to be limited to the extent necessary so that they will not render this
Deed invalid, unenforceable or not entitled to be recorded, registered or filed
under the provisions of any applicable law. If any term of this Deed or any
application thereof shall be invalid or unenforceable, the remainder of this
Deed and any other application of such term shall not be affected thereby.

      SECTION 3.18. No Waiver, etc. No failure by the Grantee to insist upon
the strict performance of any term hereof or of the Credit Agreement, or of any
other Loan Document, or to exercise any right, power or remedy consequent upon a
breach hereof or thereof, shall constitute a waiver of any such term or of any
such breach. No waiver of any breach shall affect or alter this Deed, which
shall continue in full force and effect with respect to any other then existing
or subsequent breach. By accepting payment or performance of any amount or other
Secured Obligations secured hereby before or after its due date, the Grantee
shall not be deemed to have waived its right either to require prompt payment or
performance when due of all other amounts and Secured Obligations payable
hereunder or to declare a default for failure to effect such prompt payment.

      SECTION 3.19. Compromise of Actions, etc. Any action, suit or proceeding
brought by the Grantee pursuant to any of the terms of this Deed, the Credit
Agreement pertaining to the Fixed Assets Loans, any other Loan Document
pertaining to the Fixed Assets Loans, or otherwise, and any claim made by the
Grantee hereunder or thereunder, may be compromised, withdrawn or otherwise
dealt with by the Grantee without any notice to or approval of the Grantor.

                                      -19-
<PAGE>   24
      SECTION 3.20 Foreclosure - Authority Lease. If action is brought to
foreclose this Deed, the rents, income and profits issuing from the Land and the
Improvements shall be collected either through a receiver appointed by the court
after notice of application for such appointment has been given to the Lessor
under the Authority Lease or by Grantee. Notwithstanding anything to the
contrary contained in this Deed, all such money collected shall be first applied
for the payment of the rent due and owing under the Authority Lease or to become
due and owing to the Lessor under the Authority Lease, then for any ad valorem
taxes, insurance premiums or other charges due and payable under the Authority
Lease and for all other maintenance and operating charges and disbursements
incurred in connection with the operation and maintenance of the Land and the
Improvements. The balance of such monies shall be applied pursuant to the terms
of this Deed.

                                   ARTICLE IV

                                   DEFINITIONS

      SECTION 4.1. Terms Defined in this Deed. When used herein the following
terms have the following meanings:

      "Borrowers" shall have the meaning set forth in the second recital.

      "Collateral" shall have the meaning set forth in the granting clause.

      "Contracts" shall have the meaning set forth in clause (h) of the
granting clause.

      "Credit Agreement" shall have the meaning set forth in the second
recital.

      "Credit Extensions" shall have the meaning set forth in the  the second
recital.

      "Default" means any Event of Default or any condition or event which,
after notice or lapse of time, or both, would constitute an Event of Default.

      "Goods" shall have the meaning set forth in clause (c) of the granting
clause.

      "herein", "hereof", "hereto", and "hereunder" and similar terms refer to
this Deed and not to any particular Section, paragraph or provision of this
Deed.

      "Impositions" shall have the meaning set forth in Section 1.5.

      "Improvements" shall have the meaning set forth in clause (b) of the
granting clause.

      "Indemnified Parties" shall have the meaning set forth in Section 1.16.

      "Insurance Requirements" shall have the meaning set forth in paragraph
(a) of Section 1.6.

      "Land" shall have the meaning set forth in the first recital.

      "Leases" shall have the meaning set forth in clause (e) of the granting
clause.

      "Legal Requirements" shall have the meaning set forth in paragraph (b)
of Section 1.6.

                                      -20-
<PAGE>   25
      "Deed" shall have the meaning set forth in the preamble.

      "Grantee" shall have the meaning set forth in the preamble.

      "Grantor" shall have the meaning set forth in the preamble.

      "Permits" shall have the meaning set forth in clause (g) of the
granting clause.

      "Permitted Encumbrances" shall have the meaning set forth in Section 1.2.

      "Person" means a corporation, an association, a partnership, an
organization, a business, an individual, a government or political subdivision
thereof or a governmental agency or officer.

      "Plans" shall have the meaning set forth in clause (f) of the granting
clause.

      "Post-Petition Interest" shall have the meaning set forth in Section 2.3.

      "Proceeds" shall have the meaning set forth in clause (k) of the
granting clause.

      "Property" shall have the meaning set forth in clause (b) of the
granting clause.

      "Real Estate" shall have the meaning set forth in clause (a) of the
granting clause.

      "Rents" shall have the meaning set forth in clause (j) of the granting
clause.

      "Secured Obligations" means the Fixed Assets Obligations and all
Obligations with respect to the Fixed Assets Loans now or hereafter existing
under the Credit Agreement or any Loan Document pertaining to the Fixed Assets
Loans, and all obligations (monetary or otherwise) arising under or in
connection with the Fixed Assets Notes or the Fixed Assets Loans, whether for
principal, interest, costs, fees, expenses or otherwise and all other Fixed
Assets Obligations, all advances, if any, made by Grantee pursuant to the terms
of this Deed, and all duties and obligations of Grantor under this Deed.

      "State" means the State of Georgia.

      "Total Destruction" means any damage to or destruction of the Improvements
or any part thereof which, in the reasonable estimation of the Grantee shall
require the expenditure of an amount in excess of Ten Million Dollars
($10,000,000) to restore the Improvements to substantially the same condition of
the Improvements immediately prior to such damage or destruction.

      "Total Taking" means a Taking, whether permanent or for temporary use,
which, in the reasonable judgment of the Grantee, shall substantially interfere
with and adversely affect the normal operation of the Property by the Grantor to
such an extent as would reasonably be anticipated to cause a Material Adverse
Effect.

      SECTION 4.2. Use of Defined Terms. Terms for which meanings are provided
in this Deed shall, unless otherwise defined or the context otherwise requires,
have such meanings when used in any certificate and any opinion, notice or other
communication delivered from time to time in connection with this Deed or
pursuant hereto.

                                      -21-
<PAGE>   26
      SECTION 4.3. Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Deed, including its
preamble and recitals, have the meanings provided in the Credit Agreement.


                                    ARTICLE V

                                  MISCELLANEOUS

      SECTION 5.1.  Further Assurances; Financing Statements.

      SECTION 5.1.1. Further Assurances. The Grantor, at its expense, will
execute, acknowledge and deliver all such instruments and take all such other
action as the Grantee from time to time may reasonably request:

            (a) to better subject to the security title and security interest of
      this Deed all or any portion of the Collateral,

            (b) to perfect, publish notice or protect the validity of the
      security title and security interest of this Deed,

            (c) to preserve and defend the title to the Collateral and the
      rights of the Grantee therein against the claims of all Persons as long as
      this Deed shall remain undischarged,

            (d) to better subject to the security title and security interest of
      this Deed or to maintain or preserve the security title and security
      interest of this Deed with respect to any replacement or substitution for
      any Collateral or any other after-acquired property except as provided in
      the Credit Agreement, or

            (e) in order to further effectuate the purposes of this Deed and to
      carry out the terms hereof and to better assure and confirm to the Grantee
      its rights, powers and remedies hereunder.

      SECTION 5.1.2. Financing Statements. Notwithstanding any other provision
of this Deed, the Grantor hereby agrees that, without notice to or the consent
of the Grantor, the Grantee may file with the appropriate public officials such
financing statements, continuation statements, amendments and similar documents
as are or may become necessary to perfect, preserve or protect the security
interest granted by this Deed.

      SECTION 5.2. Additional Security. Without notice to or consent of the
Grantor, and without impairment of the security interest and security title and
rights created by this Deed, the Grantee and the Lenders may accept from the
Grantor or any other Person additional security for the Secured Obligations.
Neither the giving of this Deed nor the acceptance of any such additional
security shall prevent the Grantee from resorting, first, to such additional
security, or, first, to the security created by this Deed, or concurrently to
both, in any case without affecting the Grantee's security title and rights
under this Deed.

      SECTION 5.3.  Satisfaction; Partial Release, etc.

      SECTION 5.3.1. Satisfaction. If the Fixed Assets Loans and all other
amounts owing pursuant to the Credit Agreement pertaining to the Fixed Assets
Loans and the other Loan Documents pertaining to the Fixed Assets Loans shall be
repaid in full in accordance with the terms thereof, and if the Grantor shall
pay, in full, the principal of and premium, if any, and interest on the Secured
Obligations in

                                      -22-
<PAGE>   27
accordance with the terms thereof and hereof and all other sums payable
hereunder by the Grantor and shall comply with all the terms, conditions and
requirements hereof and of the Secured Obligations, or otherwise as may be
provided in the Credit Agreement, then on such date, the Grantee shall, upon the
request of the Grantor and at the Grantor's sole cost and expense, execute and
deliver such instruments, in form and substance reasonably satisfactory to the
Grantee, as may be necessary to effectively cancel and surrender this Deed;
provided, however, this Deed secures a revolving credit facility pursuant to the
Credit Agreement and there may be repayment and disbursements of principal from
time to time as provided in the Credit Agreement. It is expressly agreed that
the outstanding principal balance of the Secured Obligations may, from time to
time, be reduced to a zero balance without such repayment operating to
extinguish and release the security title and security interest created by this
Deed. This Deed shall remain in full force and effect as to any subsequent
future advances made after the zero balance without loss of priority until the
Secured Obligations have been paid in full and satisfied and all agreements
between Grantee and Grantor for further advances pursuant to the Credit
Agreement have been terminated and this Deed is cancelled of record. To the
extent it can legally do so, Grantor hereby waives the operation of any
applicable statute, law or regulation having a contrary effect.

      SECTION 5.3.2. Partial Release, etc. The Grantee may, at any time and from
time to time, without liability therefor, and without prior notice to the
Grantor, release or reconvey any part of the Collateral, consent to the making
of any map or plat of the Property, join in granting any easement thereon or
join in any extension agreement or agreement subordinating the security title
and security interest of this Deed.

      SECTION 5.4. Notices, etc. All notices and other communications provided
to any of the parties hereto shall be in writing and addressed, delivered or
transmitted to such party as set forth in the Credit Agreement.

      SECTION 5.5. Waivers, Amendments, etc. The provisions of this Deed may be
amended, discharged or terminated and the observance or performance of any
provision of this Deed may be waived, either generally or in a particular
instance and either retroactively or prospectively, only by an instrument in
writing executed by the Grantor and the Grantee.

      SECTION 5.6. Cross-References. References in this Deed and in each
instrument executed pursuant hereto to any Section or Article are, unless
otherwise specified, to such Section or Article of this Deed or such instrument,
as the case may be, and references in any Section, Article or definition to any
clause are, unless otherwise specified, to such clause of such Section, Article
or definition.

      SECTION 5.7. Headings. The various headings of this Deed and of each
instrument executed pursuant hereto are inserted for convenience only and shall
not affect the meaning or interpretation of this Deed or such instrument or any
provisions hereof or thereof.

      SECTION 5.8. Currency. Unless otherwise expressly stated, all references
to any currency or money, or any dollar amount, or amounts denominated in
"Dollars" herein will be deemed to refer to the lawful currency of the United
States.

      SECTION 5.9. Governing Law. THIS DEED SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE.

      SECTION 5.10. Successors and Assigns, etc. This Deed shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors, successors-in-title and assigns.

                                      -23-
<PAGE>   28
      SECTION 5.11.  Waiver of Jury Trial; Submission to Jurisdiction.

            (a) EACH OF THE GRANTOR AND THE GRANTEE HEREBY KNOWINGLY,
      VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY
      JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR
      IN CONNECTION WITH THIS DEED, THE CREDIT AGREEMENT, ANY LOAN DOCUMENT OR
      ANY OTHER RELATED INSTRUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
      STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF THE GRANTOR OR THE
      GRANTEE. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE GRANTEE AND THE
      FIXED ASSETS LENDERS TO ENTER INTO THE TRANSACTIONS PROVIDED FOR IN THE
      CREDIT AGREEMENT AND TO MAKE THE FIXED ASSETS LOANS.

            (b) FOR THE PURPOSE OF ANY ACTION OR PROCEEDING INVOLVING THIS DEED,
      THE CREDIT AGREEMENT AS PERTAINS TO THE FIXED ASSETS LOANS OR ANY OTHER
      LOAN DOCUMENT AS PERTAINS TO THE FIXED ASSETS LOANS, THE GRANTOR HEREBY
      EXPRESSLY AND IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ALL
      FEDERAL AND STATE COURTS LOCATED IN THE STATE AND CONSENTS THAT IT MAY BE
      SERVED WITH ANY PROCESS OR PAPER BY REGISTERED MAIL OR BY PERSONAL SERVICE
      WITHIN OR WITHOUT THE STATE IN ACCORDANCE WITH APPLICABLE LAW, PROVIDED A
      REASONABLE TIME FOR APPEARANCE IS ALLOWED. THE GRANTOR AND GRANTEE EACH
      EXPRESSLY WAIVES, TO THE EXTENT IT MAY LAWFULLY DO SO, ANY OBJECTION,
      CLAIM OR DEFENSE WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF
      ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS DEED, THE CREDIT
      AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY SUCH COURT, IRREVOCABLY WAIVES
      ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
      COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER IRREVOCABLY
      WAIVES THE RIGHT TO OBJECT, WITH RESPECT TO ANY SUCH CLAIM, SUIT, ACTION
      OR PROCEEDING BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES NOT HAVE
      JURISDICTION OVER THE PERSON OF THE GRANTOR. NOTHING CONTAINED HEREIN WILL
      BE DEEMED TO PRECLUDE THE GRANTEE FROM BRINGING AN ACTION AGAINST THE
      GRANTOR IN ANY OTHER JURISDICTION.

      SECTION 5.12. Severability; Conflicts. Any provision of this Deed, the
Credit Agreement or any other Loan Document which is prohibited or unenforceable
in any jurisdiction shall as to such provision and such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Deed, the Credit Agreement or such
Loan Document or affecting the validity or enforceability of such provision in
any other jurisdiction. In the event of any conflict between the terms of this
Deed and the terms of the Credit Agreement, the terms of the Credit Agreement
shall control.

      SECTION 5.13. Loan Document. This Deed is a Loan Document executed
pursuant to the Credit Agreement and, unless otherwise expressly indicated
herein, shall be construed, administered and applied in accordance with the
terms and provisions thereof.

      SECTION 5.14. Usury Savings Clause. It is the intention of the Grantor and
the Grantee to conform strictly to the usury laws governing the Loan Documents,
and any interest payable under the Loan Documents shall be subject to reduction
to the amount not in excess of the maximum non-usurious amount allowed under
such laws, as construed by the courts having jurisdiction over such matters. In
the

                                      -24-
<PAGE>   29
event the maturity of the Secured Obligations is accelerated by reason of any
provision of the Loan Documents, or by reason of an election by the Grantee
resulting from an Event of Default, then earned interest may never include more
than the maximum amount permitted by law, computed from the dates of each
advance of loan proceeds under the Credit Agreement until payment, and any
interest in excess of the maximum amount permitted by law shall be canceled
automatically or, if theretofore paid, at the option of the Grantee, shall be
rebated to the Grantor, or shall be credited on the principal amount of the
Secured Obligations or, if all principal has been repaid, then the excess shall
be rebated to the Grantor. If any interest is canceled, credited against
principal or rebated to the Grantor in accordance with the foregoing sentence
and, if thereafter the interest payable hereunder is less than the maximum
amount permitted by applicable law, the rate hereunder shall automatically be
increased to the maximum extent possible to permit repayment to the Grantee and
the Lenders as soon as possible of any interest in excess of the maximum amount
permitted by law which was earlier canceled, credited against principal or
rebated to the Grantor pursuant to the provisions of the foregoing sentence.

      SECTION 5.15. Future Advances. This Deed is a "Future Advance Deed" under
the laws of the State. Any and all future advances under this Deed and the Loan
Documents pertaining to the Fixed Assets Loans shall have the same priority as
if the future advance was made on the date that this Deed was recorded. This
Deed shall secure the Secured Obligations, whenever incurred, such Secured
Obligations to be due at the times provided in the Loan Documents pertaining to
the Fixed Assets Loans. Notice is hereby given that the Secured Obligations may
increase as a result of any defaults hereunder by Grantor due to, for example,
and without limitation, unpaid interest or late charges, unpaid taxes or
insurance premiums which the Grantee elects to advance, defaults under leases
that the Grantee elects to cure, attorney fees or costs incurred in enforcing
the Loan Documents pertaining to the Fixed Assets Loans or other expenses
incurred by the Grantee in protecting the Collateral, the security of this Deed
or the Grantee's rights and interests.

      SECTION 5.16. Georgia Agent. The rights, powers, duties and obligations
conferred or imposed upon CIT under the Credit Agreement pursuant to this Deed
with respect to the Collateral (including, without limitation, holding the
security title hereunder) are hereby conferred and imposed upon the Georgia
Agent to the extent, but only to the extent, that pursuant to the laws of the
State in effect from time to time CIT shall be incompetent or unqualified to
exercise or perform such rights, power, duties and obligations.

                                      -25-
<PAGE>   30
      IN WITNESS WHEREOF, the undersigned, by its duly elected officers and
pursuant to proper authority of its board of directors has duly executed,
sealed, acknowledged and delivered this instrument as of the day and year first
above written.

                                        STERLING PULP CHEMICALS, INC., a
                                        Georgia corporation


                                       By: /s/ [SIGNATURE ILLEGIBLE]
                                           Name: [NAME ILLEGIBLE]
                                           Title: Treasurer

                                                   [CORPORATE SEAL]

Signed, sealed and delivered in the presence of:

/s/ [SIGNATURE ILLEGIBLE]
Unofficial Witness


/s/ DAWN M. SCHOENIG
Notary Public

My commission expires: 8/3/99

                              [AFFIX NOTARIAL SEAL]

         DAWN M. SCHOENIG
 Notary Public, State of New York
          No. 52-4900811
   Qualified in Suffolk County
Commission Expires August 3, 1999


                                   DRAFTED BY:

                              Mayer, Brown & Platt
                                  1675 Broadway
                            New York, New York 10019
                         Attention: Michael Sloyer, Esq.

                                      -26-
<PAGE>   31
                                                                      SCHEDULE 1


                          Legal Description of the Land
[ ]







<PAGE>   32
                                   SCHEDULE 1

All that tract or parcel of land situate, lying and being in Land Lot 170 of
the 11th Land District of Lowndes County, Georgia, and being more particularly
described as all of that certain 28 acres depicted as TRACT I upon that certain
plat of map of survey made by Robin Nelson Harris, Georgia Registered Land
Surveyor No. 2101, dated August 14, 1995, entitled "Survey for Valdosta-Lowndes
County Industrial Authority", a copy of which is of record in Plat Record Book
38, page 200, public records of Lowndes County, Georgia.

TOGETHER WITH, a perpetual non-exclusive easement for ingress and egress over
and through that certain 6.80 acres depicted as TRACT IV upon that certain plat
or map of survey made by Robin Nelson Harris, Georgia Registered Land Surveyor
No. 2101, dated August 14, 1995, entitled "Survey for Valdosta-Lowndes County
Industrial Authority", a copy of which is of record in Plat Record Book 38,
page 200, public records of Lowndes County, Georgia.

NOTE: THE VALDOSTA-LOWNDES COUNTY INDUSTRIAL AUTHORITY HAS CONVEYED HUNT ROAD
(100 DEGREES R/W) TO LOWNDES COUNTY, GEORGIA AS EVIDENCED BY RIGHT OF WAY DEED
DATED FEBRUARY 29, 1996, AND RECORDED IN DEED BOOK 1275, PAGE 263; AND RIGHT OF
WAY DEED DATED APRIL 3, 1996, AND RECORDED IN DEED BOOK 1289, PAGE 92 AFORESAID
RECORDS; SAID ROAD RUNS THROUGH THE MAJORITY OF TRACT IV.
<PAGE>   33
                                                                      SCHEDULE 2

                             Permitted Encumbrances

[ ]
<PAGE>   34

                                   SCHEDULE 2


5. Any adverse claim to any portion of said land which has been created by
artificial means or has accreted to any such portion so created and riparian
rights, if any.





1. Defects, liens, encumbrances, adverse claims, or other matters, if any,
created, first appearing in the public records or attaching subsequent to the
effective date hereof but prior to the date the proposed Insured acquires for
value of record the estate or interest or mortgage thereon covered by this
Commitment.

2. Ad valorem taxes for the year 1999 and subsequent years, not yet due nor
payable.

3. No insurance is afforded as to the exact amount of acreage contained in the
property described herein.

4. Rights of others in and to the ingress/egress easement area insured
hereunder.

5. Said ingress/egress easement area insured hereunder has a Georgia Power
Company Easement (Deed Book 3, page 346 and Deed Book 104, page 257) running
through said property. A Governmental Encroachment Agreement has been entered
into by and between The Georgia Power Company and Valdosta-Lowndes County
Industrial Authority, dated March 19, 1996, and recorded in Deed Book 1690,
page 78, public records of Lowndes County, Georgia (affects a portion of Tract
IV-insured easement tract).
<PAGE>   35
6. Any loss or damage resulting from failure to comply with the terms and
provisions of lease by and between Valdosta-Lowndes County Industrial
Authority, Lessor and Sterling Pulp Chemicals US, Inc., a Delaware Corporation,
Lessee, dated October 1, 1995, and recorded in Deed Book 1331, page 27, public
records of Lowndes County, Georgia; ASSIGNED by Sterling Pulp Chemicals US,
Inc., a Delaware corporation to Sterling Pulp Chemicals, Inc., a Georgia
corporation by instrument dated August 6, 1996, and recorded in Deed Book 1333,
page 123, rerecorded in Deed Book 1349, page 83, aforesaid records.

7. Security deed and security agreement from Valdosta-Lowndes County Industrial
Authority to Synovus Trust Company, dated October 1, 1995, and recorded in Deed
Book 1239, page 283, public records of Lowndes County, Georgia, and evidenced
by memorandum of indenture trust dated October 1, 1995, and recorded in Deed
Book 1240, page 4, aforesaid records; assigned to Texas Commerce Bank National
Association, by instrument dated October 1, 1995, and recorded in Deed Book
1240, page 12, reassigned to Synovus Trust Company by instrument dated August
20, 1996, and recorded in Deed Book 1333, page 199-rerecorded in Deed Book
1349, page 85, aforesaid records.

8. UCC-2 indicating Valdosta-Lowndes County Industrial Authority, Debtor;
Synovus Trust Company, Trustee, Secured Party; recorded in Deed Book 1240, page
7, public records Lowndes County, Georgia.

9. Communications systems right of way and easement by and between Camelia
Investment Company, and American Telephone and Telegraph Company, dated April
25, 1991, and recorded in Deed Book 818, page 176, public records of Lowndes
County, Georgia; said easement area is a 10 foot wide strip of land lying
withing and parallel to the east right of way line of existing Georgia Power
Company Transmission Easement.