EXHIBIT 10.1

                           LOAN AND SECURITY AGREEMENT

                                     Between





                TRAVIS BOATS & MOTORS, INC. a Texas corporation,
           TRAVIS BOATING CENTER FLORIDA, INC., a Florida corporation,
        TRAVIS BOATS & MOTORS BATON ROUGE, INC., a Louisiana corporation,
         TRAVIS BOATING CENTER OKLAHOMA, INC., an Oklahoma corporation,
       TRAVIS BOATING CENTER MISSISSIPPI, INC., a Mississippi corporation,
       TRAVIS BOATING CENTER LOUISIANA, INC., a Louisiana corporation, and
           TRAVIS BOATING CENTER GEORGIA, INC., a Georgia corporation
                                  as Borrower,

                                       AND



                              KENNEDY FUNDING, INC.
                                as Agent for the
                              lenders named herein




                          Date: as of November__, 2003



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                                TABLE OF CONTENTS

                                                                            Page

1.  Definitions................................................................1
2.  The Loan...................................................................2
3.  The Note...................................................................3
4.  Grant of Security Interest.................................................3
5.  Conditions Precedent to Lender's Obligations...............................3
6.  Representations and Warranties of Borrower.................................4
7.  Survival of Representations and Warranties.................................6
8.  Affirmative Covenants......................................................6
9.  Negative Covenants of Borrower.............................................7
10. Events of Default..........................................................8
11. Remedies...................................................................9
12. Payment of Expenses.......................................................10
13. Lender's Right to Assign..................................................10
14. Default Interest Rate.....................................................10
15. Usury Savings.............................................................10
16. Notices...................................................................10
17. No Waiver.................................................................11
18. Failure to Exercise Rights................................................11
19. Prohibition Against Exercise of Rights Applicable Only to Individual
       Lenders................................................................11
20. Miscellaneous.............................................................11
21. Successors and Assigns....................................................12
22. Waiver of Jury Trial......................................................12
23. Releases of Collateral....................................................13


Schedules

Schedule A........-        Description of the Collateral
Schedule B........-        Principal Loan Documents
Schedule C        -        Intentionally omitted
Schedule D        -        Lenders
Schedule E        -        Intentionally Deleted
Schedule F        -        Lender Designated Release Amounts


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<PAGE>

                           LOAN and SECURITY AGREEMENT

     THIS LOAN AND SECURITY AGREEMENT ("Agreement"),  dated as of November ____,
2003, between TRAVIS BOATS & MOTORS,  INC. a Texas  corporation,  TRAVIS BOATING
CENTER FLORIDA, INC., a Florida corporation,  TRAVIS BOATS & MOTORS BATON ROUGE,
INC., a Louisiana corporation, TRAVIS BOATING CENTER OKLAHOMA, INC., an Oklahoma
corporation, TRAVIS BOATING CENTER MISSISSIPPI, INC., a Mississippi corporation,
TRAVIS  BOATING  CENTER  LOUISIANA,  INC., a Louisiana  corporation,  and TRAVIS
BOATING CENTER GEORGIA, INC., a Georgia corporation, all of the foregoing having
an  office  at  12116   Jekel   Circle,   Suite   102,   Austin,   Texas   78727
(collectively,"Borrower"),  and KENNEDY FUNDING,  INC.  ("Agent"),  a New Jersey
corporation  having an address at Two University Plaza,  Suite 402,  Hackensack,
New Jersey  07601,  as agent for the lenders  identified  on Schedule D attached
hereto and incorporated herein by reference, in each case having an address care
of Kennedy  Funding,  Inc., Two University  Plaza,  Suite 402,  Hackensack,  New
Jersey 07601 (the aforesaid lenders are hereinafter  collectively referred to as
"Lender").

                              W I T N E S S E T H:

     WHEREAS,  Borrower has requested that Lender make a loan to Borrower in the
amount of FIVE MILLION THREE HUNDRED THOUSAND and 00/100 ($5,300,000.00) Dollars
(the  "Loan"),  subject  to  and  upon  the  terms  and  conditions  hereinafter
contained,  which Loan shall be evidenced  by a promissory  note as of even date
herewith from Borrower to Lender (the "Note"); and

     WHEREAS, the Loan is to be secured by certain  instruments,  agreements and
documents,  including those items  identified in the Principal Loan Documents as
identified in Schedule B hereto and made a part hereof  (capitalized  terms used
herein having the meaning set forth in the  respective  Principal Loan Documents
unless otherwise stated herein), and

     WHEREAS,  Lender has agreed to make the Loan to  Borrower  on the terms and
conditions hereinafter set forth.

     NOW, THEREFORE,  in consideration of the foregoing and of the covenants and
conditions hereinafter set forth, Borrower and Lender hereby agree as follows:

     1.   Definitions. As used herein,

     (a)  "Affiliate" of any Person shall mean any other Person which,  directly
or  indirectly,  controls or is controlled  by, or is under common  control with
such Person. For the purposes of this definition,  "controls"  (including,  with
correlative  meanings,  the terms  "controlled  by" and  "under  common  control
with"), as used with respect to any Person, shall mean the possession,  directly


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or  indirectly,  of the power to direct or cause the direction of the management
and policies of such Person,  whether through the ownership of voting securities
or by contract or otherwise.

     (b) "Business Day" shall mean any day upon which banks located in the State
of New Jersey generally are open to conduct regular banking business.

     (c) "Closing  Date" shall mean the date on which this Agreement is executed
by the parties  hereto and the conditions set forth in Paragraph 4 are fulfilled
to the satisfaction of Lender.

     (d)  the  "Collateral"  shall  mean  the  Real  Property  Collateral,   all
collateral  described in any Loan Document and any other property of any obligor
now or hereafter subject to a security agreement,  mortgage,  pledge, assignment
or other document granting Lender a security interest therein.

     (e) the "Default Rate" shall have the meaning ascribed thereto in the Note.

     (f)  "Environmental  Laws" shall mean a  collective  reference  when and as
applicable  to (i) [local  counsel to provide  citations to local  environmental
laws], (ii) the Comprehensive  Environmental Response,  Compensation & Liability
Act, as amended, 42 U.S.C. Section 9601 et seq., (iii) the Resource Conservation
and Recovery Act, as amended,  42 U.S.C.  Section 6901 et seq.,  and (v) any and
all  other  federal,  state  and  local  statutes,   laws,  rules,   ordinances,
regulations and executive orders pertaining to environmental  matters applicable
to  Borrower's  business  and/or  properties,  as the  same  may be  amended  or
supplemented from time to time.

     (g) "Governmental  Authority" or "Governmental  Authorities" shall mean any
federal,  state, county or municipal  governmental  agency,  board,  commission,
officer,  official  or  entity  exercising  executive,  legislative,   judicial,
regulatory or administrative functions of or pertaining to government and having
jurisdiction over Borrower or the Collateral.

     (h)  "Indemnified  Party" and  "Indemnified  Parties"  shall mean Agent and
Lender as well as their  directors,  officers,  trustees,  partners,  employees,
agents, attorneys and shareholders.

     (i) the "Loan Documents" shall mean this Agreement,  the Note, the Mortgage
and Security  Agreements  (collectively,  "Mortgage") and any other documents or
agreements given to Lender by Borrower in connection with the Loan.

     (j)  "Person"  or  "Persons"  shall  mean  any  one  or  more  individuals,
partnerships,  corporations (including a business trust), joint stock companies,


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limited liability company, trusts,  unincorporated associations,  joint ventures
or other entities,  or a foreign state or political  subdivision  thereof or any
agency of such state of subdivision.

     (k) "Real Property  Collateral" or "Mortgaged Property" shall mean the real
property owned in fee by Borrower, as more particularly  described in Schedule A
attached hereto and made a part hereof.

     2.   The Loan.

     (a)  Provided  that  no  default  shall  have  occurred  and be  continuing
hereunder,  Lender agrees,  subject to the terms and conditions  hereinafter set
forth,  to advance to  Borrower  up to  ____________and  00/100  ($____________)
Dollars.

     (b) Subject to a final closing statement prepared by Lender's counsel,  the
Loan  proceeds  shall be  disbursed  as follows and used only for the  following
purposes:

          (1)  The  sum  of  ______________________________________________  and
     00/100 ($__________)  Dollars shall be disbursed to Borrower on the Closing
     Date to be used toward working capital and Borrower's closing costs.

          (2) The sum of TWO HUNDRED  TWELVE  THOUSAND and 00/100  ($212,000.00)
     Dollars  shall be  disbursed  on behalf of Borrower on the Closing Date and
     simultaneously  paid to Lender as a fully earned,  non-refundable  fee (the
     "Fee") in  consideration  of  Lender's  commitment  to make the Loan on the
     terms and conditions stated herein. In no event shall the Fee be applied or
     credited  in  reduction  of any  principal,  interest  or other sum payable
     hereunder.  Notwithstanding  the foregoing,  provided that Borrower has not
     been in default of any of its  obligations  under this  Agreement or any of
     the other Loan  Documents  (notwithstanding  the fact that the  default may
     have been cured within any applicable  cure or grace period),  if a portion
     of the Loan in the amount of TWO MILLION THREE HUNDRED  THOUSAND and 00/100
     ($2,300,000.00)  Dollars  ("Prepaid  Principal")  is paid  in  full  within
     forty-five  (45)  days  from the date  hereof,  and  subject  to the  terms
     contained  in the Note,  then  Borrower  shall be entitled to a refund from
     Lender in an amount equal to two percent  (2%) of the Prepaid  Principal at
     the time that Borrower pays Lender all outstanding principal,  interest and
     fees hereunder or under any of the Loan Documents; and

          (3)  The  sum of  _________________________  and  00/100  ($_________)
     Dollars  shall be  disbursed by Lender on behalf of Borrower on the Closing
     Date and  simultaneously  paid to Cole, Schotz,  Meisel,  Forman & Leonard,
     P.A., in payment of its legal fees; and

          (4)  The  sum  of  SEVENTY-NINE   THOUSAND  FIVE  HUNDRED  and  00/100
     ($79,500.00)  Dollars shall be disbursed by Lender on behalf of Borrower on


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<PAGE>

     the Closing  Date and  simultaneously  paid to Lender as the balance of the
     commitment fee ("Commitment  Fee") due to Lender pursuant to the commitment
     letter dated October 28, 2003.

     (c) The  foregoing  disbursements  may be  made,  notwithstanding  contrary
directions from Borrower , and for such purpose Borrower agrees that:

          A. The foregoing constitutes an irrevocable direction or authorization
     to so  disburse  the  funds  (said  authorization  being  coupled  with  an
     interest) and no further direction or authorization  from Borrower shall be
     necessary to warrant any such disbursements; and

          B. All such  disbursements  shall  satisfy the  obligations  of Lender
     hereunder  and  shall be  secured  by the  Mortgage  as fully as if made by
     Borrower,  regardless  of  the  disposition  by  the  party  to  whom  such
     disbursements are so made.

     (d) [A portion of the Loan,  in the amount of  _______________________  and
00/00  ($_______)  Dollars  (the  "________________________")  shall  be held in
reserve by Lender,  to be applied,  at Lender's sole discretion.  Borrower shall
pay  interest  on the  _______________  to the extent  that the Reserve has been
advanced,  as afore  stated,  and interest on such portion of the Reserve  shall
accrue commencing on the day that Lender advances said portion.  Borrower hereby
pledges  the  Reserve  to Lender as  additional  security  for  satisfaction  of
Borrower's  obligations  under  the  Loan  Documents.   Accordingly,   upon  the
occurrence of an Event of Default hereunder, any unadvanced balance remaining in
the  Reserve  shall,  at  Lender's  option,  immediately  be  applied  to reduce
Borrower's  obligations under the Loan Documents.  If the funds remaining in the
Reserve  after any  installment  has been  advanced  are  insufficient  to fully
satisfy any  outstanding  balance  remaining  on  _______________Borrower  shall
immediately,  from its own funds,  deposit with Lender all amounts  necessary to
satisfy the __________________.]

     3. The Note.  The  obligation  of Borrower to repay all monies  advanced by
Lender to  Borrower  in  connection  with the Loan  shall be  evidenced  by this
Agreement and the Note. The Loan shall bear interest at the rate(s) set forth in
the Note and shall be payable as provided in the Note with final  payment due on
________________. All of Borrower's obligations hereunder and under the Note are
secured by the Mortgage.  Should the principal of or interest on the Loan become
due and payable on a day other than a Business  Day, the maturity  thereof shall
be extended to the next  succeeding  Business Day and, in the case of principal,
interest  shall be payable  thereon at the rate per annum  specified in the Note
during such extension.

     4. Grant of  Security  Interest.  Borrower  will  perform any and all steps
reasonably  requested by Lender to create and maintain in Lender's favor a first
and  valid  lien  on or  security  interest  in the  Collateral  or  pledges  of
Collateral,  including, without limitation, the execution,  delivery, filing and


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<PAGE>

recording of financing  statements  and  continuation  statements,  supplemental
security  agreements,  notes,  filings with federal  government  offices and any
other documents necessary,  in the opinion of Lender, to protect its interest in
the Collateral  which liens shall be exclusive  except for those liens expressly
permitted  elsewhere  herein.  Lender  and its  designated  officer  are  hereby
appointed Borrower's attorney-in-fact to do all acts and things which Lender may
deem  necessary to perfect and continue  perfected  the security  interests  and
Liens provided for in this Agreement,  including,  but not limited to, executing
financing statements on behalf of Borrower.

     5.  Conditions  Precedent  to  Lender's  Obligations.  Lender  shall not be
obligated  to make the Loan  hereunder  unless  Lender  shall have  received the
following, all in form and substance satisfactory to Lender in all respects:

     (a) the Note, duly executed;

     (b) the Mortgage, duly executed;

     (c) this Agreement, duly executed;

     (d) the Assignment of Leases and Rents, duly executed;

     (e) the Assignment of Licenses, duly executed;

     (f) the Environmental Indemnity Agreement, duly executed;

     (g) the Document Re-Execution Agreement, duly executed;

     (h)  certificates  of insurers,  or other evidence  satisfactory to Lender,
indicating  that Borrower has obtained the policies of insurance as are required
under the terms of the Mortgage;

     (i) a paid title insurance  policy  (without survey  exception) in the full
amount of the Loan issued by a title insurance company  acceptable to Lender and
insuring the Mortgage as a valid first lien on the Mortgaged Property, with such
endorsements  as Lender shall  require and subject to the  Permitted  Exceptions
identified in the Mortgage;

     (j) UCC-1  financing  statements  required to evidence or perfect  Lender's
security  interest in the personal  property now or hereafter  owned by Borrower
and  located on or used in  connection  with the  Mortgaged  Property  and UCC-1
financing  statements  required  to perfect  Lender's  security  interest in the
Collateral;

     (k) an appraisal of the Mortgaged Property;


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<PAGE>

     (l) financial statements and tax returns for Borrower;

     (m)  evidence  of a  search  of  the  public  records  which  discloses  no
conditional sales contracts,  financing statements or title retention agreements
filed or recorded against Borrower or the Mortgaged Property;

     (n) a survey of the  Mortgaged  Property  prepared in  accordance  with the
"Minimum  Standard  Detail  Requirements  for ALTA and ACSM Land Title  Surveys"
jointly  established  by ALTA and ACSM in [1999]  and  certified  to Lender by a
registered land surveyor acceptable to Lender;

     (o) copies of all permits or approvals required by Governmental Authorities
to such date with respect to Borrower or the Mortgaged  Property,  to the extent
the same are necessary  and  appropriate  to operate the Mortgaged  Property for
retail purposes.

     (p) an  environmental  audit of the  Mortgaged  Property  (Phase I and,  if
necessary Phase II);

     (q) the  articles of  organization  and  certificate  of  incorporation  of
Borrower, and all amendments thereof, certified by the Secretary of State of the
State where the  Collateral  is located  and in each other state where  Borrower
conducts its business, together with a certificate of said Secretary of State to
the effect that each such company is in good standing therein;

     (r) By-Laws of Borrower certified by an officer of such company;

     (s) an incumbency certificate of Borrower which shall certify the names and
titles of the directors and officers of such company  authorized to sign, in the
name and on behalf of Borrower this Agreement and each other Loan Document to be
delivered  pursuant  to this  Agreement  by  Borrower,  together  with  the true
signatures of such  officers,  upon which  certificate  Lender may  conclusively
rely;

     (t)  resolutions  of the board of  directors  of Borrower  authorizing  the
transactions  to be entered  into by each of  Borrower in  connection  with this
Agreement;

     (u)  evidence  that the  Mortgaged  Property is not located in a federal or
state flood hazard area;

     (v) certification  regarding debts and liens,  executed by the owner of the
Mortgaged Property;

     (w)  payment of the Short  Interest,  the Fee (as such terms are defined in
the Note) and other  fees and  expenses  required  to be paid to or on behalf of
Lender in connection with the Loan;


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<PAGE>

     (x) opinions of legal  counsel to Borrower  with respect to such matters as
Lender may reasonably request;

     (y) evidence of the  appointment of a New Jersey agent to accept service of
process  on  behalf  of  Borrower,  pursuant  to the  requirements  of the  Loan
Documents;

     (z) evidence  demonstrating  current full  compliance  with all  applicable
zoning,  health,  environmental  and safety  laws,  ordinances  and  regulations
(including,  without limitation,  approval of local, private or public sewage or
water utility);

     (aa)  certification  from  Borrower  that  Borrower  is not a party  to any
existing or pending or threatened litigation,  except as previously disclosed to
Lender;

     (bb) evidence  demonstrating  receipt of all appropriate  approvals meeting
all applicable requirements of all Governmental  Authorities having jurisdiction
including,  but not limited to,  subdivision  and site plan  approvals,  potable
water supply,  sewage  discharge and sewage  connection,  use of septic tanks or
alternatives;

     (cc) satisfactory  evidence that all roads and utilities  necessary for the
full utilization of the Collateral for its intended purposes have been completed
or the presently  installed and proposed  roads and utilities will be sufficient
for the full utilization of Collateral for its intended purposes; and

          (i) such other  agreements,  certificates or other documents as Lender
     or Title Insurance Company may reasonably request.

     6. Representations and Warranties of Borrower. To induce Lender to make the
Loan pursuant to this Loan Agreement, Borrower hereby represents and warrants to
Lender as follows:

     (a) Borrower is a corporation,  duly  organized  under the laws of ________
and is validly  existing and in good standing under the laws of ________ and has
all requisite power and authority and legal right to own its property,  to carry
on its business as it is now being  conducted,  to enter into this Agreement and
the  other  Loan  Documents  entered  into  by it  and  to  perform  all  of its
obligations hereunder and thereunder.

     (b) The execution and delivery by Borrower of the Loan  Documents,  and the
performance  of its  obligations  thereunder,  have been duly  authorized by all
necessary action,  corporate or otherwise,  and do not and will not: (i) require
any  further  action,  consent or approval  on the part of the  shareholders  of
Borrower;  (ii) violate any provision of law,  rule,  regulation,  order,  writ,
judgment,  injunction, decree, determination or award presently in effect having
applicability  to Borrower,  or the articles of  organization  or regulations of
Borrower;  or (iii) result in any breach of or  constitute  a default  under any


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<PAGE>

indenture  or  loan  or  credit  agreement  or any  other  agreement,  lease  or
instrument to which  Borrower is a party or by which  Borrower or its properties
may be bound or  affected,  and  Borrower is not in default  under any such law,
rule, regulation,  order, writ, judgment,  injunction,  decree, determination or
award or any such indenture, agreement, lease or instrument.

     (c) The Loan  Documents  have been duly  executed and delivered by Borrower
and are legal, valid and binding  obligations of Borrower,  enforceable  against
Borrower in accordance with their respective terms.

     (d) Except as previously  disclosed to Lender, there is no material action,
suit, proceeding,  inquiry or investigation,  at law or in equity, or before any
court,  governmental  instrumentality,  public  board or  arbitrator  pending or
threatened  against or affecting  Borrower or any of its  properties  or rights,
wherein an unfavorable  decision,  ruling or finding would (i) to the extent not
covered by insurance as to which the insurer has not disclaimed coverage, result
in any material adverse change in the financial condition,  business, properties
or operations of Borrower;  (ii) materially or adversely effect the transactions
evidenced by the Loan Documents;  (iii) materially impair the right of either to
carry on its business  substantially as now conducted;  or (iv) adversely effect
the validity or enforceability of the Loan Documents.

     (e) To the best of Borrower's knowledge, Borrower is in compliance with all
laws applicable to Borrower or its properties or assets.

     (f)  Borrower is a  pre-existing  corporation,  is actively  engaged in the
operation  of its  business  and has not been created as a vehicle to obtain the
Loan.  The  proceeds of the Loan will be used by Borrower  for the  purposes set
forth in Paragraph 6(o) in connection with the operation of Borrower's business,
and the  proceeds  of the Loan will not be paid over or  diverted by Borrower to
any officer, director or shareholder of Borrower or any other person.

     (g) The following persons constitute all of the [Shareholders] of Borrower:
Name

                  _____________

                  _____________

     (h) The following persons constitute all of the [directors and officers] of
Borrower, and hold the following offices:

                  Name                                        Title

                  __________________                _______________


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<PAGE>

                  __________________                _______________

     (i) There has been no material  adverse change in the condition,  financial
or otherwise,  of Borrower since the date of its financial  statements furnished
to Lender.

     (j) Borrower's  properties and assets reflected on its financial statements
referred to above,  and all such properties and assets are free and clear of all
mortgages, pledges, liens, charges or other encumbrances, except as reflected on
such financial statements.

     (k)  Borrower  have each  filed  all  federal,  state  and other  income or
franchise tax returns which are required to be filed and have paid all taxes due
or which may become due pursuant to such  returns or pursuant to any  assessment
received by it.

     (l)  All  timely  authorizations,   permits,   approvals  and  consents  of
Governmental  Authorities  which may be  required in  connection  with the valid
execution and delivery of this  Agreement  and the other Loan  Documents and the
carrying out or performance of any of the activities or transactions required or
contemplated  hereunder or  thereunder  have been  obtained  (and remain in full
force and effect).

     (m)  All  financial  statements,   information  and  other  financial  data
furnished by Borrower to Lender in connection  with the Agreement (i) were true,
correct and complete in all material respects,  as of the date of said financial
statements,  information and other data, (ii) such financial  statements present
fairly the financial  condition of Borrower at the respective  dates thereof and
the results of operations  and changes in financial  position for the periods to
which they apply,  and (iii) there have been no material  adverse changes in the
financial condition of Borrower since the delivery by Borrower,  as the case may
be, to Lender of the most recent financial statements.

     (n) Borrower's assets, at a fair valuation,  exceed Borrower's  liabilities
(including, without limitation, contingent liabilities).  Borrower is paying its
debts as they become due and Borrower  anticipates the continuing ability to pay
its debts as they become due.  Borrower  has  capital and assets  sufficient  to
carry on its business.

     (o)  Proceeds  from the Loan  shall be used only to for  purposes  directly
related and  benefiting  the  Mortgaged  Property,  to pay the fees and expenses
required to be paid to or on behalf of Lender in  connection  with the Loan,  to
pay outstanding  real estate taxes on the Mortgaged  Property,  and other proper
corporate purposes.  No part of the proceeds of the Loan shall be used, directly
or indirectly, for the purpose of purchasing or carrying any margin stock within
the meaning of  Regulation U of the Board of  Governors  of the Federal  Reserve
System,  or for the  purpose of  purchasing  or carrying or trading in any stock
under such  circumstances  as to involve Borrower in a violation of Regulation U
of the Board of Governors of the Federal Reserve System. In particular,  without


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<PAGE>

limitation of the foregoing,  no part of the proceeds from the Loan are intended
to be used to  acquire  any  publicly-held  stock of any  kind.  As used in this
subparagraph  (o),  the terms  "margin  stock" and  "purpose  of  purchasing  or
carrying" shall have the meanings  assigned to them in the aforesaid  Regulation
U, and the term  "publicly-held,"  in  respect  to  securities,  shall  have the
meaning  assigned  to it in Section  220.7(a)  of  Regulation  T of the Board of
Governors of the Federal Reserve System.

     (p) Borrower is not in violation of or in default under (nor on the Closing
Date is there any waiver in effect  which,  if not in effect,  would result in a
violation  or  default   under)  any   provision  of   Borrower's   articles  of
incorporation and by-laws,  or under any provision of any agreement,  indenture,
evidence of indebtedness,  loan or financing  agreement,  certificate,  lease or
other instrument to which it is a party, or by which it is bound, or of any law,
governmental order, rule or regulation, in any such case under this subparagraph
(p) so as to affect  adversely in any material  manner its  business,  assets or
financial conditions.

     (q) All statements,  representations and warranties made by Borrower or any
other person in this Agreement, any other Loan Document and any other agreement,
document,  certificate or instrument  previously furnished or to be furnished by
said person to Lender under this  Agreement or in connection  with the Loan: (i)
are and shall be true, correct and complete in all material respects at the time
they were made and, in the case of those made prior to the Closing  Date, on and
as of the Closing Date,  (ii) do not and shall not contain any untrue  statement
of a  material  fact at the time  made,  and  (iii) do not and shall not omit to
state a  material  fact  at the  time  made  necessary  in  order  to  make  the
information  contained herein or therein not misleading or incomplete.  Borrower
understands  that all such statements,  representations  and warranties shall be
deemed to have been  relied upon by Lender as a material  inducement  to provide
the Loan.

     (r)  No  person  is  entitled  to  receive  from   Borrower  any  brokerage
commission,  finder's  fee or  similar  fee or payment  in  connection  with the
consummation of the transactions contemplated by this Agreement. No brokerage or
other fee,  commission or  compensation is to be paid by Lender by reason of any
act,  alleged  act or  omission  of  Borrower  with  respect to the  transaction
contemplated hereby.

     (s) Borrower has no knowledge of any of the following:

          (i) The  release or  threatened  release of any  hazardous  substance,
     pollutant  or  contaminant  as each such term is  presently  defined in any
     applicable  Environmental  Laws resulting from any activity by or on behalf
     of Borrower or any  predecessor  in  interest  to the  Mortgaged  Property,
     including,   without  limitation,   the  generation,   handling,   storage,
     treatment, transportation or disposal of any hazardous substance, pollutant
     or  contaminant  at any of the  past  or  present  business  locations  and
     facilities or Borrower; or


                                       10
<PAGE>

          (ii) Any past or future  action  taken or to be taken by any  federal,
     state,  county or municipal  Governmental  Authority or by any other person
     under any  applicable  Environmental  Laws  concerning  the  release of any
     hazardous  substance,  pollutant or contaminant into the soil, air, surface
     or subsurface  water or the  environment in general from any of the past or
     present business locations and facilities or Borrower; or

          (iii) Any claims or  actions  brought  or which are  threatened  to be
     brought by any Person against Borrower for damages  occurring at or outside
     of any of the past or present business locations and facilities of Borrower
     resulting from the alleged  release or threatened  release of any hazardous
     substance,  pollutant  or  contaminant  by Borrower or any  predecessor  in
     interest,  including,  without  limitation,  claims for  health  effects to
     Persons, property damage and/or damage to natural resources.

     (t) (A)  Borrower's  address set forth above is the location of  Borrower's
chief  executive  office,  and is the only  location  where  Borrower  keeps its
records.  (B)  Within  four (4)  months of the date of this  Agreement,  none of
Borrower's  assets have been moved from any jurisdiction or other locations than
the present location of assets set forth above.

     (u) Borrower is the owner and the operator of the Mortgaged Property.

     7.   Survival   of   Representations   and   Warranties.    The   foregoing
representations  and  warranties  shall  survive  the  execution  of  this  Loan
Agreement and the closing of the Loan.

     8.  Affirmative  Covenants.  To induce  Lender to make the Loan pursuant to
this Loan Agreement,  Borrower  hereby  covenants and agrees that so long as the
Loan  shall  remain  outstanding  hereunder,  Borrower  shall  comply  with  the
following covenants:

     (a) Borrower shall keep and maintain complete and accurate books,  accounts
and records.  Borrower  shall permit access thereto and  examination  thereof by
Lender and any authorized representatives of Lender, at all reasonable times and
places during normal business hours  (including the right to make copies thereof
at the cost and expense of Borrower).

     (b)  Borrower  shall comply in all material  respects  with all  applicable
federal, state, county and municipal laws, rules,  regulations and orders of any
Governmental  Authority  having  jurisdiction  over  Borrower,  subject  to  the
limitations expressly set forth in the Mortgage,  except to the extent contested
in good faith and by proper  proceedings or where the failure to so comply would
not have a material adverse effect on Borrower,  including,  without limitation,
all Environmental Laws and health and safety laws.


                                       11
<PAGE>

     (c) Borrower shall promptly notify Lender of the occurrence of any Event of
Default or an event which, with the giving of notice or passage of time or both,
would  constitute an Event of Default and of the  occurrence of any event or the
commencement of any action,  suit or proceeding which, if adversely  determined,
would adversely affect the condition, financial or otherwise, of Borrower.

     (d)  Borrower  shall  indemnify,  protect,  defend  and save  harmless  the
Indemnified Parties from and against (i) any and all losses,  damages,  expenses
or liabilities of any kind or nature and from any suits,  claims, or demands, by
third parties  including  reasonable  counsel fees incurred in  investigating or
defending  such  claim,  suffered  by any of them and  caused by,  relating  to,
arising out of,  resulting  from, or in any way connected  with the Loan and the
transactions contemplated herein, and (ii) any and all losses, damages, expenses
or liabilities sustained by Lender in connection with any environmental sampling
or cleanup  relating to any  properties  or assets  owned or  otherwise  used by
Borrower in the operation of its business, or mandated by any Environmental Law;
provided, however, Borrower shall not be obligated to indemnify, protect, defend
and save  harmless  an  Indemnified  Party,  if the  loss,  damage,  expense  or
liability  was  caused by or  resulted  from the  gross  negligence  or  willful
misconduct  of that  Indemnified  Party.  In case any  action  shall be  brought
against an Indemnified Party based upon any of the above and in respect to which
indemnity may be sought against  Borrower,  the  Indemnified  Party against whom
such action was brought, shall promptly notify Borrower in writing, and Borrower
shall assume the defense  thereof,  including the employment of counsel selected
by Borrower and reasonably satisfactory to the Indemnified Party, the payment of
all costs and  expenses and the right to  negotiate  and consent to  settlement.
Upon reasonable  determination  made by the Indemnified  Party,  the Indemnified
Party shall have the right to employ separate  counsel in any such action and to
participate in the defense thereof at the Indemnified  Party's cost and expense.
Borrower  shall not be liable for any  settlement  of any such  action  effected
without its consent,  but if settled with Borrower's  consent,  or if there be a
final judgment for the claimant in any such action, Borrower agrees to indemnify
and save  harmless said  Indemnified  Party against whom such action was brought
from and against any loss or liability by reason of such settlement or judgment.
The provisions of this  subparagraph  (d) shall survive the  termination of this
Agreement and the final repayment of the Loan.

     (e) Borrower shall maintain all of its property in good working  condition,
ordinary wear and tear excepted (including obsolete and abandoned property).

     (f) Borrower will  continue to hold all necessary  licenses and permits for
the  operations  of its business,  including but not limited to contract  vendor
registrations and account numbers.

     (g) Lender (by any of its  officers,  employees  and agents) shall have the
right,  at any time or times during  Borrower's  usual business hours  (provided


                                       12
<PAGE>

reasonable  prior notice is given except if an Event of Default has occurred and
is continuing),  to inspect the Collateral,  all records related thereto (and to
make  extracts  from  such  records)  and the  premises  upon  which  any of the
Collateral  is located,  to discuss  Borrower's  affairs and  finances  with any
person and to verify the amount, quality,  quantity,  value and condition of, or
any other matter relating to, the Collateral.

     (h) Borrower will furnish Lender with at least ten (10) days' prior written
notice of any change in location of or addition to its chief  executive  office,
the office where it keeps its records  concerning  its assets and other business
locations.

     (i) Pay and discharge,  and require its  subsidiaries to pay and discharge,
when due, all taxes,  assessments or other governmental  charges imposed on them
or any of their  respective  properties,  unless  the same are  currently  being
contested in good faith by  appropriate  proceedings  and adequate  reserves are
maintained therefor.

     (j)  Operate its  properties,  and cause  those of its  subsidiaries  to be
operated  in  compliance  with all  applicable  orders,  rules  and  regulations
promulgated by the  jurisdictions and agencies thereof where such properties are
located  and duly  file or cause to be filed  such  reports  and/or  information
returns as may be required or appropriate under applicable  orders,  regulations
or law.

     (k) Permit Lender's  representatives and/or agents full and complete access
to any or all of  Borrower's  and its  subsidiaries'  properties  and  financial
records,  to make  extracts  from and/or  audit such  records and to examine and
discuss Borrower's  properties,  business,  finances and affairs with Borrower's
officers and outside accountants.

     9.  Negative  Covenants  of  Borrower.  To  induce  Lender to make the Loan
pursuant to this Agreement, Borrower hereby covenants and agrees that so long as
the Loan shall remain outstanding, Borrower shall not:

     (a) Except for  Permitted  Encumbrances  at any time:  (i)  create,  incur,
assume  or  suffer  to exist any  mortgage,  deeds of  trust,  pledge,  security
interest,  encumbrance,  lien or charge of any  nature  upon or with  respect to
Borrower's  assets  and  properties  or  (ii)  sign or file  under  the  Uniform
Commercial Code of any  jurisdiction a financing  statement which names Borrower
as a debtor or (iii) sign any security  agreement  authorizing any secured party
thereunder to file such  financing  statement.  Borrower  further  covenants and
agrees not to grant any similar negative pledge to any other lender.

     (b) Except as to the sale or  disposition  of assets  which are obsolete or
worn out and are no  longer  used or  useful  in the  conduct  of its  business,
convey, sell, lease, assign,  transfer,  hypothecate or otherwise dispose of any
of its now or hereafter acquired property, business or assets.


                                       13
<PAGE>

     (c) Create,  incur, suffer to exist, assume,  guaranty,  endorse,  become a
surety,  or otherwise  become  liable for the debt or other  obligations  of any
other  Person  whether  directly or  indirectly,  or make or incur any  advance,
purchase commitment, other obligation or loan for the direct or indirect purpose
of paying or discharging any such obligations.

     (d) Make any advance, loan, extension of credit or capital contribution to,
or purchase any stock,  bonds,  notes,  debentures or other securities of or any
assets constituting a business unit of, or make any other investment income, any
Person.

     (e) Enter  into any  merger or  consolidation  or  liquidate  or wind-up or
dissolve  itself (or suffer any  liquidation or  dissolution)  or convey,  sell,
lease, assign,  transfer or otherwise dispose of all or substantially all of its
property,  business or assets or make any material  change in its present method
of conducting business.

     (f)  Materially   change,   amend,  alter  or  modify  the  certificate  of
incorporation, by-laws, or other governing documents of Borrower.

     (g)  Enter  into  any  transaction,   including,  without  limitation,  the
purchase, sale or exchange of property or the rendering of any service, with any
officer, director, shareholder or partner of Borrower or affiliate of any of the
foregoing.

     (h) Declare or pay any dividends on,  distributions  on or make any payment
on  account  of,  or set  apart  assets  or a  sinking  fund  for the  purchase,
redemption, defeasance, retirement or other acquisition of, any interest, shares
or any  class of stock or any  warrant  or  option to  purchase  any such  stock
whether now or hereafter  outstanding or make any other  distribution in respect
thereof, directly or indirectly whether in cash or property or obligations.

     (i)  Create,   incur,   suffer  to  exist  any  indebtedness,   except  (i)
indebtedness in respect of the Loan; and (ii) indebtedness,  if any, outstanding
as of  the  date  of  this  Agreement  and  shown  on the  financial  statements
previously delivered to Lender.

     (j) Allow its  corporate  existence  to be other than in good  standing and
will not, without the prior written consent of Lender, dissolve or liquidate, or
merge or consolidate with or acquire or affiliate with any other business entity
or form any subsidiary.

     (k) Change its name  without  furnishing  to Lender at least ten (10) days'
prior written notice thereof.

     (l) Utilize any trade  name,  and will not in the future  utilize any trade
name without  furnishing to Lender at least ten (10) days prior  written  notice
thereof.


                                       14
<PAGE>

     (m) Change the nature of its business.

     10.  Events  of  Default.  The  occurrence  of any of the  following  shall
constitute an Event of Default hereunder:

     (a) failure of Borrower to make any payment of any installment of principal
or interest when due under the Note  (subject to any  applicable  grace,  notice
and/or cure period contained therein;

     (b) failure of Borrower  to pay any other sum when due  hereunder  or under
any other Loan  Document  and  continuation  of such  failure  for five (5) days
thereafter;

     (c) any  representation or warranty of Borrower made herein or in any other
Loan Document or in any other  writing  given to Lender in  connection  with the
Loan shall have been  incorrect in any material  respect as of the time when the
same shall have been made;

     (d) the occurrence of an Event of Default under any other Loan Document;

     (e) the sale,  conveyance,  assignment,  transfer or other  disposition  or
divestiture  of Borrower's  title to any of the  Collateral,  or the mortgage or
other conveyance of a security  interest in, or other  encumbrance on any of the
Collateral or any interest therein, whether voluntary or involuntary,  except as
provided herein;

     (f) any merger,  consolidation,  liquidation or dissolution, or the sale or
transfer of all or substantially all of the assets, of Borrower;

     (g) the  transfer  of any of the  stock  or  other  ownership  interest  of
Borrower;

     (h) the use of proceeds of the Loan for any purpose  other than the purpose
described in Paragraph 6(o);

     (i) any Loan  Documents  for any reason shall cease to be in full force and
effect, the liens on the Collateral  purported to be created thereby shall cease
to be or are not valid and perfected  liens having priority over all other liens
except any encumbrances specifically permitted under such Loan Documents;

     (j) one or more judgments or decrees shall be entered against Borrower (not
paid or fully covered by insurance)  and all such judgments or decrees shall not
have been vacated or  discharged,  stayed or bonded  pending appeal within sixty
(60) days from the entry thereof;


                                       15
<PAGE>

     (k) if Borrower becomes insolvent;

     (l) if  Borrower  generally  does not pay its debts as they  become due and
Borrower  has  failed  to make  any  payment  to  Lender  required  by the  Loan
Documents;

     (m) if Borrower makes an assignment for the benefit of creditors;

     (n) if Borrower calls or causes to be called a meeting of creditors for the
composition of debts;

     (o) if there  shall be filed by or with the  consent  or  authorization  of
Borrower a petition in bankruptcy for  liquidation or for  reorganization,  or a
custodian,  receiver or agent is appointed or  authorized  to take charge of its
properties, or Borrower authorizes any such action;

     (p) if there shall be filed against Borrower a petition in bankruptcy,  for
liquidation,  or for  reorganization,  or a  custodian,  receiver,  or  agent is
appointed or authorized to take charge of its  properties  and Borrower,  as the
case may be, has not consented to or  authorized  such action and such action is
not dismissed within sixty (60) days; and

     (q) if any license, permit, registration,  vendor account or other approval
required  for  the  normal  operation  of  Borrower's  business  or  any  of the
Collateral shall be suspended or shall cease to be in full force and effect.

     11. Remedies.

     (a) Upon the  occurrence of an Event of Default and at any time  thereafter
during the  continuance  of such Event of Default,  in addition to any  remedies
available to Lender  under  applicable  law,  Lender may take one or more of the
following remedial steps in any order of priority:

          (i) Declare  immediately  due and payable  the  outstanding  principal
     balance of the Note,  together with all accrued and unpaid  interest,  fees
     and other sums or expenses payable thereunder and hereunder and accordingly
     accelerate payment thereof without presentment, demand, notice of intention
     to accelerate,  notice of  acceleration or notice of any other kind, all of
     which are expressly waived;

          (ii)  Take any  action  at law or in equity  against  Borrower  (a) to
     collect the payments  then due and  thereafter to become due under the Loan
     Documents,  or (b) to enforce performance and observance of any obligation,
     agreement  or covenant of  Borrower  or such other  parties  under the Loan
     Documents;

          (iii)  Exercise  any and all rights and  remedies  provided for in the
     other Loan Documents as they relate to Borrower.


                                       16
<PAGE>

          (iv) Proceed with or without  judicial  process to take  possession of
     all or any part of the  Collateral  provided  for herein not already in the
     possession  of Lender and  Borrower  agrees that upon  receipt of notice of
     Lender's  intention  to  take  possession  of  all  or  any  part  of  said
     Collateral,  Borrower will do everything  reasonably  necessary to assemble
     the  Collateral  and  make  same  available  to  Lender  at a  place  to be
     designated  by  Lender.  Borrower  hereby  waives any and all rights it may
     have,  by statute,  constitution  or otherwise  to notice from Lender,  for
     Lender to obtain  possession,  by Court  proceedings  or otherwise,  of the
     Collateral provided for in this or in any other agreement with Lender;

          (v) So  long  as  Lender  acts in a  commercially  reasonable  manner,
     assign,  transfer and deliver at any time or from time to time the whole or
     any  portion  of the  Collateral  or any  rights  or  interest  therein  in
     accordance with the Uniform Commercial Code, and without limiting the scope
     of Lender's rights thereunder,  Lender may sell the Collateral at public or
     private sale, or in any other manner, at such price or prices as Lender may
     deem best, and either for cash or credit,  or for future  delivery,  at the
     option of  Lender,  in bulk or in parcels  and with or  without  having the
     Collateral at the sale or other disposition. Lender shall have the right to
     be the purchaser at any public sale. Lender shall have the right to conduct
     such sales on Borrower's  premises or elsewhere and shall have the right to
     use  Borrower's  premises  without  charge  for such sales for such time or
     times as Lender  may see fit.  Lender is hereby  granted  license  or other
     right to use,  without  charge,  Borrower's  labels,  patents,  copyrights,
     rights of use of any name,  trade  secrets,  trade  names,  trademarks  and
     advertising  matter, or any property of a similar nature, as it pertains to
     the  Collateral,  in  advertising  for sale and selling any  collateral and
     Borrower's  rights under all licenses and franchise  agreements shall inure
     to Lender's benefit. In the event of a sale of the Collateral, or any other
     disposition thereof, Lender shall apply all proceeds first to all costs and
     expenses of disposition,  including reasonable attorneys' fees, and then to
     the Obligations of Borrower to Lender;

          (vi)  Elect  to  retain  the   Collateral   or  any  part  thereof  in
     satisfaction  of all Obligations due from Borrower to Lender upon notice of
     such  proposed  election to Borrower and any other party as may be required
     by the Uniform Commercial Code; and

          (vii) Lender shall have the right  immediately,  and without notice or
     other action to set-off against any of any Borrower's Obligations to Lender
     any sum owed by Lender in any capacity to any Borrower  whether due or not,
     and Lender shall be deemed to have  exercised  such right of set-off and to
     have made a charge against any such sum immediately  upon the occurrence of
     a Default,  even  though the actual  book  entries may be made at some time
     subsequent thereto.

     (b) No remedy  conferred in this  Agreement or the other Loan  Documents is
intended to be  exclusive  of any other  remedy,  and each and every such remedy


                                       17
<PAGE>

shall be  cumulative  and shall be in addition to every other  remedy  conferred
herein or now or hereafter existing at law or equity or by statute or otherwise.

     12. Payment of Expenses.

     (a) Borrower  agrees that it shall pay,  within five (5) days after demand,
all   out-of-pocket   expenses  incurred  by  Lender  in  connection  with  this
transaction  including,  without  limitation,  fees and  expenses  for any title
searches  required   hereunder,   recording  and  filing  fees,  and  reasonable
attorneys'  fees incurred by Lender in connection  with the Loan  (including any
amendments  and  waivers),   the   preparation  of  the  Loan   Documents,   the
administration  of the Loan,  inspection  of the Mortgaged  Property  during the
course of the Project and the enforcement Lender's rights and remedies under the
Loan Documents.

     (b) If  Borrower  should  fail to  perform  or  observe,  or to cause to be
performed or observed,  any covenant or obligation  under this Loan Agreement or
any of the  other  Loan  Documents,  then  Lender,  may  (but  shall be under no
obligation   to)  take  such  steps  as  are   necessary   to  remedy  any  such
nonperformance or nonobservance  and provide for payment thereof,  if any (which
shall  include,  without  limitation,  steps  necessary  to cure any defaults of
Borrower under any lease).

     (c) All amounts  expended or advanced by Lender  pursuant to this Paragraph
11 shall become part of the  outstanding  principal  balance of the Loan and the
Note, shall be secured by the Mortgage, shall become due and payable by Borrower
upon  demand by  Lender,  and shall  bear  interest  at the  Default  Rate (such
interest to be calculated from the date of such advance by Lender to the date of
repayment thereof by Borrower).

     13. Lender's Right to Assign.  Lender shall have the right to sell, assign,
transfer or dispose of all or any part of its  interest in the Loan  without the
consent or approval of Borrower.

     14. Default  Interest Rate. All sums advanced and all expenses  incurred by
Lender  pursuant  to any  provision  of  this  Agreement  or of the  other  Loan
Documents  which are not paid when due shall bear  interest at the Default  Rate
set forth in the Note  from the date such sum was due until  such sum is paid in
full and shall be secured by the Mortgage.

     15.  Usury  Savings.  Notwithstanding  anything to the  contrary  contained
herein,  under no circumstances  shall the aggregate amount paid or agreed to be
paid hereunder or under the Note exceed the highest lawful rate permitted  under
applicable  usury  law (the  "Maximum  Rate")  and the  payment  obligations  of
Borrower under this Agreement and the Note are hereby  limited  accordingly.  If
under any circumstances, whether by reason of advancement or acceleration of the


                                       18
<PAGE>

maturity of the unpaid  principal  balance  hereof or  otherwise,  the aggregate
amounts paid hereunder or under the Note shall include  amounts which by law are
deemed  interest and which would exceed the Maximum  Rate,  Borrower  stipulates
that payment and  collection of such excess  amounts shall have been and will be
deemed to have been the  result of a mistake  on the part of both  Borrower  and
Lender or the holder of the Note, and the party  receiving such excess  payments
shall  promptly  credit such excess  (only to the extent  such  payments  are in
excess of the Maximum Rate) against the unpaid principal  balance hereof and any
portion  of such  excess  payments  not  capable of being so  credited  shall be
refunded to Borrower.

     16. Notices.  Any notices or other communications to be delivered to either
party shall be  delivered  by (a)  certified  mail,  return  receipt  requested,
postage prepaid,  (b) nationally  recognized  overnight  courier against receipt
therefor or (c) fax,  with a copy  simultaneously  delivered to the attorney for
such party,  addressed to the parties at their address first set forth above and
to their attorneys as follows:

                  Borrower's Fax No.:----------------

                  Lender's Fax No.: (201)342-8373

                  Borrower's Attorney:
                           Mitchell Savrick, Esq.
                           Savrick, Schumann, Johnson & McGarr
                           2901-G Bee Caves Road
                           Austin, Texas 78786
                           Tel: (512) 347-1604
                           Fax: (512) 347-1676

                  Lender's Attorney:

                           Cole, Schotz, Meisel, Forman & Leonard, P.A.
                           Court Plaza North
                           25 Main Street
                           Hackensack, New Jersey 07601
                           Attn:  Michael R. Leighton, Esq.
                           Fax No. (201) 489-1536

     Any party may change its address for notices by delivering  notice  thereof
to the other party hereunder. Notices shall be deemed delivered (a) two (2) days
after  mailing as aforesaid,  (b) on the date shown on the courier's  receipt or
(c) on the date when faxed as shown on the log of the transmitting machines.

     17. No Waiver.  No course of  dealing  between  Borrower  and Lender or any
failure  or delay on the part of Lender in  exercising  any  rights or  remedies
hereunder  shall  operate as a waiver of any rights or remedies of Lender and no


                                       19
<PAGE>

single or partial exercise of any rights or remedies  hereunder shall operate as
a waiver or preclude the exercise of any other rights or remedies hereunder.  In
the event any agreement  contained in this Agreement or the other Loan Documents
should be breached and thereafter waived by Lender, such waiver shall be limited
to the  particular  breach so waived  and shall not be deemed to waive any other
breach hereunder or thereunder.

     18. Failure to Exercise Rights.  Nothing herein contained shall impose upon
Lender any obligation to enforce any terms, covenants or conditions contained in
this Agreement and the other Loan  Documents.  Failure of Lender,  in any one or
more  instances,  to insist upon strict  performance of any terms,  covenants or
conditions  of this  Agreement  and  the  other  Loan  Documents,  shall  not be
considered  or taken as a waiver  or  relinquishment  by  Lender of its right to
insist upon and to enforce in the future,  by  injunction  or other  appropriate
legal or equitable remedy,  strict compliance with all the terms,  covenants and
conditions of this Agreement and the other Loan Documents. The consent of Lender
to any act or omission by Borrower shall not be construed to be a consent to any
other or subsequent act or omission or a waiver of the  requirement for Lender's
consent to be obtained in any future or other instance.

     19.  Prohibition  Against Exercise of Rights  Applicable Only to Individual
Lenders.  Borrower is hereby prohibited from exercising  against Lender or Agent
any right or remedy which it might otherwise be entitled to exercise against any
one or more (but less than all) of the individual parties  constituting  Lender,
including, without limitation, any right of set-off or any defense.

     20. Miscellaneous.

     (a) Choice of Law. THE LOAN WAS NEGOTIATED IN THE STATE OF NEW JERSEY, THIS
AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW JERSEY,  WAS EXECUTED AND DELIVERED
BY BORROWER AND ACCEPTED BY LENDER IN THE STATE OF NEW JERSEY,  AND THE PROCEEDS
OF THE NOTE WERE DISBURSED FROM THE STATE OF NEW JERSEY, WHICH STATE THE PARTIES
AGREE  HAS A  SUBSTANTIAL  RELATIONSHIP  TO THE  PARTIES  AND TO THE  UNDERLYING
TRANSACTION  EMBODIED HEREBY, AND IN ALL RESPECTS,  INCLUDING,  WITHOUT LIMITING
THE  GENERALITY  OF  THE  FOREGOING,  MATTERS  OF  CONSTRUCTION,   VALIDITY  AND
PERFORMANCE.  THIS  AGREEMENT AND THE  OBLIGATIONS  ARISING  HEREUNDER  SHALL BE
GOVERNED BY, AND  CONSTRUED  IN  ACCORDANCE  WITH,  THE LAWS OF THE STATE OF NEW
JERSEY  APPLICABLE  TO  CONTRACTS  MADE  AND  PERFORMED  IN SUCH  STATE  AND ANY
APPLICABLE  LAW OF THE UNITED  STATES OF  AMERICA,  EXCEPT THAT AT ALL TIMES THE
PROVISIONS FOR THE CREATION,  PERFECTION,  PRIORITY, ENFORCEMENT AND FORECLOSURE


                                       20
<PAGE>

OF THE LIENS AND SECURITY  INTERESTS  CREATED UNDER THE LOAN DOCUMENTS  SHALL BE
GOVERNED BY AND CONSTRUED  ACCORDING TO THE LAW OF THE STATE WHERE THE MORTGAGED
PROPERTY IS LOCATED,  IT BEING  UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED
BY THE LAW OF SUCH STATE,  THE LAW OF THE STATE OF NEW JERSEY  SHALL  GOVERN THE
VALIDITY AND  ENFORCEABILITY OF ALL LOAN DOCUMENTS,  AND THE DEBT OR OBLIGATIONS
ARISING HEREUNDER.

     (b)  Jurisdiction.  AT  LENDER'S  ELECTION,  TO  BE  ENTERED  IN  ITS  SOLE
DISCRETION,  ANY LEGAL SUIT,  ACTION OR  PROCEEDING  AGAINST  BORROWER OR LENDER
ARISING  OUT OF OR RELATING  TO THIS NOTE OR THE OTHER LOAN  DOCUMENTS  SHALL BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN NEW JERSEY,  AND BORROWER WAIVES ANY
OBJECTION  WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING,  AND HEREBY IRREVOCABLY  SUBMITS TO THE JURISDICTION
OF ANY SUCH  COURT IN ANY  SUIT,  ACTION OR  PROCEEDING.  BORROWER  DOES  HEREBY
DESIGNATE  AND  APPOINT____________________________________,  HAVING AN  ADDRESS
AT____________________________________________,   AS  ITS  AUTHORIZED  AGENT  TO
ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE
SERVED IN ANY SUCH SUIT,  ACTION OR  PROCEEDING IN ANY FEDERAL OR STATE COURT IN
NEW JERSEY,  AND AGREES THAT  SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS
AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN THE MANNER
PROVIDED IN THE MORTGAGE,  SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF
PROCESS UPON BORROWER IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW
JERSEY.  BORROWER (x) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED  ADDRESS
OF ITS  AUTHORIZED  AGENT  HEREUNDER,  (y) MAY AT ANY TIME AND FROM TIME TO TIME
DESIGNATE  A  SUBSTITUTE  AUTHORIZED  AGENT WITH AN OFFICE IN NEW JERSEY  (WHICH
OFFICE SHALL BE DESIGNATED AS THE ADDRESS FOR SERVICE OF PROCESS), AND (c) SHALL
PROMPTLY  DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED  AGENT CEASES TO HAVE AN
OFFICE IN NEW JERSEY OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

     (c) No  modification  or  waiver  of any  provision  of the Note or of this
Agreement and no consent by Lender to any departure  therefrom by Borrower shall
be effective  unless such  modification or waiver shall be in writing and signed


                                       21
<PAGE>

by a duly  authorized  officer of Lender,  and the same shall then be  effective
only for the period and on the conditions provided therein.

     (d) Any  condition  of this  Agreement  or any other  Loan  Document  which
requires  the  submission  of evidence of the  existence or  non-existence  of a
specified  fact or facts implies as a condition the existence or  non-existence,
as the case may be, of such fact or facts,  and Lender shall,  at all times,  be
free  independently  to  establish  to its  reasonable  satisfaction  and in its
absolute discretion such existence or non-existence.

     (e) Borrower, as the case may be, shall execute and deliver, or cause to be
executed  and  delivered  to Lender,  all other  instruments,  certificates  and
agreements as Lender or Lender's counsel may reasonably require,  including, but
not limited to, estoppel certificates stating that the Loan is in full force and
effect and that there are no defenses or offsets thereto, to effect,  confirm or
assure the  rights,  remedies  and liens  intended  to be granted or conveyed to
Lender under this Agreement or any other Loan Document.

     (f) A  determination  that any portion of this Agreement or any of the Loan
Documents is  unenforceable  or invalid shall not affect the  enforceability  or
validity of any other provision,  and any determination  that the application of
any  provisions  of  this  Agreement  or any  Loan  Document  to any  person  or
circumstance is illegal or unenforceable  shall not affect the enforceability or
validity of such provisions it may apply to other persons or circumstances.

     21. Successors and Assigns.

     (a)  Borrower may not assign its rights  under this  Agreement  without the
prior written consent of Lender.  Any such attempted  assignment in violation of
this Agreement shall be void and of no effect.

     (b) All covenants and agreements in this Agreement  shall bind and inure to
the benefit of the  respective  permitted  successors and assigns of the parties
hereto and any holder or holders of the Note or any portion thereof.

     22. Waiver of Jury Trial.  BORROWER AND LENDER AGREE THAT ANY SUIT,  ACTION
OR PROCEEDING,  WHETHER CLAIM OR COUNTERCLAIM,  BROUGHT BY BORROWER OR LENDER ON
OR WITH  RESPECT  TO THIS LOAN  AGREEMENT  OR ANY  OTHER  LOAN  DOCUMENT  OR THE
DEALINGS OF THE PARTIES WITH RESPECT HERETO OR THERETO, SHALL BE TRIED ONLY BY A
COURT AND NOT BY A JURY. BORROWER AND LENDER EACH HEREBY KNOWINGLY,  VOLUNTARILY
AND INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR


                                       22
<PAGE>

PROCEEDING.  FURTHER, BORROWER WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER,
IN ANY SUCH  SUIT,  ACTION OR  PROCEEDING,  ANY  SPECIAL,  EXEMPLARY,  PUNITIVE,
CONSEQUENTIAL  OR OTHER DAMAGES  OTHER THAN, OR IN ADDITION TO, ACTUAL  DAMAGES.
BORROWER  ACKNOWLEDGES  AND AGREES THAT THIS  SECTION IS A SPECIFIC AND MATERIAL
ASPECT  OF THIS LOAN  AGREEMENT  AND THAT  LENDER  WOULD  NOT  EXTEND  CREDIT TO
BORROWER  (AS  APPLICABLE)  IF THE WAIVERS SET FORTH IN THIS  SECTION WERE NOT A
PART OF THIS LOAN AGREEMENT.

     23. Releases of Collateral

     (a) Lender may release, regardless of consideration,  the obligation of any
Person or Persons liable for payment of any of the  Obligations  secured hereby,
or may release any part of the Mortgaged Property or any other collateral now or
hereafter  given to secure the payment of the  Obligations  or any part thereof,
without  impairing,  reducing or affecting the obligations of Borrower under the
Loan  Documents,  the remainder of the security of this Mortgage or the priority
of the rights created by this Mortgage.

     (b) Within thirty (30) days of Mortgagor's request, provided: (i) Mortgagor
is not in default  hereunder  or under any other Loan  Document(s);  and (ii) no
event has  occurred  which with the  passage of time and/or the giving of notice
would  constitute  a default  hereunder  or under any  other  Loan  Document(s),
Mortgagee shall release portions of the Mortgaged Property from the lien created
by the Mortgage  ("Released  Property")  subject to: (i) Mortgagor's  payment to
Mortgagee  of the  Release  Price  (as  hereinafter  defined)  for the  Released
Property and (ii) Mortgagor's delivery to Mortgagee of documentation  evidencing
an arms length  transaction for the sale of the Released  Property.  The Release
Price for the  Released  Property  shall be equal to the  greater of: (i) eighty
percent  (80%)  of the net sale  price  of the  Released  Property  (subject  to
reasonable  and  customary  closing  adjustments  and sales  commissions  [to be
approved  by Lender  in  Lender's  reasonable  discretion]);  (ii)  seventy-five
percent  (75%) of the gross sale price of the Released  Property;  and (iii) the
release  amounts  designated  for the  Released  Property on Schedule F attached
hereto and made a part hereof.


                                       23
<PAGE>

     IN WITNESS WHEREOF,  the undersigned have executed this Agreement as of the
day and year first set forth above.

ATTEST:                              LENDER:
                                     KENNEDY FUNDING, INC., as Agent
_________________________
Name:____________________
Title:___________________            By:________________________________
                                     Name:
                                     Title:

ATTEST:                              BORROWER:


_________________________            By:________________________________
Name:____________________            Name:_____________________
Title:___________________            Title:____________________



                                       24
<PAGE>


STATE OF NEW JERSEY        )
                           )SS.:
COUNTY OF BERGEN           )

     I CERTIFY that on November ____, 2003,  ________________________ personally
came before me and this person acknowledged under oath, to my satisfaction, that
he:

     (c) executed the attached Loan and Security Agreement; and

     (d) was  authorized  to and did  execute  the  attached  Loan and  Security
Agreement  on behalf of and as of  _______________________________,  the  entity
named in this  instrument,  by virtue of  authority  granted by its  Articles of
Incorporation and By-Laws.

                                              ______________________________
                                                  Notary Public

STATE OF NEW JERSEY        )
                           )SS.:
COUNTY OF BERGEN           )

     I CERTIFY that on November ___, 2003,  ________________________  personally
came before me and this person acknowledged under oath, to my satisfaction, that
he:

     (a) executed the attached Loan and Security Agreement; and

     (b) was  authorized  to and did  execute  the  attached  Loan and  Security
Agreement on behalf of and as of ___________________________________, the entity
named in this  instrument,  by virtue of  authority  granted by its  Articles of
Incorporation and By-Laws.

                                              _____________________________
                                                  Notary Public

STATE OF NEW JERSEY        )
                           )SS.:
COUNTY OF BERGEN           )

     I CERTIFY that on November ___, 2003,  ________________________  personally
came before me and this person acknowledged under oath, to my satisfaction, that
he:

     (c) executed the attached Loan and Security Agreement; and

     (d) was  authorized  to and did  execute  the  attached  Loan and  Security
Agreement on behalf of and as of ___________________________________, the entity


                                       25
<PAGE>

named in this  instrument,  by virtue of  authority  granted by its  Articles of
Incorporation and By-Laws.

                                              _____________________________
                                                  Notary Public


                                       26
<PAGE>

                                   SCHEDULE A

                          DESCRIPTION OF THE COLLATERAL


                                       27
<PAGE>

                                   SCHEDULE B

                            PRINCIPAL LOAN DOCUMENTS


                                       28
<PAGE>

                                   SCHEDULE C


                                       29
<PAGE>

                                   SCHEDULE D

                                     LENDERS


                                       30
<PAGE>

                                   SCHEDULE E

                              INTENTIONALLY DELETED


                                       31
<PAGE>


                                   SCHEDULE F

                        LENDER DESIGNATED RELEASE AMOUNTS

         1. San Antonio, Texas: $2,300,000.00

         2. Clearwater, Florida: $1,850,000.00

         3. Baton Rouge, Louisiana: $450,000.00

         4. Claremore, Oklahoma: $400,000.00

         5. Pascagoula, Mississippi: $600,000.00

         6. Bossier, Louisiana: $1,250,000.00

         7. Atlanta, Georgia: $2,100,000.00


                                       32