<PAGE>COVER


                                   EXHIBIT D-4

                   FORM OF AMENDED AND RESTATED DEED OF TRUST


State:                                                 Site No(s).:
      ---------                                                    -------------


                       AMENDED AND RESTATED DEED OF TRUST,
                  LEASEHOLD DEED OF TRUST, SECURITY AGREEMENT,
                ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING


Trustor:          PAYLESS CASHWAYS, INC.
                  2300 Main Street
                  Kansas City, Missouri  64108


Beneficiary:      CANADIAN IMPERIAL BANK OF COMMERCE,
                    as Coordinating and Collateral Agent
                  425 Lexington Avenue
                  New York, New York  10017


Trustee:


Deed of Trust
  Amount:         $500,000,000


Date:             December 2, 1997


Premises:


Record and        SHOOK, HARDY & BACON L.L.P.
Return to:        1200 Main St., Suite 3000
                  Kansas City, MO 64105
                  Attn.: Richard D. Woods, Esq.


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     AMENDED  AND  RESTATED  DEED OF TRUST,  LEASEHOLD  DEED OF TRUST,  SECURITY
AGREEMENT,  ASSIGNMENT  OF  LEASES  AND RENTS AND  FIXTURE  FILING,  dated as of
December 2, 1997, by and among PAYLESS CASHWAYS,  INC., a Delaware  corporation,
having an office at 2300 Main Street,  Kansas City,  Missouri 64108 ("Trustor"),
_______________________,    a   _____________   having   an   office   at   ____
_______________________  ("Trustee"), and CANADIAN IMPERIAL BANK OF COMMERCE, as
Coordinating and Collateral Agent under the Agreement (as hereinafter  defined),
having  an  office  at  425  Lexington   Avenue,   New  York,   New  York  10017
("Beneficiary").

                                   DEFINITIONS

     Trustor  and  Beneficiary  agree  that all  capitalized  terms used but not
defined  herein are defined in or by reference to the  Agreement  and shall have
the same meanings herein as therein. Trustor and Beneficiary further agree that,
unless the context  otherwise  specifies or requires,  the following terms shall
have the meanings herein specified, such definitions to be applicable equally to
the singular and the plural forms of such terms.

     "Agreement"  means that certain Amended and Restated Credit Agreement dated
as of December 2, 1997, by and among Trustor, the signatory Lenders thereto, the
Underwriters,  U.S. Bank National Association,  as a Fronting Bank, and Canadian
Imperial Bank of Commerce, as a Fronting Bank and as Coordinating and Collateral
Agent for the  Lenders,  the  Fronting  Banks,  the  Underwriters  and the other
Secured   Parties,   together  with  any  future   amendments,   amendments  and
restatements, extensions, modifications or supplements thereto or thereof.

     "Bankruptcy Case" means In re Payless Cashways,  Inc., Case No. 97-50543 in
the Bankruptcy Court.

     "Bankruptcy Code" means 11 U.S.C. ss.101 et seq.

     "Bankruptcy Court" means the United States Bankruptcy Court for the Western
District of Missouri.

     "Bankruptcy  Reorganization  Plan" means Payless' plan of reorganization in
the Bankruptcy Case, as confirmed by the Bankruptcy Court.

     "Deed of Trust" means this Deed of Trust, Leasehold Deed of Trust, Security
Agreement,  Assignment of Leases and Rents and Fixture Filing  together with any
future  amendments,  amendments and restatements,  extensions,  modifications or
supplements hereto or hereof.

     "Deed of Trust Amount" means an aggregate  principal amount  outstanding at
any time not to exceed $500,000,000.


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     "Default" means Default, as that term is defined in the Agreement.

     "Default  Rate" means the rate of interest  specified in Section  2.8(a) of
the Agreement.

     "DIP Agent" means the DIP Agent, as that term is defined in the Agreement.

     "DIP Credit  Agreement" means the Revolving Credit  Agreement,  dated as of
July 21, 1997,  among  Payless,  as a  Debtor-in-Possession,  the  Lenders,  the
Underwriters and the Fronting Banks party thereto and Canadian  Imperial Bank of
Commerce,  as Coordinating and Collateral  Agent,  together with any amendments,
amendments and restatements, extensions, modifications or supplements thereto or
thereof prior to the date of the Agreement.

     "DIP Obligations" means the DIP Obligations, as that term is defined in the
Agreement.

     "Event of Default" means the events and circumstances  described as such in
Article II hereof.

     "Fixtures"  means  all  of  Trustor's  right,  title  and  interest  in all
furniture,  furnishings,  partitions,  screens, awnings, venetian blinds, window
shades, draperies,  carpeting, pipes, ducts, conduits, dynamos, motors, engines,
compressors,  generators,  boilers, stokers,  furnaces, pumps, tanks, elevators,
escalators,  vacuum  cleaning  systems,  call systems,  switchboards,  sprinkler
systems,  fire  prevention  and  extinguishing  apparatus,   refrigerating,  air
conditioning,   heating,   dishwashing,   plumbing,   ventilating,  gas,  steam,
electrical and lighting  fittings and fixtures,  licenses or permits of any kind
and all building  materials,  equipment and goods now or hereafter  delivered to
the Premises (hereinafter defined) and intended to be installed therein, and all
other machinery, fixtures, tools, implements,  apparatus, appliances, equipment,
goods,  facilities  and other  personal  property of similar  character in which
Trustor now has, or at any time  hereafter  acquires,  an interest and which are
now or  hereafter  affixed  or  attached  to,  or used in  connection  with  the
enjoyment,  occupancy  and/or  operation of, all or any portion of the Premises,
together with all renewals, replacements and substitutions thereof and additions
and accessions thereto and the proceeds of all of the foregoing items.

     "Fronting  Banks" means the Fronting  Banks, as that term is defined in the
Agreement.

     "Improvements"  means all  buildings,  structures  and  other  improvements
presently  existing or hereafter  constructed on the land described in Exhibit A
attached hereto.

     "Lease" has the meaning ascribed to such term in Section 3.01 hereof.

     "Leasehold"  has the meaning  ascribed to such term in paragraph "F" of the
Granting Clause, below.


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     "Leasehold Interest" has the meaning ascribed to such term in paragraph "F"
of the Granting Clause, below.

     "Lenders" means the Lenders, as that term is defined in the Agreement.

     "Lessee" has the meaning ascribed to such term in Section 3.01 hereof.

     "LoanDocuments"  means the Loan  Documents,  as that term is defined in the
Agreement.

     "Loans" means the Loans, as that term is defined in the Agreement.

     "Mortgaged  Property" has the meaning ascribed to such term in the Granting
Clause, below.

     "Notes" means the Notes, as that term is defined in the Agreement.

     "Payless" means Payless Cashways, Inc., an Iowa corporation.

     "Post-Petition Mortgage Liens" has the meaning ascribed to such term in the
fifth WHEREAS clause, below.

     "Pre-Petition  Agent" means the Pre-Petition Agent, as that term is defined
in the Agreement.

     "Pre-Petition  Credit  Agreement"  means the  Amended and  Restated  Credit
Agreement  dated as of  October  3,  1996,  by and among  Payless,  the  lenders
signatory thereto,  Canadian Imperial Bank of Commerce, as letter of credit bank
and as  administrative  and  collateral  agent,  and The  Bank  of Nova  Scotia,
NationsBank of Texas,  N.A. and Bank of America  National Trust and Savings,  as
co-agents,   together  with  any   amendments,   amendments  and   restatements,
extensions, modifications or supplements thereto or thereof prior to the date of
the Agreement.

     "Pre-Petition  Deed of Trust" has the meaning  ascribed to such term in the
third WHEREAS clause, below.

     "Pre-Petition Obligations" means the Pre-Petition Obligations, as that term
is defined in the Agreement.

     "Premises"  means the land described in Exhibit A annexed hereto,  together
with the Improvements  thereon or to be constructed thereon or therein,  and all
of the easements, rights, privileges and appurtenances thereunto belonging or in
anywise appertaining  thereto including,  but not limited to, all of the estate,
right, title, interest, claim or demand whatsoever of Trustor therein and in and
to the strips and gores, streets and ways adjacent thereto, whether in law or in
equity,  in


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possession or expectancy,  now or hereafter  acquired and also any other realty,
Leaseholds (hereinafter defined), or Fixtures encompassed by the term "Mortgaged
Property", elsewhere herein defined.

     "Rents" has the meaning ascribed to such term in Section 3.01 hereof.

     "Secured  Obligations"  has  the  meaning  ascribed  to  such  term  in the
paragraph entitled "Secured Obligations" below.

     "Secured  Parties"  means Secured  Parties,  as that term is defined in the
Agreement.

     "Underwriters"  means  Underwriters,   as  that  term  is  defined  in  the
Agreement.

                              W I T N E S S E T H :

     WHEREAS, on July 21, 1997, Payless filed a voluntary petition of bankruptcy
under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court; and

     WHEREAS,  prior to the  commencement  of the Bankruptcy  Case,  Payless was
obligated  to certain of the  Lenders  pursuant  to,  among  other  things,  the
Pre-Petition Credit Agreement; and

     WHEREAS,  Payless'  obligations under the Pre-Petition Credit Agreement and
the other Credit  Documents (as defined in the  Pre-Petition  Credit  Agreement)
were  secured by, among other  things,  the  following  real  property  security
instruments (individually and collectively, the "Pre-Petition Deed of Trust"):

          (a) the Deed of Trust, Leasehold Deed of Trust, Security Agreement and
     Assignment of Leases and Rents,  dated as of October 3, 1996, from Payless,
     as  trustor,  to the  trustee  named  therein,  for the benefit of Canadian
     Imperial Bank of Commerce, as administrative and collateral agent under the
     Pre-Petition  Credit Agreement,  as beneficiary,  and recorded  __________,
     1996,  at Book ___,  Page ____ of the real  property  records of  _________
     County, ___________; and

          (b) the Deed of Trust, Leasehold Deed of Trust, Security Agreement and
     Assignment of Leases and Rents,  dated as of October 3, 1996, from Payless,
     as  trustor,  to the  trustee  named  therein,  for the benefit of Canadian
     Imperial Bank of Commerce, as administrative and collateral agent under the
     Pre-Petition  Credit Agreement,  as beneficiary,  and recorded  __________,
     1996,  at Book ___,  Page ____ of the real  property  records of  _________
     County, ___________; and



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          (c) the Deed of Trust, Leasehold Deed of Trust, Security Agreement and
     Assignment of Leases and Rents,  dated as of October 3, 1996, from Payless,
     as  trustor,  to the  trustee  named  therein,  for the benefit of Canadian
     Imperial Bank of Commerce, as administrative and collateral agent under the
     Pre-Petition  Credit Agreement,  as beneficiary,  and recorded  __________,
     1996,  at Book ___,  Page ____ of the real  property  records of  _________
     County, ___________; and

          (d) the Deed of Trust, Leasehold Deed of Trust, Security Agreement and
     Assignment of Leases and Rents,  dated as of October 3, 1996, from Payless,
     as  trustor,  to the  trustee  named  therein,  for the benefit of Canadian
     Imperial Bank of Commerce, as administrative and collateral agent under the
     Pre-Petition  Credit Agreement,  as beneficiary,  and recorded  __________,
     1996,  at Book ___,  Page ____ of the real  property  records of  _________
     County, ___________; and

     WHEREAS, during the Bankruptcy Case, Payless became obligated to certain of
the Lenders pursuant to the DIP Credit Agreement; and

     WHEREAS, pursuant to the orders of the Bankruptcy Court entered on July 21,
1997  and  August  20,  1997  in the  Bankruptcy  Case,  the DIP  Agent  and the
Pre-Petition  Agent were granted liens (the  "Post-Petition  Mortgage Liens") on
the  Mortgaged  Property  to secure  the  Pre-Petition  Obligations  and the DIP
Obligations; and

     WHEREAS,  as  contemplated  by  Payless'  Bankruptcy  Reorganization  Plan,
Payless has merged with and into Trustor,  with Trustor being the sole surviving
entity; and

     WHEREAS,   Canadian  Imperial  Bank  of  Commerce,   the  Coordinating  and
Collateral  Agent under the Agreement and this Deed of Trust,  is the same legal
entity  as  Canadian   Imperial   Bank  of  Commerce,   New  York  Agency,   the
administrative and collateral agent under the Pre-Petition  Credit Agreement and
the Pre-Petition Deed of Trust; and

     WHEREAS,  pursuant to the terms of the Bankruptcy  Reorganization  Plan and
the  Agreement,  the parties  have agreed to amend and restate the  Pre-Petition
Deed of Trust pursuant to this Deed of Trust in order,  among other things,  (i)
to  reflect  the  merger  of  Payless  into  Trustor,  (ii)  to  secure  various
obligations  of Trustor (as Payless'  successor) in respect of the  Pre-Petition
Obligations and the DIP Obligations,  and (iii) without  duplication,  to secure
all  obligations,  whether now  existing or  hereafter  incurred or arising,  of
Trustor  under  the  Agreement,  the Notes  and/or  the  other  Loan  Documents,
including,  without limitation,  the Secured  Obligations;  in each case as more
particularly set forth in the Agreement and this Deed of Trust; and

     WHEREAS, Trustor is the actual, record and beneficial owner of the Premises
or owns an actual beneficial interest therein; and


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     WHEREAS,  Trustor has agreed  pursuant to the terms of the  Agreement,  the
Notes, and/or the other Loan Documents  evidencing the Secured Obligations to be
liable for the Secured Obligations; and

     WHEREAS,  the parties intend that the Secured  Obligations shall be secured
by this Deed of Trust;

                                 GRANTING CLAUSE

     NOW, THEREFORE,  Trustor, in consideration of the premises, and in order to
secure the payment in full of the Deed of Trust Amount, the Secured Obligations,
all interest due thereon and all other costs and expenses and other  amounts due
hereunder and in respect of the Secured  Obligations,  and the  performance  and
discharge of all the provisions hereof, of the Secured Obligations and all other
Loan Documents,  hereby gives, grants,  bargains,  sells,  conveys,  pledges and
grants a  security  interest  to  Trustee  in trust,  with power of sale for the
benefit of Beneficiary,  all of Trustor's estate,  right, title and interest in,
to and under any and all of the following  described  property whether now owned
or hereafter acquired (all such properties being collectively referred to as the
"Mortgaged Property"):

     A. All Trustor's right, title and interest in and to the Premises and all
right,  title and interest of Trustor in and to the Improvements on the Premises
or to be constructed  thereon and all Fixtures now or hereafter  situated in, on
or about,  or affixed or attached  to the  Improvements  or the  Premises or any
building, structure or other improvement now or hereafter standing,  constructed
or placed  upon or within the  Premises,  and all and  singular  the  tenements,
hereditaments,   easements,   rights-of-way  or  use,  rights,   privileges  and
appurtenances  to  the  Premises,  now  or  hereafter  belonging  or in  anywise
appertaining  thereto,  including,  without  limitation,  any such right, title,
interest, claim and demand in, to and under any agreement granting, conveying or
creating, for the benefit of the Premises, any easement, right or license in any
way affecting  other  property and in, to and under any streets,  ways,  alleys,
vaults,  gores or strips of land adjoining the Premises,  or any parcel thereof,
and  all  claims  or  demands  either  in law or in  equity,  in  possession  or
expectancy, of, in and to the Premises.

     B. All right, title and interest of Trustor in and to all awards heretofore
made or  hereafter  to be made for the taking by eminent  domain of the whole or
any part of the above  described  premises,  or any estate or easement  therein,
including  any awards for change of grade of  streets,  all of which  awards are
hereby  assigned to Trustee and  Beneficiary,  which Trustee and Beneficiary are
hereby  authorized to collect (unless  provided  otherwise in the Agreement) and
receive the proceeds of such awards and to give proper receipts and acquittances
therefor  and Trustee and  Beneficiary  shall have the right and option to apply
such  excess  towards  the  payment  of any sum owing on account of this Deed of
Trust and the Secured Obligations secured thereby, notwithstanding the fact that
such sum may not then be due and payable.


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     C. The Fixtures and the products and proceeds thereof.

     D. All present and future leases, subleases and licenses and any guarantees
thereof,  rents,  issues and  profits  and  additional  rents now or at any time
hereafter covering or affecting all or any portion of the Mortgaged Property and
all proceeds of, and all  privileges and  appurtenances  belonging or in any way
appertaining  to, the Mortgaged  Property,  or any part  thereof,  and all other
property  subjected  or required  to be  subjected  to the lien and/or  security
interest of or conveyed pursuant to the terms of this Deed of Trust,  including,
without limitation,  all of the income, revenues,  earnings,  rents, maintenance
payments,  tolls, issues,  awards (including,  without limitation,  condemnation
awards and  insurance  proceeds),  products and profits  thereof,  which income,
revenues, earnings, rents, maintenance payments, tolls, issues, awards, products
and profits are hereby expressly assigned with the right to take and collect the
same upon the terms  hereinafter set forth;  and all the estate,  right,  title,
interest and claim  whatsoever,  at law and in equity,  which Trustor now has or
may  hereafter  acquire  in and to the  aforementioned  property  and every part
thereof;  provided, that so long as no Event of Default (as hereinafter defined)
shall have  occurred and be  continuing,  all such income,  revenues,  earnings,
rents,  maintenance payments,  tolls, issues, awards, products and profits shall
remain  with and under the  control of  Trustor  except as  otherwise  expressly
provided  herein  or  in  any  other  written   agreement  between  Trustor  and
Beneficiary.

     E. All right,  title and interest of Trustor in and to all  agreements,  or
contracts,  now or  hereafter  entered  into for the sale,  leasing,  brokerage,
development,  construction, renovation, management, maintenance and/or operation
of the Premises (or any part  thereof),  including  all moneys due and to become
due thereunder,  and all permits, licenses, bonds, insurance policies, plans and
specifications relative to the construction and/or operation of the Improvements
upon the Mortgaged Property.

     F. All  right,  title and  interest  (including,  without  limitation,  all
present  and future  rights to  possession  and use,  and all present and future
options and other  rights to renew and to  purchase)  of  Trustor,  as lessee or
sublessee,  under any  leases,  subleases,  licenses,  occupancy  agreements  or
concessions  now in effect or to be entered into  hereafter  (collectively,  the
"Leasehold Instruments") whereby Trustor has any right to the use, possession or
occupancy of the Premises or any part thereof (collectively, the "Leaseholds").

     G. All of  Trustor's  claims and rights to the  payment of damages  arising
from any rejection of a Leasehold or a Lease under or pursuant to the Bankruptcy
Code.

     H. All of  Trustor's  rights  and  remedies  at any time  arising  under or
pursuant to  Subsection  365(h) of the  Bankruptcy  Code,  11 U.S.C.  ss.365(h),
including,  without limitation,  all of Trustor's rights to remain in possession
of the Premises.



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     I. Any other  property  and rights  which  are,  by the  provisions  of the
Agreement or any other Loan Document,  required to be subject to the lien hereof
or conveyed pursuant to the terms hereof, and any additional property and rights
that may from time to time  hereafter  by  installation  in or on the  Mortgaged
Property,  or by writing of any kind,  or  otherwise,  be  subjected to the lien
hereof by Trustor or by anyone on its behalf.

     J. 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, and all right, title and interest
of Trustor in and to all unearned premiums accrued, accruing and to accrue under
any or all insurance policies obtained by Trustor.

     TO HAVE AND TO HOLD the Mortgaged Property, unto Trustee for the benefit of
Beneficiary  and its  successors  and assigns,  upon the terms,  provisions  and
conditions  herein set forth,  forever,  and Trustor does hereby bind itself and
its successors, legal representatives, and assigns to warrant and forever defend
all and singular the Mortgaged  Property unto  Beneficiary and Trustee and their
successors and assigns,  against every person whomsoever lawfully claiming or to
claim the same or any part thereof.

     IN TRUST, to secure the payment and performance of the Secured Obligations,
whereupon this Deed of Trust shall cease and be void and the Mortgaged  Property
shall be released at the cost of Trustor.

                               SECURED OBLIGATIONS

     This Deed of Trust,  and all rights,  titles,  interests,  liens,  security
interests,  powers,  privileges and remedies created hereby or arising hereunder
or by virtue  hereof,  are given to secure the  payment and  performance  of all
indebtedness,   obligations  and  liabilities   arising  under  the  Notes,  the
Agreement,  this Deed of Trust and any other Loan  Document,  and any  renewals,
extensions,   amendments,   amendments   and   restatements,    supplements   or
modifications  thereof or  thereto,  howsoever  created,  arising or  evidenced,
whether direct or indirect, absolute or contingent, now or hereafter existing or
due or to  become  due,  and any and all fees,  costs or  expenses  incurred  by
Beneficiary or the other Secured Parties or Trustee,  including, but not limited
to,  interest  accruing at the then  applicable  rate  provided in the Agreement
after the  maturity of the Loans and  interest  accruing at the then  applicable
rate provided in the Agreement or other applicable agreement after the filing of
any  petition  in   bankruptcy,   or  the   commencement   of  any   insolvency,
reorganization  or like proceeding,  relating to the Trustor on the Loans and on
all other  obligations of the Trustor to the Secured Parties,  taxes,  recording
expenses and  attorneys'  fees in connection  with the execution and delivery of
any of the  aforesaid  and the  consummation  of the  transactions  contemplated
thereby, the administration  thereof, and, after Default, the administration and
collection  thereof,  all costs incurred of whatever  nature by Beneficiary  and
Trustee in the exercise of any rights  hereunder or under any Loan  Document and
all other  amounts  payable  by  Trustor  under  this Deed of Trust  (all


<PAGE>9


of the foregoing  indebtedness,  obligations and  liabilities  being referred to
herein as the "Secured Obligations").

                                    ARTICLE I

                     PARTICULAR WARRANTIES, REPRESENTATIONS
                            AND COVENANTS OF TRUSTOR

     Section 1.01  Warranties and  Representations.  Trustor hereby warrants and
represents as follows:

          (a) Trustor is the actual, record and beneficial owner of the Premises
and holder of a good and marketable title to an indefeasible leasehold estate in
the Leaseholds or owns an actual  beneficial  interest therein and fee estate in
the rest of the Mortgaged Property,  subject only to such exceptions to title as
are  listed  in the  title  policy  insuring  the lien of this Deed of Trust and
approved by Beneficiary as permitted exceptions.  Trustor is the owner of all of
the remaining Mortgaged  Property;  Trustor will own the Fixtures free and clear
of liens and claims except those in favor of Beneficiary; and this Deed of Trust
is and will remain a valid and enforceable first lien on the Mortgaged  Property
subject only to the permitted exceptions referred to above.

          (b) Trustor has full power and lawful authority to convey,  pledge and
encumber the  Mortgaged  Property in the manner and form herein done or intended
hereafter to be done. Trustor will preserve such title, and will forever warrant
and defend the validity  and priority of the lien hereof,  against the claims of
all persons and parties whomsoever.

          (c) Except as  otherwise  specified in the Title Policy (as defined in
the Agreement) or in the Survey (as defined in the  Agreement),  the Premises is
not  located  in an area  identified  by the  Secretary  of  Housing  and  Urban
Development as an area having  special flood hazards or if it so located,  flood
insurance acceptable to Beneficiary has been obtained.

     Section 1.02 Further  Assurances.  Trustor will,  at its sole expense,  do,
execute, acknowledge and deliver every further act, deed, conveyance,  mortgage,
assignment,  notice of assignment,  transfer or assurance as  Beneficiary  shall
from  time to time  reasonably  require,  for the  better  assuring,  conveying,
assigning,  transferring and confirming unto Beneficiary the property and rights
hereby conveyed, mortgaged or assigned or intended now or hereafter so to be, or
which Trustor may be or may hereafter become bound to convey, mortgage or assign
to Trustee or Beneficiary or for carrying out the intention or facilitating  the
performance of the terms of this Deed of Trust,  and for filing,  registering or
recording  this Deed of Trust and,  on demand,  will  execute and  deliver,  and
hereby  authorizes  Beneficiary  or Trustee to execute in the name of Trustor to
the extent it may  lawfully  do so, one or more  financing  statements,  chattel
mortgages or comparable security instruments,  and renewals thereof, to evidence
more effectively the lien hereof upon the Fixtures.


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     Section 1.03 Filings,  Recordings and Payments.  (a) Trustor forthwith upon
the execution of this Deed of Trust,  and thereafter from time to time, will, at
its  expense,  cause this Deed of Trust and any security  instrument  creating a
lien or  evidencing  the lien hereof upon the  Fixtures and each  instrument  of
further assurance to be filed, registered or recorded in such manner and in such
places as may be  required  by any  present  or future  law in order to  publish
notice of and fully to protect the lien hereof upon, and the interest of Trustee
and Beneficiary in, the Mortgaged Property.

          (b) Trustor will pay all taxes,  filing,  registration  and  recording
fees, and all expenses incident to the execution and acknowledgment of this Deed
of Trust,  any  supplemental  deed of trust,  any other Loan  Document,  and any
security instrument with respect to the Fixtures,  and any instrument of further
assurance,  and all federal,  state,  county and municipal stamp taxes and other
taxes, duties, imposts,  assessments and charges arising out of or in connection
with the  execution  and  delivery  of the  Agreement,  this Deed of Trust,  any
supplemental  deed of trust,  any other Loan Document,  any security  instrument
with respect to the Fixtures or any instrument or further assurance,  other than
income,  franchise or other similar taxes imposed on  Beneficiary  in respect of
income derived by Beneficiary under the Secured Obligations.

     Section 1.04 Payment of Sums Due. Trustor will punctually pay the principal
and  interest and all other sums to become due in respect of the  Agreement  and
any other Loan Document at the time and place and in the manner specified in the
Agreement and any other Loan Document,  according to the true intent and meaning
thereof and without offset, counterclaim, defense or cause of action of any kind
whatsoever,  and without  deduction or credit for any amount  payable for taxes,
all in immediately available funds in Dollars.

     Section  1.05 After  Acquired  Property.  All right,  title and interest of
Trustor  in  and  to  all  extensions,   improvements,   betterments,  renewals,
substitutes and  replacements  of, and all additions and  appurtenances  to, the
Mortgaged Property, hereafter acquired by or released to Trustor or constructed,
assembled  or placed by  Trustor on the  Premises,  and all  conversions  of the
security  constituted  thereby,  immediately  upon  such  acquisition,  release,
construction,  assembling,  placement or conversion,  as the case may be, and in
each such case,  without any further mortgage,  conveyance,  assignment or other
act by Trustor,  shall become subject to the lien of this Deed of Trust as fully
and  completely,  and with the same  effect,  as though now owned by Trustor and
specifically  described in the granting clauses hereof, but at any and all times
Trustor  will  execute  and  deliver  to  Beneficiary  any and all such  further
assurances,  mortgages,  deeds of trust,  conveyances or assignments  thereof as
Beneficiary   may   reasonably   require  for  the  purpose  of  expressing  and
specifically subjecting the same to the lien of this Deed of Trust.

     Section 1.06 Taxes, Fees and Other Charges. (a) Trustor,  from time to time
when the same shall become due, and prior to the date of  imposition of interest
or penalty  (except  as  otherwise  permitted  in the  Agreement),  will pay and
discharge,  or cause  to be paid and  discharged,  all  taxes of every  kind and
nature  (including  real and  personal  property  taxes and  income,  franchise,
withhold-


<PAGE>11


ing,  transfer or  recordation  taxes,  profits and gross  receipt  taxes),  all
general and special assessments,  levies, permits,  inspection and license fees,
all water and sewer rents and charges, and all other public charges,  whether of
a like or different nature, imposed upon or assessed against it or the Mortgaged
Property or any part thereof or upon the  revenues,  rents,  issues,  income and
profits  of  the  Premises  or  arising  in  respect  of the  occupancy,  use or
possession  thereof.  Trustor  will,  at any time upon  request by  Beneficiary,
promptly deliver to Beneficiary receipts evidencing the payment of same.

    Upon the occurrence of an Event of Default under the Agreement,  Beneficiary
may,  at any time and from  time to time,  at its  option,  to be  exercised  by
written  notice to  Trustor,  require the deposit by Trustor at the time of each
payment of an  installment  of interest or principal  under the  Agreement of an
additional  amount sufficient to discharge the obligations under this subsection
(a) when they become due. The  determination of the amount so payable and of the
fractional part thereof to be deposited with Beneficiary,  so that the aggregate
of  such  deposit  shall  be  sufficient  for  this  purpose,  shall  be made by
Beneficiary  in its sole  discretion.  Such amounts shall be held by Beneficiary
without  interest in an account  acceptable  to  Beneficiary  and applied to the
payment of the  obligations  in respect to which such amounts were deposited or,
at the option of  Beneficiary  and subject to applicable  law, to the payment of
the Secured Obligations in such order or priority as Beneficiary shall determine
consistent  with the Agreement,  on or before the respective  dates on which the
same or any of them would become delinquent.  If one month prior to the due date
of any of the obligations  under this subsection (a) the amounts then on deposit
therefor  shall be  insufficient  for the payment of such  obligations  in full,
Trustor  within  ten (10) days  after  demand  shall  deposit  the amount of the
deficiency with Beneficiary.  Nothing herein contained shall be deemed to affect
any right or remedy of Beneficiary under the provisions of this Deed of Trust or
of any  statute  or rule of law to pay any such  amount and to add the amount so
paid  together  with  interest at the Default  Rate to the  indebtedness  hereby
secured.

          (b) Except as otherwise permitted in the Agreement,  Trustor will pay,
from time to time when the same shall become due, all lawful  claims and demands
of mechanics,  materialmen,  laborers, and others which, if unpaid, might result
in, or permit the  creation  of, a lien on the  Mortgaged  Property  or any part
thereof, or on the revenues, rents, issues, income and profits arising therefrom
and in general will do or cause to be done everything necessary so that the lien
hereof  shall be fully  preserved,  at the cost of Trustor,  without  expense to
Beneficiary.

     Section 1.07 Intentionally Deleted.

     Section  1.08  Insurance.  (a)  Trustor  agrees  to at all  times  provide,
maintain and keep in force the policies of insurance  required to the maintained
pursuant to the terms of the Agreement.

          (b) In the event Trustor fails to provide,  maintain, keep in force or
deliver and furnish to  Beneficiary  the policies of  insurance  required by the
Agreement  or this Deed of Trust,  Beneficiary


<PAGE>12


may procure such insurance or single-interest  insurance for such risks covering
Beneficiary's  interest, and Trustor will pay all premiums thereon promptly upon
demand by  Beneficiary,  and until such payment is made by Trustor the amount of
all such premiums,  together with interest  thereon at the Default Rate shall be
secured by this Deed of Trust.

          (c) After the happening of any casualty to the  Mortgaged  Property or
any  part  thereof,   Trustor  shall  give  prompt  written  notice  thereof  to
Beneficiary,  and  Beneficiary  may make proof of loss if not made  promptly  by
Trustor. In the event of such loss or damage, all proceeds of insurance shall be
payable in the manner provided for in the Agreement.  Unless otherwise  provided
in the  Agreement,  nothing herein  contained  shall be deemed to excuse Trustor
from repairing or maintaining the Premises as provided in Section 1.12 hereof or
restoring all damage or  destruction  to the Mortgaged  Property,  regardless of
whether  or not there are  insurance  proceeds  available  or  whether  any such
proceeds are sufficient in amount, and the application or release by Beneficiary
of any  insurance  proceeds  shall  not cure or waive any  Default  or notice of
Default  under this Deed of Trust or  invalidate  any act done  pursuant to such
notice.  Any monies  received as payment for loss under any  insurance  shall be
applied pursuant to the terms of the Agreement.

          (d) In the  event  of  foreclosure  of this  Deed of  Trust  or  other
transfer of title or assignment of the Premises in  extinguishment,  in whole or
in part, of the debt secured hereby, all right, title and interest of Trustor in
and to all  policies of  insurance  required by this Section 1.08 shall inure to
the benefit of and pass to the successor in interest to Trustor or the purchaser
or grantee of the Premises.

          (e) Trustor shall not take out separate  insurance  concurrent in form
or contributing  in the event of loss with that required to be maintained  under
this Section 1.08, unless Beneficiary has approved the insurance company and the
form and content of the insurance policy,  including,  without  limitation,  the
naming  thereon  of  Beneficiary  as  a  named  insured  with  loss  payable  to
Beneficiary  under a  standard  mortgagee  endorsement  of the  character  above
described and the inclusion of a provision  therein  obligating  said  insurance
company  to  provide   Beneficiary   with  notice  thirty  (30)  days  prior  to
cancellation, lapse or amendment of any policy. Trustor shall immediately notify
Beneficiary whenever any such separate insurance is taken out and shall promptly
deliver to Beneficiary the policy or policies of such insurance.

          (f)  Beneficiary  may at any time following the occurrence of an Event
of Default under the Agreement, at its option, to be exercised by written notice
to Trustor,  require the deposit by Trustor,  at the time of each  payment of an
installment  of interest or  principal  under the  Agreement,  of an  additional
amount sufficient to discharge the obligations under this Section 1.08 when they
become due.  The  determination  of the amount so payable and of the  fractional
part thereof to be deposited with Beneficiary with each installment, so that the
aggregate of such deposit shall be sufficient for this purpose, shall be made by
Beneficiary  in its sole  discretion.  Such amounts shall be held by Beneficiary
without  interest in an account  acceptable  to  Beneficiary  and applied to the
payment of the obligations in respect of which such amounts were deposited on or
before  the  respective


<PAGE>13


dates on which the same or any of them would become delinquent or, at the option
of  Beneficiary,  to the  payment of the  Secured  Obligations  in such order or
priority as Beneficiary  shall determine  consistent with the Agreement.  If one
month prior to the due date of any of the aforementioned obligations the amounts
then  on  deposit  therefor  shall  be  insufficient  for  the  payment  of such
obligations in full, Trustor within five (5) days after demand shall deposit the
amount of the deficiency  with  Beneficiary.  Nothing herein  contained shall be
deemed to affect any right or remedy of Beneficiary under the provisions of this
Deed of Trust or of any statute or rule of law to pay any such amount and to add
the  amount  so  paid  together  with  interest  at  the  Default  Rate  to  the
indebtedness hereby secured.

     Section 1.09  Condemnation.  (a) In the event the Mortgaged Property or any
part thereof or interest  therein,  shall be taken or damaged by eminent domain,
alteration of the grade of any street,  or there shall occur any other injury to
or decrease in the value of the Mortgaged  Property,  by reason of any public or
quasi-public  improvement or  condemnation  proceeding,  or in any other similar
manner  ("Condemnation"),   or  should  Trustor  receive  any  notice  or  other
information  regarding such  Condemnation  or a proposed  Condemnation,  Trustor
shall give prompt written notice thereof to Beneficiary.

          (b) All compensation, awards and other payments or relief payable as a
result of any such Condemnation,  shall be payable in the manner provided for in
the Agreement.  All such  compensation,  awards,  damages,  rights of action and
proceeds  awarded to Trustor (the "Proceeds") are hereby assigned to Beneficiary
and  Trustor  agrees to execute  such  further  assignments  of the  Proceeds as
Beneficiary  may require.  Beneficiary  shall be under no obligation to question
the  amount of any such  award or  compensation  and may  accept the same in the
amount paid. All Proceeds may be applied either against the Secured  Obligations
(in such order and priority as Beneficiary  shall determine  consistent with the
Agreement) or to restore the Premises, at the discretion of Beneficiary,  except
as may be otherwise provided in the Agreement.

          (c)  Unless  otherwise  provided  in  the  Agreement,  nothing  herein
contained  shall be deemed to excuse Trustor from  repairing or maintaining  the
Premises  as  provided  in  Section  1.12  hereof  or  restoring  all  damage or
destruction  to the Mortgaged  Property,  regardless of whether or not there are
proceeds  available or whether any such Proceeds are  sufficient in amount,  and
the  application  or release by  Beneficiary  of any Proceeds  shall not cure or
waive any  Default or notice of Default  under this Deed of Trust or  invalidate
any act done pursuant to such notice.

          (d)  Receipt  by   Beneficiary   and   application   in  reduction  of
indebtedness  of any Proceeds less than the full amount of the then  outstanding
Secured  Obligations  shall not defer,  alter or modify Trustor's  obligation to
continue  to  pay  the  regular  installments  of  principal,  interest  on  the
outstanding  principal  balance and other charges owed in respect of the Secured
Obligations and herein.



<PAGE>14


          (e) If  prior  to the  receipt  of the  Proceeds  by  Beneficiary  the
condemned  Premises  shall have been sold on  foreclosure of this Deed of Trust,
Beneficiary shall,  nevertheless,  have the right to receive the Proceeds and to
retain, for its own account,  (i) an amount equal to the counsel fees, costs and
disbursements  incurred by  Beneficiary  in  connection  with  collection of the
Proceeds  and not  repaid  by  Trustor  and  (ii) the  full  amount  of all such
Proceeds, if Beneficiary is the successful purchaser at the foreclosure sale, to
the extent of amounts owed in respect of the Secured Obligations.

     Section 1.10 Beneficiary's Performance of Trustor's Obligations. If Trustor
shall fail to perform  any of the  covenants  contained  herein or any  covenant
contained in the  Agreement  or any other Loan  Document,  Beneficiary  may, but
shall not be obligated to, make  advances  and/or  disbursements  to perform the
same.  Trustor will repay on demand all sums so advanced  and/or  disbursed with
interest  at the  Default  Rate  from the date of  making  such  advance  and/or
disbursement  until such sums have been repaid and all sums so  advanced  and/or
disbursed,  together with interest  thereon at the Default Rate, shall be a lien
upon the Mortgaged  Property and shall be secured hereby. The provisions of this
Section  1.10 shall not prevent any default in the  observance  of any  covenant
contained herein or with respect to the Secured Obligations or in any other Loan
Document from constituting an Event of Default.

     Section  1.11  Financial  Records.   Trustor  will  provide  the  financial
statements to Beneficiary required pursuant to the terms of the Agreement.

     Section  1.12 Waste and  Maintenance.  Trustor will not  threaten,  commit,
permit or suffer any waste to occur on or to the Mortgaged  Property or any part
thereof or alter or demolish the  Mortgaged  Property or any part thereof in any
manner or make any change in its use (except as provided  in the  Agreement)  or
any change which will in any way increase any fire or other hazards  arising out
of  construction  or operation of the Mortgaged  Property.  Trustor will, at all
times,  maintain the Mortgaged Property as required pursuant to the terms of the
Agreement.

     Section 1.13 Enforcement Expenses.  Except where inconsistent with the laws
of the state in which the Mortgaged Property is located,  Trustor agrees that if
any action or  proceeding be  commenced,  including an action to foreclose  this
Deed of Trust or to collect the indebtedness  hereby secured, to which action or
proceeding  Beneficiary  is made a party by reason of the execution of this Deed
of Trust or the other Loan Documents, or in which it becomes necessary to defend
or uphold the lien of this Deed of Trust,  all sums paid by Beneficiary  for the
expense  of  any  litigation  to  prosecute  or  defend  or  participate  in the
transaction  and the  rights  and liens  created  hereby  (including  reasonable
attorneys'  fees) shall be paid by Trustor  together with interest  thereon from
date of payment by  Beneficiary  at the Default Rate. All such sums paid and the
interest thereon shall be immediately due and payable,  shall be a lien upon the
Mortgaged  Property,  and  shall be  secured  hereby  as shall be all such  sums
incurred in connection with  enforcement by Beneficiary of its rights  hereunder
or under any other Loan Document.


<PAGE>15


     Section  1.14  Defense  of  Beneficiary's  Interests.  If the  interest  of
Beneficiary  in the  Mortgaged  Property  or any  part  thereof  or the  lien or
security  interest of this Deed of Trust thereon shall be attacked,  directly or
indirectly, or if legal proceedings shall be instituted against Trustee, Trustor
or  Beneficiary  with  respect  thereto or  against  Trustor,  Trustor  upon its
learning  thereof,  will promptly give written notice thereof to Beneficiary and
Trustor will, at Trustor's cost and expense, exert itself diligently to cure, or
will cause to be cured,  any  defect  that may have  developed  or be claimed to
exist,  and will take all  necessary  and proper  steps for the  protection  and
defense  thereof  and will take,  or will cause to be taken,  such  action as is
appropriate  to the defense of any such legal  proceedings,  including,  but not
limited  to,  the  employment  of counsel  and the  prosecution  and  defense of
litigation.

     Section 1.15 No Impairment of Security. In no event shall Trustor do or
permit to be done,  or omit to do or permit the  omission  of, any act or thing,
the doing, or omission,  of which would  materially  impair the security of this
Deed of Trust or materially  impair the value of the  Mortgaged  Property or any
part thereof.

     Section 1.16  Restrictions  on Transfers and  Mortgages.  Unless  otherwise
permitted  pursuant to the terms of the Agreement,  Trustor will not directly or
indirectly, by transfer, mortgage, conveyance, or sale of an interest in Trustor
permit,  do or suffer the  assignment,  lease,  transfer,  sale,  conveyance  or
encumbrance  of the  Mortgaged  Property,  or any part  thereof or any  interest
therein,  without  the  express  prior  written  consent of  Beneficiary  unless
otherwise  permitted  pursuant to the terms of the Agreement.  While the Secured
Obligations are outstanding,  neither the structure nor the ownership of Trustor
may be changed without the express prior written  consent of Beneficiary  unless
otherwise permitted pursuant to the terms of the Agreement.

     Section 1.17  Beneficiary's  Defense.  Beneficiary or Trustee may appear in
and  defend  any  action or  proceeding  at law or in  equity  or in  bankruptcy
purporting  to affect  the  Premises  or the  security  hereof or the rights and
powers of Beneficiary  or Trustee,  and any appellate  proceedings,  and in such
event Trustor shall pay all of Beneficiary's  and Trustee's  costs,  charges and
expenses,  including cost of evidence of title and  attorneys'  fees incurred in
such action or proceeding. All costs, charges and expenses so incurred, together
with  interest  thereon at the Default  Rate from the date of payment of same by
Beneficiary  or Trustee as aforesaid,  shall be secured by the lien of this Deed
of Trust and shall be due and payable upon demand.

     Section  1.18  Environmental  Compliance.  Trustor  will perform and comply
promptly  with,  and cause the Premises to be  maintained,  used and operated in
accordance with, all applicable federal,  state and local laws pertaining to air
and water quality,  hazardous  waste,  waste  disposal,  air emissions and other
environmental matters, as set forth in the Agreement.

     Section 1.19 Zoning  Changes.  Trustor will not consent to, join in, permit
or allow any change in the zoning laws or  ordinances  relating to or  affecting
the Premises which could  reasonably


<PAGE>16


be expected to materially adversely affect the Premises and will promptly notify
Beneficiary of any changes to the zoning laws.

     Section 1.20 Grant of Security Interest.  Trustor,  as further security for
the payment of said  indebtedness and in addition to all the rights and remedies
otherwise  available to  Beneficiary or Trustee under this Deed of Trust and the
other Loan  Documents,  grants to Beneficiary  and Trustee a security  interest,
under the Uniform Commercial Code as now in effect in the state where all or any
of the Fixtures are located,  in and to the Fixtures,  and all proceeds thereof.
Upon an Event of Default, Beneficiary and Trustee shall have, in addition to all
the other  rights and  remedies  allowed by law,  the rights and  remedies  of a
secured  party  under the  Uniform  Commercial  Code as in effect at that  time.
Trustor  further agrees that the security  interest  created hereby also secures
all expenses of Beneficiary and Trustee (including reasonable expenses for legal
services of every kind, and cost of any insurance, and payment of taxes or other
charges) incurred in or incidental to, the custody, care, sale or collection of,
or realization  upon, any of the property  secured hereby or in any way relating
to the  enforcement  or  protection  of the  rights of  Beneficiary  or  Trustee
hereunder, together with interest thereon at the Default Rate until paid.

     Section 1.21 Compliance with Laws and ADA Compliance.

          (a) Trustor  warrants  and  covenants  that the  Premises are and will
continue to be  substantially in compliance with all applicable  local,  county,
state and federal laws and regulations and all building, housing and fire codes,
rules and regulations.

          (b) Without  limiting the provisions of subsection (a) of this Section
1.21:  (i) Trustor  represents  and  warrants  to  Beneficiary  that  Trustor is
substantially in compliance with the Americans with Disabilities Act of 1990 (42
U.S.C.A. sec. 12101 et. seq.), as the same may be amended from time to time (the
"ADA")  and  all  other  federal,   state  and  local  laws  pertaining  to  the
accessibility  of the  Premises by persons with  disabilities  (the ADA and such
other laws are, collectively,  the "Accessibility Laws"); (ii) Trustor covenants
to ensure  that the  Premises  will at all times  substantially  comply with all
applicable Accessibility Laws and, upon the request of Beneficiary, Trustor will
conduct such surveys of the Premises as  Beneficiary  shall require to ascertain
such   compliance;   (iii)  Trustor  will  maintain   accurate  records  of  all
expenditures  made in connection  with any  alterations to the Premises and will
deliver copies  thereof to  Beneficiary  upon  Beneficiary's  request;  and (iv)
Trustor shall defend,  indemnify and hold harmless  Beneficiary,  its employees,
agents,  officers  and  directors,  attorneys,  and any parent or  affiliate  of
Beneficiary,   from  and  against  any  claims,   demands,   penalties,   fines,
liabilities,  settlements, damages, cost or expenses of whatever kind or nature,
known or unknown, contingent or otherwise,  arising out or in any way related to
any violations of the Accessibility  Laws (including,  without  limitation,  any
costs incurred by Beneficiary in complying with any Accessibility Laws). Neither
payment of the  indebtedness  secured hereby nor foreclosure  shall operate as a
discharge  of  Trustor's  obligations  under this  subsection  (b). In the event
Trustor  tenders  a deed in lieu  of  foreclosure,  Trustor  shall  deliver  the
Premises to Beneficiary


<PAGE>17


(or its designee)  substantially  free of any  violations  of the  Accessibility
Laws. In the event Trustor does not timely perform any of the above obligations,
Beneficiary  after 30 days notice to Trustor may perform said obligations at the
expense of Trustor and Trustor  shall,  upon  written  demand from  Beneficiary,
reimburse Beneficiary for all costs, including attorneys' fees and out-of-pocket
expenses,  and  all  liabilities  incurred  by  Beneficiary  by  reason  of  the
foregoing,  with  interest  thereon  at the  Default  Rate from the date of such
payment by  Beneficiary  to the date of  repayment.  Until paid,  said costs and
expenses shall be secured by this Deed of Trust.

     Section 1.22 Other Multistate  Mortgages.  The indebtedness secured in part
by this Deed of Trust is secured by mortgages and/or deeds of trust  encumbering
and conveying lands and other property  and/or  leasehold  interests  therein in
other  states as more  particularly  described  in the  Agreement,  all of which
mortgages  and/or deeds of trust,  including this  instrument,  being  hereafter
referred to as "the mortgage instruments."

     It is  understood  and  agreed  that  all of the  properties  of all  kinds
conveyed or encumbered by the mortgage  instruments are security for the Secured
Obligations  without  allocation  of any one or more of the  parcels or portions
thereof to any portion of the  Secured  Obligations  less than the whole  amount
thereof unless so stated in said mortgage instruments.

     It is  specifically  covenanted and agreed that  Beneficiary or Trustee may
proceed,  at  the  same  or at  different  times,  to  foreclose  said  mortgage
instruments,  or any of them, by any proceedings  appropriate in the state where
any of the land lies, and that no event of enforcement taking place in any state
including,  without  limiting  the  generality  of the  foregoing,  any  pending
foreclosure,  judgment or decree of the  foreclosure,  foreclosure  sale,  rents
received,  possession taken, deficiency judgment or decree, or judgment taken on
the Secured  Obligations,  shall in any way stay, preclude or bar enforcement of
the mortgage instruments or any of them in any other state, and that Beneficiary
or Trustee may pursue any or all its remedies to the maximum extent permitted by
state law until all of the Secured  Obligations now or hereafter  secured by any
or all of the mortgage instruments has been paid and discharged in full.

     Neither Trustor, nor any person claiming under Trustor, shall have or enjoy
any right to marshaling of assets,  all such right being hereby expressly waived
as to Trustor and all persons claiming under it,  including  junior lienors.  No
release  of  personal  liability  of any person  whatever  and no release of any
portion  of the  property  now or  hereafter  subject  to the lien of any of the
mortgage  instruments  shall have any effect  whatever by way of  impairment  or
disturbance  of the lien or priority of any of said  mortgage  instruments.  Any
foreclosure or other  appropriate  remedy brought in any of the states aforesaid
may be brought and prosecuted as to any part of the mortgaged security, wherever
located,  without  regard  to the fact  that  foreclosure  proceedings  or other
appropriate  remedies  have or have not been  instituted  elsewhere on any other
land subject to the lien of said mortgage instruments or any of them.



<PAGE>18


     Section 1.23 Leasehold and Leasehold Instruments.

          (a) Trustor covenants and agrees to faithfully comply with and perform
all of its obligations under the Leasehold  Instruments and to promptly cure any
default by it under the Leasehold Instruments.

          (b) Trustor may modify,  amend or terminate any  Leasehold  Instrument
without the prior written  consent  provided such action is consistent  with the
terms of the Agreement.

          (c)  Trustor  will  promptly  give  Beneficiary  a copy of any default
notice given to Trustor with respect to any Leasehold Instrument.

                                   ARTICLE II

                         EVENTS OF DEFAULT AND REMEDIES

     Section 2.01 Events of Default.  The following  shall  constitute  defaults
hereunder  and,  after the giving of notice and the passage of time,  if any, as
provided herein, shall constitute "Events of Default" hereunder:

          (a) If Trustor shall fail to pay when due any Secured Obligation after
the passage of any applicable notice or grace period, if any; or

          (b) If an Event of Default,  as defined in the Agreement,  shall occur
under the Agreement.

     Section 2.02  Beneficiary's  Remedies.  (a) During the  continuance  of any
Event of Default, Beneficiary,  without notice or presentment, each of which are
hereby  waived by Trustor,  may,  subject to the  provisions  of the  Agreement,
declare the entire principal of the Secured Obligations then outstanding and all
accrued  and unpaid  interest  thereon  and all other  amounts  owing in respect
thereof (if not then due and payable, whether by acceleration or otherwise),  to
be due and payable  immediately,  and upon any such declaration the principal of
the Secured Obligations and said accrued and unpaid interest shall become and be
immediately due and payable,  anything in the instruments evidencing the Secured
Obligations or in this Deed of Trust to the contrary notwithstanding;

          (b) During the  continuance  of any Event of Default,  Beneficiary  or
Trustee may enter into and upon all or any part of the Premises, and, having and
holding the same, may use, operate, manage and control the Mortgaged Property or
any part thereof and conduct the business  thereof,  either personally or by its
superintendents,   managers,  agents,  servants,  attorneys  or  receivers;  and
likewise,  from time to time,  at the  expense of  Trustor,  Beneficiary  and/or
Trustee may make all necessary or proper repairs,  renewals and replacements and
such useful  alterations,  addi-


<PAGE>19


tions,  betterments  and  improvements  thereto  and  thereon  as to it may deem
advisable  in its sole  judgment;  and in every  such  case  Beneficiary  and/or
Trustee shall have the right to manage and operate the Mortgaged Property and to
carry on the business thereof and exercise all rights and powers of Trustor with
respect  thereto  either in the name of Trustor or otherwise as  Beneficiary  or
Trustee shall deem best; and  Beneficiary or Trustee shall be entitled,  with or
without  entering  into or upon the  Premises,  to collect and receive all gross
receipts,  earnings,  revenues, rents, maintenance payments, issues, profits and
income of the Mortgaged Property and every part thereof,  all of which shall for
all purposes  constitute  property of  Beneficiary;  and,  after  deducting  the
expenses of conducting  the business  thereof and of all  maintenance,  repairs,
renewals, replacement,  alterations, additions, betterments and improvements and
amounts necessary to pay taxes, assessments, insurance and prior or other proper
charges upon the  Mortgaged  Property or any part  thereof,  as well as just and
reasonable  compensation for the services of Beneficiary  and/or Trustee and for
all  attorneys,  counsel,  agents,  clerks,  servants and other  employees by it
properly  engaged  and  employed,  Beneficiary  may apply the moneys  arising as
aforesaid in such manner and at such times as Beneficiary shall determine in its
discretion  consistent  with  the  Agreement  to  the  payment  of  the  Secured
Obligations and the interest thereon,  when and as the same shall become payable
and/or to the  payment of any other sums  required  to be paid by Trustor  under
this Deed of Trust;

          (c)  During the  continuance  of any such  Event of  Default,  Trustor
covenants and agrees as follows:

          (1) Trustee or Beneficiary  may, with or without entry,  personally or
by their agents or attorneys, insofar as applicable, sell the Mortgaged Property
or any part  thereof and  pursuant to the  procedures  provided by law,  and all
estate,  right,  title,  interest,  claim  and  demand  therein,  and  right  of
redemption thereof, at one or more sales as an entity or in parcels, and at such
time and place upon such terms and after such notice  thereof as may be required
or permitted by law; or

          (2)  Trustee  or  Beneficiary  may  institute  an action  of  mortgage
foreclosure or institute other proceedings  according to law for the foreclosure
hereof,  and may  prosecute  the same to  judgment,  execution  and sale for the
collection  of the Secured  Obligations  secured  hereby,  and all interest with
respect  thereto,  together  with all taxes and insurance  premiums  advanced by
Beneficiary  or Trustee  and other sums  payable by Trustor  hereunder,  and all
fees,  costs and expenses of such  proceedings,  including  attorneys'  fees and
expenses; or

          (3) Trustee or  Beneficiary  may, if default be made in the payment of
any part of the  Secured  Obligations,  proceed  with  foreclosure  of the liens
evidenced  hereby in  satisfaction  of such item either through the courts or by
conducting  the sale as herein  provided,  and proceed with  foreclosure  of the
security interest created hereby, all without declaring the whole of the Secured
Obligations  due, and provided  that if sale of the Mortgaged  Property,  or any
portion thereof,  is made because of default in payment of a part of the Secured
Obligations,  such sale may be made subject to the unmatured part of the Secured
Obligations, but as to such unmatured part of the Secured


<PAGE>20


Obligations  (and it is agreed  that  such  sale,  if so made,  shall not in any
manner affect the unmatured part of the Secured  Obligations) this Deed of Trust
shall remain in full force and effect just as though no sale had been made under
the  provisions of this  paragraph.  And it is further agreed that several sales
may be made  hereunder  without  exhausting  the right of sale for any unmatured
part  of the  Secured  Obligations,  it  being  the  purpose  to  provide  for a
foreclosure  and sale of the Mortgaged  Property,  or any part thereof,  for any
matured  portion of the  Secured  Obligations  without  exhausting  the power to
foreclose and to sell the Mortgaged Property, or any part thereof, for any other
part of the  Secured  Obligations  whether  matured at the time or  subsequently
maturing; or

          (4) Trustee or Beneficiary  may take such steps to protect and enforce
its rights  whether by action,  suit or  proceeding  in equity or at law for the
specific  performance  of any  covenant,  condition  or  agreement  in the  Loan
Documents or in aid of the  execution of any power  herein  granted,  or for any
foreclosure hereunder,  or for the enforcement of any other appropriate legal or
equitable remedy or otherwise as Beneficiary or Trustee shall elect; or

          (5)  Beneficiary  or Trustee may exercise in respect of the  Mortgaged
Property  consisting of Fixtures,  all of the rights and remedies available to a
secured  party upon  default  under the  applicable  provisions  of the  Uniform
Commercial  Code as then in effect in the state where the Mortgaged  Property is
located; or

          (6)  Beneficiary  or Trustee may apply any proceeds or amounts held in
escrow pursuant to the terms of this Deed of Trust to payment of any part of the
Secured  Obligations  in such order of priority  as  Beneficiary  may  determine
consistent with the Agreement; or

          (7) Any sale as aforesaid may be subject to such existing tenancies as
Beneficiary, in its sole discretion, may elect.

     Section 2.03 Sale, Foreclosure, etc. (a) Beneficiary or Trustee may adjourn
from  time to time any sale by it to be made  under or by virtue of this Deed of
Trust by  announcement at the time and place appointed for such sale or for such
adjourned  sale or sales;  and,  except as otherwise  provided by any applicable
provision of law, Beneficiary or Trustee, without further notice or publication,
may  make  such  sale at the  time and  place  to  which  the  same  shall be so
adjourned.

          (b) Upon the  completion of any sale or sales made by  Beneficiary  or
Trustee under or by virtue of this Article II,  Beneficiary  or Trustee,  or any
officer  of any court  empowered  to do so,  shall  execute  and  deliver to the
accepted purchaser or purchasers a good and sufficient  instrument,  or good and
sufficient instruments, conveying, assigning and transferring all estate, right,
title  and  interest  in and to  the  properties,  interests  and  rights  sold.
Beneficiary  and  Trustee  are each hereby  irrevocably  appointed  the true and
lawful  attorney of Trustor,  in its name and stead,  to make all the  necessary
conveyances,  assignments, transfers and deliveries of any part of the Mortgaged
Property  and rights so sold,  and for that purpose  Beneficiary  or Trustee may
execute all necessary


<PAGE>21


instruments  of  conveyance,  assignment  and transfer and may substitute one or
more persons with like power,  Trustor hereby  ratifying and confirming all that
its said attorney or such substitute or substitutes  shall lawfully do by virtue
hereof. Nevertheless,  Trustor, if so requested by Beneficiary or Trustee, shall
ratify  and  confirm  any such  sale or sales by  executing  and  delivering  to
Beneficiary or Trustee or to such  purchaser or purchasers all such  instruments
as may be advisable,  in the reasonable judgment of Beneficiary or Trustee,  for
the purpose and as may be designated in such request.

          (c) Upon any sale,  whether under the power of sale hereby given or by
virtue of judicial  proceedings,  it shall not be necessary for  Beneficiary  or
Trustee, or any public officer acting under execution or order of court, to have
present or constructive possession of any of the Mortgaged Property.

          (d) The recitals  contained in any  conveyance  made by Beneficiary or
Trustee to any  purchaser at any sale made pursuant  hereto or under  applicable
law shall be full evidence of the matters therein stated,  and all prerequisites
to such sale shall be presumed to have been satisfied and performed.

          (e) Any such  sale or sales  made  under or by  virtue of this Deed of
Trust, whether under the power of sale hereby granted and conferred, or under or
by virtue of any judicial proceedings, shall operate to divest all right, title,
interest, claim and demand whatsoever, either by law or in equity, of Trustor in
and to the premises and property sold, and shall be a perpetual bar, both at law
and in equity,  against Trustor, its successors and assigns, and against any and
all persons or entities  claiming the premises  and property  sold,  or any part
thereof, from through or under Trustor and its successors or assigns.

          (f) The receipt given by Beneficiary or Trustee for the purchase money
paid at any such sale,  or the receipt  given by any other person  authorized to
receive the same, shall be sufficient discharge therefor to any purchaser of the
property, or any part thereof, sold as aforesaid,  and no such purchaser, or his
representatives,  grantees or assigns,  after  paying  such  purchase  money and
receiving  such receipt,  shall be bound (i) to see to the  application  of such
purchase money or any part thereof upon or for any trust or purpose of this Deed
of Trust,  (ii) by the  misapplication  or  nonapplication  of any such purchase
money,  or any  part  thereof,  or  (iii) to  inquire  as to the  authorization,
necessity, expediency or regularity of any such sale.

          (g) In case  the  liens or  security  interests  hereunder,  or by the
exercise of any other right or power,  shall be foreclosed by  Beneficiary's  or
Trustee's sale or by other judicial or non-judicial action, the purchaser at any
such sale shall receive, as an incident to its ownership,  immediate  possession
of the property  purchased,  and if Trustor or Trustor's  successors  shall hold
possession of said  property,  or any part thereof,  subsequent to  foreclosure,
Trustor or Trustor's  successors shall be considered as tenants at sufferance of
the purchaser at  foreclosure  sale,  and


<PAGE>22


anyone occupying the property after demand made for possession  thereof shall be
guilty of  forcible  detainer  and shall be subject  to  eviction  and  removal,
forcible or otherwise, with or without process of law, and all damages by reason
thereof are hereby expressly waived.

          (h) In the  event  a  foreclosure  hereunder  shall  be  commenced  by
Beneficiary  or Trustee,  Beneficiary or Trustee may at any time before the sale
abandon the suit,  and may then institute suit for the collection of the Secured
Obligations and for the foreclosure of the liens and security  interest  hereof.
If  Beneficiary  or Trustee  should  institute a suit for the  collection of the
Secured  Obligations  and for a foreclosure  of the liens and security  interest
hereof,  it may at any time  before the entry of a final  judgment  in said suit
dismiss  the  same  and  proceed  to sell the  Mortgaged  Property,  or any part
thereof, in accordance with provisions of this Deed of Trust.

          (i) Any  reasonable  expenses  incurred by  Beneficiary  or Trustee in
prosecuting,  resetting  or settling  the claim of  Beneficiary  shall become an
additional Secured Obligation of Trustor hereunder.

          (j) In the event of any sale made  under or by virtue of this  Article
II (whether made under the power of sale herein granted or under or by virtue of
judicial  proceedings or of a judgment or decree of foreclosure  and sale),  the
entire principal of, and interest on, the Secured Obligations, if not previously
due and payable,  and all other sums required to be paid by Trustor  pursuant to
this  Deed of  Trust,  immediately  thereupon  shall,  anything  in the  Secured
Obligations or in this Deed of Trust to the contrary notwithstanding, become due
and payable.

          (k) The purchase money proceeds or avails of any sale made under or by
virtue of this Article II,  together  with any other sums which then may be held
by  Beneficiary  under this Deed of Trust,  whether under the provisions of this
Article II or  otherwise,  shall be applied in  accordance  with the laws of the
state  where  the  Mortgaged  Property  is  located,   and  to  the  extent  not
inconsistent,  first to the  payment  of the costs and  expenses  of such  sale,
including reasonable compensation to Beneficiary or Trustee and their agents and
counsel,  second to the payment of the amounts due and owing under or in respect
of the Secured  Obligations  for  principal  and interest and any other  amounts
including  (without  limitation)  any other sums  required to be paid by Trustor
pursuant to any provision of this Deed of Trust or any other Loan Document, with
interest  at the  Default  Rate  from and after  the  happening  of any Event of
Default  in the  order  set  forth in  Section  7.2 of the  Agreement,  all with
interest at the Default  Rate from the date such sums were or are required to be
paid under this Deed of Trust, and third to the payment of the surplus,  if any,
to whomsoever may be lawfully entitled to receive the same.

          (l) Upon any sale made under or by virtue of this Article II,  whether
made under the power of sale  herein  granted or under or by virtue of  judicial
proceedings or of a judgment or decree of foreclosure and sale,  Beneficiary and
any  other  Secured  Party or  Trustee  may bid for and  acquire  the  Mortgaged
Property or any part thereof and Beneficiary and any other Secured Party in lieu
of


<PAGE>23


paying cash  therefor may make  settlement  for the purchase  price by crediting
some or all of the  indebtedness  of Trustor secured by this Deed of Trust owing
to such  Secured  Party (or,  in the case of  Beneficiary,  owing to all Secured
Parties) the net sales price after deducting  therefrom the expenses of the sale
and the costs of the action and any other sums which  Beneficiary  or Trustee is
authorized to deduct under this Deed of Trust.

     Section 2.04 Payments, Judgment, etc. (a) In case an Event of Default under
the Agreement and the  acceleration  of the  obligations  thereunder  shall have
occurred,  then Trustor will in accordance with the Agreement pay to Beneficiary
the whole  amount  which then shall have  become due and  payable on the Secured
Obligations,  whether for principal  and interest or both or  otherwise,  as the
case may be,  which  interest  shall then accrue at the Default Rate on the then
unpaid principal of or other amounts constituting the Secured  Obligations,  and
the sums  required to be paid by Trustor  pursuant to any provision of this Deed
of Trust,  and in addition thereto such further amount as shall be sufficient to
cover  the  costs  and  expenses  of  collection,   including   compensation  to
Beneficiary  and/or Trustee,  their agents and counsel and any expenses incurred
by Beneficiary or Trustee  hereunder.  In the event Trustor shall fail forthwith
to pay such amounts upon demand,  Beneficiary  and/or  Trustee shall be entitled
and empowered to institute such action or proceedings at law or in equity as may
be advised by its counsel for the collection of the sums so due and unpaid,  and
may prosecute any such action or proceedings to judgment or final decree.

          (b) Beneficiary  and/or Trustee shall be entitled to recover  judgment
as aforesaid  either  before or after or during the pendency of any  proceedings
for the  enforcement  of the  provisions  of this Deed of Trust and the right of
Beneficiary and/or Trustee to recover such judgment shall not be affected by any
entry or sale hereunder,  or by the exercise of any other right, power or remedy
for the  enforcement of the provisions of this Deed of Trust or the  foreclosure
of the lien hereof;  and in the event of a sale of the Mortgaged Property or any
part thereof and of the application of the proceeds of sale, as provided in this
Deed of Trust, to the payment of the  indebtedness  hereby secured,  Beneficiary
and/or  Trustee  shall be  entitled  to enforce  payment  of, and to receive all
amounts then  remaining  due and unpaid upon,  the Secured  Obligations,  and to
enforce payment of all other charges,  payments and costs due under this Deed of
Trust and shall be  entitled  to recover  judgment  for any  portion of the debt
remaining  unpaid,  with  interest  thereon  at the  Default  Rate.  In  case of
proceedings  against  Trustor in insolvency or bankruptcy or any proceedings for
its reorganization or involving the liquidation of its assets,  then Beneficiary
and/or  Trustee  shall be entitled to prove the whole  amount of  principal  and
interest due upon the Secured  Obligations to the full amount  thereof,  and all
other payments, charges and costs due under this Deed of Trust without deducting
therefrom  any proceeds  obtained  from the sale of the whole or any part of the
Mortgaged Property.

          (c) No recovery of any judgment by  Beneficiary or Trustee and no levy
of an execution under any judgment upon the Mortgaged Property or upon any other
property of Trustor  shall affect,  in any manner or to any extent,  the lien of
this Deed of Trust  upon the  Mortgaged


<PAGE>24


Property  or any part  thereof,  or any liens,  rights,  powers or  remedies  of
Beneficiary or Trustee hereunder, but such liens, rights, powers and remedies of
Beneficiary or Trustee shall continue unimpaired as before.

          (d) Any moneys thus  collected by  Beneficiary  or Trustee  under this
Section 2.04 shall be applied by Beneficiary  in accordance  with the provisions
of paragraph (k) of Section 2.03.

     Section 2.05 Receiver,  Waiver. After the happening of any Event of Default
and  immediately  upon the  commencement  of any  action,  suit or  other  legal
proceedings by  Beneficiary or Trustee to obtain  judgment for the principal of,
or interest  on, and any other  amounts  constituting  the Secured  Obligations,
including  (without  limitation)  all other sums  required to be paid by Trustor
pursuant to any  provision  of this Deed of Trust or of any nature in aid of the
enforcement of the Secured  Obligations  or of this Deed of Trust,  Trustor will
(a)  waive the  issuance  and  service  of  process  and  submit to a  voluntary
appearance in such action, suit or proceeding and (b) if required by Beneficiary
or  Trustee,  consent to the  appointment  of a  receiver  or  receivers  of the
Mortgaged Property or any part thereof and of all the earnings, revenues, rents,
maintenance  payments,  issues,  profits and income  thereof in accordance  with
Section 2.11 hereof.  After the happening of any Event of Default and during its
continuance,  or upon the commencement of any proceedings to foreclose this Deed
of Trust or to enforce the specific performance hereof or in aid thereof or upon
the  commencement  of any other  judicial  proceeding  to  enforce  any right of
Beneficiary or Trustee, Beneficiary or Trustee shall be entitled, as a matter of
right, if it shall so elect, without the giving of notice to any other party and
without  regard to the  adequacy or  inadequacy  of any security for the Deed of
Trust  indebtedness,  forthwith  either  before or after  declaring  the  unpaid
principal of the Secured  Obligations to be due and payable,  to the appointment
of such a receiver or receivers.

     Section 2.06 Beneficiary's  Possession.  Notwithstanding the appointment of
any receiver,  liquidator or trustee of Trustor or of any of its property, or of
the  Mortgaged  Property or any part thereof,  Beneficiary  and Trustee shall be
entitled to retain possession and control of the Mortgaged Property.

     Section  2.07  Remedies  Cumulative.  No remedy  herein  conferred  upon or
reserved to  Beneficiary  or Trustee is intended  to be  exclusive  of any other
remedy or  remedies  which  Beneficiary  or Trustee  may be entitled to exercise
against Trustor and each and every such remedy shall be cumulative, and shall be
in addition to every other remedy given  hereunder or in the Agreement or in any
other Loan Document now or hereafter existing at law or in equity or by statute.
No delay by or omission of Beneficiary or Trustee to exercise any right or power
shall be  construed  to be a waiver of any Event of Default or any  acquiescence
therein;  and  every  power  and  remedy  given in this  Deed of Trust or in the
Agreement  or in any other  Loan  Document  to  Beneficiary  or  Trustee  may be
exercised  from time to time as often as may be deemed  expedient by Beneficiary
or Trustee.  The resort to any remedy provided  hereunder or in the Agreement or
in any other Loan Document or provided by law or at equity shall not prevent the
concurrent or subsequent


<PAGE>25


employment of any other appropriate  remedy or remedies against Trustor.  By the
acceptance  of payment of principal of or interest on or any other amount due in
respect of any of the Secured  Obligations  after its due date,  Beneficiary and
Trustee do not waive the right either to require  prompt payment when due of all
other amounts  secured hereby or to regard as an Event of Default the failure to
pay any other such amounts. Nothing in this Deed of Trust or in the Agreement or
in any instrument evidencing the Secured Obligations shall affect the obligation
of Trustor to pay (i) the principal of, and interest on, the Secured Obligations
in the manner and at the time and place therein or in the Agreement expressed or
(ii)  the  other  Secured  Obligations  in the  manner  and at the  time  herein
expressed.

     Section  2.08  Agreement  by Trustor.  Trustor  will not at any time insist
upon, or plead, or in any manner whatever claim or take any benefit or advantage
of any stay or extension or moratorium law, any exemption from execution or sale
of the Mortgaged Property or any part thereof,  wherever enacted,  now or at any
time hereafter in force, which may affect the covenants and terms of performance
of this Deed of Trust or any other Loan Document,  or claim, take or insist upon
any benefit or advantage of any law now or hereafter in force  providing for the
valuation or appraisal of the Mortgaged Property, or any part thereof,  prior to
any sale or sales thereof which may be made pursuant to any provision herein, or
pursuant  to  the  decree,   judgment  or  order  of  any  court  of   competent
jurisdiction,  or,  after any such sale or sales,  claim or  exercise  any right
under any statute heretofore or hereafter enacted to redeem the property so sold
or any part  thereof;  and  Trustor  hereby  expressly  waives  all  benefit  or
advantage of any such law or laws and covenants  not to hinder,  delay or impede
the  execution  of any power  herein  granted or  delegated  to  Beneficiary  or
Trustee, but to suffer and permit the execution of every power as though no such
law or laws had been made or  enacted.  Trustor,  waives,  to the extent that it
lawfully  may,  all right to have the  Mortgaged  Property  or any part  thereof
marshaled upon any foreclosure hereof.

     Section 2.09 Use and  Occupancy  Payments.  During the  continuance  of any
Event of Default and pending the  exercise by  Beneficiary  and Trustee of their
rights to exclude  Trustor from all or any part of the Premises,  unless Trustor
is legally  entitled to continue  possession of the Premises,  Trustor agrees to
pay to Beneficiary the fair and reasonable  rental value,  which amount shall be
determined  by the  Beneficiary  in its  reasonable  judgement,  for the use and
occupancy of the Premises or any portion thereof which are in its possession for
such period and,  upon default of any such  payment,  will vacate and  surrender
possession of the Premises to Beneficiary  or Trustee or to a receiver,  if any,
and in default  thereof may be evicted by any summary  action or proceeding  for
the recovery of  possession  of the Premises for  non-payment  of rent,  however
designated.  Any payments  received under this Section 2.09 by Beneficiary shall
be applied in accordance with Section 2.03(k) of this Deed of Trust.

     Section 2.10 Beneficiary's Right to Purchase. In case of any sale under the
foregoing  provisions  of this Article II,  whether made under the power of sale
hereby given or pursuant to judicial proceedings, Beneficiary or Trustee may bid
for and purchase any property,  and may make


<PAGE>26


payment  therefor as  hereinafter  set forth or as set forth in Section  2.03(l)
above,  and, upon compliance  with the terms of said sale, may hold,  retain and
dispose  of such  property  without  further  accountability  therefor.  For the
purpose  of  making  settlement  or  payment  for  the  property  or  properties
purchased,  Beneficiary  and Trustee  shall be entitled to use and apply such of
the  Secured  Obligations  held by it or the other  Secured  Parties,  including
(without  limitation) any accrued and unpaid interest thereon,  as it may elect,
or as may be otherwise provided for in Section 2.03(l) above.

     Section 2.11  Appointment of Receiver.  Upon  application of Beneficiary or
Trustee to any court of competent  jurisdiction,  if any Event of Default  shall
have occurred and so long as it shall be continuing,  to the extent permitted by
law, a receiver may be appointed to take possession of and to operate, maintain,
develop and manage the  Mortgaged  Property or any part  thereof.  In every case
when a  receiver  of the whole or any part of the  Mortgaged  Property  shall be
appointed  under this Section 2.11 or  otherwise,  the net income and profits of
the  Mortgaged  Property  shall,  subject to the order of any court of competent
jurisdiction,  be paid over to, and shall be received by, Beneficiary or Trustee
to be applied as provided in Section 2.03(k) hereof.

     Section  2.12 No  Waiver.  Beneficiary  and/or  Trustee  may  resort to any
security  given by this Deed of Trust or to any other  security  now existing or
hereafter given to secure the payment of any of the Secured  Obligations secured
hereby,  in whole or in part, and in such portions and in such order as may seem
best to Beneficiary or Trustee in its reasonable discretion, and any such action
shall not in any way be considered  as a waiver of any of the rights,  benefits,
liens or security interest created by this Deed of Trust.

                                   ARTICLE III

                         ASSIGNMENT OF LEASES AND RENTS

     Section 3.01 Lease Related Definitions.  As used in this Deed of Trust: (a)
"Lease" means any lease, sublease, or other similar agreement,  now or hereafter
existing, under the terms of which any person other than Trustor has or acquires
any right to occupancy or use of the Mortgaged Property, or any part thereof, or
interest therein; (b) "Lessee" means the lessee, sublessee,  licensee, tenant or
other person  having the right to occupy or use all or any part of the Mortgaged
Property  under a Lease;  and (c) "Rent" means the rents,  additional  rents and
other consideration payable to Trustor by the Lessee under the terms of a Lease.
Whenever  reference is made in this Deed of Trust to a lease,  license,  lessee,
licensee,  tenancy  or  tenant,  such  reference  shall be deemed  to  include a
sublease, sublessee, license, licensee, subtenancy or subtenant, as the case may
be.

     Section 3.02  Assignment  of Leases and Rents.  Trustor  hereby  assigns to
Beneficiary and to Trustee for the benefit of Beneficiary  all Leases,  together
with all Rents payable under the Leases, now or at any time hereafter  existing,
such  assignment  being  upon  the  following  terms:  (a)  until  receipt  from
Beneficiary of notice of the occurrence of an Event of Default,  each Lessee may
pay


<PAGE>27


rent directly to Trustor,  (b) upon receipt from  Beneficiary  of notice that an
Event of  Default  exists,  each  Lessee  shall,  and is hereby  authorized  and
directed to, pay directly to Beneficiary  or Trustee (as therein  specified) all
Rent thereafter accruing, and the receipt of such Rent by Beneficiary or Trustee
shall be a release of such Lessee to the extent of all amounts so paid, (c) Rent
so received by Beneficiary or Trustee shall be applied by Beneficiary or Trustee
first to the expenses, if any, of collection and then in accordance with Article
II hereof,  (d) without impairing its rights  hereunder,  Beneficiary or Trustee
may, at its option,  at any time and from time to time,  release to Trustor Rent
so received by Beneficiary or Trustee, or any part thereof,  (e) Beneficiary and
Trustee  shall not be liable for their  failure to collect,  or their failure to
exercise diligence in the collection of, Rent, but shall be accountable only for
Rent that they shall actually receive.  As among Beneficiary,  Trustee,  Trustor
and any person claiming  through or under Trustor,  the assignment  contained in
this  Section  3.02 is  intended to be  absolute,  unconditional  and  presently
effective, and the provisions of subsection 3.02(a) are intended for the benefit
of each  Lessee and shall  never  inure to the  benefit of Trustor or any person
claiming  through or under Trustor.  It shall never be necessary for Beneficiary
or Trustee to institute legal  proceedings of any kind whatsoever to enforce the
provisions  of  this  Section  3.02.  Notwithstanding  anything  herein  to  the
contrary,  Trustor may collect  such Rent until such time as an Event of Default
shall occur hereunder.

     Section 3.03 Beneficiary's Consent.  Nothing in this Article III shall ever
be  construed  as (a) allowing any Lease  without  Beneficiary's  prior  written
consent unless  otherwise  permitted under the Agreement,  or (b)  subordinating
this Deed of Trust to any Lease.

     Section 3.04 Lease Related Covenants. Trustor covenants to: (a) upon demand
by Beneficiary, assign to Beneficiary or Trustee, by separate instrument in form
and substance satisfactory to Beneficiary,  any and all Leases, and/or all Rents
payable  thereunder,  including,  but not  limited to, any Lease which is now in
existence or which may be executed  after the date  hereof;  (b) not accept from
any  Lessee,  nor  permit  any  Lessee  to pay,  Rent for more than one month in
advance except for payment in the nature of security for performance of Lessee's
obligations  unless  otherwise  provided  for in the Lease;  (c) comply with the
terms and provisions of each Lease including, without limitation, the payment of
all sums required to be paid by Trustor or which any Lessor has an option to pay
under any Lease in order to prevent any reduction in or offset  against any Rent
payable  under any  Lease or any  default  thereunder;  (d) not  amend,  extend,
cancel,  abridge,  or otherwise  modify,  or accept  surrender of, or renew, any
Lease  without the written  consent of  Beneficiary  other than in the  ordinary
course of business,  (e) not assign,  transfer or mortgage any Lease without the
written consent of Beneficiary; (f) not assign, transfer, pledge or mortgage any
Rent;  (g) not  waive,  excuse,  release or condone  any  nonperformance  of any
covenant  of any  Lease by any  Lessee  other  than in the  ordinary  course  of
business;  (h) give to Beneficiary and Trustee duplicate notice of each material
default by each Lessee; (i) on all Leases executed after the date hereof,  cause
each Lessee to agree (and each Lessee under each Lease  executed  after the date
hereof does so agree) to give to Beneficiary  and Trustee written notice of each
and every  material  default by  Trustor  under its Lease and not  exercise  any
remedies  under  such Lease  unless  Beneficiary  or Trustee  fails to cure such


<PAGE>28


material default within a reasonable  period after  Beneficiary and Trustee have
received such notice; provided, that Beneficiary or Trustee shall never have any
obligation  or duty to cure any such  material  default;  (j) enforce its rights
with regard to all Leases in the ordinary course of business;  and (k) not enter
into any Lease  affecting  the  Mortgaged  Property or any part  thereof  unless
otherwise   permitted  under  the  Agreement   without  the  prior  approval  of
Beneficiary.

     Section 3.05 Beneficiary Not Liable.  Beneficiary  and/or Trustee shall not
be obligated to perform or discharge, nor does it hereby undertake to perform or
discharge,  any  obligation,  duty or liability  under any Lease, or under or by
reason of this assignment,  and Trustor shall and does hereby agree to indemnify
and to hold  Beneficiary  and  Trustee  harmless  from and  against  any and all
liability,  loss or damage which Beneficiary or Trustee may or might incur under
any Lease or under or by reason of this  assignment and from and against any and
all claims and demands  whatsoever which may be asserted against  Beneficiary or
Trustee by reason of any  alleged  obligations  or  undertakings  on its part to
perform or discharge any of the terms,  covenants or agreements contained in any
Lease.  Should  Beneficiary or Trustee incur any such liability,  loss or damage
under any Lease or under or by reason of this  assignment,  or in the defense of
any such claims or demands,  the amount thereof,  including all costs,  expenses
and attorneys'  fees, shall be secured hereby and constitute part of the Secured
Obligations,  and Trustor shall reimburse Beneficiary therefore immediately upon
demand,  and upon the failure of Trustor to do so,  Beneficiary  may declare all
sums secured by this Deed of Trust immediately due and payable.

     Section 3.06 Estoppel  Certificates.  On all Leases executed after the date
hereof,  all Leases shall  provide for the giving by the Lessee of  certificates
with respect to the status of such Leases,  and Trustor shall exercise its right
to request  such  certificates  within ten (10) days of any demand  therefor  by
Beneficiary.  Trustor shall furnish to Beneficiary  or Trustee,  within ten (10)
days after a request by Beneficiary or Trustee to do so, an executed counterpart
of all Leases.

     Section 3.07 Lease Approval Requirements.  On all Leases executed after the
date hereof, all Leases and Lessees of the Premises,  or any part thereof,  must
be acceptable to and approved by Beneficiary unless otherwise provided under the
Agreement;   and  all  Lessees  shall   execute  such   estoppel   certificates,
subordinations,  attornments  and other  agreements as Beneficiary  may require.
Under no circumstances shall Beneficiary or Trustee be liable for any obligation
to pay any  leasing  commission,  brokerage  fee or  similar  fee or  charge  in
connection  with any Lease nor shall  Beneficiary  or  Trustee be  obligated  to
complete any Improvements for the benefit of any Lessee.

                                   ARTICLE IV

                                  MISCELLANEOUS

     Section 4.01 Benefit of Beneficiary.  All of the grants, covenants,  terms,
provisions  and  conditions  of this  Deed of Trust  shall run with the land and
shall apply to, bind and inure to the


<PAGE>29


benefit  of the  successors  and  assigns  of  the  respective  parties  hereto;
provided,  that  Trustor may not assign its  obligations  hereunder  without the
prior written consent of Beneficiary.

     Section 4.02 Savings Clause. In the event any one or more of the provisions
contained  in this  Deed of Trust  shall for any  reason be held to be  invalid,
illegal  or  unenforceable  in  any  respect,  such  invalidity,  illegality  or
unenforceability  shall,  at the  option of  Beneficiary,  not  affect any other
provision  of this Deed of Trust but this Deed of Trust shall be construed as if
such invalid, illegal or unenforceable provision had never been contained herein
or therein.

     Section 4.03 Notices.  All notices hereunder shall be given pursuant to the
terms of  Section  9.1 of the  Agreement,  and  supplementing  such  provisions,
notices required to be given to Trustee shall be given at Trustee's  address set
forth herein.

     Section 4.04  Governing  Law. This Deed of Trust shall,  without  regard to
place of contract or payment, be construed and enforced according to the laws of
the state  where the  Mortgaged  Property  is  located,  all  without  regard to
principles of conflict of laws.

     Section 4.05 No Change. Neither this Deed of Trust nor any provision hereof
may be changed,  waived,  discharged or  terminated,  except by an instrument in
writing, signed by Beneficiary and Trustor.

     Section 4.06  Security  Agreement  and Fixture  Filing.  This Deed of Trust
shall be deemed to be a security  agreement and fixture  filing  pursuant to the
Uniform Commercial Code of the state where the Mortgaged Property is located.

     Section 4.07 No Usury.  In the event that  Beneficiary,  in  enforcing  its
rights  hereunder,  determines that charges and fees incurred in connection with
the Secured Obligations may, under the applicable usury laws, cause the interest
rate herein to exceed the maximum  allowed by law, then such  interest  shall be
recalculated  and any excess over the maximum  interest  permitted  by said laws
shall be  credited  to the then  principal  outstanding  balance to reduce  said
balance by that  amount.  It is the intent of the parties  hereto  that  Trustor
under no  circumstances  shall be  required  to pay,  nor shall  Beneficiary  be
entitled to collect,  any interest  which is in excess of the maximum legal rate
permitted under the applicable usury laws.

     Section  4.08  Effect of  Partial  Release.  No  release of any part of the
Mortgaged  Property  or of any other  property  conveyed  to secure the  Secured
Obligations shall in any way alter,  vary or diminish the force,  effect or lien
or security interest of this Deed of Trust on the Mortgaged  Property or portion
thereof remaining subject to the lien and security interest created hereby.

     Section 4.09  Beneficiary's  Dealing with  Successors  and Lessees.  In the
event Trustor or any of Trustor's successors conveys or leases without the prior
approval  of  Beneficiary  (except  as


<PAGE>30


otherwise  permitted  herein or in the  Agreement) any interest in the Mortgaged
Property,  or any part thereof, to any other party,  Beneficiary and Trustee may
deal  with  any  owner or  lessee  of any part of the  Mortgaged  Property  with
reference  to this  Deed of Trust  and to the  Secured  Obligations,  either  by
forbearance  on the part of  Beneficiary  or  release  of all or any part of the
Mortgaged  Property  or of any other  property  securing  payment of any Secured
Obligations,  without  in any  way  modifying  or  affecting  Beneficiary's  and
Trustee's rights, remedies, liens or security interests hereunder (including the
right to exercise  any one or more of the  remedies  described or referred to in
Article  I,  Article  II,  Article  III or  Article  IV hereof in the event such
conveyance is made in  contravention of the provisions of this Deed of Trust) or
the  liability  of Trustor  or any other  party  liable  for the  payment of the
Secured  Obligations,  in whole or in part. This shall not be construed to allow
any such conveyance or leasing by Trustor,  except as permitted herein or in the
Agreement.

     Section 4.10 No Waiver by  Beneficiary.  All options and rights of election
herein  provided for the benefit of Beneficiary  and/or Trustee are  continuing,
and the  failure  to  exercise  any such  option  or right  or  election  upon a
particular  default or breach or upon any subsequent default or breach shall not
be  construed  as waiving the right to  exercise  such option or election at any
later date. By the  acceptance of payment of principal or interest after its due
date,  Beneficiary  and/or  Trustee  does not waive the right  either to require
prompt  payment when due of all other amounts  secured hereby or to regard as an
Event of Default the failure to pay any other such  amounts.  No exercise of the
rights and powers  herein  granted and no delay or  omission in the  exercise of
such rights and powers  shall be held to exhaust the same or be  construed  as a
waiver thereof,  and every such right and power may be exercised at any time and
from time to time. All grants, covenants, terms and conditions hereof shall bind
Trustor and all successive owners of the Premises.

     Section 4.11 Headings Descriptive. The headings of the several sections and
subsections  of this Deed of Trust are inserted for  convenience  only and shall
not in any way affect the meaning or  construction of any provision of this Deed
of Trust.

     SECTION 4.12 WAIVER OF TRIAL BY JURY. THE TRUSTOR,  TRUSTEE AND BENEFICIARY
WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING
OUT OF OR IN ANY WAY CONNECTED TO THIS DEED OF TRUST.

    Section  4.13  Indemnification.  The  Trustor  agrees  to pay,  and to save,
indemnify  and keep the  Beneficiary  and its  respective  directors,  officers,
employees,   attorneys,   experts,   and  agents  harmless  from,  any  and  all
liabilities,  costs and expenses (including,  without limitation, legal fees and
expenses),  losses or damages (i) with respect to, or resulting  from, any delay
in paying,  any and all  excise,  sales or other  taxes  which may be payable or
determined  to be payable with respect to any of the  Mortgaged  Property,  (ii)
with respect to, or resulting  from, any delay in complying with any requirement
of law applicable to any of the Mortgaged  Property or (iii) in connection  with
any of the transactions  contemplated by this Deed of Trust,  including the fees
and disbursements of counsel


<PAGE>31


and of any  other  experts,  which  Beneficiary  or  its  respective  directors,
officers,  employees,  attorneys, experts or agents may incur in connection with
(w) the  administration  or  enforcement  of this Deed of Trust,  including such
expenses as are incurred to preserve the value of the Mortgaged Property and the
validity,  perfection,  rank and value of any liens granted  hereunder,  (x) the
collection,  sale or other disposition of any of the Mortgaged Property, (y) the
exercise by the Beneficiary of any of the rights  conferred upon it hereunder or
(z) any Default or Event of Default,  but excluding any such liabilities,  costs
and  expenses,  losses  or  damages  incurred  solely  by  reason  of the  gross
negligence  or willful  misconduct  of the party  seeking to be  indemnified  as
determined by a final order or judgment of a court of competent jurisdiction.

     Any amount due hereunder which is not paid on demand shall bear interest at
a rate equal to the Default Rate and shall be a lien upon the Mortgaged Property
and shall be secured hereby.

     The agreements of the Trustor  contained in this Section 4.13 shall survive
the payment and  performance of the Secured  Obligations  and the termination of
the  liens  and  security   interests  granted  hereby.  All  of  the  Trustor's
obligations to indemnify  Beneficiary  and its directors,  officers,  employees,
attorneys,  experts  and agents  hereunder  shall  (without  duplication)  be in
addition  to,  and  shall not limit in any way,  the  Trustor's  indemnification
obligations contained in the Agreement or in any other Loan Document.

     Section 4.14 Advances under the Agreement. It is understood and agreed that
the funds to be advanced under this Deed of Trust are to be advanced  subject to
and in  accordance  with the  provisions  of the  Agreement  and the other  Loan
Documents,  and that all sums  advanced  thereunder  or  hereunder  are included
within the Secured Obligations secured hereby.

     Section 4.15 Limitation of Trustee's Liability.  Trustee shall be protected
in acting upon any notice, request,  consent, demand,  statement,  note or other
paper or  document  believed by Trustee to be genuine and to have been signed by
the party or parties  purporting  to sign the same.  Trustee shall not be liable
for any error of  judgment,  nor for any act done or step taken or omitted,  nor
for any  mistakes  of law or fact,  nor for  anything  which  Trustee  may do or
refrain  from  doing  in good  faith,  nor  generally  shall  Trustee  have  any
accountability  hereunder  except for willful  misconduct  or gross  negligence.
Trustee may act  hereunder  and may sell or otherwise  dispose of the  Mortgaged
Property or any part thereof as herein provided,  although Trustee has been, may
now  or  may  hereafter  be,  attorneys,   officers,   agents  or  employees  of
Beneficiary,  in respect of any matter of business  whatsoever.  Beneficiary and
Trustee  shall not be liable for any loss to any  chattels in their  possession,
provided that they shall use reasonable care with respect thereto;  and any such
loss shall not diminish the debt due.

     Section 4.16 Substitution of Trustee. Beneficiary shall have, and is hereby
granted with warranty of further  assurances,  the irrevocable power to remove a
Trustee or  successor  Trustee and to appoint a  substitute  Trustee or Trustees
hereunder  (including,  in case of  death  or  refusal  to act of


<PAGE>32


a Trustee  or  Trustees  or their  nonacceptance  of, or  dissatisfaction  with,
Trustee,  absence  or  any  other  reason),  to  appoint  a new  or  replacement
substitute  Trustee or Trustees,  to be exercised at any time without notice and
without specifying any reason therefor, by filing for record in the office where
this  instrument is recorded a Deed of Appointment or Notice of  Substitution of
Trustee.  The power of  appointment  of a successor  Trustee or Trustees  may be
exercised as often as and whenever  Beneficiary may choose,  and the exercise of
the  power of  appointment,  no matter  how  often,  shall not be an  exhaustion
thereof.  Upon the recordation of such Deed or Deeds of Appointment or Notice or
Notices of  Substitution  of Trustee,  Trustee or Trustees  so  appointed  shall
thereupon,  without any further act or deed of  conveyance,  become fully vested
with identically the same title and estate in and to the Mortgaged  Property and
with all the rights,  powers, trusts and duties of their, his or its predecessor
in the trust hereunder with like effect as if originally  named as Trustee or as
one of Trustees  hereunder.  Whenever in this Deed of Trust reference is made to
Trustee,  it shall be  construed to mean Trustee or Trustees for the time being,
whether  original or  successors or successor in trust;  and all title,  estate,
rights,  powers,  trusts  and  duties  hereunder  given  or  appertaining  to or
devolving upon Trustee shall be in each of Trustees so that any action hereunder
or  purporting  to be  hereunder  of any one of the  original  or any  successor
Trustee  shall for purposes be considered to be, and as effective as, the action
of all Trustees.

     Section 4.17 Particular State Provisions. There is attached hereto and made
a part hereof Exhibit B containing  additional  provisions that are necessary or
appropriate  under  the laws of the  state in which the  Mortgaged  Property  is
located or pursuant to the provisions of any permitted property liens.

                                    ARTICLE V

                            AMENDMENT AND RESTATEMENT

     Section  5.01  Pre-Petition  Deed of Trust.  This Deed of Trust  amends and
restates in its  entirety the  Pre-Petition  Deed of Trust to which this Deed of
Trust relates and the Post-Petition Mortgage Liens; provided,  however, that, to
the fullest  extent  permitted by law,  (a) the priority of all liens,  security
interests and other  encumbrances  evidenced  hereby or arising  hereunder shall
relate  back to the date and time the  Pre-Petition  Deed of Trust to which this
Deed of  Trust  relates  was  recorded,  or to such  earlier  date  and  time as
permitted  by  applicable  law; (b) nothing  herein  shall impair the  creation,
attachment,  perfection or priority of the liens,  security  interests and other
encumbrances  evidenced by or arising  under the  Pre-Petition  Deed of Trust to
which this Deed of Trust relates or the  Post-Petition  Mortgage Liens;  and (c)
nothing  herein shall  constitute  a novation or  discharge  of the  obligations
secured by the Pre-Petition Deed of Trust to which this Deed of Trust relates or
the Post-Petition Mortgage Liens.



<PAGE>33


     IN WITNESS  WHEREOF,  this Deed of Trust has been duly  executed by Trustor
and Beneficiary as of the day and year first above written.


                                       TRUSTOR:

                                       PAYLESS CASHWAYS, INC.



                                       By:  
                                          --------------------------------
                                          Name:
                                          Title:


                                       BENEFICIARY:

                                       CANADIAN IMPERIAL BANK OF COMMERCE,
                                         as Coordinating and Collateral Agent



                                       By:  
                                          --------------------------------
                                          Name:
                                          Title:




<PAGE>34



                                    EXHIBIT A

                              (DESCRIPTION OF LAND)




<PAGE>35



                                    EXHIBIT B

                             (LOCAL LAW PROVISIONS)