SECURITY AGREEMENT FOR SUBSEQUENT NOTES
                            (Equipment and Inventory)

        Section 1.  Grant and Related Data.
                    ----------------------
        (a)

        ("Debtor"),   hereby  grants  to  UNITED  RESOURCES,   INC.,  an  Oregon
corporation  ("Secured  Party"),  or its  successors  and  assigns,  a  security
interest in the following described personal property:

         All of Debtor's  present  and  hereafter  acquired  inventory,
         furniture,  trade  fixtures,  and equipment,  and all proceeds
         therefrom,  including insurance proceeds, accounts receivable,
         contract  rights,   leasehold   improvements,   and  leasehold
         interest,  and  all  substitutions,  additions,  replacements,
         parts,  equipment,  and accessories,  ABC liquor license,  now
         owned or hereafter affixed to or used in connection  therewith
         ("Collateral"),

to secure (i) the payment of Debtor's  Installment Note of even date herewith in
the amount of $          payable to the order of Secured  Party at the times and
               --------
in the  amounts  therein  provided;  and (ii)  any  renewals,  modifications  or
amendments thereof; and (iii) to secure all other present and hereafter incurred
indebtedness of Debtor to Secured Party.

        (b) The  Collateral is bought or used  primarily  for Debtor's  business
purposes, and it will be permanently kept at                   ,           ,  in
                                             ------------------   ---------
the County of             ,  State of                ,  which is the  address of
               -----------             --------------
Debtor's place of business.

        (c) The  Collateral is not and will not be attached to real estate so as
to become a fixture.

        (d) The  Collateral  consisting  of inventory is  maintained  and at all
times  will be  maintained  at a level of not  less  than  $             cost to
                                                            -----------
Debtor.

        (e) As often as Secured  Party shall  require,  Debtor shall  deliver to
Secured Party such lists, descriptions, and designations of inventory as Secured
Party may require to identify the nature, extent, and location thereof.

        Section 2.  Warranties, Covenants and Agreements.
                    ------------------------------------
        Debtor warrants and covenants and it is understood by the parties that:

        (a) Except for the security interest granted hereby, Debtor is the owner
of the Collateral free from any lien,  security  interest,  or encumbrance,  and
will  defend  the  Collateral  against  the claims  and  demands of all  persons
whomsoever.

        (b) Except as provided  below in Paragraph (c) and in Paragraph (d) with
respect to inventory, Debtor will not sell, offer to sell, or otherwise transfer
or dispose of the  Collateral  or any part thereof or any interest  therein,  or
create or cause or permit  to be  created  any  lien,  encumbrance  or  security
interest in or upon any part thereof.

        (c) In the event that United Resources, Inc. advances additional sums or
Debtor incurs subsequent  indebtedness to United Resources,  Inc., Debtor hereby

SECURITY AGREEMENT FOR SUBSEQUENT NOTES - 1
<PAGE>

grants United Resources, Inc. a security interest in the Collateral subordinate,
in all  respects,  to the security  interest  granted  hereby in order to secure
payment of such subsequent lending.

        (d) While Debtor is not in default hereunder, Debtor may sell inventory,
but only in the ordinary  course of business and only to buyers who qualify as a
buyer in the  ordinary  course of  business.  A sale in the  ordinary  course of
Debtor's  business does not include a transfer in partial or total  satisfaction
of a debt or any bulk sale.

        (e) Debtor will keep the Collateral fully insured against loss or damage
by fire,  and such other hazards as Secured Party may from time to time require,
with such  deductible  provisions,  upon such terms,  including loss payable and
other  endorsements,  and in such  company or  companies  as  Secured  Party may
approve;  and Debtor will  immediately  deliver all such  insurance  policies to
Secured  Party to be retained  while any  indebtedness  hereby  secured  remains
owing. Secured Party shall hold all such policies in pledge to secure payment of
the indebtedness  hereby secured,  with control to adjust any loss,  receive any
receipt for any sum payable,  surrender  any policy,  discharge  and release any
insurer, endorse any loss or refund check or draft and, in general,  exercise in
the name of Debtor or otherwise, any and all rights of Debtor in respect thereto
or in respect to the proceeds thereof.

        (f) Debtor will maintain the Collateral in good condition and repair and
preserve the same against waste,  loss,  damage or  depreciation  in value other
than by reasonable wear. Secured Party may enter any premise in which any of the
Collateral may be kept at any reasonable  time for the purpose of inspecting the
same.  Debtor will not permit any use of any of the  Collateral  in violation of
any law or  ordinance.  Debtor will not,  without the prior  written  consent of
Secured  Party,  cause or permit the  Collateral or any part thereof to be taken
outside the state where  permanently  located as agreed in Section 1(b) or to be
used for hire or under lease.

        (g)  Debtor  will pay  promptly  when due all  taxes,  license  fees and
governmental  rates and charges upon or relating to any of the Collateral or its
use and relative to the indebtedness hereby secured.

        (h) At its option,  Secured Party may discharge taxes,  liens,  security
interests or other  encumbrances  upon any of the Collateral,  may place and pay
premiums  upon  insurance  on any of the  Collateral  and may incur  expense for
maintenance and  preservation of any of the Collateral.  Debtor agrees to pay to
Secured Party upon demand all sums incurred or paid for any said purposes,  with
interest from the date on which the same were incurred to the date of payment at
the rate of 18 percent per annum. Payment thereof is secured by the Collateral.

        Section 3.  General Provisions.
                    ------------------
        (a) The  obligations  which this  Agreement  secures  are  evidenced  by
separate instruments which may be assigned,  renewed,  negotiated or extended by
Secured Party without  releasing  Debtor,  the  Collateral,  or any guarantor or
co-maker.

        (b) All of the terms of this  Agreement  and the rights,  remedies,  and
duties of the parties  hereto  shall be  governed by the laws of Oregon.  If any
provision  of this  Agreement  is in conflict  with the law of any state  having
jurisdiction, the remaining parts hereof shall be effective as if such provision
had not been made.

SECURITY AGREEMENT FOR SUBSEQUENT NOTES - 2
<PAGE>

        (c) If any  interest  of  Debtor  in any  of  the  Collateral  shall  be
transferred or if any indebtedness hereby secured shall be assigned,  the terms,
covenants,  and conditions hereof shall be binding upon and inure to the benefit
of the successors in interest of the parties hereto.

        (d) If there be more than one Debtor or a  guarantor  or  co-maker,  the
liability of all such parties shall be primary and joint and several.

        (e) If Secured  Party shall,  once or often,  extend the time for paying
any indebtedness hereby secured or fail promptly to exercise any right or remedy
it may have for any  default  hereunder  or breach  or  violation  hereof,  such
indulgence  or  forebearance  shall not be deemed a waiver of strict  and prompt
performance  by  Debtor of all the terms  and  conditions  hereof  and shall not
preclude Secured Party from thereafter,  without notice, exercising any right or
remedy for any  subsequent  breach or default in  performance of the same or any
other provision hereof or for any other breach or violation of this Agreement.

        (f) If any  notice  is  given  to  Secured  Party,  it shall be given by
registered  or  certified  mail  directed  to Secured  Party at the place  where
indebtedness  hereby secured is payable. If any notice is to be given to Debtor,
mailing by  registered  or certified  mail to the address  stated above shall be
sufficient  unless  Secured  Party shall have  received  from  Debtor  notice in
writing of a change of address. Reasonable notice, when such notice is required,
shall be deemed to be five days' notice.

        (g) Debtor will promptly  notify  Secured Party in writing of any change
in Debtor's business or residence address.

        Section 4.  Default.
                    -------
        Debtor shall be in default  under this  Agreement  upon the happening of
any of the following events or conditions:

        (a) If  Debtor's  inventory  level  falls  below  the  stated  value  of
$           cost to Debtor.
 ----------
        (b
 If Debtor shall fail to pay, when due, any  installment of principal
or interest of any indebtedness owing by Debtor to Secured Party.

        (c) If Debtor shall fail to perform promptly at the time and strictly in
the manner  provided by any  covenant of Debtor  contained  in this or any other
agreement between Debtor and Secured Party.

        (d) If any  warranty,  representation,  or  statement  made by Debtor to
Secured Party is false in any material respect.

        (e) If there shall be any uninsured  loss,  theft,  substantial  damage,
destruction,  sale or encumbrance to or of any of the Collateral,  or the making
of any levy, seizure or attachment thereof or thereon.

        (f)  If  there  shall  be any  dissolution,  termination  of  existence,
insolvency,  business  failure,  appointment  of a  receiver  of any part of the
property of,  assignment for the benefit of creditors by, or commencement of any
proceeding  under any  bankruptcy  or  insolvency  law by or  against  Debtor or
guarantor or surety for Debtor.

        (g) If Secured Party has reasonable cause to deem itself insecure.

SECURITY AGREEMENT FOR SUBSEQUENT NOTES - 3
<PAGE>

        Section 5.  Remedies.
                    --------
        Upon such default and at any time  thereafter,  Secured Party shall have
each and all of the rights and remedies  granted to Secured Party by the Uniform
Commercial Code of Oregon or other applicable laws, by this Agreement and by the
Installment  Note or Notes hereby secured,  and Secured Party may without notice
declare  any or all such  Installment  Notes  immediately  due and  payable  and
Secured  Party  may  require  Debtor  to  assemble  the  Collateral  and make it
available to Secured Party at a place to be designated by Secured Party which is
reasonably  convenient  to both  parties.  Debtor  agrees  to pay all  expenses,
including  reasonable  attorneys'  fees  incurred  by  Secured  Party in taking,
holding,  preparing  for sale,  and  selling any of the  Collateral,  as well as
attorneys'  fees and court costs in such amount as shall be adjudged  reasonable
for services in the trial court and for services in any  appellate  court in any
suit or action to require  performance  or for the breach of this  Agreement  or
upon any Installment Note hereby secured.

        In the  construction of this  Agreement,  the singular shall include the
plural as the circumstances may require.

        Signed in duplicate this      day of       , 1997.
                                 ----        -----

                SECURED PARTY:        UNITED RESOURCES, INC.

                                      By
                                         -------------------------------
                                         G. P. Fleming, President

                BORROWERS:
                                       ---------------------------------


                                       ---------------------------------
SECURITY AGREEMENT FOR SUBSEQUENT NOTES - 4