BAY VIEW FRANCHISE MORTGAGE ACCEPTANCE COMPANY LOAN PROGRAM

                          PLEDGE AND SECURITY AGREEMENT

                                       OF

           DATE:                     February 28, 2000

           NAME OF BORROWER:         MAIN STREET AND MAIN INCORPORATED,
                                     a Delaware corporation; and
                                     MAIN ST. CALIFORNIA, INC., an Arizona
                                     corporation

           NAME OF FRANCHISOR:       TGI Friday's, Inc.

           STORE NO.:                1917

     PLEDGE AND SECURITY AGREEMENT  ("Security  Agreement"),  dated the date set
forth above, by the Borrower(s) identified above (if more than one collectively,
and jointly and severally,  "Borrower"), in favor of BAY VIEW FRANCHISE MORTGAGE
ACCEPTANCE  COMPANY, a California  corporation,  its successors and assigns,  as
secured party ("Secured Party").

                              Preliminary Statement

     Borrower's  legal name (and,  if  Borrower  is  comprised  of more than one
Person,  the name of each such  Person) is  accurately  set forth on  SCHEDULE 1
hereto.  Under its legal name (or trade name(s),  if any, referenced on SCHEDULE
1),  Borrower is engaged in the business of operating the restaurant  identified
by  the  above-referenced  Store  Number  ("Business")  as a  franchisee  of the
above-referenced  Franchisor from the parcel of real property  identified as the
Property on SCHEDULE 1 ("Property").

     Secured  Party is  willing  to make a  loan(s)  (collectively,  "Loan")  to
Borrower  and  Borrower  has  agreed  to  evidence  such Loan by  executing  and
delivering to Secured Party (i) a Secured Promissory Note in the form of EXHIBIT
A  ("Note"),  dated the date  hereof,  made  payable  to Secured  Party,  in the
original  principal amount set forth therein,  and for the term and on the terms
and conditions set forth therein, and (ii) if applicable,  certain other Secured
Promissory Notes (collectively,  the "Other Notes"), dated the date hereof, made
payable to Secured Party, in the original principal amount(s) set forth therein,
and for the term and on the terms and conditions set forth therein. The Note and
the Other Notes, if any, are more particularly described on the attached Exhibit
B.

     As a condition to the making of the Loan,  Secured  Party has requested and
Borrower has agreed to execute and deliver this Security Agreement, which, among
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other things,  grants to Secured Party a security interest in the Collateral (as
defined below).

     In  consideration of the foregoing,  the benefits  accruing to Borrower and
for other good and valuable consideration,  the receipt and sufficiency of which
Borrower   hereby   acknowledges,    Borrower   hereby   makes   the   following
representations  and  warranties  to Secured Party and covenants and agrees with
Secured Party as follows:

     1. DEFINITIONS: The terms used herein (whether or not capitalized) have the
meanings  accorded  such  terms in  boldface  above,  in the text  hereof and in
section 16 hereof, and, to the extent not inconsistent therewith, the UCC.

     2. PLEDGE & GRANT: To secure the  Obligations,  Borrower hereby pledges and
grants to  Secured  Party a  security  interest  in the  Collateral  (including,
without limitation, Borrower's Equipment).

     3. REPRESENTATIONS,  WARRANTIES AND COVENANTS:  Borrower hereby represents,
warrants and covenants that:

     3.1  Borrower's  Name.  Each of  Borrower's  legal name,  federal tax payor
identification  number,  and mailing address is accurately set forth on SCHEDULE
1. Borrower has not merged,  consolidated,  acquired all or substantially all of
the assets of any other  Person,  or except as disclosed on SCHEDULE 1, used any
other name  (whether in  connection  with the Business or the  Collateral or for
business,  obtaining  credit or  financing  or  otherwise)  in the last five (5)
years.

     3.2 Location of Borrower and Collateral;  Inspection. Under its legal name,
Borrower  is  operating  and shall  continue to operate  the  Business  from the
Property  at the address and in the County and State as set forth in SCHEDULE 1.
SCHEDULE 1 correctly  discloses that Borrower either is sole record owner of the
fee estate in the Property or leases (or  subleases) the Property and the record
owner of the fee estate in the  Property  is the person or entity  disclosed  on
SCHEDULE 1. All personal property of Borrower owned, acquired,  held, used, sold
or consumed in the Business including Goods (including Inventory and Equipment),
General   Intangibles,   accounts,   chattel  paper,   instruments,   documents,
certificates of title, fixtures, securities and money, and all writings relating
thereto and records thereof,  books of record or account,  employees,  business,
offices and  operations  are located at and conducted out of such Property or at
the chief  executive  office of the  Borrower  set forth on  SCHEDULE 1 or other
business office disclosed on SCHEDULE 1. Borrower shall allow Secured Party, its
agents and  representatives,  from time to time, to inspect the Collateral,  the
Property and Borrower's books and records pertaining thereto or otherwise to the
Business,  and Borrower  will assist (and permit  abstracts and  photocopies  of
Borrower's  books and records to be taken and  retained by) Secured  Party,  its
agents and representatives in making any such inspection.

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     3.3 State of Organization, Chief Executive Office or Residence; Affiliates.
If an  entity,  Borrower  is and will  continue  to be duly  organized,  validly
existing  and in good  standing  in the state of its  organization  set forth on
SCHEDULE 1, and if such state is not the State, Borrower is and will continue to
be duly qualified to do business and in good standing in each jurisdiction where
the  Business or Property is located.  There is no state or  jurisdiction  other
than its  state of  organization  and,  if  different,  the  State,  where  such
organization,  qualification  or  standing is  necessary,  required or proper in
connection with Borrower's ownership or use of the Collateral or the Property or
the conduct of its  Business.  Borrower's  chief  executive  office  (and,  if a
natural person, residence) address is accurately set forth on SCHEDULE 1.

     3.4 Change in Name, Location, Ownership or Use.

          3.4.1 Change in Name or  Location.  Borrower  will neither  change its
name,  federal tax payor  identification  number,  or its chief executive office
(or, if a natural person, residence), nor the location of its business, property
or assets  (including the Business and the  Collateral),  nor assume a different
name,  nor conduct its business or affairs  under any other name or in any other
location,  without  in each  instance  obtaining  the prior  written  consent of
Secured Party. Any request for such consent must specify with reasonable clarity
and particularity the terms, timing and nature of the proposed action.

          3.4.2  Change  in  Ownership  or  Use.   Borrower   shall  not  merge,
consolidate,  or otherwise change its corporate or ownership  structure (whether
by stock sale, issuance,  purchase or otherwise), nor change its use of any item
of Collateral,  without in each instance  obtaining the prior written consent of
Secured Party. Any request for such consent must specify with reasonable clarity
and particularity the terms, timing and nature of the proposed action.

     3.5 Power and Authority.  Borrower has full power,  authority and the legal
right and all necessary  permits,  consents,  licenses and authorizations to own
the  Collateral  and to conduct its Business.  Borrower (and in the case of Loan
Documents  executed by  Borrower's  Affiliates,  each such  Affiliate)  has full
power,  authority  and the legal  right  and all  necessary  permits,  consents,
licenses  and  authorizations  to execute,  deliver and perform its  obligations
under this Security Agreement, the Note and the other Loan Documents.

     3.6 Due Execution and Delivery,  Enforceability.  This Security  Agreement,
the Note and the other Loan  Documents  have been duly and validly  executed and
delivered by Borrower. Each of this Security Agreement,  the Note and other Loan
Documents   constitutes   Borrower's  legal,   valid  and  binding   obligation,
enforceable against Borrower in accordance with its terms.

     3.7 Operating Experience. Borrower or its Business manager has had not less
than two years  experience  operating  businesses such as the Business in one or
more

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of the Systems.  In addition,  either (i) the Business has been operating for at
least one year or (ii)(a) Borrower  operates not less than two businesses in one
or more of the  Systems  in  addition  to the  Business,  (b) all of  Borrower's
businesses  in the Systems  have been  operating a combined  average of not less
than two years,  and (c) the  Business  has been  operating  not less than three
months and its operating  statements for such period demonstrate  operating cash
flow sufficient to make monthly payments of the Stated Payment Amount.

     3.8  FCCR.  During  the term of this  Security  Agreement,  Borrower  shall
maintain its Borrower FCCR at not less than 1.20 ("Minimum  Borrower FCCR"). All
calculations  of  Borrower  FCCR shall be based upon the  financial  information
furnished by Borrower  hereunder  (see  Sections 3.19 and 3.20) for (i) the most
recent  three-month  period of  operations,  or (ii) if higher,  the most recent
twelve-month period;  provided,  however,  that if Borrower is an entity and has
been in  existence  for a period of less than twelve  months on the date hereof,
the twelve-month  measurement period shall be reduced to the number of months in
which  Borrower  has been in  existence  until such time as Borrower has been in
existence  for twelve  months and provided  further,  however,  if Borrower is a
natural  person  and has owned  the  Business  for a period of less than  twelve
months on the date hereof, the twelve-month  measurement period shall be reduced
to the number of months for which  Borrower  has owned the  Business  until such
time as Borrower has owned the Business for twelve months.  The Minimum Borrower
FCCR shall be measured  with  respect to either (i)  Borrower (if Borrower is an
entity and not a natural person),  or (ii) the Business and all other businesses
in the System  owned by Borrower  (if  Borrower  is a natural  person and not an
entity).

     3.9  Limitation  on  Indebtedness,   Lease   Obligations  and  Payments  to
Affiliates.  Borrower shall not, directly or indirectly,  incur any Indebtedness
or Lease  Obligations  to any  Person  or make or become  obligated  to make any
Payments  to  Affiliates  (i) at any time  subsequent  to an Event of Default or
other event  that,  but for the giving of notice,  the passage of time,  or both
would  constitute  an Event of Default  hereunder or under any of the other Loan
Documents,  and/or  (ii) if the  Borrower  FCCR for the  twelve  (12) month time
period  immediately  preceding  the making of any such  proposed  payment or the
incurrence of any such obligation is less than the Minimum Borrower FCCR, and/or
(iii) if the reasonably  projected  Borrower FCCR for the twelve (12) month time
period immediately  subsequent to any such proposed payment or the incurrence of
any such obligation would be less than the Minimum Borrower FCCR.

     3.10 No Further Disposition or Encumbrances. Other than with respect to the
interest  granted in favor of  Secured  Party,  to the  extent of the  Permitted
Encumbrances,  if any, and except as provided in Section 4 hereof,  Borrower has
not and, without the prior written consent of Secured Party (which consent shall
not be unreasonably withheld or delayed in connection with encumbrances in favor
of Bay View Franchise  Mortgage  Acceptance  Company or any of its  Affiliates),
will not enter into any agreement or understanding or take,  permit or suffer to
exist any action  (including  the filing of a  financing  statement,  agreement,
pledge, mortgage, notice or registration) or event

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<PAGE>
(whether by operation of law or otherwise)  for the purpose of, or that may have
the effect of, directly or indirectly,  granting a security  interest in or lien
on (including any state or federal tax lien), pledging, transferring, assigning,
selling, disposing of, or encumbering any Collateral or the Franchise Agreement,
any interest therein or rights pertaining thereto or involving the Business,  or
changing, modifying,  supplementing,  or increasing the amount of credit, loans,
Indebtedness  or value  secured by the  Permitted  Encumbrances,  if any, or the
amount, property or assets encumbered thereby.

     3.11 Title; No Liens, Claims or Encumbrances.  Borrower has and, subject to
Section 4, will maintain good and  marketable  title to the  Collateral  and the
Franchise Agreement, free of all liens, claims, encumbrances or rights of others
(other than the security  interest granted to Secured Party hereunder and to the
extent  of  the  Permitted  Encumbrances)  and  such  Collateral  and  Franchise
Agreement are sufficient to enable a franchisee of the Franchisor to operate the
Business at the Property in accordance with the Franchise Agreement.  Other than
the  Permitted  Encumbrances,  there  is  no  financing  statement  (or  similar
statement, agreement, pledge, mortgage, notice or registration), lien (including
any federal or state tax lien), suit (including any action, proceeding, or other
litigation  pending,  or  to  Borrower's  knowledge,   threatened)  or  judgment
(including  any award,  injunction,  order) filed with,  registered,  indexed or
recorded in any public office, court,  arbitration panel,  administrative agency
or  regulatory  authority  (or  intended  so to  be),  directly  or  indirectly,
identifying  or  encumbering  or covering or  involving  the  Collateral  or the
Franchise Agreement or which could materially affect Borrower,  its Business, or
its ability to perform its Obligations.

     3.12 Franchise Agreement.  Borrower is and will continue to be a franchisee
in good  standing  with  Franchisor.  Borrower  has not  breached  and is not in
default under the Franchise Agreement or License;  Borrower shall not terminate,
fail to renew, breach or be in default under the Franchise Agreement or License;
and  Borrower  has no  knowledge of any claim of (or basis for any claim of) any
such  termination,  nonrenewal,  breach  or  default.  Borrower  agrees to fully
comply,  at Borrower's  own cost and expense,  with the terms of the License and
Franchise  Agreement  (including  any renewal  option)  and to  promptly  notify
Secured Party of any adverse  development with regard to the Franchise Agreement
or  License,  including  any claim of breach of or default  under,  or threat of
nonrenewal or termination of, or litigation involving the Franchise Agreement or
License.

     3.13  Encumbrance of Franchise  Agreement.  Borrower agrees that until such
time as Borrower's  Obligations  under the Loan  Documents  (including the Note)
have been fully  satisfied,  if,  whether  because of a change in the  Franchise
Agreement,  applicable  law or  otherwise,  Borrower is able to grant a security
interest  in the  Franchise  Agreement  to  the  Secured  Party  to  secure  its
Obligations  without  Franchisor's  consent and without  breaching or defaulting
under the Franchise  Agreement,  Borrower agrees to promptly grant such security
interest  in favor of the  Secured  Party and to obtain,  procure,  execute  and
deliver, file and affix such further agreements  (including  modification of the
Security Agreement), assignments, instruments, documents, notices,

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statements,  writings (including financing statements),  powers (including stock
and bond powers, and powers of attorney), tax stamps and information,  and to do
or cause to be done all such further acts and things  (including  the execution,
delivery and filing of financing  statements on Form UCC-1) as Secured Party may
reasonably  request,  from time to time, in its  discretion,  in connection with
such  security  interest  and  the  perfection  thereof.  Without  limiting  the
foregoing,  Borrower  authorizes Secured Party to the extent permitted by law to
execute and file, or file without  Borrower's  signature,  any and all financing
statements,  amendments thereto and continuations thereof as Secured Party deems
necessary or appropriate in connection therewith.

     3.14 Renewal of Franchise Agreement.  Until such time as the Obligations of
Borrower  under the Loan Documents  (including the Note and the Other Notes,  if
any) have  been  fully  satisfied,  Borrower  agrees to make one or more  timely
elections to renew the term of the Franchise  Agreement in  accordance  with the
terms of the Franchise  Agreement for a period which extends beyond the Maturity
Date (as defined in the Note and the Other Notes,  if any) of the Loan and shall
use its best efforts to satisfy any and all conditions to any such renewal,  and
to obtain, procure, execute and deliver, file and affix such further agreements,
instruments,  documents, notices, statements,  writings, powers and information,
and to do or cause to be done all such further acts and things as Secured  Party
may reasonably request, from time to time, in its discretion, in connection with
Borrower's Obligations set forth herein.

     3.15 Perfected Security Interest;  Financing Statements.  The execution and
delivery of this Security Agreement and the grant and transfer of the Collateral
hereunder creates a valid security interest in the Collateral which has attached
and is  enforceable.  Upon filing of the  Financing  Statements in the State and
County with respect to all Goods  (including  Inventory and Equipment),  General
Intangibles, accounts, fixtures and chattel paper included in the Collateral and
upon  delivery  into  Secured  Party's  possession  with  respect  to all  other
Collateral, as applicable,  such security interest will be perfected and subject
to no prior or equal security  interest other than and only to the extent of the
Permitted  Encumbrances,  if any.  The  execution  and  filing of the  Financing
Statements  has been duly  authorized by all  appropriate  action on the part of
Borrower  (and any other Person named as debtor  therein) and Borrower  (and any
other  Person  named  as  debtor   therein)  has  duly  executed  the  Financing
Statements.

     3.16 No Conflict; No Default. Borrower's (and in the case of Loan Documents
executed by Borrower's  Affiliates,  such Affiliate's)  execution,  delivery and
consummation of the transactions  contemplated by this Security  Agreement,  the
Note and other Loan  Documents  do not and will not (with the passage of time or
otherwise)  (i) conflict  with,  violate or  constitute a default under any law,
rule, regulation,  order, decree,  contract,  agreement (including the Franchise
Agreement),  note, mortgage,  bond, indenture,  lease,  license,  organizational
documents, or obligation of or applicable to Borrower (or such Affiliate) or the
Collateral or (ii) grant,  create or result in any lien,  claim,  encumbrance or
right in favor of any Person (other than Secured Party as  contemplated  hereby)
on or

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to Borrower's  Business,  property or assets  (including  the Collateral and the
Franchise Agreement). No Event of Default has occurred and is continuing.

     3.17 No Consent Required. Except for the filing of the Financing Statements
with the UCC filing offices of the State and the County (and, if applicable, the
recording of the mortgage or deed of trust included in the Loan  Documents),  no
consent,  authorization,  approval,  license, permit,  registration,  exemption,
filing, notice or declaration of, from, with or to any other party or any court,
government,  agency or regulatory authority is required prior to or otherwise in
connection with Borrower's execution,  delivery and performance of this Security
Agreement, the Note and other Loan Documents.

     3.18 Purpose for Loans.  Borrower does not intend to (and will not) use all
or any  portion  of the Loan to  purchase  or carry any  securities,  including,
without  limitation,  Margin  Stock.  Borrower  intends to and agrees to use the
proceeds  of the Loan  solely for the  lawful,  proper  business  or  commercial
purpose(s) set forth in its application for the Loan.

     3.19 Solvency; Compliance Certificates;  Reports; Communications.  Borrower
(and each  Affiliate  executing any Loan  Document) is solvent and, after giving
effect to the  Obligations,  will  continue  to be solvent.  Borrower  agrees to
provide  to  Secured  Party (i)  within 20 days after the end of (a) each of the
first three  quarters of each fiscal year of the  Borrower,  and (b) each fiscal
year of the Borrower (each a "Fiscal Period"), a completed and signed compliance
certificate (in the form attached hereto as EXHIBIT D) and a copy of any reports
required  under  the  Franchise   Agreement  covering  the  fiscal  period  then
concluded,  (ii) within 45 days after December 31st,  March 31st,  June 30th and
September  30th of each  calendar  year,  consolidated  Borrower and  individual
Business  financial  statements  covering the three (3) month period  then-ended
(each a "Quarterly Financial Statement"), and (iii) within 60 days after the end
of each  fiscal  year of the  Borrower,  consolidated  Borrower  and  individual
Business financial  statements  covering the twelve (12) month period then-ended
(each an "Annual  Financial  Statement").  Borrower further agrees to provide to
Secured Party, upon request:  (x) within ten days after the end of each calendar
month,  monthly  sales  reports for the Business  for the month just ended;  (y)
promptly  following receipt by Borrower,  complete copies of any  communications
that are material to Borrower, its Business or the Collateral provided that such
disclosure  would not  constitute a breach of the Franchise  Agreement;  and (z)
copies of such other reports and  information  as Secured Party may from time to
time reasonably request.  The financial statements furnished to Secured Party in
connection with Borrower's  application for the Loan and hereunder shall reflect
all Indebtedness  and Lease  Obligations of the Person covered thereby and shall
be sufficiently  detailed to allow Secured Party to calculate the Borrower FCCR.
If and to the extent that any disclosure required under clauses (x), (y), or (z)
of this  section  is not made  because  of the  proviso  in  clause  (y) of this
section,  then notice of such  nondisclosure  and the nature of information  not
disclosed shall be provided to Secured Party at the time such  disclosure  would
have been required to be made. All Quarterly

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Financial  Statements and Annual Financial Statements required hereunder must be
prepared as follows:

  Aggregate Obligations owed
by Borrower and its Affiliates               Financial Statement
      to Secured Party                     Preparation Requirements
      ----------------                     ------------------------
$4,999,999.00 or less              Quarterly  Financial  Statements  and  Annual
                                   Financial  Statements  may be prepared by the
                                   Borrower;   provided,   however,   all   such
                                   statements  must  be  certified  to be  true,
                                   complete and correct by an authorized officer
                                   of the Borrower.

$5,000,000.00 - $9,999,999.00      Quarterly  Financial  Statements  and  Annual
                                   Financial  Statements  must  be  compiled  in
                                   accordance with generally accepted accounting
                                   principles  ("GAAP")  applied on a consistent
                                   basis by an unrelated  third party  certified
                                   public   accountant  that  is  acceptable  to
                                   Secured Party.

$10,000,000.00 - $19,999,999.00    Quarterly  Financial  Statements  and  Annual
                                   Financial  Statements  must  be  reviewed  in
                                   accordance  with GAAP applied on a consistent
                                   basis by an unrelated  third party  certified
                                   public   accountant  that  is  acceptable  to
                                   Secured Party.

$20,000,000.00 or greater          Quarterly  Financial  Statements  and  Annual
                                   Financial  Statements  must  be  audited  and
                                   certified in accordance  with GAAP applied on
                                   a  consistent  basis  by an  unrelated  third
                                   party  certified  public  accountant  that is
                                   acceptable to Secured Party.

     Notwithstanding  the foregoing,  Secured Party reserves the right to modify
the requirements set forth herein upon reasonable notice to the Borrower.

     3.20 Accuracy of  Information.  All  information,  reports,  statements and
financial  and other data  furnished  (or  hereafter  furnished)  by Borrower to
Secured Party,  its agents or  representatives  hereunder or in connection  with
Borrower's  application for the Loan and the  Obligations,  are (and shall be on
the date so furnished) true, complete and correct.

     3.21  Maintenance of Collateral and Business.  At Borrower's  sole cost and
expense,  Borrower shall keep,  use,  operate and maintain the  Collateral,  the
Business  and the  Property  in  accordance  with  applicable  laws,  rules  and
regulations in accordance with the standards established by Franchisor,  operate
the Business at the Property in  accordance  with the  Franchise  Agreement  and
License and customary, prudent business

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practices,  and at all times fully comply with the terms and  provisions  of the
Franchise Agreement and License, and not do or suffer to be done any act whereby
the  value  of the  Collateral,  the  Property  or the  Business  or any part or
interest therein may be lessened in any material respect.  Borrower shall notify
Secured  Party  promptly  of any actual or  threatened  destruction  or material
damage or impairment of the Business, the Collateral or the Property.

     3.22 Insurance. Borrower shall:

          (i) (a) keep the  Collateral  (which for purposes of this Section 3.22
includes the Property) insured against loss or damage by fire, theft,  collision
and other  hazards  (including  flood,  if no  certification  or other  evidence
satisfactory  to Secured  Party is delivered to Secured Party to the effect that
the Property is not located within a federally  designated  special flood hazard
area) as may be required by Franchisor or Secured Party and by policies of fire,
extended  coverage and other  insurance with such company or companies,  in such
amounts (and,  with respect to policies  required for  property,  fire and flood
insurance  in an amount  not less than the  lesser of (A) the  replacement  cost
thereof and (B) the Principal Amount payable under the Note), as may be required
by or acceptable to Franchisor and Secured Party,  but in no event less than the
minimum amount required to prevent the imposition of any coinsurance requirement
on the insured,  (b) maintain  liability  insurance of not less than $1 million,
(c) maintain business interruption  insurance with scope and coverage reasonably
satisfactory to Secured Party, and (d) maintain such other insurance (including,
without limitation,  certain minimum levels of acceptable workers' compensation,
property damage,  general public liability  insurance and "Year 2000" insurance)
as may be required by the Franchisor and/or Secured Party.

          (ii)  cause  all  insurance  policies  required  hereunder  (a)  to be
maintained by providers  either (A) having ratings of not less than A- from A.M.
Best Company Inc. (or comparable  ratings from a comparable  rating  agency,  as
determined by Secured Party) or (B) who, if not so rated,  have been approved by
Secured Party and (b) to contain a standard  lender's  loss payable  endorsement
and mortgagee's or lienholder's  endorsement  providing for payment  directly to
Secured  Party  and/or its  designees  and to  provide  for a minimum of 30-days
notice to Secured Party prior to cancellation or modification or nonrenewal;

          (iii) timely pay all premiums, fees and charges required in connection
with all of its  insurance  policies  and  otherwise  continue to maintain  such
policies in full force and effect;

          (iv)  promptly  deliver  the  insurance  policies,  certificates  (and
renewals) thereof or other evidence of compliance herewith to Secured Party; and

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<PAGE>
          (v) use its best  efforts to inhibit the  inclusion of any "Year 2000"
exclusion  clauses in any insurance  policies (and the renewals  thereof) now or
hereafter required pursuant to this Agreement and/or the Mortgage.

     3.23 No  Violation;  Indemnity.  Borrower  has not and shall  not  acquire,
obtain, make, manufacture, produce, operate, hold, possess, maintain, use, sell,
transfer,   grant,  pledge,  or  dispose  of  (for  purposes  of  this  section,
collectively  "Borrower's Use") any of its businesses  (including the Business),
securities,  property  or  assets  (including  any  proceeds  of the  Loan,  any
Collateral and the Property) in violation of any statute,  law, rule, ordinance,
regulation,  policy, procedure,  injunction,  award, decree, judgment, contract,
agreement  (including  the  Franchise  Agreement),  understanding,  or  right or
interest  of any  other  Person  (for  purposes  of  this  section  collectively
"Violation"),  and to  Borrower's  knowledge no  Violation  has been made by any
other Person and no basis for a claim of any Violation  exists.  Borrower  shall
indemnify and hold Secured Party  harmless from and against any  Violation,  and
any  other  loss,  liability,  damage,  cost or  expense  whatsoever  (including
attorneys  fees  and  disbursements)  arising  out  of  or  in  connection  with
Borrower's  Use of any of its businesses  (including the Business),  securities,
property or assets  (including  any proceeds of the Loan, any Collateral and the
Property).

     3.24 Contact With Franchisor,  Suppliers and Other Creditors. Secured Party
shall  have  the  right  on an  ongoing  basis,  and  Secured  Party  is  hereby
authorized, to contact Borrower's Franchisor,  suppliers and other creditors for
purposes of  confirming,  among other things,  (i) that Borrower is current with
respect to its obligations and liabilities  owed to such parties,  and (ii) that
Borrower  is not  in  default  under  any  agreement  in  connection  therewith.
Borrower's Franchisor,  suppliers and creditors are hereby authorized to release
all such information to Secured Party, which  authorization is more particularly
set forth and confirmed in the Franchisor,  Supplier and Creditor  Authorization
Form  attached  hereto as  EXHIBIT  E.  Neither  Secured  Party  nor  Borrower's
Franchisor,  suppliers  and/or creditors shall be required to obtain any further
authorization or consent from the Borrower with regard to the matters  addressed
herein.  Notwithstanding  the foregoing,  Borrower shall  cooperate with Secured
Party in connection  therewith and shall  execute any  additional  documentation
that may be  necessary  in order  for  Secured  Party to  obtain  the  aforesaid
information from such third parties.

     3.25  Press  Releases/Promotional  Materials.  In  addition  to  any  other
disclosures  set forth herein,  the Borrower  consents to the use by the Secured
Party, its Affiliates and/or its successors and assigns,  of (i) the name of the
Borrower,  (ii) the names of the owners and operators of the Borrower (and their
respective  principals),  and/or  (iii) the  location of the Store and photos or
other  depictions  of the  Store,  in  press  releases,  advertising  and  other
promotional materials;  provided, however, that Secured Party shall not disclose
information  concerning  the  Borrower  that is not  otherwise  available to the
public unless otherwise consented to by the Borrower, which consent shall not be

                                       10
<PAGE>
unreasonably withheld or delayed. In no event shall the Borrower receive any fee
or other consideration for the use of information as described herein.

     4. SPECIAL PROVISIONS CONCERNING INVENTORY, EQUIPMENT AND REAL PROPERTY:

     4.1 Preservation of Secured Party's First Priority Lien.  Borrower shall do
nothing to impair the rights of Secured Party in the Inventory and Equipment and
shall cause the  Inventory  and  Equipment  to at all times be,  constitute  and
remain personal  property subject to a first priority security interest in favor
of Secured Party. Notwithstanding the preceding sentence, provided that Borrower
is not in default on any of its Obligations (and no event which with the passage
of time would be an Event of Default has  occurred  and is  continuing),  in the
ordinary  course of Borrower's  Business,  Borrower may sell its Inventory,  and
subject to Sections  3.7, 3.8 and 3.9 hereto,  with the prior consent of Secured
Party, which will not be unreasonably withheld, Borrower may, from time to time,
refinance  indebtedness secured by existing Permitted  Encumbrances,  if any, in
accordance  with the terms  thereof,  replace its Equipment  and/or  acquire new
Equipment and  accessions  to its  Equipment,  in each case,  subject to a first
priority  perfected  security interest in favor of Secured Party, or acquire the
fee interest in (or ground lease of) the  Property;  provided  that,  if Secured
Party has a leasehold  mortgage  or deed of trust on any lease of the  Property,
such lease does not merge  into the fee estate (or ground  lease) and  otherwise
remains in full force and effect and subject to Secured Party's mortgage or deed
of trust and each holder of a lien on the fee  interest in (or ground  lease of)
the Property provides Secured Party with a non-disturbance agreement(s) and such
other assurances as Secured Party shall reasonably request.

     4.2 Permitted  Debt.  Subject to Sections  3.7, 3.8, and 3.9,  Borrower may
enter  into  lease  and/or  purchase  money  financing  transaction(s)  for  the
acquisition of specific items of new Equipment only for the Business;  provided,
however  (i) in no event  shall the  aggregate  amount of all such lease  and/or
purchase  money  financing  obligations  (including,   without  limitation,  all
principal,  interest,  fees  and  other  related  expenses)  exceed  the  sum of
$50,000.00  at any given  time  during  the Loan term,  (ii)  Borrower  provides
Secured Party with prior notice of each proposed transaction,  which notice must
specify  with  reasonable  clarity the terms of each such  transaction  and must
identify the specific item of new Equipment  that is being  acquired as a result
thereof, (iii) in no event shall the Borrower incur any such obligation(s) if an
Event of Default  shall exist and/or if an event has  occurred or is  continuing
and that,  but for the giving of notice,  the  passage of time,  or both,  would
constitute  an Event of Default,  (iv) in no event shall the Borrower  incur any
such obligation(s)  unless, after giving effect to all such present and proposed
obligations,  the Borrower is in compliance  with the Minimum  Borrower FCCR for
the twelve (12) month time period  immediately  preceding the  incurrence of the
proposed  obligation,  (v)  in no  event  shall  the  Borrower  incur  any  such
obligation(s)  unless,  after  giving  effect to all such  present and  proposed
obligations,  the Borrower is in  compliance  with the Minimum  Borrower FCCR as
reasonably projected for the twelve

                                       11
<PAGE>
(12) month time period  immediately  following  the  incurrence  of the proposed
obligation,   and  (vi)  in  no  event  shall  the   Borrower   incur  any  such
obligation(s), if the consummation of any such transaction would otherwise cause
the Borrower to be in default of the Loan Documents.

     5. SPECIAL  PROVISIONS  CONCERNING  COLLATERAL  REVENUES:  Borrower  hereby
directs any and all  transferors,  distributors or payors  (including  insurance
companies  with  whom  Borrower  maintains  insurance)  to make  payment  of all
Collateral  Revenues directly to Secured Party and authorizes  Secured Party, in
its sole discretion, to apply the same to repayment of the Obligations,  whether
or not due, or, toward  replacement of the Collateral.  All Collateral  Revenues
and proceeds whether  received by Secured Party or by Borrower,  or by any other
Person will be  included  in the  Collateral  subject to the  security  interest
granted to Secured Party hereunder. Upon and during the continuation of an Event
of Default, Borrower shall identify,  segregate and keep separate all Collateral
Revenues and proceeds  received by it, upon Secured  Party's  request,  promptly
account to Secured Party for all Collateral Revenues and proceeds,  and hold all
Collateral  Revenues and proceeds  received by Borrower in trust for the benefit
of Secured  Party and shall  promptly (and in any event not later than the fifth
day after receipt)  deliver (or cause to be delivered) the same to Secured Party
and into its  possession in the form received by Borrower and at a time and in a
manner satisfactory to Secured Party.

     6. SPECIAL  PROVISIONS  CONCERNING RIGHTS AND DUTIES WHILE IN POSSESSION OF
COLLATERAL.

     6.1 Borrower's Possession.  Upon and during the continuation of an Event of
Default,  to the  extent the same  shall,  from time to time,  be in  Borrower's
possession,  Borrower  will hold all  securities,  instruments,  chattel  paper,
documents,  certificates and money and other writings  evidencing or relating to
the  Collateral  in trust for Secured  Party and,  upon  request or as otherwise
provided herein, promptly deliver the same to Secured Party in form received and
at a time and in a manner  satisfactory  to Secured  Party.  With respect to the
Collateral in Borrower's  possession  Borrower shall at Secured  Party's request
take such action as Secured Party in its discretion deems necessary or desirable
to create,  perfect and protect Secured Party's security  interest in any of the
Collateral.

     6.2  Secured  Party's  Possession.  With  respect to all of the  Collateral
delivered  or  transferred  to,  or  otherwise  in the  custody  or  control  of
(including any items in transit to or set apart for) Secured Party or any of its
agents, associates or correspondents in accordance with this Security Agreement,
Borrower  agrees  that such  Collateral  will be and be deemed to be in the sole
possession  of Secured  Party;  subject to Section 4,  Borrower  has no right to
withdraw or substitute any such Collateral without the consent of Secured Party,
which  consent may be withheld or delayed in Secured  Party's  sole  discretion;
Borrower  shall not take or permit any action,  or exercise any voting and other
rights,  powers and  privileges in respect of the Collateral  inconsistent  with
Secured

                                       12
<PAGE>
Party's  interest  therein and sole possession  thereof and Secured Party may in
its sole discretion and without notice,  without  obligation or liability except
to account  for  property  actually  received by it, and  without  affecting  or
discharging the  Obligations,  (x) further transfer and segregate the Collateral
in its possession;  (y) receive Collateral  Revenues and hold the same as a part
of the  Collateral  and/or  apply  the  same as  hereinafter  provided;  and (z)
exchange  any  of  the  Collateral  for  other  property  upon   reorganization,
recapitalization or other readjustment.  Following the occurrence of an Event of
Default,  Secured  Party is  authorized  (i) to exercise or cause its nominee to
exercise all or any rights, powers and privileges (including to vote) on or with
respect to the  Collateral  with the same force and effect as an absolute  owner
thereof;  (ii)  whether  any of the  Obligations  be  due,  in  its  name  or in
Borrower's name or otherwise,  to demand,  sue for, collect or receive any money
or property at any time payable or  receivable on account of or in exchange for,
or make any compromise or settlement  Secured Party deems desirable with respect
to, any of the Collateral;  and (iii) to extend the time of payment, arrange for
payment in installments,  or otherwise  modify the terms of, or release,  any of
the Collateral.  Notwithstanding  the rights accorded Secured Party with respect
to the Collateral and except to the extent provided below or required by the UCC
or other  applicable  law  (which  requirement  cannot  be  modified,  waived or
excused),  Secured  Party's  sole duty with  respect  to the  Collateral  in its
possession (with respect to custody, preservation,  safekeeping or otherwise and
whether under Section 9-207 of the UCC or otherwise)  will be to deal with it in
the same  manner  that  Secured  Party  deals with  similar  property  owned and
possessed by it. Without  limiting the foregoing,  Secured Party, and any of its
officers,  directors,  partners,  trustees, owners, employees and agents, to the
extent  permitted by law (i) will have no duty with respect to the Collateral or
the  rights  granted  hereunder;  (ii)  will not be  required  to sell,  invest,
substitute,  replace or otherwise  dispose of the Collateral;  (iii) will not be
required  to take any steps  necessary  to  preserve  any rights  against  prior
parties to any of the Collateral; (iv) will not be liable for (or deemed to have
made an election of or exercised any right or remedy on account of) any delay or
failure to demand,  collect or realize upon any of the Collateral;  and (v) will
have no  obligation or liability in  connection  with the  Collateral or arising
under this  Agreement.  Borrower agrees that such standard of care is reasonable
and appropriate under the circumstances.

     7. EVENTS OF DEFAULT:  The  happening  of any one or more of the  following
events shall constitute an "Event of Default" hereunder:

     7.1 Nonpayment, default, breach, etc.

          7.1.1 Borrower  default:  (i)  Borrower's  failure to make any payment
when due under this  Security  Agreement,  the Note or any other Loan  Document;
(ii)  Borrower's  failure  to make any  payment  when due  under  the  Franchise
Agreement, the License, or any Permitted Encumbrance,  subject to any applicable
grace periods provided for in any such agreement;  (iii) the Borrower's  failure
to make any payment to its material food or beverage suppliers within forty-five
(45) days from the date of each  delivery;  (iv)  Borrower's  breach of, default
under, or failure to perform or observe any other covenant

                                       13
<PAGE>
or condition of or agreement in, this Security  Agreement,  the Note,  any other
Loan  Document,   the  Franchise  Agreement,   the  License,  or  any  Permitted
Encumbrance,  subject to any applicable  grace periods  provided for in any such
agreements;  (v) Borrower's  breach of default  under,  or failure to perform or
observe any agreement, instrument or obligation with Borrower's material food or
beverage   suppliers;   (vi)  the   making  of  a   material   misstatement   or
misrepresentation  in, or the omission of any material fact or information from,
any  representation or warranty under or in this Security  Agreement,  the Note,
any other Loan Document, or any financial statement or other statement delivered
to Secured  Party;  or (vii) the  nonrenewal  or  termination  of the  Franchise
Agreement; or

          7.1.2 Cross-default with Secured Party:  Borrower or any of Borrower's
Affiliates fails to make any payment when due under, or defaults under, fails to
perform or observe any  covenant of or  condition  or agreement in breach of, or
makes any  material  misstatement  in or omission  from any  representation  and
warranty under, any security agreement, note, or any other document,  instrument
or  agreement  now or  hereafter  existing  with  Secured  Party or in any other
agreement,  instrument, document or certificate, or financial or other statement
now or hereafter delivered to Secured Party, and such failure, default or breach
continues beyond any applicable grace period provided therein; or

          7.1.3  Cross-Default  with Other  Persons.  Borrower fails to make any
payment when due,  subject to any applicable  grace period or cure period,  with
regard to any indebtedness that exceeds the aggregate amount of $50,000 and that
is now or hereafter owed by the Borrower to any other Person, or the Borrower is
otherwise  in  default  of, or fails to  perform or  observe  any  covenant,  or
condition,  or agreement of, or makes any material misstatement or omission from
any representation or warranty under, any security agreement, note, or any other
document, agreement, or instrument that evidences, secures and/or guarantees all
or any part of such  indebtedness  and such default,  failure to perform  and/or
misrepresentation  entitles such Person to accelerate  all or any portion of the
indebtedness and/or to exercise any other collection remedies.

     7.2 Other  Events of Default  of  Borrower  and other  liable  parties:  If
Borrower  or any of  Borrower's  Affiliates  who is a maker,  drawer,  acceptor,
endorser,  guarantor, surety, accommodation party or otherwise liable for any of
the Obligations or Collateral, or any partnership in which Borrower is a partner
(each hereinafter called an "other liable party") shall die, dissolve,  merge or
consolidate,  suspend the transaction of business or incur any material  adverse
change in its  financial  condition  or  prospects;  or if Borrower or any other
liable  party shall be expelled  from or  suspended  by any stock or  securities
exchange or other exchange, or any proceeding, procedure or remedy supplementary
to or in  enforcement  of  judgment  (involving  an amount not fully  covered by
insurance  in  excess of  $20,000  in the  aggregate)  shall be  resorted  to or
commenced  against,  or with respect to any  property of,  Borrower or any other
liable party;  or if Borrower or any other liable party shall make an assignment
for the  benefit  of,  or  composition  with,  creditors,  or shall be or become
insolvent or unable, or generally fail, to pay its debts when due,

                                       14
<PAGE>
or shall be or  become a party or  subject  to any  bankruptcy,  reorganization,
insolvency or other similar proceeding,  or a receiver or liquidator,  custodian
or trustee  shall be  appointed  for Borrower or any other  liable  party,  or a
substantial  portion of any of Borrower's or their respective assets and, if any
of the foregoing shall occur  involuntarily  as to Borrower and any other liable
party, it shall not be dismissed with prejudice,  stayed or discharged within 45
days;  or if Borrower or any other liable party shall take any action to effect,
or which indicates its acquiescence in, any of the foregoing.

     8. REMEDIES.

     8.1  Cumulative  Rights and  Remedies.  Upon the  occurrence of an Event of
Default,  Secured  Party shall have the rights,  powers and remedies  granted to
secured  parties  under the UCC or other  applicable  Uniform  Commercial  Code;
granted  to Secured  Party  under any other  applicable  statute,  law,  rule or
regulation; and granted to Secured Party under this Security Agreement, the Note
or any other Loan Document or any other agreement  between  Borrower and Secured
Party. In addition, all such rights, powers and remedies shall be cumulative and
not alternative.  Any single or partial exercise of, or forbearance,  failure or
delay in exercising any right,  power or remedy shall not be, nor shall any such
single or partial exercise of, or forbearance,  failure or delay be deemed to be
a limitation, modification or waiver of any right, power or remedy and shall not
preclude  the  further  exercise  thereof;  and every  right power and remedy of
Secured  Party shall  continue in full force and effect until such right,  power
and remedy is  specifically  waived by an  instrument  in writing  executed  and
delivered with respect to each such waiver by Secured Party.

     8.2  Acceleration  of  Obligations.  Upon  the  occurrence  of an  Event of
Default,  and at any time  thereafter  if any  Event of  Default  shall  then be
continuing,  Secured Party may, from time to time in its discretion,  by written
notice to Borrower declare the Debt (as such term is defined in the Note and the
Other Notes,  if any)  (including an amount equal to that required to be paid if
the Loan were prepaid as described in Section 5 of the Note and the Other Notes,
if any) and any other  Obligations to be immediately  due and payable  whereupon
(and, ipso facto, without the need for any notice or other action by any Person,
upon the  occurrence  of any Event of Default of the type referred to in Section
7.2 hereof) such principal,  interest and other Obligations shall be immediately
due and payable,  without  presentment,  demand,  protest or other notice of any
kind, all of which are hereby waived by Borrower to the maximum extent permitted
by law.

     8.3 Additional  Rights of Secured Party. Upon the occurrence of an Event of
Default,  Secured Party may, from time to time, in its  discretion,  and without
Borrower's consent, advertisements or notices of any kind (except for the notice
specified in Section 8.5 below  regarding  notice  required in connection with a
public or private sale), or demand of performance or other demand, or obligation
or  liability  (except to account  for  amounts  actually  received)  to or upon
Borrower or any other  Person  (all such  advertisements,  notices and  demands,
obligation and liabilities, if any, hereby being expressly waived and discharged
to the extent permitted by law), forthwith, directly or

                                       15
<PAGE>
through its agents or representatives, (i) to the extent permitted by applicable
law enter any premises, with or without the assistance of other persons or legal
process;  (ii) require  Borrower to account for  (including  accounting  for any
products and proceeds of any Collateral),  segregate,  assemble,  make available
and deliver to Secured Party,  its agents or  representatives,  the  Collateral;
(iii) take  possession  of,  operate,  render  unusable,  collect,  transfer and
receive, recover, appropriate, foreclose, extend payment of, adjust, compromise,
settle,  release  any  claims  included  in,  and do all  other  acts or  things
necessary  or, in Secured  Party's  sole  discretion  appropriate,  to  protect,
maintain,  preserve  and realize  upon,  the  Collateral  and any  products  and
proceeds thereof, in whole or in part; and (iv) exercise all rights,  powers and
interests  with  respect to any and all  Collateral,  and sell,  assign,  lease,
license, pledge, transfer,  negotiate (including endorse checks, drafts, orders,
or  instruments),  deliver or  otherwise  dispose  (by  contract,  option(s)  or
otherwise) of the Collateral or any part thereof. Any such disposition may be in
one or more public or private sales, at or upon an exchange,  board or system or
in the County, in the State or elsewhere,  at such price, for cash or credit (or
for  future  delivery  without  credit  risk)  and upon  such  other  terms  and
conditions  as it deems  appropriate,  with the  right of  Secured  Party to the
extent  permitted  by law upon any such sale or sales,  public  or  private,  to
purchase the whole or any part of said Collateral,  free of any right,  claim or
equity of  redemption  of or in  Borrower  (such  rights,  claims  and equity of
redemption, if any, hereby being expressly waived). Notwithstanding that Secured
Party,  whether  in its own behalf  and/or on behalf of  another or others,  may
continue to hold the  Collateral  and  regardless of the value  thereof,  or any
delay or  failure to dispose  thereof,  unless and then only to the extent  that
Secured  Party  proposes  to  retain  the  Collateral  in  satisfaction  of  the
Obligations by written notice in accordance with the UCC,  Borrower shall be and
remain  liable for the  payment in full of any  balance of the  Obligations  and
expenses at any time unpaid.  Without  limiting the foregoing,  upon  Borrower's
failure to abide by and comply with its obligations  under Section 3 (including,
without  limitation,  Sections  3.10,  3.21 or 3.22) or  Section  4  hereof,  in
addition  to its  other  rights  and  remedies,  Secured  Party  may (but is not
required  to),  in its sole  discretion  and to the  extent it deems  necessary,
advisable or appropriate, take or cause to be taken such actions or things to be
done (including the payment or advancement of funds, or requiring advancement of
funds to be held by Secured Party to fund such  obligations,  including taxes or
insurance)  as may be required  hereby (or  necessary or desirable in connection
herewith)  to correct  such  failure  (including  causing the  Collateral  to be
maintained  or  insurance   protection   required  hereby  to  be  procured  and
maintained)  and any and all costs and expenses  incurred  (including  attorneys
fees and disbursements) in connection  therewith shall be included in Borrower's
Obligations  and shall be  immediately  due and payable and bear interest at the
Default Rate.

     8.4 Application of Proceeds.  Secured Party may apply the net proceeds,  if
any,  of  any  collection,  receipt,  recovery,  appropriation,  foreclosure  or
realization,  or from any  use,  operation,  sale,  assignment,  lease,  pledge,
transfer,  delivery  or  disposition  of all or  any  of the  Collateral,  after
deducting all reasonable  costs and expenses  (including  attorneys fees,  court
costs and legal  expenses)  incurred in connection  therewith or with respect to
the care,  safekeeping,  custody,  maintenance,  protection,  administration  or

                                       16
<PAGE>
otherwise of any and all of said Collateral or in any way relating to the rights
of Secured Party under this Security  Agreement,  first, to the  satisfaction of
the Obligations, in whole or in part, in such order as Secured Party may, in its
discretion,  elect;  second,  to the payment,  satisfaction  or discharge of any
other  Indebtedness  or  obligation,  or  otherwise  as may be  permitted  or as
required by any law, rule or regulation  (including  Section  9-504(1)(c) of the
UCC); and lastly, the surplus, if any, to Borrower.

     8.5 Required Notice of Sale. In exercising its rights,  powers and remedies
as secured party,  Secured Party agrees to give Borrower five days notice of the
time and place of any public sale of  Collateral  or of the time after which any
private sale of Collateral  may take place,  unless the Collateral is perishable
or threatens to decline  speedily in value or is of a type customarily sold on a
recognized  market.  Borrower agrees that such period and notice is commercially
reasonable under the circumstances.

     9. POWER OF ATTORNEY:  Borrower hereby irrevocably constitutes and appoints
Secured Party acting  through any officer or agent  thereof,  with full power of
substitution,   as  Borrower's  true  and  lawful   attorney-in-fact  with  full
irrevocable  power and authority in Borrower's place and stead and in Borrower's
name or in its own name,  from time to time in Secured  Party's  discretion upon
and  following  the  occurrence  of an Event of Default,  to  receive,  open and
dispose of mail  addressed  to Borrower,  to take any and all action,  to do all
things, to execute,  endorse, deliver and file any and all writings,  documents,
instruments,  notices,  statements (including financing statements, and writings
to  correct  any error or  ambiguity  in any Loan  Document),  applications  and
registrations (including registrations and licenses for securities,  Copyrights,
Patents, and Trademarks),  checks, drafts,  acceptances,  money orders, or other
evidence of payment or proceeds,  which may be or become  necessary or desirable
in the sole  discretion of Secured Party to accomplish  the terms,  purposes and
intent of this Security  Agreement and the other Loan  Documents,  including the
right to appear in and defend any action or  proceeding  brought with respect to
the Collateral or Property,  and to bring any action or proceeding,  in the name
and on behalf  of  Borrower,  which  Secured  Party,  in its  discretion,  deems
necessary or desirable  to protect its interest in the  Collateral  or Property.
Said  attorney or  designee  shall not be liable for any acts of  commission  or
omission,  nor for any error of judgment  or mistake of fact or law,  unless and
then  only to the  extent  that the same  constitutes  its gross  negligence  or
willful  misconduct.  This power is coupled with an interest and is irrevocable.
THIS POWER DOES NOT AND SHALL NOT BE CONSTRUED TO AUTHORIZE  ANY  CONFESSION  OF
JUDGMENT.

     10.  DISCLOSURE:  Borrower hereby consents to the disclosure by the Secured
Party of any and all  information  (financial or otherwise)  which Secured Party
may now  have or  hereafter  acquire  concerning  Borrower  or the  Property  in
connection  with the Loan or any other  loan made by Secured  Party to  Borrower
(including  any  securitization  thereof)  or  the  sale  or  transfer  of  such
Borrower's Loan on a whole loan basis together with other loans.

                                       17
<PAGE>
     11. INDEMNIFICATION:  Borrower hereby saves,  indemnifies and holds Secured
Party harmless from and against all expense,  cost,  liability,  loss or damage,
including  attorney's  fees and expenses,  suffered or incurred by Secured Party
arising out of or in connection with this Security Agreement, the Loan Documents
or the  transactions  contemplated  hereby  or  thereby.  Without  limiting  the
foregoing,  Borrower will pay to Secured Party all expenses  (including expenses
for legal  services of every kind) of, or  incidental  to, the  negotiation  of,
entering into and enforcement of any of the provisions  hereof and of any of the
Obligations,  and any actual or attempted sale,  lease or other  disposition of,
and any exchange,  enforcement,  collection,  compromise or settlement of any of
the  Collateral  and receipt of the  proceeds  thereof,  and for the care of the
Collateral  and defending or asserting the rights and claims of Secured Party in
respect thereof, by litigation or otherwise, including expense of insurance, and
all such expenses shall be Borrower's Obligations.

     12.  OBLIGATIONS  ABSOLUTE:   Borrower's   Obligations  will  be  absolute,
unconditional  and  irrevocable  and  will  be  paid or  satisfied  strictly  in
accordance  with their  respective  terms  under all  circumstances  whatsoever,
including:  the invalidity or unenforceability of all or any of, or any part of,
this Security  Agreement,  the Note or any other Loan Document,  or any consent,
waiver,  amendment or modification  thereof; the existence of any claim, setoff,
defense or other  right  which  Borrower  may have at any time  against  Secured
Party, or any other Person,  whether in connection with this Security Agreement,
any other Loan  Documents,  the  transactions  contemplated  hereby,  thereby or
otherwise all of which Borrower hereby waives to the maximum extent permitted by
law; or the loss, theft, damage, destruction or unavailability of the Collateral
to  Borrower  for any reason  whatsoever,  it being  understood  and agreed that
Borrower  retains  all  liability  and   responsibility   with  respect  to  the
Collateral.

     13. ASSIGNMENT: This Security Agreement (and unless a contrary intention is
expressly provided, each other Loan Document) is freely assignable,  in whole or
in part, by Secured Party without the consent of the Borrower and, to the extent
of any  such  assignment,  Secured  Party  shall be  fully  discharged  from all
responsibility. Secured Party's assignee shall, to the extent of the assignment,
be vested with all the powers and rights of Secured Party hereunder  (including,
without  limitation,  those  granted  under  Section 8 hereof or otherwise  with
respect to the  Collateral),  and to the extent of such  assignment the assignee
may fully enforce such rights and powers as Secured Party and all  references to
Secured Party shall mean and refer to such assignee.  Secured Party shall retain
all  rights  and  powers  hereby  given  not  so  assigned,  transferred  and/or
delivered. Without limiting the foregoing,  Borrower understands and agrees that
Secured Party may, from time to time, sell, pledge, grant a security interest in
and collaterally  assign,  transfer and deliver or otherwise encumber or dispose
of the Note, this Security Agreement and the other Loan Documents and its rights
and powers hereunder and thereunder, in whole or in part, in connection with the
Securitization  or any  other  assignment  or  other  disposition  of the  Note.
Borrower  may not,  in whole or in part,  directly  or  indirectly,  assign this
Security Agreement or any Loan Document or its rights hereunder or thereunder or
delegate its duties hereunder or thereunder without,

                                       18
<PAGE>
in each  instance,  the specific prior written  consent of Secured Party,  which
consent may be  withheld  or delayed in Secured  Party's  sole  discretion,  and
payment  of  the  amount   required  under  and  compliance  with  Section  "12.
Miscellaneous"  of the Note and the Other  Notes,  if any.  For purposes of this
Security  Agreement,  a change in control  (whether by stock  sale,  issuance or
otherwise) shall constitute an assignment hereof.

     14. FURTHER ASSURANCES:  Borrower agrees at any time and from time to time,
at Borrower's sole cost and expense,  to obtain,  procure,  execute and deliver,
file  and  affix  such  further  agreements,  bills  of  sale  and  assignments,
instruments, documents, warehouse receipts, bills of lading, vouchers, invoices,
notices,  statements,  writings (including financing statements, and writings to
correct any error or ambiguity in any Loan Document),  powers  (including  stock
and bond powers, and powers of attorney), tax stamps and information,  and to do
or cause to be done all such further acts and things  (including  the execution,
delivery  and  filing  of  financing  statements,  payment  of  filing  fees and
transfer,  gains and recording  taxes) as Secured Party may reasonably  request,
from time to time, in its discretion.  Without limiting the foregoing,  Borrower
authorizes  Secured Party to the extent  permitted  under the UCC to execute and
file, or file without Borrower's  signature,  any and all financing  statements,
amendments thereto and continuations thereof as Secured Party deems necessary or
appropriate  and Borrower  shall pay and  indemnify  Secured  Party for and hold
Secured  Party  harmless  from any and all  costs  and  expenses  in  connection
therewith. Borrower further agrees that it will promptly notify Secured Party of
and,  subject to Section  17.1  hereof,  agree to correct any  defect,  error or
omission  in the  contents  of any of the Loan  Documents  or in the  execution,
delivery or acknowledgment thereof. In addition, Borrower agrees to cooperate in
good faith with Secured Party in connection with any Securitization,  including,
without limitation, amending the Loan Documents to the extent necessary so as to
satisfy the  requirements  of  purchasers,  transferees,  assignees,  servicers,
participants,  investors  or  selected  rating  agencies  involved  in any  such
Securitization,  so long as such  amendments  would not have a material  adverse
effect upon Borrower, or the transaction contemplated hereunder.

     15. TERM:  This Security  Agreement  shall be immediately in full force and
effect upon Borrower's  execution below,  whether or not it is signed by Secured
Party. Upon  indefeasible  payment in full of the Obligations in accordance with
the terms thereof,  this Agreement and the security  interest granted  hereunder
shall terminate and Secured Party, at Borrower's expense, will transfer (without
recourse,  representation  or  warranty)  such  Collateral  as may be in Secured
Party's  possession,  and not to be  retained,  sold,  or  otherwise  applied or
released  pursuant  to  this  Security  Agreement,  to  Borrower,   except  that
Borrower's   obligations  under  Sections  11,  12,  14  and  17  shall  survive
indefinitely.

     16. DEFINED TERMS:

     "Affiliate"  means, when used with any specified Person, (i) any Person who
controls,  is controlled by, or is under common  control with such Person,  (ii)
any Person

                                       19
<PAGE>
who is a director or officer of, member of,  partner in, trustee of, or blood or
legal  relative,  guardian or  representative  of the specified  Person,  or any
Person who acts or serves in a similar  capacity  with respect to the  specified
Person,  (iii) any Person of which or whom the specified Person is a director or
officer,  partner,  member,  trustee,  or blood or legal  relative,  guardian or
representative,  or with respect to which or whom, the specified  Person acts or
serves in a similar capacity;  (iv) any Person, who, directly or indirectly,  is
the legal or beneficial  owner of or controls 10% or more of any class of equity
securities  of the specified  Person,  and (v) any Person who is an Affiliate as
defined in clauses (i),  (ii),  (iii) or (iv) of an  Affiliate of the  specified
Person.

     "Borrower" means the Person or Persons (if more than one collectively,  and
jointly and severally) executing this Security Agreement as Borrower.

     "Borrower  FCCR"  means,  with respect to any  Borrower,  as of the date of
determination for any period,  the quotient of (x) Borrower's Cash Flow for such
period divided by (y) the sum of Borrower's  Indebtedness  (excluding contingent
obligations  to Secured Party which do not become due during such period),  plus
Borrower's Lease Obligations for such period. As used herein:

     (A) if Borrower is solely a natural person,

          (i) Borrower's  Cash Flow shall mean for any period an amount equal to
the difference of (1) the sum of (a) net income, plus (b) depreciation, plus (c)
amortization,  plus (d) interest expense, plus (e) Discretionary  Expenses, plus
(f) Lease Obligations,  plus (g) Non-Recurring Expenses, minus (2) Non-Recurring
Income,  in each case for the Business and any other System  restaurant owned by
Borrower as a natural  person,  and all as  reflected  on  Borrower's  financial
statement for such period for the Business and any other System restaurant owned
by Borrower as a natural person;

          (ii)  Discretionary  Expenses shall mean for any period the difference
(whether  positive  or  negative)  of  (x)  Borrower's  operating  expenses  for
salaries,  wages, benefits, and reimbursements and the like incurred by Borrower
for the Business and any other System  restaurant owned by Borrower as a natural
person,  minus (y) the  reasonable and customary  expenses for salaries,  wages,
benefits,  and  reimbursements  for the Business and any other System restaurant
owned by Borrower as a natural person;

          (iii) Non-Recurring  Expenses and Non-Recurring  Income shall mean for
any period expenses or income, as the case may be, that is extraordinary for the
Business and any other System  restaurant  owned by Borrower as a natural person
and generally not reflected in any prior period or reasonably  anticipated to be
incurred or received in any subsequent period; and

          (iv) Borrower's Indebtedness and Borrower's Lease Obligations shall be
based for any period on the Business and any other  System  restaurant  owned by

                                       20
<PAGE>
Borrower as a natural  person,  and all as  reflected  on  Borrower's  financial
statement for such period for the Business and any other System restaurant owned
by Borrower as a natural person.

     (2) if Borrower is NOT solely natural person,

          (i) Borrower's  Cash Flow shall mean for any period an amount equal to
the difference of (1) the sum of (a) net income, plus (b) depreciation, plus (c)
amortization,  plus (d) interest expense, plus (e) Discretionary  Expenses, plus
(f) Lease Obligations,  plus (g) Non-Recurring Expenses, minus (2) Non-Recurring
Income, all as reflected on (x) a consolidated  financial statement with respect
to such  Person(s)  constituting  Borrower which is not a natural person and any
Affiliate  of Borrower  that is  providing  the Secured  Party with an Affiliate
Guarantee of any of Borrower's  Obligations  (an  "Affiliate  Borrower") and (y)
with respect to such Person constituting  Borrower who is a natural person, such
Person's  financial  statement  for such period for the  Business  and any other
System restaurant owned by such Person as a natural person;

          (ii)  Discretionary  Expenses shall mean for any period the difference
(whether  positive or negative) of (x) operating  expenses for salaries,  wages,
benefits, and reimbursements and the like incurred by Borrower and any Affiliate
Borrower minus (y) the reasonable  and customary  expenses for salaries,  wages,
benefits, and reimbursements incurred by Borrower and any Affiliate Borrower;

          (iii) Non-Recurring  Expenses and Non-Recurring  Income shall mean for
any period  expenses or income,  as the case may be, that is  extraordinary  and
generally  not  reflected in any prior period or  reasonably  anticipated  to be
incurred or received in any subsequent period; and

          (iv) Borrower's  Indebtedness and Borrower's Lease  Obligations  shall
mean for any period the Indebtedness  and Lease  Obligations of Borrower and any
Affiliate  Borrower as reflected on  Borrower's  financial  statements  for such
period.

     "Business"  has  the  meaning  accorded  to such  term  in the  Preliminary
Statement.

     "Collateral" means all Goods (including  Inventory and Equipment),  General
Intangibles  (other  than  the  Franchise  Agreement  and  License),   accounts,
certificates of title,  fixtures,  money,  instruments,  securities,  documents,
chattel paper, deposits,  credits,  claims, demands and other personal property,
now or hereafter  owned,  acquired,  held,  used, sold or consumed in connection
with  Borrower's  Business  and any other  property,  rights  and  interests  of
Borrower  which at any time relate to,  arise out of or in  connection  with the
foregoing  or which  shall  come into the  possession  or  custody  or under the
control of Secured  Party or any of its agents,  representatives,  associates or
correspondents,  for any purpose; all additions thereto,  substitutions therefor
and replacements  thereof, all interest,  income,  dividends,  distributions and
earnings  thereon or other monies or revenues derived  therefrom,  including any
such property received in

                                       21
<PAGE>
connection with any disposition of the Franchise  Agreement and all moneys which
may become  payable  under any  policy  insuring  the  Collateral  or  otherwise
required to be  maintained  hereunder  (including  return of  unearned  premium)
("Collateral Revenues"); and all income, products and proceeds of the foregoing.

     "Collateral  Revenues" shall have the meaning  accorded to such term in the
definition of Collateral.

     "Copyrights"   shall  mean  all  United  States  or  other  registered  and
unregistered  copyrights,  all licenses thereto, and all applications  therefor,
and all reissues, divisions, continuations, renewals, extensions, modifications,
supplements  thereto  or to any part  thereof,  and the  right to sue for  past,
present and future infringements of the foregoing,  and all rights corresponding
to the foregoing throughout the world.

     "County"  means  the  county,  parish,  city or  recording  district  where
financing  statements are filed under the UCC with respect to security interests
in personal property (including fixtures).

     "Default Rate" shall have the meaning ascribed to such term in the Note and
the Other Notes, if any.

     "Equipment"  shall have the  meaning  accorded  to such term in the UCC and
shall include all goods used or bought for use primarily in the Business and not
included  within  the  Inventory,   including  machines,  computers,   fixtures,
furnishings,  furniture, appliances, vehicles, tools, and supplies, and the like
employed in connection  with the Business,  together with all present and future
additions, attachments,  accessions thereto, all replacements,  improvements and
betterments thereof and all substitutions therefor.

     "Event of Default" shall have the meaning  accorded to such term in section
7.

     "FCCR" or "Fixed Charge  Coverage  Ratio" means Borrower FCCR as defined in
this section 16.

     "Financing Statements" mean the financing statements on Form UCC-1 dated as
of the date hereof by Borrower in favor of Secured Party.

     "Franchise Agreement" means the Franchise Agreement between Franchisor,  as
franchisor, and Borrower, as franchisee.

     "Franchisor" means the franchisor  identified as such in boldface on page 1
of this Security Agreement.

     "General  Intangibles"  shall have the meaning accorded to such term in the
UCC and shall include agreements, contracts, writings, memoranda, confirmations,
passbooks,  signature cards, acknowledgments,  understandings,  contract rights,
licenses, leases,

                                       22
<PAGE>
permits,  filings,  consents,  and  approvals,  and all  puts,  calls,  options,
warrants,  and  securities,  and all security  interests,  Patents,  inventions,
processes,   lists  (including  customer  and  suppliers  lists),  methods,  and
information (including proprietary information, director and shareholder, sales,
business,  financial,  accounting,  forecasts,  projections,  media,  and  other
information),  know how, software,  programs, plans, data, blueprints,  designs,
drawings, surveys, notices, Copyrights,  Trademarks, trade names, trade secrets,
service  marks,  service  names,  logos and  goodwill,  and all  recordings  and
registrations  thereof,  applications for recording or  registration,  renewals,
modifications,   supplements,  reissues,  continuations,  extensions,  divisions
thereof and rights corresponding thereto, and all manuals, standards, practices,
mail,  advertisements,  files,  reports,  books,  catalogs,  records,  journals,
invoices,  and bills, and all rights (including voting rights, rights to receive
notice or to consent, rights to payment, interest,  dividends,  distributions or
earnings,  rights to sue and enforce),  powers  (including  powers of attorney),
privileges,  benefits,  and remedies  relating  thereto or arising in connection
therewith.

     "Goods"  shall have the meaning  accorded to such term in the UCC and shall
include (i) all Inventory and (ii) all Equipment.

     "Indebtedness"   means   all   indebtedness    (including    reimbursement,
subrogation,  or contribution  obligations and any other indebtedness assumed or
guaranteed) in respect of money borrowed,  or evidenced by a note (including the
Note and the Other Notes, if any) or other like written obligation to pay money,
or deferred purchase price or constituting a capitalized lease obligation.

     "Inventory"  shall have the  meaning  accorded  to such term in the UCC and
shall  include all goods held by Borrower  for sale or lease or to be  furnished
under  contracts  of  service,  all  goods so  furnished  by  Borrower,  all raw
materials and work in process,  and all materials used or consumed in Borrower's
Business and all documents of title covering any inventory.

     "Lease  Obligations"  mean Personal  Property  Lease  Obligations  and Real
Property Lease Obligations.

     "License"  means the license to use the Trademarks of Franchisor  under the
Franchise Agreement.

     "Loan"  shall have the  meaning  accorded  to such term in the  Preliminary
Statement.

     "Loan  Documents"  means the Note,  the Other Notes,  if any, this Security
Agreement,  any  Mortgage,  assignment  of lease,  security  agreement  or other
instrument,  agreement, guaranty document,  certificate or other writing, now or
hereafter executed and delivered in connection with the Obligations, as the same
may be modified,  amended,  consolidated,  continued  or extended,  from time to
time.

                                       23
<PAGE>
     "Margin Stock" shall have the meaning accorded to such term in Regulation G
of the Federal Reserve Board.

     "Minimum  Borrower  FCCR" shall have the  meaning  accorded to such term in
section 3.8 hereof.

     "Mortgage"  means the  mortgages,  deeds of trust and  similar  instruments
securing or perfecting Secured Party's security interest in the Property.

     "Note"  shall have the  meaning  accorded  to such term in the  Preliminary
Statement.

     "Obligations"  shall mean all of Borrower's  Indebtedness,  obligations and
liabilities to Secured Party  evidenced by, arising under or in connection  with
the  Note  and  the  Other  Notes,  if  any  (including,   without   limitation,
indebtedness, obligations and liabilities in respect of principal, interest, and
Prepayment  Amount (as defined in the Note and the Other Notes,  if any)),  this
Security Agreement, or any other Loan Document, and any future advances thereon,
renewals,    extensions,    modifications,    amendments,    substitutions   and
consolidations  thereof,  or any other  agreement with Secured Party under or in
connection with the Loan, including Borrower's  obligations to pay (or reimburse
Secured  Party  for)  all  costs  and  expenses  (including  attorneys  fees and
disbursements) incurred by Secured Party in obtaining,  maintaining,  protecting
and preserving its interest in the Collateral or its security  interest therein,
foreclosing,  retaking,  holding,  preparing  for  sale  or  lease,  selling  or
otherwise  disposing or realizing on the  Collateral or in exercising its rights
hereunder  or as  secured  party  under  the  UCC,  any  other  applicable  law,
regulation  or rule or this  Security  Agreement,  and all  other  indebtedness,
obligations  and  liabilities  of any kind of Borrower  to Secured  Party now or
hereafter  existing  (including  future  advances  whether  or not  pursuant  to
commitment),  arising  directly  between  Borrower and Secured Party or acquired
outright,  conditionally  or as collateral  security  from another,  absolute or
contingent,  joint  and/or  several,  secured,  due or not due,  contractual  or
tortious, liquidated or unliquidated,  arising by operation of law or otherwise,
or direct or indirect,  including  Borrower's  liabilities to Secured Party as a
member of any  partnership,  syndicate,  association or other group, and whether
incurred by Borrower as principal,  surety, indorser,  guarantor,  accommodation
party or otherwise.

     "Office" shall mean  Borrower's  chief  executive  office (or, if a natural
person, residence) as set forth on Schedule 1 hereto.

     "Patents" shall mean all United States or other registered and unregistered
patents, all licenses thereto, and all applications  therefor, and all reissues,
divisions,  continuations,  renewals,  extensions,  modifications,   supplements
thereto  or to any part  thereof,  and the  right to sue for past,  present  and
future  infringements  of the  foregoing,  and all rights  corresponding  to the
foregoing throughout the world.

                                       24
<PAGE>
     "Payments to  Affiliates"  shall mean all payments,  transfers,  dividends,
distributions,  salaries,  fees and other  compensation,  and all reimbursement,
repayment,  and/or indemnification,  directly or indirectly,  paid or payable to
(or for the benefit of) any Affiliate of Borrower, other than a Person who is an
officer of Borrower and is not otherwise an Affiliate of Borrower, any Guarantor
and any Affiliate of Guarantor and regardless of whether any of the foregoing is
made to any of them in their  capacity  as a  shareholder,  partner,  member  or
otherwise,  or  characterized  as  repayment  of loans,  other  obligations,  or
interest or as return of capital,  return on equity,  or investment.  Payment to
Affiliates  shall  specifically  include,  without  limitation,  any  payment or
reimbursement of travel and entertainment  expenses,  automobiles expenses,  and
premiums or  expenses  associated  with any  insurance  policy  other than those
expressly required to be maintained pursuant to section 3.22 hereof.

     "Permitted Encumbrances" has the meaning accorded to such term in EXHIBIT C
hereto.

     "Person"  shall  mean  any  natural   person,   corporation,   partnership,
association, firm, trust, limited liability company or other entity.

     "Personal Property Lease Obligation" shall mean any obligations of Borrower
in connection with any leases for personal property,  including  Equipment,  not
included in Indebtedness.

     "Principal Amount" shall have the meaning accorded to such term in the Note
and the Other Notes, if any.

     "Preliminary   Statement"  shall  mean  the  paragraphs  of  this  Security
Agreement preceding section 1 hereof and captioned "Preliminary Statement."

     "Property"  has  the  meaning  accorded  to such  term  in the  Preliminary
Statement.

     "Real Property Lease  Obligation" shall mean any obligations of Borrower in
connection with any leases for real property not included in Indebtedness.

     "Securitization" shall mean the sale, pledge, grant of a security interest,
collateral assignment, transfer and delivery or other encumbrance or disposition
of all or any  portion  of the  Loan  (or  Secured  Party's  rights  and  powers
therein),  from  time to  time,  to one or more of its  Affiliates  or to  other
Persons,  including the sale of the Loan by Secured Party to one or more Persons
who will issue debt  instruments or equity  certificates  backed by the Loan and
the  servicing  of the Loan by a Person  appointed  as  servicer  in  connection
therewith.

     "State"  shall mean the state of the  location of the  Property  from which
Borrower operates the Business.

                                       25
<PAGE>
     "Stated Payment  Amount" has the meaning  accorded to such term in the Note
and the Other Notes, if any, and has the same meaning as "Initial Stated Payment
Amount" in any Note or Other Note that has a floating rate of interest.

     "System"  or  "Systems"  mean  one or more  restaurant  franchise  concepts
approved by Secured Party.

     "Trademarks"   shall  mean  all  United  States  or  other   registered  or
unregistered  trademarks  together  with the goodwill of the business  connected
with the use thereof,  and symbolized  thereby,  all licenses thereto (including
the  License),  and all  applications  therefor,  and all  reissues,  divisions,
continuations,  renewals, extensions,  modifications,  supplements thereto or to
any  part  thereof,   and  the  right  to  sue  for  past,  present  and  future
infringements  of the foregoing,  and all rights  corresponding to the foregoing
through out the world.

     "UCC"  means the Uniform  Commercial  Code of the State and the state where
the Office is located, if different and as applicable.

     "UCC  Search"  means the  security  interest,  tax lien,  suit and judgment
search of  Borrower  conducted  in the state and county of the Office and in the
State and the County.

     17. MISCELLANEOUS.

     17.1 Final Agreement; Amendments, Consents,  Authorizations.  THIS SECURITY
AGREEMENT  REPRESENTS THE FINAL AGREEMENT BETWEEN BORROWER AND SECURED PARTY AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF BORROWER AND SECURED PARTY.  BORROWER  UNDERSTANDS AND AGREES THAT
ORAL AGREEMENTS AND ORAL COMMITMENTS TO LOAN MONEY,  EXTEND CREDIT OR TO FORBEAR
FROM ENFORCING  REPAYMENT OF A DEBT ARE NOT ENFORCEABLE.  BORROWER  ACKNOWLEDGES
AND AGREES THERE ARE NO ORAL AGREEMENTS BETWEEN BORROWER AND SECURED PARTY. This
Security Agreement and the Loan Documents represent the entire  understanding of
Secured Party and Borrower with respect to the transactions  contemplated hereby
and thereby.  None of the terms or provisions of this Security  Agreement or any
other Loan Document may be waived, altered,  modified, or amended except in each
instance  by a specific  written  instrument  duly  executed  by Secured  Party.
Without limiting the foregoing,  no action or omission to act shall be deemed to
be a consent, authorization, representation or agreement of Secured Party, under
the UCC or  otherwise,  unless,  in each  instance,  the  same is in a  specific
writing  signed by Secured  Party.  The  inclusion  of  Collateral  Revenues and
proceeds  in the  Collateral  does not and  shall  not be  deemed  to  authorize
Borrower to sell,  exchange or dispose the Collateral or the Franchise Agreement
or  otherwise  use the  Collateral  in any  manner  not  otherwise  specifically
authorized herein.

                                       26
<PAGE>
     17.2 Notices.  All notices and other communications given pursuant to or in
connection  with this Security  Agreement  shall be in writing  delivered to the
parties  at the  addresses  set forth  below (or such  other  address  as may be
provided by one party in a notice to the other):

     If to Secured Party:

     Bay View Franchise Mortgage Acceptance Company
     Three American Lane
     Greenwich, Connecticut 06831
     Attn: Chief Operating Officer

     If to Borrower,  at its Chief Executive  Office, as represented by Borrower
     on Schedule 1.

Notice  delivered in accordance  with the foregoing  shall be effective (i) when
delivered,  if delivered personally,  (ii) two days after being delivered in the
United States  (properly  addressed  and all fees paid) for  overnight  delivery
service to a courier (such as Federal  Express)  which  regularly  provides such
service and regularly  obtains executed  receipts  evidencing  delivery or (iii)
five days after being deposited  (properly addressed and stamped for first-class
delivery) in a daily serviced United States mail box.

     17.3  Reasonableness.  If at any time Borrower  believes that Secured Party
has not acted  reasonably  in granting or  withholding  any  approval or consent
under the Note, this Security Agreement, or any other Loan Document or otherwise
with respect to the Obligations,  as to which approval or consent either Secured
Party has expressly agreed to act reasonably,  or absent such agreement, a court
of law having  jurisdiction  over the subject matter would require Secured Party
to act  reasonably,  then  Borrower's  sole remedy  shall be to seek  injunctive
relief or specific  performance  and no action for monetary  damages or punitive
damages shall in any event or under any  circumstance  be maintained by Borrower
against Secured Party.

     17.4  Recovery of Sums  Required To Be Paid.  Secured  Party shall have the
right  from  time to  time  to take  action  to  recover  any sum or sums  which
constitute a part of the  Obligations as the same become due,  without regard to
whether  or not  the  balance  of the  Obligations  shall  be due,  and  without
prejudice  to the  right of  Secured  Party  thereafter  to bring an  action  of
foreclosure, or any other action, for a default or defaults by Borrower existing
at the time such earlier action was commenced.

     17.5 WAIVERS.  BORROWER HEREBY MAKES AND ACKNOWLEDGES  THAT IT MAKES ALL OF
THE WAIVERS SET FORTH IN THIS  SECURITY  AGREEMENT,  THE NOTE AND THE OTHER LOAN
DOCUMENTS KNOWINGLY, INTENTIONALLY,  VOLUNTARILY, WITHOUT DURESS, AND ONLY AFTER
EXTENSIVE  CONSIDERATION OF THE RAMIFICATIONS OF SUCH WAIVERS WITH ITS

                                       27
<PAGE>
ATTORNEY;  BORROWER  FURTHER  ACKNOWLEDGES  THAT  SUCH  WAIVERS  ARE A  MATERIAL
INDUCEMENT  TO SECURED PARTY TO MAKE THE LOAN TO BORROWER AND THAT SECURED PARTY
WOULD NOT HAVE MADE THE LOAN WITHOUT SUCH WAIVERS.

     17.6   WAIVER  OF  TRIAL  BY  JURY.   BORROWER   HEREBY   IRREVOCABLY   AND
UNCONDITIONALLY WAIVES, AND SECURED PARTY BY ITS ACCEPTANCE OF THE NOTE AND THIS
SECURITY  AGREEMENT AND OTHER LOAN  DOCUMENTS  IRREVOCABLY  AND  UNCONDITIONALLY
WAIVES, ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION,  SUIT OR COUNTERCLAIM
ARISING IN  CONNECTION  WITH,  OUT OF OR  OTHERWISE  RELATING TO THE NOTE,  THIS
SECURITY AGREEMENT, OR ANY OTHER LOAN DOCUMENT OR THE OBLIGATIONS.

     17.7 Relationship.  The relationship of Secured Party to Borrower hereunder
is  strictly  and solely that of secured  commercial  lender on the one hand and
commercial  borrower  on the  other  in a  commercial  transaction  and  nothing
contained in the Note,  this  Security  Agreement or any other Loan  Document or
otherwise in connection with the Obligations is intended to create,  or shall in
any event or under any  circumstance  be construed as creating,  a  partnership,
joint venture,  tenancy-in-common,  joint tenancy or other  relationship  of any
nature  whatsoever  between  Secured  Party and  Borrower  other than as secured
commercial  lender  on the one hand and  commercial  borrower  on the other in a
commercial transaction.

     17.8 No Conflict with  Franchise  Agreement.  This Agreement and the rights
(including  the  remedies)  granted  and the duties  imposed  hereunder  are not
intended to conflict with or contravene the Franchise Agreement or the License.

     17.9  Time  is of  the  Essence.  For  all  payments  to be  made  and  all
obligations to be performed under the Loan Documents, time is of the essence.

     17.10 LIMITATION ON INTEREST.  NOTWITHSTANDING  ANY OTHER PROVISION HEREOF,
IN NO EVENT  SHALL  THE  AMOUNT OR RATE OF  INTEREST  (INCLUDING  TO THE  EXTENT
APPLICABLE ANY DEFAULT RATE INTEREST OR LATE PAYMENT CHARGE) PAYABLE, CONTRACTED
FOR,  CHARGED OR RECEIVED UNDER OR IN CONNECTION WITH THE NOTE OR ANY OTHER LOAN
DOCUMENT,  FROM TIME TO TIME OR FOR WHATEVER REASON,  EXCEED THE MAXIMUM RATE OR
AMOUNT, IF ANY, SPECIFIED BY APPLICABLE LAW.

     17.11 Governing Law;  Binding  Effect;  Consent to  Jurisdiction.  (i) This
Security  Agreement  shall be governed by and construed in  accordance  with the
laws of the State of Connecticut  without reference to choice of law principles;
provided,  however,  that the laws of the State  shall  govern  any  foreclosure
remedies  of Secured  Party.  This  Security  Agreement  shall be  binding  upon
Borrower,  and  the  heirs,  devisees,   administrators,   executives,  personal
representatives,  successors, receivers, trustees, and (without limiting Section
12 hereof) assigns, including all successors in interest of Borrower in and

                                       28
<PAGE>
to all or any part of the Collateral,  and shall inure to the benefit of Secured
Party, and the successors and assigns of Secured Party.

     (ii) The Borrower hereby consents that any action or proceeding against the
Borrower  in  connection  with  this  Agreement  or the  Loan  Documents  may be
commenced and  maintained in any court within the State of Connecticut or in the
United  States  District  Court for the  District of  Connecticut.  The Borrower
agrees  that the  courts  of the  State of  Connecticut  and the  United  States
District  Court for the District of  Connecticut  shall have  jurisdiction  with
respect  to the  subject  matter  hereof  and the  person of the  Borrower.  The
Borrower  hereby waives the  requirement of personal  service of the summons and
complaint or other process or papers issued in any action or proceeding  against
Borrower  under this  Agreement or the Loan Documents and agrees that service of
such summons and complaint,  or other process or papers may, at Secured  Party's
option,  be made by regular or certified  mail  addressed to the Borrower at the
respective  addresses of the Borrower set forth herein.  The Borrower agrees not
to assert any defense to any action or proceeding initiated in any courts of the
State of Connecticut or in the United States  District Court for the District of
Connecticut by Secured Party based upon improper venue or inconvenient forum. It
is hereby agreed that service of process on Borrower may be made on any manager,
officer,  director or agent for service of process. The Borrower agrees that any
action  brought by the Borrower  shall be commercial  and  maintained  only in a
court of federal judicial  district or county in which Secured Party has a place
of  business  in  Connecticut.  Nothing  contained  in  this  section  shall  be
interpreted  or construed in any way to limit the right of Secured Party to: (i)
serve  process in any other manner or on any other  person or entity  (including
without  limitation  personal  service and service on the  Secretary of State of
Connecticut)  and/or (ii) bring any action or  proceeding  in courts  other than
courts of the State of Connecticut  and the United States District Court for the
District of Connecticut.

     17.12 Severability. Whenever possible this Security Agreement, the Note and
each Loan Document and each provision hereof and thereof shall be interpreted in
such manner as to be effective,  valid and enforceable  under applicable law. If
and  to  the  extent  that  any  such  provision   shall  be  held  invalid  and
unenforceable  by any court of competent  jurisdiction,  such holding  shall not
invalidate or render  unenforceable any other provisions hereof or thereof,  and
any determination that the application of any provision hereof or thereof to any
person or under any circumstance is illegal and  unenforceable  shall not affect
the legality, validity and enforceability of such provision as it may be applied
to any other person or in any other circumstances.

     17.13  Captions;  Construction.  The  paragraph  titles used herein are for
convenience  only  and  shall  not  affect  the  construction  of this  Security
Agreement or any term or provision hereof. The inclusion of an example by way of
illustration such as a parenthetical  ("including . . .") shall not be construed
as or deemed a  limitation  on the  generality  of the general  text to which it
refers. The terms Borrower and Secured Party

                                       29
<PAGE>
shall   include   heirs,   devisees,   executors,    administrators,    personal
representatives, successors, receivers, trustees and assigns.

     17.14  Liability.  The  liability  under  this  Security  Agreement  of all
Persons, if more than one, constituting Borrower shall be joint and several.

     17.15 Cross-Collateralization.  The Loan Documents are cross-collateralized
with all other loan agreements,  notes, mortgages,  deeds of trust and all other
agreements,  if any,  entered into  concurrently  herewith  between Borrower and
Secured  Party;  provided,  however,  notwithstanding  anything to the  contrary
contained in this Security Agreement or the other Loan Documents:

          (a) in the  event  that  the  Loan  evidenced  by the  Note  is  sold,
     transferred or otherwise  conveyed by Secured Party to a third party,  then
     at the election of Secured Party, this Security  Agreement shall not secure
     the  indebtedness  and  obligations  evidenced by the Other Notes,  if any,
     which are not similarly  sold,  transferred  or otherwise  conveyed to such
     third party; and

          (b) in the event that one or more of the Other Notes, if any, is sold,
     transferred or otherwise  conveyed by Secured Party to a third party,  then
     at the election of Secured Party, this Security  Agreement shall not secure
     the indebtedness  and obligations  evidenced by the Other Notes so conveyed
     unless the Loan  evidenced by the Note is similarly  sold,  transferred  or
     otherwise conveyed to such third party; and

          (c) in the  event  that the Loan  evidenced  by the Note  becomes  the
     subject of a Securitization transaction,  this Security Agreement shall not
     secure the  indebtedness  and obligations  evidenced by the Other Notes, if
     any,  except for those Other  Notes which are part of the same  Securitized
     Loan Pool as the Loan evidenced by the Note; and

          (d) in the event that one or more of the Other Notes, if any,  becomes
     the subject of a Securitization transaction,  this Security Agreement shall
     not secure the indebtedness  and obligations  evidenced by such Other Notes
     that become the subject of any such  Securitization  transaction unless the
     Loan evidenced by the Note is part of the same Securitized Loan Pool; and

          (e) as used herein,  (i) the term  "Securitization"  transaction shall
     mean  an  asset   securitization   vehicle  or  a   securitized   financing
     transaction,  as  selected  by  Secured  Party,  in  its  sole  discretion,
     including,  without  limitation,  the  sale,  pledge,  grant of a  security
     interest, collateral assignment, transfer and delivery or other encumbrance
     or disposition  of all or any portion of a loan (or Secured  Party's rights
     and powers  therein),  from time to time, to one or more of its  Affiliates
     (as defined in the Security  Agreement)  or to other Persons (as defined in
     the Security  Agreement),  including the sale of a loan by Secured Party to
     one

                                       30
<PAGE>
     or more  Persons  who will issue debt  instruments  or equity  certificates
     backed by the loan and the  servicing of the loan by a Person  appointed as
     servicer in connection therewith, and (ii) the term "Securitized Loan Pool"
     shall mean any  classification,  pooling, or grouping of all or any part of
     one or more loans that are a part of a Securitization transaction.

     17.16  Year 2000  Compliance.  On the basis of a  comprehensive  review and
assessment of Borrower's computer software,  related systems and equipment,  and
inquiry  made  of  Borrower's  material  suppliers,   vendors,   customers,  and
Affiliates,  Borrower  represents  and warrants that all of Borrower's  computer
software and related  systems for the Business and all other  operations  of the
Borrower are "Year 2000"  compliant,  or, will be "Year 2000" compliant no later
than  June 1,  1999.  For  purposes  of this  Agreement,  the  term  "Year  2000
compliant"  means  that  computers  and  computer  components,   software,   and
accessories,  as  well as  imbedded  microchips  in  non-computing  devices  and
equipment,  shall  perform  properly  and for the purpose or purposes  intended,
including performance of date-sensitive  functions with respect to certain dates
prior to and after  December 31, 1999.  Borrower  reasonably  believes  that all
costs of investigation,  analysis,  testing, and remediation to become Year 2000
compliant,  could not  reasonably  be expected to result in or have any material
adverse   effect   upon   the   Business,   financial   condition,   operations,
administration,  sales and acquisitions,  business prospects,  or other business
affairs of Borrower;  and  Borrower has  developed  feasible  contingency  plans
adequate to ensure  uninterrupted and unimpaired business operation in the event
of a failure of its own or a third party's systems or equipment due to a failure
to become Year 2000 compliant, including those of vendors, customers, suppliers,
and  Affiliates,  as  well  as a  general  failure  of or  interruption  in  its
communications  and  delivery  infrastructure.  In  this  regard,  Borrower  has
delivered to Secured Party documentation  evidencing (i) its current compliance,
or (ii) its  current  adoption  of plans and  procedures  to attain  "Year 2000"
compliance  no later  than June 1, 1999.  Borrower  agrees to deliver to Secured
Party,  immediately upon request,  any written  documentation that Secured Party
may request to verify or confirm the foregoing.

          Borrower  further  agrees to  promptly  comply  with any  "Year  2000"
compliance requirements imposed on it by the Secured Party,  Franchisor,  and/or
any other  third  party that is  involved  with the  Borrower  and its  Business
operations.  Secured  Party may,  in its  discretion,  undertake  an  additional
assessment and/or review of Borrower's computer software and related systems, at
Borrower's sole cost and expense to ascertain and confirm Borrower's "Year 2000"
compliance. In such event, Borrower agrees to fully cooperate with Secured Party
in  connection  with any such review or  assessment.  In the event that Borrower
breaches  any  representation  or warranty set forth  herein,  then such failure
shall,  in the sole  discretion  of the Secured  Party,  constitute  an Event of
Default under this Agreement and Secured Party shall be entitled to exercise any
and all rights and remedies  available to it at law, in equity  and/or under the
Loan Documents.

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<PAGE>
     17.17 Lost Note. Borrower shall, if any Note is mutilated,  destroyed, lost
or stolen (a "Lost Note"), promptly deliver to Secured Party, upon receipt of an
affidavit  from Secured  Party  stipulating  that such Note has been  mutilated,
destroyed,  lost or stolen,  in  substitution  therefor,  a new promissory  note
containing  the same  terms and  conditions  as such  Lost Note with a  notation
thereon of the unpaid principal and accrued and unpaid interest.  Borrower shall
provide  fifteen  (15) days prior  notice to  Secured  Party  before  making any
payments to third parties in connection with a Lost Note.

                           [SIGNATURE PAGE TO FOLLOW]

                                       32
<PAGE>
     IN WITNESS  WHEREOF,  Borrower has executed and entered into this  Security
Agreement  and  delivered  it to  Secured  Party on and as of the date set forth
below.  This  document is executed  under seal and  intended to take effect as a
sealed instrument.

                                        BORROWER(S):

                                        MAIN STREET AND MAIN INCORPORATED


                                        By: /s/ James Yeager
                                           -------------------------------------
                                        Name: James Yeager
                                        Title: Vice President - Finance


                                        MAIN ST. CALIFORNIA, INC.


                                        By: /s/ James Yeager
                                           -------------------------------------
                                        Name: James Yeager
                                        Title: Vice President - Finance


                                        SECURED PARTY:

                                        BAY VIEW FRANCHISE MORTGAGE
                                        ACCEPTANCE COMPANY,
                                        a California corporation


                                        By: /s/ Liana Morris
                                           -------------------------------------
                                        Name: Liana Morris
                                        Title: Loan Closer