Document:

SECURITY AGREEMENT

                            (LORETTA FOOD GROUP INC.)

     THIS SECURITY  AGREEMENT  ("Agreement') is made as of the 9th day of March,
2005,  by Loretta  Food  Group,  Inc.,  a Delaware  corporation,  with a mailing
address of 2405 Lucknow Drive,  Mississauga,  ON L5S 1H9 ('Debtor"), in favor of
Caithness  Financial  Services  Limited,  an Ontario  corporation with a mailing
address of 141 Adelaide Street, Suite 500, Toronto, ON M5H 3L5 ("Lender").

1. THE SECURED  INDEBTEDNESS.  For  valuable  consideration,  Debtor  makes this
Agreement  to  secure  the  payment  of all  present  and  future  indebtedness,
liabilities  and  obligations of Debtor to Lender,  however  created or arising,
whether under the following:

         the Senior Secured Promissory Note of even date hereof in the amount of
         Eight Hundred Eighty Thousand ($880,000) Dollars made by Debtor payable
         to Lender, arising from the Loan Agreement (the "Loan Agreement') dated
         March 8, 2005 between Loretta Baking Mix Products, Ltd. ("Loretta') and
         Lender,  and any other  note(s),  guaranty(ies),  loan and/or letter of
         credit  agreement(s),  indemnity  agreement(s) or other  evidence(s) of
         indebtedness to Lender made as of the date of this Agreement by Loretta
         or Debtor and all extensions, renewals, modifications, substitutions or
         replacements;

or under any other present or future  instrument or agreement between Loretta or
Debtor  and  Lender,  or  otherwise,  and  whether  direct,  indirect,  primary,
secondary,  fixed,  contingent,  joint or  several,  due or to become  due,  and
including,  without limit and any and all renewals,  extensions,  modifications,
substitutions  or  replacements  of any of  them,  and  the  performance  of the
covenants and  obligations  due or to become due to Lender,  including,  without
limit, those due under this Agreement, and the repayment of all sums expended by
Lender  in  connection  with  performance  of those  covenants  and  obligations
(individually and collectively, the "Indebtedness").

2.  GRANT  OF  SECURITY  INTEREST  IN  COLLATERAL.  To  secure  payment  of  the
Indebtedness,  Debtor grants Lender a continuing first security  interest in all
of the following assets and property of Debtor, wherever located and whether now
owned or existing or hereafter arising or acquired:

     All assets of Debtor, (the "Collateral") including, but not limited to:

         (a)  all  equipment  in all of its  forms,  and all  fixtures  wherever
         located,  now  or  hereafter  existing,  and  all  parts  thereof,  and
         accessions,  accessories,  supplies, and operating manuals thereto (the
         "Equipment");

<PAGE>

         (b)  all  inventory  in all of its  forms,  and all  products  thereof,
         wherever located, now or hereafter existing, including, but not limited
         to, (i) all raw materials and work in process therefore, finished goods
         thereof,   and  materials  used  or  consumed  in  the  manufacture  or
         production  thereof,  (ii) goods in which the Debtor has an interest in
         mass or a joint or other interest or right of any kind, and (iii) goods
         which  are held for  sale or  lease,  and all  accessions  thereto  and
         products  thereof  (the   "Inventory";   Equipment  and  Inventory  are
         hereinafter referred to collectively as the "Tangible Collateral");

         (c) all  accounts,  rights  arising  under  contracts,  chattel  paper,
         instruments,   rights  under  letters  of  credit,  documents,  general
         intangibles,  payment  intangibles  and other  obligations of any kind,
         whether now owned or hereafter acquired,  whether or not arising out of
         or in  connection  with the sale or lease of goods or the  rendering of
         services,  and  all  rights  now or  hereafter  existing  in and to all
         security  agreements,  leases and other contracts securing or otherwise
         relating  to any of such  accounts,  rights  arising  under  contracts,
         chattel  paper,   instruments,   general   intangibles  or  obligations
         (collectively, the "Intangible Collateral");

         (d) all interests in equities,  debentures,  securities  and negotiable
         instruments  including,  but  limited  to, all shares of capital  stock
         whether voting or non-voting,  preferred or common,  public or private,
         or convertible and including all options, warrants, appreciation rights
         and all other  forms of  ownership  for  example,  but not  limited to,
         limited  partnership  interests,  limited liability company membership,
         real estate investment  trusts and the like and the proceeds  therefrom
         ("Securities");

         (e) all  books  and  records  of the  Debtor  pertaining  to any of the
         Collateral; and

         (f)  all  cash  and all  proceeds  of any of the  foregoing  Collateral
         (including,  without limitation,  proceeds which constitute property of
         the types  described in clauses (a) through (d) of this Section 1) and,
         to the extent not  otherwise  included,  all payments  under  insurance
         (whether  or not the  Secured  Party  is loss  payee  thereof),  or any
         indemnity, warranty or guaranty, payable by reason of loss or damage to
         or otherwise with respect to any of the foregoing Collateral.

3. WARRANTIES AND  REPRESENTATIONS.  Debtor represents and warrants to Lender as
follows:

                                       2

<PAGE>

     3.1 Payment of  Indebtedness.  Debtor will pay the Indebtedness and perform
all  obligations  related to the  Indebtedness  when due,  whether by  maturity,
acceleration or otherwise.

     3.2  Authority.  This  Agreement  is the valid and  binding  obligation  of
Debtor,  enforceable in accordance with its terms.  Debtor is duly organized and
validly  existing and in good  standing  under the laws of the State of Delaware
and  authorized  to  transact  business in all states in which  Debtor  conducts
business, and the execution, delivery and performance of this Agreement has been
duly authorized by all necessary action of Debtor's  governing body and will not
violate Debtor's governing instruments or other agreements.

     3.3 Name;  Address;  Location  of  Collateral.  Debtor's  name and  mailing
address,  chief executive office address, and the location of the Collateral and
all records  concerning the Collateral are accurately set forth on the signature
page of this  Agreement.  Debtor has not  conducted  business in any other name.
Debtor  shall  notify  Lender in advance of any  changes  to name,  address,  or
location of Collateral including the addition of one or more of the foregoing.

     3.4  Title to  Collateral.  Debtor  has good  and  marketable  title to the
Collateral,  free and clear of any liens,  encumbrances  or  security  interests
whatsoever,  other than the  security  interest  granted by this  Agreement  and
existing   liens,   encumbrances   or  security   interests   disclosed  to  and
affirmatively  accepted by Lender in writing.  Lender's security interest in the
Collateral has first  priority,  and Debtor will keep the Collateral free of all
other  liens,  encumbrances  and  security  interests.  Debtor  will  defend the
Collateral  against all claims and  demands of all persons at any time  claiming
any interest in the Collateral. Debtor will immediately mark its records and the
Collateral to clearly indicate the security interest of Lender.

     3.5 Nature of  Collateral.  All of the  Collateral is held by Debtor solely
for business purposes, and none of the Collateral constitutes consumer goods. No
part of the Collateral  consists of equipment used in farming operations or farm
products or accounts or general intangibles arising from or relating to the sale
of farm products by a farmer. The Collateral was acquired in the ordinary course
of business of Debtor.  There are no setoffs,  counterclaims or defenses against
the Collateral.

     3.6 Financing Statements.  No other financing statement covering all or any
part of the  Collateral  is on file in any public  office.  Debtor will  execute
financing  statement(s)  in form  acceptable  to Lender and will pay the cost of
filing  financing  statement(s) in all public offices  wherever filing is deemed
desirable  by  Lender.  A carbon,  photographic  or other  reproduction  of this
Agreement  shall be  sufficient  as a  financing  statement  under the  Delaware
Uniform Commercial Code ("UCC") and may be filed by Lender in any filing office.
This  Agreement  shall be  terminated  only by Lender's  filing of a termination
statement in accordance  with the applicable  provisions of the UCC. Debtor will
do all other things, execute all documents,  and pay all related costs necessary
or  requested  by Lender to  establish,  verify or  continue  the  validity  and
priority of Lender's security interest.

                                       3

<PAGE>

4. COVENANTS. Debtor covenants and agrees as follows:

     4.1 Payment of Taxes.  Debtor  shall pay when due and before any  interest,
collection fees or penalties accrue, all taxes, expenses,  assessments, liens or
other  charges  which may now or  hereafter  be levied or  assessed  against the
Collateral. Debtor shall furnish proof of payment upon request of Lender.

     4.2 Insurance.

     4.2.1 Debtor shall keep the tangible  Collateral insured for the benefit of
Lender  against  fire and other  hazards and risks,  including,  without  limit,
vandalism and malicious mischief, as Lender may require and shall provide public
liability and product liability  insurance and any other insurance as Lender may
reasonably  require from time to time. All insurance  shall be in amounts and in
forms and with companies  satisfactory to Lender. Debtor shall deliver to Lender
the policies  evidencing the required insurance with premiums fully paid for one
year in  advance,  and with loss payee  clauses  making  all  losses  payable to
Lender.  Renewals of the required  insurance  (together with evidence of premium
prepayment  for one (1) year in advance)  shall be  delivered to Lender at least
thirty (30) days before the  expiration of any existing  policies.  All policies
and  renewals  shall  provide  that they may not be canceled or amended  without
giving  Lender  thirty  (30)  days'  prior  written  notice of  cancellation  or
amendment.

     4.3 Maintenance of Collateral.  Debtor will maintain the Collateral in good
condition  and repair,  and will  replace  any  damaged or obsolete  Collateral.
Debtor  shall not use,  or suffer or permit the use of, the  Collateral  for any
unlawful  purpose,  and  shall  use,  operate  and  control  the  Collateral  in
compliance with all applicable law and regulation,  including without limitation
those  governing  protection  of the  environment  and the use and  disposal  of
hazardous substances,  and shall not cause, permit or suffer the presence,  use,
storage, disposal, or release on or in any place where the Collateral is located
any toxic or  hazardous  substance  as  defined  in any  federal  or state  law,
regulation  or rule  relating  to health,  safety or  environmental  protection.
Debtor will  promptly  inform  Lender of any loss or  diminution in value of the
Collateral.  Debtor  shall  make  or  permit  no  modification,   compromise  or
substitution  for the  Collateral  without the prior written  consent of Lender,
provided that in the ordinary course of business Debtor may (1) grant any person
obligated on any of the Collateral any credits, refunds and adjustments to which
they may be lawfully  entitled,  and  (2) repair and replace  Equipment.  Debtor
shall  maintain its place of  incorporation  in Delaware and shall  maintain the
location where it keeps its  Intangible  Collateral at the location shown on the
signature page.

     4.4 Stock and Equity  Covenants.  Because  Lender  believes  that Debtor is
essentially a holding company, Debtor further covenants:

     4.4.1  Debtor  agrees  to  pledge  its   Securities  to  Lender  until  the
Indebtedness is fully paid with Lender to be a secured creditor under applicable
laws of the United States and Ontario;

                                       4

<PAGE>

     4.4.2  Debtor  shall  not sell,  transfer,  redeem,  hypothecate,  deliver,
encumber,   assign,  dispose,  or  abandon  ("Disposition")  its  Securities  or
Collateral without thirty (30) days advance written notice to Lender;

     4.4.3  Debtor  shall  not  distribute  proceeds  from  any  Disposition  of
Securities without the prior written consent of Lender, it being understood that
Debtor  accepts all proceeds as the  Lender's  agent in trust for the Lender and
Debtor will not  commingle  the  proceeds  with its other  Collateral  and shall
instead deliver said proceeds to the Lender upon Debtor's  receipt or thereafter
if an Event of Default has occurred.

     4.4.4 Debtor shall not engage in any financing activity with respect to any
of its subsidiaries or divisions  without the advance written notice and consent
of the Lender.

     4.5 Leased Facilities. If the Collateral is located at a facility leased by
Debtor,  Debtor  will  obtain  from the  lessor a consent to the  granting  of a
security  interest in the  Collateral  and a  disclaimer  of any interest of the
lessor in the Collateral. The consent and disclaimer shall be in form acceptable
to Lender.  Debtor  will pay all rents and  perform  other  obligations  for any
leased facilities.

     4.6 Redelivered  Collateral.  If Lender redelivers any of the Collateral in
Lender's  possession  to Debtor or Debtor's  designee for the purpose of (1) the
ultimate sale or exchange thereof,  (2) presentation,  collection,  renewal,  or
registration of transfer thereof, or (3) loading,  unloading, storing, shipping,
transshipping,   manufacturing,   processing  or  otherwise   dealing  therewith
preliminary  to sale or  exchange,  such  redelivery  shall be in trust  for the
benefit  of Lender  and shall not  constitute  a release  of  Lender's  security
interest   therein  or  in  the  proceeds  or  products  thereof  unless  Lender
specifically  so agrees in  writing.  If Debtor  requests  any such  redelivery,
Debtor will  deliver with such request a duly  executed  financing  statement in
form and substance  satisfactory  to Lender.  Any proceeds of Collateral  coming
into  Debtor's  possession as a result of any such  redelivery  shall be held in
trust for Lender  and  forthwith  delivered  to Lender  for  application  on the
Indebtedness.  Lender  may (if,  in its sole  discretion,  it  elects  to do so)
deliver  the  Collateral  or any  part of the  Collateral  to  Debtor,  and such
delivery  by  Lender  shall  discharge  Lender  from  any and all  liability  or
responsibility for such Collateral.

     4.7  Prohibition  on Transfer or  Modification.  Debtor shall not transfer,
sell, assign,  lease or modify the Collateral or any interest therein,  any part
thereof, or any substantial portion of Debtor's other assets or property without
the  prior  written  consent  of  Lender,  except  for  sales of  Inventory  and
replacements  of  Equipment  and  supplies  in the  ordinary  course of Debtor's
business.

     4.8 Prohibition on Change of Name,  Organization or Location.  Debtor shall
not  conduct  Debtor's  business  under any name  other  than as appears in this
Agreement nor change or reorganize  the type of Debtor's  business  entity,  nor
change the location of any of the Collateral  without the prior written  consent
of Lender.

                                       5

<PAGE>

     4.9 Right of Setoff.  Debtor  grants Lender the right,  exercisable  at any
time, whether or not Debtor is then in default,  to set off or apply against the
Indebtedness  any account or deposit with Lender in which Debtor has an interest
or against any other amounts which may be in the possession of Lender and to the
credit of Debtor. 4.10 Examination of Records and Collateral.  Debtor shall keep
full and  accurate  records of  Debtor's  business,  including,  without  limit,
records  related to the  Collateral,  and such  records  shall be open to audit,
inspection  and  duplication  by Lender at all times.  Lender may enter upon any
property  owned by or in the  possession  of Debtor to examine  and  inspect the
Collateral. Debtor shall promptly provide Lender with any information concerning
the Collateral as Lender may request at any time.

     4.11 Further  Actions.  Promptly  upon the request of Lender,  Debtor shall
execute,  acknowledge  and  deliver  any and  all  further  documents,  security
agreements,  financing statements and assurances, and do or cause to be done all
further  acts as Lender  may  require to confirm  and  protect  the lien of this
Agreement or otherwise to accomplish the purposes of this Agreement.

5. RECEIVABLES. Debtor covenants and agrees as follows:

     5.1  Collection.  Debtor shall  continue to collect and enforce all present
and future payments due to Debtor pursuant to the accounts, leases or any of the
other Collateral (collectively,  the "Receivables") until Lender notifies Debtor
and  the  obligors  under  the  Receivables  of  Lender's  interest  under  this
Agreement,  after  which time  Debtor  shall hold any  proceeds  collected  with
respect to the Receivables in trust for Lender and shall cooperate and assist in
collection and  enforcement of the  Receivables.  Debtor shall not commingle the
proceeds and shall turn the proceeds over to Lender immediately upon receipt.

     5.2 Updates.  Debtor shall,  immediately upon request from Lender,  provide
Lender with an updated  list of the  Receivables,  stating the current  name and
address of each obligor,  the balance due, the amount of any setoffs,  defenses,
contras or  counterclaims,  whether  Debtor's  performance is complete,  and any
other comments  required by Lender.  Each update list shall be Debtor's warranty
that (i) the  Receivables are valid and  enforceable and owing,  subject only to
reported  offsets,  (ii) if  evidenced  by  a  note,  chattel  paper,  or  other
instrument  or  document,  it has been  endorsed  and  delivered  to Lender,  or
(iii) Debtor does not know of any death, dissolution,  liquidation,  insolvency,
bankruptcy, appointment of receiver, or similar action by or against any obligor
of the Receivables.

     5.3 Notice to Obligors. Lender may notify obligors under the Receivables of
the existence of this Agreement,  and Lender may instruct the obligors under the
Receivables to make future  payments to Lender  (whether before or after default
by Debtor).

     5.4 Actions of Lender.  Debtor agrees that Lender shall be entitled, in its
own name (or in the name of Debtor,  or by receiver,  or  otherwise)  but at the
sole expense of Debtor, to collect,  demand,  receive, sue for or compromise any

                                       6

<PAGE>

and all of the Receivables, to give good and sufficient releases, to endorse any
checks,  drafts or other  orders for the  payment of money  payable to Debtor in
payment of the Receivables  and, in Lender's  discretion,  to file any claims or
take any other  action or  proceeding  which Lender  deems  advisable.  Upon the
occurrence of an Event of Default,  to establish a United States Post Office Box
in the name of Debtor but under the exclusive  custody and control of Lender, to
direct  all  obligors  on any  Receivable(s)  or  other  intangible  to make all
payments  due and to become due  thereon to the United  States  Post  Office Box
established by Lender in the name of Debtor or to make said payments directly to
Lender,  to direct the Postmaster of the United States Post Office to forward to
Lender all mail  addressed to Debtor or to hold all mail  addressed to Debtor at
the Post Office until an officer or employee of Lender shall request  possession
of same,  to open  and  dispose  of all  mail,  howsoever  received  by  Lender,
addressed  to Debtor,  and to endorse  any item  howsoever  received  by Lender,
representing any payment on or other proceeds or products of the Collateral.

     5.5 No Duty.  Debtor  acknowledges  and  agrees  that  Lender  shall not be
required  or  obligated  to make any,  demand or to make any  inquiry  as to the
nature or  sufficiency  of any payment  received  by Lender with  respect to the
Receivables  or to present to file any claim or take any other action to collect
or enforce the payment of any amounts with respect to the  Receivables  assigned
to Lender.

6.  REIMBURSEMENT  OF  EXPENSES.  Debtor  shall  be  responsible  for and  shall
reimburse Lender for all costs and expenses, including attorneys' fees, incurred
by Lender in drafting and enforcing  the rights of Lender under this  Agreement.
All  costs and  expenses  shall be  included  in the  Indebtedness  and shall be
immediately due and payable together with interest at the maximum rate in effect
under the Promissory Note and the Loan Documents.  Such costs and expenses shall
include,  without  limitation,  costs or  expenses  incurred  by  Lender  in any
bankruptcy,   reorganization,   insolvency  or  other  similar  proceeding.  Any
reference in this Agreement to attorneys' fees shall mean fees,  charges,  costs
and expenses of both in house and outside counsel and paralegals, whether or not
a suit or  proceeding  is  instituted,  and whether  incurred at the trial court
level, on appeal, in a bankruptcy,  administrative or probate  proceeding,  in a
workout,  in consultation with counsel,  or otherwise.  All costs,  expenses and
fees of any nature for which  Debtor is  obligated  to  reimburse  or  indemnify
Lender are part of the  Indebtedness  secured by this  Agreement and are payable
upon demand,  unless expressly provided otherwise,  with interest at the highest
rate charged by Lender on any of the Indebtedness (but not to exceed the maximum
rate permitted by law).

7.  RIGHTS AND  OBLIGATIONS  OF LENDER.  In the event that  Debtor  fails to pay
taxes,  maintain  insurance or perform any other  obligation  arising under this
Agreement,  Lender  may pay or perform  such  obligation(s)  for the  account of
Debtor and the same shall be added to the  Indebtedness and shall be immediately
due and payable  together with interest at the highest rate charged by Lender on
any of the  Indebtedness  (but not to exceed the maximum rate permitted by law).
Lender  shall not be liable for any loss to the  Collateral  nor shall such loss
reduce the amount of the  Indebtedness.  Lender will use reasonable  care in the
custody and  preservation of any Collateral in Lender's  possession,  but Lender
has no duty to preserve rights against prior parties.

                                       7

<PAGE>

8. INDEMNIFICATION. Debtor shall indemnify, defend and save Lender harmless from
all claims,  liabilities,  obligations,  damages,  fines,  costs,  and expenses,
including  attorneys'  fees,  incurred  by Lender  and causes of action or other
rights  asserted  against  Lender and  relating  to this  Agreement  or Debtor's
obligations  hereunder and/or the Collateral,  its ownership,  use,  collection,
disposition or compliance with applicable law.

9. EVENTS OF DEFAULT AND REMEDIES.

     9.1 Events of Default.  Any of the following  events shall, for purposes of
this Agreement, constitute an "Event of Default":

     9.1.1 Failure by Debtor or any  co-obligor to pay any payment of principal,
interest,  bonus amount or Reserve or any other amount owing on the Indebtedness
when due, whether by maturity, acceleration or otherwise.

     9.1.2 Any failure by Debtor,  any co-obligor or any guarantor of all or any
part of the  Indebtedness  to comply with, or breach by Debtor,  any co-obligor,
any guarantor or any subordinator of any of the terms, provisions, warranties or
covenants of this Agreement or any of the Loan Documents (as defined in the Loan
Agreement) after the lapse of any period such agreements of documents afford for
remedy of the breach.  Notwithstanding  any  provision to the  contrary,  in the
event of a non-monetary or non-financial default, Debtor shall have a reasonable
time but not longer than  thirty  (30) days from the date of Lender's  notice to
cure such  default if such  default is curable,  otherwise  no cure period shall
apply.

     9.1.3   Termination,   cancellation,   or   disclaimer   of   liability  or
enforceability  of any guaranty or  subordination  agreement given in connection
with any of the Indebtedness.

     9.1.4  Institution of remedial  proceedings or other exercise of rights and
remedies by the holder of any security interest or other lien against any of the
Collateral.

     9.1.5 The  insolvency  of Debtor,  any  co-obligor  or any guarantor or the
admission in writing of Debtor's,  any co-obligor's or any guarantor's inability
to pay debts as they mature.

     9.1.6 Any statement,  representation or information made or furnished by or
on behalf of Debtor, any co-obligor,  any guarantor or subordinator to Lender in
connection  with or to induce  Lender to provide any of the  Indebtedness  shall
prove to be false or materially misleading when made or furnished.

     9.1.7  Institution  of  bankruptcy,  reorganization,  insolvency  or  other
similar proceedings by or against Debtor, any co-obligor or any guarantor or the
appointment of a receiver,  custodian or trustee for the Debtor,  any co-obligor
or any guarantor or any substantial portion of its assets.

                                       8

<PAGE>

     9.1.8 Any loss, theft, substantial damage or destruction to the Collateral,
unless insured as required by this Agreement or other document;  or the entry of
any judgment in an amount greater than  Twenty-Five  Thousand and 00/100 Dollars
($25,000.00) against Debtor, any co-obligor,  or any guarantor,  or the issuance
or filing of any judgment,  attachment, levy, garnishment or the commencement of
any related  proceeding  or judicial  process upon or in respect to Debtor,  any
co-obligor  or any guarantor or the  Collateral  unless such action is stayed by
payment or an appropriate court order within 21 days after filing.

     9.1.9 Sale or other disposition by Debtor,  any co-obligor or any guarantor
of any substantial  portion of assets or property,  or equity, or a distribution
to shareholders outside the ordinary course of business, or death,  dissolution,
merger, consolidation, termination of existence, insolvency, business failure or
assignment  for the benefit of creditors of or by Debtor,  any co-obligor or any
guarantor.

     9.1.10 If there is any failure by Debtor,  any  co-obligor or any guarantor
to pay when due any  indebtedness,  or in the  observance or  performance of any
term, covenant or condition in any document evidencing,  securing or relating to
such indebtedness.

     9.1.11  There  is a  substantial  change  in the  existing  or  prospective
financial condition of Debtor, any co-obligor,  any guarantor or the Collateral,
which  Lender in good faith  determines  to be  materially  adverse  that is not
corrected or resolved to the Lender's satisfaction within thirty (30) days after
notice of the change to Debtor.

     9.1.12  Lender in good faith deems  itself  insecure  provided  that Lender
notifies  Debtor of the related  event(s) or  condition(s)  and Debtor  fails to
correct or resolve the same to Lender's  reasonable  satisfaction  within thirty
(30) days afterwards.

     9.2  Remedies.  Upon the  occurrence  of any  Event of  Default  which  has
occurred and is continuing, Lender shall have the right to do the following:

     9.2.1 Declare all or part of the Indebtedness immediately due and payable.

     9.2.2  Institute  legal  proceedings  to  foreclose  the lien and  security
interest  granted  by  this  Agreement,  to  recover  judgment  for  all  of the
Indebtedness  then due and owing, and to collect it out of any of the Collateral
or the proceeds of its sale.

     9.2.3  Institute  legal  proceedings  for the sale,  under the  judgment or
decree of any court of competent jurisdiction, of any or all of the Collateral.

     9.2.4  Personally or by agents,  attorneys,  or  appointment of a receiver,
enter upon any premises where any Collateral is located,  and take possession of
any of it and all related records and/or render any of it unusable;  and without
being responsible for its loss or damage, hold, operate, sell, lease, or dispose
of,  all or any of the  Collateral  at one or  more  public  or  private  sales,
leasings or other dispositions,  at places and times and on terms and conditions

                                       9

<PAGE>

as Lender may deem fit, without any previous demand or advertisement; and except
as provided in this Agreement, and to the extent permitted by law, Debtor waives
all notice of sale, lease or other  disposition,  and  advertisement,  and other
notice or demand,  any right or equity of  redemption,  and any  obligation of a
prospective  purchaser  or lessee to  inquire as to the power and  authority  of
Lender  to sell,  lease or  otherwise  dispose  of the  Collateral  or as to the
application  by  Lender  of the  proceeds  of sale  or  otherwise,  which  would
otherwise be required by, or available to Debtor under, applicable law.

     9.2.5 Take  possession of the Collateral (and any other property then in or
on the Collateral) and all related records,  with or without demand, and with or
without  process of law;  sell and  dispose of the  Collateral  in any amount or
order and to distribute the proceeds according to law. Any statutory requirement
for notice  shall be met if Lender shall send notice to Debtor at least five (5)
days prior to the date of sale,  disposition or other applicable  event.  Debtor
shall  be  liable  for  any  deficiency   remaining  after  disposition  of  the
Collateral.

     9.2.6 Notify all persons  obligated under any of the Collateral to make all
payments to Lender and demand,  collect,  sue for, receive,  receipt for, settle
and  compromise,  extend or  postpone  the time for  payment  of,  forbear  from
enforcing, and otherwise do all things Debtor could do in connection therewith.

     9.2.7  Exercise any one or more of the rights and remedies under the UCC or
at law or equity to enforce the payment of the Indebtedness.

     9.3 Remedies Generally.

     9.3.1 At any sale  pursuant to this  Agreement,  physical  or  constructive
possession of the Collateral is not required and any purchaser may  conclusively
rely on the recitals in any evidence of conveyance and shall have not obligation
to  see  to the  application  of the  purchase  money.  Any  sale  of any of the
Collateral  under this  Agreement  shall be a perpetual bar against  Debtor with
respect to that Collateral.

     9.3.2 Debtor agrees, upon request of Lender, to assemble the Collateral and
all  related  records  and make it  available  to Lender  at any place  which is
reasonably  convenient for Lender. Debtor grants Lender permission to enter upon
any premises owned or occupied by Debtor for the purpose of taking possession of
the Collateral.  Debtor agrees to notify all persons  obligated under any of the
Collateral to make all payments to Lender.

     9.3.3 All remedies  provided for under this Agreement shall be available to
the extent not prohibited by law. Each remedy shall be cumulative and additional
to any  other  remedy of Lender  at law,  in equity or by  statute.  No delay or
omission to exercise  any right or power  accruing  upon any default or Event of
Default  shall  impair  any such  right or power or shall be  construed  to be a
waiver of, or acquiescence in, any such default or Event of Default.

     9.4  Application  of  Proceeds.  Any  proceeds  received by Lender from the
exercise of its remedies shall be applied as follows:

                                       10

<PAGE>

     9.4.1 First, to pay all costs and expenses incidental to disposition of the
Collateral,  including,  without limit,  reasonable  attorneys  fees, any taxes,
assessments,  liens and encumbrances prior to the lien of this Agreement.  9.4.2
Second, to the payment of the Indebtedness in the following order:  (i) Lender's
expenses made to perform Debtor's  obligations,  (ii) late  charges and interest
accrued  and  unpaid,  (iii) any  prepayment  premiums  and any  bonus  amounts,
(iv) unpaid fees and other charges, and (v) the outstanding principal balance.

     9.4.3 Third, any surplus  remaining shall be paid to Debtor or to whosoever
may be lawfully entitled.

10. MISCELLANEOUS.

     10.1 Governing Law. This Agreement shall be construed according to the laws
of the State of Michigan.

     10.2  Successors and Assigns.  Lender shall have the right to assign any of
the Indebtedness and deliver all or any part of the Collateral  without Debtor's
consent.  This  Agreement  shall be binding upon the  successors  and assigns of
Debtor  including,  without  limit,  any  debtor in  possession  or  trustee  in
bankruptcy  for  Debtor,  and the rights  and  privileges  of Lender  under this
Agreement  shall inure to the benefit of its successors and assigns.  This shall
not be deemed a consent by Lender to a  conveyance  by Debtor of all or any part
of the Collateral or of any ownership interest in Debtor.

     10.3 Notices.  Notice from one party to another relating to this Agreement,
if  required,   shall  be  deemed  effective  if  made  in  writing   (including
telecommunications)  and  delivered  to the  recipient's  address or  telecopier
number set forth by any of the following  means:  hand  delivery,  registered or
certified mail, postage prepaid, express mail or other overnight courier service
or telecopy,  telex or other wire  transmission  with  request for  assurance of
receipt in a manner typical with respect to  communications of that type. Notice
made in accordance with these provisions shall be deemed delivered on receipt if
delivered by hand or wire transmission,  on the third business day after mailing
if mailed by  registered  or certified  mail,  or on the next business day after
mailing or deposit with the postal  service or an overnight  courier  service if
delivered  by express  mail or  overnight  courier to the  following  address or
number:

         If to Secured Party:

         Caithness Financial Services Limited
         141 Adelaide Street West, Suite 500
         Toronto, ON
         Canada M5H 3L5
         Attn:    William Smethurst
         Facsimile No.: 416-363-0456

                                       11

<PAGE>

         If to Debtor:

         Loretta Food Group, Inc.
         2405 Lucknow Drive
         Mississauga, ON
         Canada L5S 1H9
         Attn:    Al Burgio
         Facsimile No.: (905) 678-0733

     10.3.1  Entire  Agreement;  Waivers;  Amendments.  This  Agreement  and any
agreement to which it refers state all rights and obligations of the parties and
supersede  all other  agreements  (oral or written) with respect to the security
interests  granted by this  Agreement.  Any  waiver by Lender of any  default or
Event of  Default  shall be in writing  and shall be  limited to the  particular
default waived and shall not be deemed to waive any other default. Any amendment
of this Agreement  shall be in writing and shall require the signature of Debtor
and Lender.

     10.4  Partial  Invalidity.   The  invalidity  or  unenforceability  of  any
provision of this Agreement shall not affect the validity or  enforceability  of
the remaining provisions of this Agreement.

     10.5 Inspections. Any inspection, audit, appraisal or examination by Lender
or its agents of the Collateral or of information or documents pertaining to the
Collateral is for the sole purpose of protecting  Lender's  interests under this
Agreement and is not for the benefit or protection of Debtor or any third party.

     10.6 Joint and Several Liability. In the event that more than one person or
entity executes this  Agreement,  the obligations of each person or entity shall
be joint and several and may be enforced  against any one or more of them in any
order without releasing any of the others.

     10.7  Automatic   Reinstatement.   Notwithstanding  any  prior  revocation,
termination, surrender or discharge of this Agreement, the effectiveness of this
Agreement shall automatically continue or be reinstated,  as the case may be, in
the event that any payment  received or credit given by Lender in respect of the
Indebtedness is returned, disgorged or rescinded as a preference,  impermissible
setoff, fraudulent conveyance,  diversion of trust funds, or otherwise under any
applicable state or federal law,  including,  without limit,  laws pertaining to
bankruptcy or insolvency,  in which case this Agreement  shall be enforceable as
if the returned,  disgorged or rescinded payment or credit had not been received
or given,  whether or not Lender  relied upon this  payment or credit or changed
its  position  as  a  consequence  of  it.  In  the  event  of  continuation  or
reinstatement of this Agreement,  Debtor agrees upon demand by Lender to execute
and deliver to Lender those documents which Lender determines are appropriate to
further  evidence (in the public  records or  otherwise)  this  continuation  or
reinstatement,  although  the failure of Debtor to do so shall not affect in any

                                       12

<PAGE>

way the reinstatement or continuation. If Debtor does not execute and deliver to
Lender  such  documents  upon  demand,  Lender  and each  officer  of  Lender is
irrevocably  appointed (which  appointment is coupled with an interest) the true
and lawful attorney of Debtor (with full power of  substitution)  to execute and
deliver such documents in the name and on behalf of Debtor.

     10.8 WAIVER OF JURY TRIAL.  DEBTOR AND LENDER ACKNOWLEDGE THAT THE RIGHT TO
TRIAL BY JURY IS A  CONSTITUTIONAL  ONE, BUT THAT IT MAY BE WAIVED.  EACH PARTY,
AFTER  CONSULTING  (OR HAVING HAD THE  OPPORTUNITY  TO CONSULT)  WITH COUNSEL OF
THEIR CHOICE,  KNOWINGLY AND VOLUNTARILY,  AND FOR THEIR MUTUAL BENEFIT,  WAIVES
ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION  REGARDING THE PERFORMANCE
OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE INDEBTEDNESS.

                                       13

<PAGE>

     This  Security  Agreement  is dated and  effective  on the date first above
written.

                                                     DEBTOR:
                                                     LORETTA FOOD GROUP, INC.,
                                                     a Delaware corporation
                                                     By:
                                                       -----------------------
                                                              Al Burgio
                                                     Its:     President

Location of the Collateral and all records:
2405 Lucknow Drive
Mississauga, ON
Canada L5S 1H9

                                       14LEASE AGREEMENT

(1) THIS LEASE AGREEMENT made this 25th day of February, 2005, by and between MB
Monroe Properties Inc. (MB), a Michigan Corporation whose address is 115 Foxhunt
Crescent,  Syosset  NY  11791,  (the  "Lessor"),  hereafter  designated  as  the
Landlord,  and Loretta  Baking  Products  Ltd.,  a Michigan  corporation,  whose
address  is 317  Front  Street,  Monroe  Michigan  (the  "Lessee"),  hereinafter
designated  as the Tenant.  Monaco  Group  Inc.,  a Delaware  Corporation  whose
address is 2405 Lucknow Drive, Mississauga,  Ontario, Canada L5S 1H9 ("MGI"), is
the parent and sole  shareholder  of Loretta  Baking  Products  Ltd.  and is the
guarantor of this lease.  This Lease Agreement shall be effective on the closing
date (the  "Closing  Date") of the real  estate  purchase  agreement  (the "Real
Estate Purchase Agreement") by and between MB Monroe Properties Inc. and Loretta
Baking Mix Products  Ltd.  whereby MB Monroe  Properties  Inc.  shall become the
owner of the  Leased  Premises  (defined  below).  If the Real  Estate  Purchase
Agreement is terminated, then this Lease Agreement shall become null and void.

                                   WITNESSETH:

DESCRIPTION
(2) The Landlord,  in  consideration of the rents to be paid and the
covenants and agreements to be performed by the Tenant and the  Guarantor,  does
hereby lease unto the Tenant Premises (the "Leased Premises") situated in Monroe
County, City of Monroe,  Michigan,  commonly known as 317 Front Street,  Monroe,
Michigan to-wit:

                  SEE ATTACHED LEGAL DESCRIPTION AS Exhibit A.

TERM
(3)  (A) The term of the Lease  shall be for ten (10)  years  from and after the
Closing Date. The Landlord,  at its sole discretion,  may allow Tenant to remain
in the Leased Premises for an extended period, subject to the terms of paragraph
3 (B). Any subsequent  extension beyond the initial renewal will be for five (5)
additional  years,  or such  other term as the  Landlord  shall  designate.  All
provisions of this Lease shall apply during all extension terms hereof.

     (B) If Tenant fully  complies with each and every covenant and condition as
contained in this Lease, and the Lease continues in full force and effect during
the entire original ten (10) year term the Tenant, at its option, may extend the
term of this lease for an additional  five (5) year period,  upon the same terms
and conditions as herein contained, except for the monthly rental payment, which
shall be as described in paragraph  (4) hereafter  (the  "Extended  Lease").  If
Tenant  desires to exercise  this option to extend under the Lease,  Tenant must
give written notice to Landlord of its intention to exercise the option to renew
not less than two  hundred  seventy  (270) days prior to the  expiration  of the
original term of this lease,  which written  notice must be provided to Landlord
either by hand  delivery or by receipt of  Landlord  via  certified  mail of the
written  notice,  which  written  notice,  if sent by  certified  mail,  must be
received by Landlord not less than two hundred  seventy  (270) days prior to the
expiration of the original  term of the lease.  If Tenant does not exercise this
option,  Tenant  agrees to vacate the premises  and have all  personal  property
belonging to Tenant  removed by the date that is one hundred twenty (120) months
after the Closing Date.

<PAGE>

     (C) If the Tenant  exercises  its option to extend the term of the original
lease in accordance  with paragraph 3(B),  then the Tenant,  at its option,  may
extend the term of the Extended  Lease for an  additional  five (5) year period,
upon the same terms and conditions of the Extended  Lease.  If Tenant desires to
exercise  this  option to extend  under the  Extended  Lease,  Tenant  must give
written  notice to Landlord of its intention to exercise the option to renew not
less than two hundred seventy (270) days prior to the expiration of the original
term of this lease,  which written notice must be provided to Landlord either by
hand  delivery  or by receipt of  Landlord  via  certified  mail of the  written
notice,  which written  notice,  if sent by certified  mail, must be received by
Landlord not less than two hundred seventy (270) days prior to the expiration of
the term of the Extended Lease.

RENT
(4) The  annual  Rent for the  initial  term of the  Lease,  which Rent does not
include  additional  amounts to be paid by Tenant as set forth in paragraph (5),
(6) and any  amounts,  other than Rent,  which  Tenant  may be  required  to pay
pursuant  to  additional  terms of this Lease,  totals One  Hundred  Twenty Five
Thousand Dollars,  with monthly Rent payments in the amount of Ten Thousand Four
Hundred Sixteen Dollars and sixty seven cents ($10,416.00) Dollars per month due
on the first day of each month,  beginning on the Closing Date,  and  subsequent
payments  ($10,416.67)  due every month on the 1st day of each month  thereafter
until all Rent  amounts  herein have been paid in full for the year.  The annual
rental shall  increase each year by 5% over the preceding  year's rent until the
lease expiration in 2014.

If the Tenant  shall  default  in any  payment  or  expenditure  other than Rent
required  to be paid or  expended  by the  Tenant  under the terms  hereof,  the
Landlord may at its option make such payment or expenditure,  in which event the
amount thereof shall be paid as rental to the Landlord by the Tenant on the next
ensuing day Rent would be due,  together  with interest at ten (10%) percent per
annum from the date any payment or  expenditure  other than Rent  required to be
paid or  expended  by the  Tenant  was due or from the date of such  payment  or
expenditure  by the Landlord  and on default in such payment the Landlord  shall
have the same  remedies as on default in payment of rent. If the Tenant shall be
in default in the payment of Rent required to be paid pursuant to Paragraph 4 of
this Agreement,  a late fee in the amount of One Hundred ($100.00) Dollars shall
become  due and owing and paid as rental to the  Landlord  by the  Tenant on the
next  ensuing  day Rent would be due and on default  of such  payment,  Landlord
shall be entitled to pursue all legal or equitable  remedies it may have against
Tenant.  If the Tenant  defaults on any rent or required  payments  and does not
cure any default within 10 business days of said default,  the landlord shall be
entitled to accelerate all rental payments due under the terms of this lease and
the landlord  may, at its sole  discretion  declare the lease null  canceled and
require the tenant to vacate the premises.

All payments of Rent or other sums to be made to the  Landlord  shall be made at
such place as the Landlord  shall  designate  in writing from time to time.  The
Landlord shall have the option to receive the monthly lease  payments  either in
the form of cash or shares of common stock of MGI ("Monaco Shares").  The Monaco
Shares shall be registered pursuant to MGI's S-8 stock plan at the closing price
on the date of payment.

RENT SECURITY AND ADDITIONAL INDUCEMENT IN FAVOR OF LANDLORD
a) The Tenant shall pay the landlord $24,000 as security deposit upon signing of
this lease agreement.

b) MGI agrees to guarantee all the lease  payments  payable by the Tenant to the
Landlord  pursuant  to the terms and  conditions  of this  Lease and will  issue
600,000  Monaco Shares of its common stock to the Landlord,  which shall be held

                                       2

<PAGE>

in escrow,  by an escrow  agent to be mutually  agreed upon by the parties  (the
"Escrow  Agent"),  as  additional  collateral to guarantee  payments  under this
Lease.  Said shares shall have piggy back  registration  rights and, at the sole
discretion  of the Landlord,  may be used in  connection  with the share payment
option of the Landlord as described above in this paragraph (4).

c) As an inducement to the Landlord to acquire the premises from Monroe Bank and
Trust and to lease the premises to the Tenant, MGI agrees to grant three hundred
fifty thousand  (350,000) options on its common stock  ("Stock-Options")  to the
Landlord.  The  350,000  Stock-Options  shall  be  validly  issued  by  MGI  and
irrevocably  granted to the Landlord and evidenced by a written option agreement
pursuant  to Rule  144.  The  option  period  shall be valid for seven (7) years
following the date granted to acquire 350,000 shares of the capital stock of MGI
at a per share price of $1.50.  Shares  underlying the above warrants shall have
piggy back registration rights. The number of shares underlying the options will
be adjusted  upward pari pasu with any forward splits or downward in the case of
any  reverse  splits but in no case shall the  Landlord be entitled to less than
150,000  shares under the option  agreement.  The options shall be issued at the
time of the execution of this Lease.

d) MGI herby represents that it has induced the Landlord to acquire the property
at 317 Front  Street in Monroe,  Michigan  in order to be able to  complete  the
acquisition  of the  business  formerly  owned by  Amendt  Corporation  ("Amendt
Business")  from Monroe Bank & Trust and to be able to operate the  facility for
the benefit of the Tenant and MGI. MGI  represents  that the  acquisition of the
Amendt  Business  is a critical  part of MGI's  strategic  business  plan and is
therefore  binding itself as a party to this lease agreement and hereby warrants
and  guarantees  all  of the  terms,  conditions  and  representations  in  this
agreement as though it were the Tenant in this contract.

INSURANCE
(5) In addition to the rentals hereinbefore specified,  the Tenant agrees to pay
as additional  rental all premiums for  insurance,  as described in Paragraph 11
hereof, that are charged during the term of the Lease on the Leased Premises and
on the improvements situated on said Leased Premises, which amount shall be paid
as and when due to the insurance company issuing the subject insurance and which
amount is in addition to the amount set forth in Paragraph 4 above.

TAXES
(6) In addition to the rentals hereinbefore specified,  the Tenant agrees to pay
as additional  rental all taxes that may be charged during the term of the Lease
on the Leased Premises and on the improvements situated on said Leased Premises,
which amount shall be due as and when the same are due  according to the charges
billed and before interest accrues on the amounts due.

ASSIGNMENT
(7) The Tenant  covenants not to assign or transfer this Lease or hypothecate or
mortgage the same or sublet said Leased Premises or any part thereof without the
written  consent  of the  Landlord.  Any  assignment,  transfer,  hypothecation,
mortgage or subletting  without said written consent shall give the Landlord the
right to terminate this Lease and to re-enter and repossess the Leased Premises.

                                       3

<PAGE>

BANKRUPTCY AND INSOLVENCY
(8) The  Tenant  agrees  that if the  estate  created  hereby  shall be taken in
execution,  or by other  process  of law,  or if the  Tenant  shall be  declared
bankrupt or  insolvent,  according to law, or any receiver be appointed  for the
business and property of the Tenant,  or if any assignment  shall be made of the
Tenant's  property  for the  benefit of  creditors,  then and in such event this
Lease may be canceled at the option of the Landlord.

RIGHT TO MORTGAGE
(9) The Landlord reserves the right to subject and subordinate this Lease at all
times to the lien of any mortgage or mortgages now or hereafter  placed upon the
Landlord's interest in the said Leased Premises and on the land and buildings of
which the said Leased Premises are a part or upon any buildings hereafter placed
upon the land of which the Leased Premises form a part. The Tenant covenants and
agrees to execute and deliver upon demand such further instrument or instruments
subordinating  this Lease to the lien of any such mortgage or mortgages as shall
be desired by the Landlord and any mortgagees or proposed  mortgagees and hereby
irrevocably  appoints the Landlord the attorney-in-fact of the Tenant to execute
and  deliver  any  such  instrument  or  instruments  for and in the name of the
Tenant.

USE AND OCCUPANCY
(10) It is  understood  and agreed  between the parties  hereto that said Leased
Premises  during the  continuance  of this Lease shall be used and  occupied for
those purposes  required by Tenant as a manufacturer  and  distributor of baking
mix products and for no other purpose or purposes without the written consent of
the  Landlord,  and that the  Tenant  will not use the Leased  Premises  for any
purpose in violation of any law, municipal ordinance or regulation,  and that on
any breach of this  agreement  the Landlord may at their option  terminate  this
Lease forthwith and re-enter and repossess the Leased Premises.

FIRE AND INSURANCE

(11) It is  understood  and agreed  that if the Leased  Premises  are damaged or
destroyed in whole or in part by fire,  the elements or other  casualty which is
insured under insurance carried by Landlord during the term hereof, the Landlord
shall,  within one  hundred  eighty  (180)  days from the date of the  casualty,
repair and restore the Leased  Premises to good tenantable  condition,  and that
the rent  herein  provided  for shall abate  entirely in case the entire  Leased
Premises are untenantable and pro rata for the portion rendered untenantable, in
case a part  only is  untenantable,  until  the  same  shall  be  restored  to a
tenantable condition; provided, however, that if the Tenant shall fail to adjust
its own insurance or to remove its damaged goods,  wares,  equipment or property
within a reasonable  time, and as a result thereof the repairing and restoration
is delayed,  there  shall be no  abatement  of rental  during the period of such
resulting delay, and provided further that there shall be no abatement of rental
if such fire or other cause  damaging or destroying  the Leased  Premises  shall
result  from  the  negligence  or  willful  act of the  Tenant,  its  agents  or
employees,  and  provided  further  that if the Tenant shall use any part of the
Leased  Premises  for storage  during the period of repair a  reasonable  charge
shall be made therefore  against the Tenant,  and provided  further that in case
the  Leased  Premises,  or the  building  of  which  they  are a part,  shall be
destroyed to the extent of more than one-half of the value thereof, the Landlord
may at its option  terminate  this Lease  forthwith  by a written  notice to the
Tenant.  In no event  shall  Landlord  be  required  to  expend in excess of the
insurance proceeds allocated to the Leased Premises which Landlord receives from
its insurance  carrier to repair and restore the Leased  Premises.  In the event
Landlord  repairs or  restores  the Leased  Premises,  any  amount  expended  by
Landlord in repairing or restoring  the Leased  Premises  which are in excess of
the proceeds of  insurance  received by  Landlord,  said excess  amount shall be

                                       4

<PAGE>

repayable  by Tenant to Landlord  within ten (10) days after  received by Tenant
from  Landlord  of a  statement  setting  forth the amount of such  excess.  The
Landlord's  insurance  carrier shall determine the amount of insurance  proceeds
attributable to the damage to such improvements,  which  determination  shall be
binding upon Landlord and Tenant.

The Tenant  agrees,  at its sole cost and expense,  to keep the Leased  Premises
insured with a responsible Insurance Company with the Landlord being named as an
additional  insured for all risk hazard insurance for fire and extended coverage
(the "All Risk  Policy")  and to deliver the policy or policies to the  Landlord
and upon its failure to do so the Landlord may place such  insurance  and charge
the same to the Tenant as so much  additional  rent as provided in Paragraph (4)
and (5);  but the failure on the part of the  Landlord  to place such  insurance
does not release the Tenant of the liability.  The All Risk Policy shall provide
not  less  than  thirty  (30)  days  written  notice  to  the  Landlord   before
cancellation.

The Tenant also  agrees to procure  and keep in effect  during the term hereof a
policy or policies for Rental Interruption  Insurance,  in an amount which would
fully cover all Rent and  additional  amounts owing by Tenant under the terms of
this Lease for the entire unexpired Term of the Lease,  which insurance shall be
provided  by an insurer  authorized  or  licensed to do business in the State of
Michigan.  The cost of the foregoing  insurance  coverage  shall be incurred and
paid for by Tenant.  The Landlord shall be named as an additional  insured under
said policy.  Tenant shall  deliver a copy of the policy or policies to Landlord
upon  Landlord's  request and upon its failure to do so, the  Landlord may place
such insurance and charge the same to the Tenant as so much  additional  rent as
provided in  Paragraph  (4) and (5), but the failure on the part of the Landlord
to place such insurance does not release the Tenant of the liability. The Rental
Interruption  Insurance  policy  shall  provide  not less than  thirty (30) days
written notice to the Landlord before cancellation.

The  Tenant  agrees to procure  and keep in effect at its sole cost and  expense
during the term hereof public  liability and property  insurance for the benefit
of the Landlord (the "PLPD Insurance"), and naming the Landlord as an additional
insured, in the sum of One Million Dollars ($1,000,000.00) for damages resulting
to one person,  One Million Dollars  ($1,000,000.00)  for damages resulting from
one casualty, and One Million Dollars ($1,500,000.00)  property damage insurance
resulting  from any one  occurrence.  Tenant shall  deliver said policies to the
Landlord  and upon  Tenant's  failure so to do the  Landlord may at their option
obtain such insurance and the cost thereof shall be paid as additional  rent due
and payable  upon the next ensuing  rent day.  The PLPD  Insurance  policy shall
provide not less than thirty (30) days  written  notice to the  Landlord  before
cancellation.

REPAIRS AND ALTERATIONS
(12) (A) Tenant,  at its sole cost and  expense,  during the term of this Lease,
shall keep and  maintain in first class  appearance  and in good  condition  and
repair as reasonably determined by Landlord,  the Leased Premises and every part
thereof,  and  all  other  repairs,  replacements,  renewals  and  restorations,
interior and exterior, ordinary and extraordinary,  foreseen and unforeseen, and
all other work as may be needed  performed by or on behalf of Tenant pursuant to
the terms of this Lease.  Tenant agrees to pay Landlord,  as Additional Payments
all costs  associated  with any  maintenance,  materials  used,  or  maintenance
personnel requests by Tenant. Tenant shall keep and maintain the Leased Premises
in a clean, sanitary and safe condition in accordance with the laws of the state
where the Leased  Premises is located  and in  accordance  with all  directions,
rules and regulations of the health officer,  fire marshal,  building inspector,
or other officials of the governmental  agencies having jurisdiction there over,
and Tenant shall comply with all requirements of law,  ordinances and otherwise,
affecting the Leased  Premises,  all at the sole cost and expense of Tenant.  At
the time of the expiration or earlier termination of the tenancy created herein,
Tenant shall surrender the Leased Premises in good order,  condition and repair.

                                       5

<PAGE>

In the event  Tenant  fails to keep the Leased  Premises in good  condition  and
repair and in a neat and clean condition, Landlord may, with written notice, but
shall not be required to do so, take all appropriate action to cure such failure
and make and  complete  such  repairs or  cleaning  and Tenant  shall  reimburse
Landlord as  additional  rent all costs  incurred by Landlord  relating  thereto
within ten (10) days after Tenant's receipt of an invoice therefore.

     (B) Tenant  covenants and agrees it shall keep the Leased  Premises and all
parts of the  Leased  Premises  free  from  all  liens  arising  out of any work
performed,  materials  furnished or obligations  incurred by or for Tenant,  and
agrees to bond against or discharge  any such lien within thirty (30) days after
written request therefore by Landlord.  Tenant shall reimburse  Landlord for all
costs and expenses,  including  actual  attorney fees,  which may be incurred by
Landlord  by reason of the filing of any such liens  and/or the removal of same,
such  reimbursement to be made within ten (10) days after receipt by Tenant from
Landlord  of a written  statement  setting  forth the  amount of such  costs and
expenses.  The failure of Tenant to pay any such amount to Landlord  within said
ten (10) day period shall carry with it the same  consequences as failure to pay
any installment of Rent. Notwithstanding anything contained in this Lease to the
contrary,  Tenant shall not be deemed to be Landlord's agent with respect to any
alterations,  additions  or  improvements  made by or on behalf of Tenant to the
Leased Premises.  Nothing contained in this Lease shall enable Tenant to subject
the Leased  Premises to any liens as a result of any  alterations,  additions or
improvements made by or on behalf of Tenant to the Leased Premises.

     (C) Tenant  shall not make or cause to be made any  alterations,  additions
and  improvements to the Leased Premises  without the prior written  approval of
Landlord  in each  instance,  which  Landlord  will not  unreasonably  withhold.
Whether with or without prior approval by Landlord as previously referenced, all
alterations,  additions and improvements  made by Tenant shall be deemed to have
attached to the  leasehold and to have become the property of Landlord upon such
attachment.  Upon expiration or earlier  termination of this Lease, Tenant shall
not remove any such alterations,  additions and/or  improvements.  Landlord may,
however, designate, by written notice to Tenant at the time of approval of same,
those  alterations,  additions or improvements  which may or shall be removed by
Tenant  at the  expiration  or  earlier  termination  of this  Lease,  and if so
designated at the time of Landlord's  approval  thereof,  Tenant shall  promptly
remove the same and repair  any  damage to the  Leased  Premises  caused by such
removal. Trade fixtures installed by Tenant, including movable office furniture,
chairs,  and cabinets  may be removed if all Rent and other  payments due herein
are paid in full and Tenant is not otherwise in default hereunder, provided that
Tenant repairs any damage to the Leased Premises caused by such removal.

EMINENT DOMAIN
(13) If all or any part of the  Leased  Premises  shall  be taken by any  public
authority under the power of eminent  domain,  then the term of this Lease shall
terminate as to the part so taken as of the date of taking,  and, in the case of
partial taking, either Landlord or Tenant shall have the right to terminate this
Lease as to the  balance of the Leased  Premises  by notice to the other  within
thirty (30) days after such date.  If the Lease shall be terminated as to a part
or all of the Leased  Premises,  all obligations  under the Lease shall abate in
direct  proportion  to a fraction  whose  numerator is the rentable  area of the
Leased  Premises  as to  which  this  Lease  shall  have  terminated  and  whose
denominator  is the total  rentable area of the Leased  Premises.  If this Lease
shall not be terminated  as to the entire Leased  Premises as the result of such
taking,  the balance of the Leased  Premises  shall be restored by Landlord to a
state which is as useful and  architecturally  complete  as  possible  under the
circumstances.

                                       6

<PAGE>

All damages  awarded  for any taking of all or any part of the Leased  Premises,
including without limitation the leasehold  improvement,  shall belong to and be
the property of Landlord,  whether such damages be awarded as  compensation  for
diminution and value of the leasehold or of Landlord's  fee interest;  provided,
however,  Landlord  shall not be entitled to any portion of the  separate  award
made to  Tenant  for  Tenant's  fixtures,  for  personal  property,  for loss of
business or business  interruption,  or for moving expenses or other  relocation
costs.

CARE OF LEASED PREMISES
(14) The Tenant  shall not perform any acts or carry on any  practices  that may
injure the  building or be a nuisance or menace to other other  buildings in the
immediate  vicinity of the leases  property  and shall keep the Leased  Premises
under its control (including adjoining drives, streets,  parking lots, alleys or
yards) clean and free from rubbish,  dirt, snow and ice at all times,  and it is
further  agreed  that in the  event  the  Tenant  shall not  comply  with  these
provisions,  the Landlord may enter upon said Leased  Premises and have rubbish,
dirt,  snow and ashes  removed  and the  sidewalks  cleaned,  in which event the
Tenant  agrees  to pay all  charges  that the  Landlord  shall  pay for  hauling
rubbish,  ashes, snow removal and dirt, or cleaning walks. Said charges shall be
paid to the  Landlord  by the  Tenant  as soon  as a bill is  presented  and the
Landlord  shall have the same  remedy as is provided  in  Paragraph (4)  of this
Lease in the event of Tenant's failure to pay.

(15) The Tenant shall at its own expense under penalty of forfeiture and damages
promptly comply with all lawful laws,  orders,  regulations or ordinances of all
municipal,  County and State  authorities  affecting the Leased Premises and the
cleanliness, safety, occupation and use of same.

CONDITION OF LEASED PREMISES AT TIME OF LEASE
(16) The  Tenant  further  acknowledges  that it has  examined  the said  Leased
Premises prior to the making of this Lease, and knows the condition thereof, and
that no  representations  as to the  condition or state of repairs  thereof have
been made by the Landlord,  or their agent, that are not herein  expressed,  and
the Tenant hereby  accepts the Leased  Premises in their present  "as is" "where
is" condition at the date of the execution of this Lease.

(17) The Landlord  shall not be responsible or liable to the Tenant for any loss
or damage that may be  occasioned by or through the acts or omissions of persons
occupying  adjoining  premises  or any part of the  building of which the Leased
Premises  are a part or for any loss or damage  resulting  to the  Tenant or its
property from bursting, stoppage or leaking of water, gas, sewer or steam pipes.

RE-RENTING
(18) The Tenant hereby agrees that for a period commencing 270 days prior to the
termination  of this  Lease,  the  Landlord  may show  the  Leased  Premises  to
prospective Tenants and may display in and about said Leased Premises and in the
windows thereof the usual and ordinary "TO RENT" signs.

HOLDING OVER
(19) It is hereby  agreed that there shall be no hold over period in the absence
of a written agreement between the landlord and the tenant

                                       7

<PAGE>

GAS, WATER, HEAT, ELECTRICITY
(20) The Tenant will pay all charges made against said Leased  Premises for gas,
water,  heat and  electricity  during the Term of this Lease,  and any  extended
Terms, and shall pay same as the same shall become due.

ADVERTISING DISPLAY
(21) All signs and advertising  displayed in and about the Leased Premises shall
be such only as advertise the business carried on upon said Leased Premises, and
the Landlord shall control the character and size thereof, with the lettering on
any sign to be approved by Landlord.  No sign shall be displayed  excepting such
as  shall be  approved  in  writing  by the  Landlord,  and no  awning  shall be
installed or used on the exterior of said building unless approved in writing by
the Landlord.

ACCESS TO LEASED PREMISES
(22) The Landlord shall have the right to enter upon the Leased  Premises at all
reasonable  hours for the purpose of inspecting  the same. If the Landlord deems
any  repairs  necessary,  it may demand  that the Tenant  make the same.  If the
Tenant  refuses or neglects  forthwith to commence such repairs and complete the
same with  reasonable  dispatch,  the Landlord may make or cause to be made such
repairs and shall not be  responsible  to the Tenant for any loss or damage that
may accrue by reason  thereof.  If the Landlord  makes or causes to be made such
repairs,  the Tenant agrees that it will forthwith on demand pay to the Landlord
the cost  thereof with  interest at ten (10%)  percent per annum and if it shall
make default in such payment the  Landlord  shall have the remedies  provided in
Paragraph 5 hereof.

The Landlord  reserves the right of free access at all times to the roof of said
Leased  Premises  and  reserves  the  right to rent  said  roof for  advertising
purposes.  The Tenant shall not erect any  structures for storage or any aerial,
or use the roof for any purpose without the written consent of the Landlord.

REENTRY/DEFAULT
(23) In case any  Rent or any  other  payments  shall  be due and  unpaid  or if
default be made in any of the  covenants  herein  contained,  or if said  Leased
Premises shall be deserted or vacated, then it shall be lawful for the Landlord,
its attorney, heirs,  representatives and assigns, to reenter into and repossess
the said Leased  Premises  and the Tenant and each and every  occupant to remove
and put out and to take such other  action as  Landlord  may desire in law or in
equity against Tenant.

QUIET ENJOYMENT
(24) The  Landlord  covenants  that  the  said  Tenant,  on  payment  of all the
aforesaid installments and performing all the covenants aforesaid, shall and may
peacefully and quietly have, hold and enjoy the said demised Leased Premises for
the term aforesaid.

EXPENSES--DAMAGES REENTRY
(25) In the event that the  Landlord  shall,  during the period  covered by this
Lease or during any  Holdover or extension  period,  obtain  possession  of said
Leased Premises by reentry, summary proceedings, or otherwise, in any proceeding
at law or in equity,  the Tenant hereby agrees to pay the Landlord  expenses and
costs incurred in obtaining possession of said Leased Premises and all expenses,
costs and commissions  that may be paid in and about the re-letting of the same.
Tenant shall also pay all of Landlord's  reasonable  attorney fees, court costs,
and all other damages  associated with this and in enforcing any other provision
of this Lease.

                                       8

<PAGE>

REMEDIES NOT EXCLUSIVE
(26) It is agreed  that  each and every of the  rights,  remedies  and  benefits
provided by this Lease shall be  cumulative,  and shall not be  exclusive of any
other of said rights,  remedies and benefits,  or of any other rights,  remedies
and benefits allowed by law.

WAIVER
(27) One or more waivers of any covenant or condition by the Landlord  shall not
be construed as a waiver of a further breach of the same covenant or condition.

INDEMNIFICATION
(28) Tenant shall indemnify and save harmless  Landlord against and from any and
all claims by and on behalf of any person or persons, firm or firms, corporation
or corporations,  or any other entity, including but not limited to any federal,
state,  municipal,  or other  governmental  entity,  arising from any use of the
Leased  Premises  or  anything  whatsoever  done by or on behalf of Tenant on or
after the date of this Lease  Agreement,  and will  further  indemnify  and save
Landlord  harmless  against and from any and all claims or threatened  claims or
actions  arising  from  any  breach  or  default  on the part of  Tenant  in the
performance  of any  covenant or agreement on the part of Tenant to be performed
pursuant  to the terms of this Lease or arising  from any act or  negligence  of
Tenant, or any of its agents,  contractors,  servants,  employees, or licensees,
and from and against all costs, actual attorney fees, expenses,  and liabilities
incurred  in or about any such claim or action or  proceeding  brought  thereon,
including but not limited to any action or threatened action that may arise as a
result of the violation or threatened violation of any federal, state, municipal
or other law,  regulation,  or guideline now in effect or  hereinafter  enacted,
with respect to the impact on the  environment.  In the event that any action or
proceeding shall be brought or shall be threatened against Landlord by reason of
any such claim set forth above, Tenant, upon notice from the Landlord, covenants
to resist or defend at  Tenant's  sole  expense,  such  action,  proceeding,  or
threatened  proceeding,  and shall  retain such legal  counsel or other  support
services as are  satisfactory  to the  Landlord to resist or defend such action,
proceeding,  or threatened  proceeding.  Tenant shall reimburse Landlord for any
and all actual costs and expenses,  including  actual  attorney fees incurred by
Landlord hereunder.

TRIPLE-NET LEASE
(29) It is the  intention  of the  Landlord  and the Tenant that the rent herein
specified  shall  be net  to  the  Landlord  during  the  term  of  this  Lease.
Accordingly,  all costs, expenses, and obligations of every kind relating to the
Leased  Premises,  including but not limited to all taxes and insurance that may
arise or become due  during  the term of this Lease  shall be paid by the Tenant
before the due date hereof and the Landlord  shall be  indemnified by the Tenant
against all costs, expenses, and obligations.

The net rent shall be paid to the Landlord  without notice or demand and without
abatement,  deduction, or set-off. All sums payable hereunder shall be deemed to
be additional rent hereunder;  and in the event of nonpayment by the Tenant, the
Landlord  shall have all the rights and  remedies  with  respect  thereto as the
Landlord has for the nonpayment of the Rent.

Tenant shall  notify  Landlord,  in writing,  with respect to the payment of all
charges  hereunder,  including but not limited to taxes,  insurance,  etc.,  and
shall  include with such notice a copy of the invoice for each such charge and a
copy of the check  tendered to pay such  charge.  Such notice  shall be given to
Landlord  at the time the  payment  is made.  In  addition,  Tenant  shall  send
Landlord a copy of any "paid" receipt it receives with respect to such payments.

                                       9

<PAGE>

In the event  that the Tenant  contests  the  amount or  validity  of any charge
pursuant to this  provision,  the Tenant  shall  nevertheless  promptly pay such
charge.  In the event the Tenant  prevails  with respect to any such  challenge,
then Landlord shall,  within thirty (30) days after the final resolution of that
matter, refund any balance due to the Tenant.

NOTICES
(30)  Whenever  under this Lease a  provision  is made for notice of any kind it
shall be deemed  sufficient  notice and  service  thereof if such  notice to the
Tenant is in writing  addressed  to the  Tenant at its last  known  Post  Office
address or at the Leased Premises and deposited in the mail with postage prepaid
and if such notice to the  Landlord is in writing  addressed  to the Landlord at
the address set forth in  Paragraph 1  of this  Agreement,  and deposited in the
mail with  postage  prepaid,  or at such  other  place as may be  designated  in
writing by either Landlord or Tenant in the future.  Notice need be sent to only
one Tenant or Landlord where the Tenant or Landlord is more than one person.

MISCELLANEOUS
(31) It is agreed  that in this Lease the word "he" shall be used as  synonymous
with the words  "she," "it" and "they," and the word "his"  synonymous  with the
words "her," "its" and "their."

(32) The  covenants,  conditions  and  agreements  made and entered  into by the
parties  hereto are  declared  binding on their  respective  heirs,  successors,
representatives and assigns.

(33) This Lease Agreement shall be governed and construed in accordance with the
laws of the State of Michigan, to which jurisdiction Landlord and Tenant submit.
The  invalidity  or  unenforceability  of any  provision of this Lease shall not
affect or impair the validity or any other portion or provision.

(34) The  covenants,  conditions  and  agreements  made and entered  into by the
parties  hereto are  declared  binding on their  respective  heirs,  successors,
representatives and/or assigns.

(35) This Lease Agreement and the Exhibits,  if any, attached hereto,  set forth
all the covenants,  promises,  agreements,  conditions and understandings by the
Landlord and Tenant  covering the Leased  Premises,  and there are no covenants,
promises,  agreements,  conditions  or  understandings,  either  oral or written
between them other than set forth herein.  No  amendment,  change or addition to
this Lease shall be binding upon Landlord or Tenant,  unless  reduced to writing
and signed by an authorized  representative of each party.  However, by entering
into this Agreement,  Landlord and Tenant acknowledge that Landlord is in no way
waiving any rights or remedies it may have,  in law or in equity,  regarding any
amounts  owing or any previous  violations to any lease or leases for the Leased
Premises  previously  entered into between Landlord and Tenant.  Landlord hereby
reserves  all of its  rights and  remedies  and its  ability to recover  against
Tenant for same as appropriate hereafter.

(36) The captions and article numbers  appearing in this Lease are inserted only
as a matter of convenience and in no way define, limit, construe or describe the
scope or intent of such articles of this Lease, or in any way affect this Lease.

(37) Payment by Tenant or receipt by Landlord of a lesser amount than the Rental
or other charges herein agreed to be paid by Tenant,  at Landlord's sole option,
may be deemed to be on account of the earliest due rents or other  amounts owing
to  Landlord,  or deemed to be on account of rent owing for the  current  period
only,  notwithstanding  any  instructions  by or on  behalf  of  Tenant  to  the
contrary,  which  instructions  shall be null and void,  and no  endorsement  or
statement on any check or any letter  accompanying  any check payment as rent or

                                       10

<PAGE>

other  charges  shall be deemed an accord and  satisfaction,  and  Landlord  may
accept such check or payment  without  prejudice to Landlord's  right to recover
the  balance of such rent or other  charges  or pursue any other  remedy in this
Lease or in law or in equity against Tenant.

(38) The parties  hereto  shall and hereby do waive trial by jury in any action,
proceeding or claim brought by either of the parties hereto against the other on
any matter  whatsoever  arising out of or in any way connected  with this Lease,
the relationship of Landlord and Tenant, Tenant's use or occupancy of the Leased
Premises,  and/or  any claim of injury or  damage.  In the event  that  Landlord
commences any  proceeding  for  non-payment of rent, or any other amount payable
hereunder,  Tenant shall not interpose any  counterclaim  of whatever  nature or
description in any such proceeding.  This shall not, however,  be construed as a
waiver of Tenant's right to assert such claims in any separate action brought by
Tenant.

IN WITNESS WHEREOF,  the parties have hereunto set their hands and seals the day
and year first above written.

NOTARY PUBLIC:                                    LANDLORD:

--------------------                              MB MONROE PROPERTIES INC.

                                                  By:
                                                     ----------------------
                                                     Marguerite Barbella,
                                                     President

NOTARY PUBLIC:                                     TENANT:

---------------------                              LORETTA BAKING PRODUCTS LTD.

                                                  By:
                                                     ----------------------
                                                     Al Burgio,
                                                     President

NOTARY PUBLIC:                                      GUARANTOR:

----------------------                              MONACO GROUP INC.

                                                  By:
                                                     ----------------------
                                                     Al Burgio,
                                                     President

                                       11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00080-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00080-of-00352.parquet"}]]