Document:

Exhibit 10.11

                                                                       Execution

                          PLEDGE AND SECURITY AGREEMENT

      PLEDGE AND SECURITY AGREEMENT dated November 8, 2006, made by AEROBIC
CREATIONS, INC., a Delaware corporation ("Parent"), MARITIME LOGISTICS US
HOLDINGS INC., a Delaware corporation ("MLI"), TUG USA, INC., a New Jersey
corporation, formerly known as Dolphin US Logistics Inc ("TUG USA"), AMR
INVESTMENTS INC, a New Jersey corporation ("AMRI"), FMI HOLDCO I, LLC, a
Delaware limited liability company ("FMI Holdco"), FMI INTERNATIONAL LLC, a
Delaware limited liability company ("FMI International") and SEAMASTER LOGISTICS
INC., a Delaware corporation ("SeaMaster", and together with Parent, MLI, TUG
USA, AMRI, FMI Holdco and FMI International, collectively "Pledgors" and each a
"Pledgor") in favor of FORTRESS CREDIT CORP., a Delaware corporation, in its
capacity as administrative and collateral agent for and on behalf of the Lenders
(as defined below) party to the Loan Agreement referred to below (in such
capacity, the "Pledgee").

                              W I T N E S S E T H:

      WHEREAS, pursuant to the Loan Agreement, dated as of November 8, 2006, by
and among MLI, Parent, Summit Logistics International Inc, a New Jersey
corporation ("Summit"), SeaMaster Logistics Inc., a Delaware corporation
("SeaMaster"), AmeRussia Shipping Company Inc., a Delaware corporation
("AmeRussia Shipping"), FMI International, Fashion Marketing, Inc., a New Jersey
corporation ("FM"), FMI International Corp. (West), a New Jersey corporation
("FMIW"), FMI International Corp., a New Jersey corporation ("FMII"), Freight
Management LLC, a Delaware limited liability company ("FMLLC"), FMI Trucking,
Inc., a New Jersey corporation ("Trucking"), FMI Express Corp., a New Jersey
corporation ("Express"), Clare Freight, Los Angeles, Inc., a California
corporation ("Clare"), TUG New York, Inc., a New York corporation ("TUG NY"),
TUG USA, AMRI and FMI Holdco (each individually, a "Borrower" and collectively,
"Borrowers"), the parties thereto as guarantors on the signature pages to the
Loan Agreement (as hereinafter defined) (each individually, a "Guarantor" and
collectively, "Guarantors"), the parties from time to time thereto as lenders
(each a "Lender" and collectively, "Lenders") and Pledgee (such agreement, as
amended, restated, supplemented or otherwise modified from time to time, being
hereinafter referred to as the "Loan Agreement"), the Pledgors and certain of
their affiliates have entered into financing arrangements with Pledgee and
Lenders;

      WHEREAS, pursuant to the Loan Agreement, the Lenders have agreed to make
certain revolving loans and term loans (each a "Loan" and collectively, the
"Loans") to the Borrowers in an aggregate principal amount of up to $65,000,000;

      WHEREAS, in order to induce Pledgee and Lenders to make the Loans to
Borrowers pursuant to the Loan Agreement, Pledgors have agreed to pledge as
collateral security to Pledgee, for itself and the benefit of Lenders and to the
grant to Pledgee, for itself and the benefit of Lenders, of a security interest
in and Lien on, the outstanding Capital Stock (as defined in the Loan Agreement)
of Pledgors now or hereafter existing and in which such Pledgor has any interest
at any time subject to the terms and conditions hereof;

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      WHEREAS, the Pledgors are mutually dependent on each other in the conduct
of their respective businesses as an integrated operation, with the credit
needed from time to time by each Pledgor often being provided through financing
obtained by the other Pledgors and the ability to obtain such financing being
dependent on the successful operations of all of the Pledgors as a whole; and

      WHEREAS, each Pledgor has determined that the execution, delivery and
performance of this Agreement directly benefits, and is in the best interest of,
such Pledgor.

      NOW, THEREFORE, in consideration of the premises and the agreements herein
and in order to induce the Pledgee and Lenders to make and maintain the Loans
pursuant to the Loan Agreement and provide other financial accommodations to the
Borrowers, each Pledgor hereby jointly and severally agrees with the Pledgee,
for itself and the benefit of the Lenders, as follows:

      SECTION 1. DEFINITIONS.

            (a) Reference is hereby made to the Loan Agreement for a statement
of the terms thereof. All terms used in this Agreement which are defined in the
Loan Agreement or in Article 8 or Article 9 of the Uniform Commercial Code
currently in effect in the State of New York (the "Code") and which are not
otherwise defined herein shall have the same meanings herein as set forth
therein.

            (b) Notwithstanding anything to the contrary contained herein, for
purposes of Section 5 hereof, the terms "Pledged Shares" and "Pledged
Collateral" shall not include the shares of stock and other ownership interests
in (i) SeaMaster Logistics (China) Limited, a company organized under the laws
of the People's Republic of China ("SeaMaster China"), at such time as any
shares of stock or other ownership interests in SeaMaster China may become
subject to this Agreement or a similar pledge and security agreement in favor of
Agent after the date hereof to the extent that the representations and
warranties included in Section 5 hereof would relate to matters of the laws of
the People's Republic of China as to such shares of stock and other ownership
interests in SeaMaster China, and (ii) AmeRussia Ltd., a company organized under
the laws of Russia ("AmeRussia"), to the extent that the representations and
warranties included in Section 5 hereof would relate to matters of the laws of
Russia as to the shares of stock and other ownership interests in AmeRussia.

      SECTION 2. PLEDGE AND GRANT OF SECURITY INTEREST.

            (a) As collateral security for the prompt performance, observance
and indefeasible payment in full of all of the Obligations (as defined in
Section 3 hereof), each Pledgor hereby pledges and collaterally assigns to the
Pledgee, for itself and the benefit of the Lenders, and grants to the Pledgee
for the benefit of itself and the Lenders a continuing security interest in and
Lien on, such Pledgor's right, title and interest in and to the following (the
"Pledged Collateral"):

                  (i) the shares of stock, partnership interests, member
interests and other ownership interests described in Schedule I hereto (the
"Pledged Shares"), whether or not evidenced or represented by any stock
certificate, certificated security or other instrument, issued by the Persons
described in such Schedule I (the "Existing Issuers"), the certificates
representing the Pledged Shares (if any), all options and other rights,
contractual or otherwise, in respect

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thereof and all dividends, distributions, cash, instruments, investment property
and other property (including without limitation, any stock dividend and any
distribution in connection with a stock split) from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Pledged Shares;

                  (ii) the shares of stock, partnership interests, member
interests or other ownership interests at any time and from time to time
acquired by such Pledgor of any and all Persons now or hereafter existing, all
or a portion of such stock, partnership interest, member interest or other
ownership interests, whether or not evidenced by any stock certificate,
certificated security or other instrument, which are acquired by such Pledgor at
any time (such Persons, together with the Existing Issuers, being hereinafter
referred to collectively as the "Issuers" and individually as an "Issuer"), the
certificates representing such shares, partnership interests, member interests
or other ownership interests, all options and other rights, contractual or
otherwise, in respect thereof and all dividends, distributions, cash,
instruments, investment property and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such shares, partnership interests, member interests or other ownership
interests;

                  (iii) all investment property, financial assets, securities,
Capital Stock, other equity interests, stock options and commodity contracts of
such Pledgor, all notes, debentures, bonds, promissory notes or other evidences
of indebtedness of such Pledgor, and all other assets now or hereafter received
or receivable with respect to the foregoing;

                  (iv) all security entitlements of such Pledgor in any and all
of the foregoing;

                  (v) all of such Pledgor's records with respect to the
foregoing; and

                  (vi) all proceeds (including proceeds of proceeds) of any and
all of the foregoing, including, without limitation, all causes of action,
claims and warranties now or hereafter held by such Pledgor in respect of any of
the items listed above, and to the extent related to any property described
above or such proceeds;

in each case, whether now owned or hereafter acquired by such Pledgor and
howsoever its interest therein may arise or appear (whether by ownership,
security interest, Lien, claim or otherwise).

            (b) Notwithstanding anything to the contrary set forth in this
Agreement, neither the "Additional Collateral", the "Pledged Collateral" nor any
of the other "Collateral" shall include (i) the Capital Stock of any Subsidiary
that is organized under the laws of a jurisdiction outside of the United States
that is a "controlled foreign corporation" (as such term is defined in Section
957(a) of the Code or a successor provision thereof) in excess of sixty-five
(65%) percent of all of the issued and outstanding shares of Capital Stock of
such foreign Subsidiary entitled to vote (within the meaning of Treasury
Regulation Section 1.956-2), to the extent that the grant of a security interest
in the Capital Stock of each foreign Subsidiary in excess of sixty-six and two
thirds (66 2/3%) percent of all of the issued and outstanding shares of Capital
Stock of such foreign Subsidiary entitled to vote (within the meaning of
Treasury Regulation Section 1.956-2) to secure the Obligations may result in any
adverse tax consequence to any Pledgor, and (ii) the

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funds held by Law Debenture Trust Company of New York, a limited purpose trust
company, chartered by the New York State Banking Department ("Law Debenture
Trust"), as escrow agent pursuant to the escrow agreement, dated as of May 4,
2006, among AMRI, Rick Shannon, an individual and Law Debenture Trust Company.

      SECTION 3. SECURITY FOR OBLIGATIONS. The security interest created hereby
in the Pledged Collateral constitutes continuing collateral security for all of
the following obligations, whether now existing or hereafter incurred (the
"Obligations"):

            (a) all present and future indebtedness, obligations, and
liabilities of each Pledgor to Pledgee and the Lenders under the Loan Documents,
whether or not the right of payment in respect of such claim is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, disputed,
undisputed, legal, equitable, secured, unsecured, and whether or not such claim
is discharged, stayed or otherwise affected by any proceeding referred to in
Sections 8.01(f) and 8.01(g) of the Loan Agreement. Without limiting the
generality of the foregoing, the Obligations include the obligation of each
Pledgor to pay principal, interest, charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by such Pledgor under the
Loan Documents, whether now existing or hereafter arising, whether arising
before, during or after the initial or any renewal term of the Loan Agreement or
after the commencement of any case with respect to such Pledgor under the United
States Bankruptcy Code or any similar statute (including the payment of interest
and other amounts which would accrue and become due but for the commencement of
such case, whether or not such amounts are allowed or allowable in whole or in
part in such case),

            (b) the obligation of each Pledgor to reimburse any amount in
respect of any of the foregoing that Pledgee or any Lender (in its sole
discretion) may elect to pay or advance on behalf of such Pledgor; and

            (c) the due performance and observance by each Pledgor of all of its
other obligations from time to time existing in respect of the Loan Documents.

      SECTION 4. DELIVERY OF THE PLEDGED COLLATERAL.

            (a) (i) All certificates currently representing the Pledged Shares
(if any) shall be delivered to the Pledgee, for the benefit of itself and the
Lenders, on or prior to the execution and delivery of this Agreement. All other
certificates and instruments constituting Pledged Collateral from time to time
or required to be pledged to the Pledgee, for the benefit of itself and the
Lenders, pursuant to the terms of this Agreement and the other Loan Documents
(the "Additional Collateral"), shall be delivered to the Pledgee promptly upon
receipt thereof by or on behalf of any of the Pledgors. All such certificates
and instruments shall be held by or on behalf of the Pledgee pursuant hereto and
shall be delivered to Pledgee in suitable form for transfer by delivery or shall
be accompanied by duly executed instruments of transfer or assignment or undated
powers executed in blank, all in form and substance satisfactory to the Pledgee.
If any Pledged Collateral consists of uncertificated securities, unless the
immediately following sentence is applicable thereto, upon the occurrence and
continuation of an Event of Default under the Loan Agreement, such Pledgor shall
cause the Pledgee (or its designated custodian or nominee) to become the
registered holder thereof, or cause each issuer of such securities to agree

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that it will comply with instructions originated by the Pledgee with respect to
such securities without further consent by such Pledgor. If any Pledged
Collateral consists of security entitlements, such Pledgor shall collaterally
assign such security entitlements to the Pledgee (or its custodian, nominee or
other designee), or cause the applicable securities intermediary to agree that
it will comply with entitlement orders by the Pledgee without further consent by
such Pledgor, in each case, upon the occurrence and continuation of an Event of
Default. Notwithstanding the foregoing, unless an Event of Default has occurred
and is continuing, Pledgee shall, upon written request from any Pledgor,
promptly return to such Pledgor any promissory note(s) and/or other
instrument(s) in Pledgee's possession necessary or useful to enable such Peldgor
to take any action to collect or enforce any performance or the payment of
amounts due under such promissory note(s) and/or other instrument(s).

                  (ii) Within ten (10) Business Days of the receipt by a Pledgor
of any Additional Collateral, a Pledge Amendment, duly executed by such Pledgor,
in substantially the form of Exhibit A hereto (a "Pledge Amendment") shall be
delivered to the Pledgee, in respect of the Additional Collateral which must be
pledged pursuant to this Agreement and the Loan Agreement. The Pledge Amendment
shall from and after delivery thereof constitute part of Schedule I hereto. Each
Pledgor hereby authorizes the Pledgee to attach each Pledge Amendment to this
Agreement and agrees that all promissory notes, certificates or instruments
listed on any Pledge Amendment delivered to the Pledgee shall for all purposes
hereunder constitute Pledged Collateral and such Pledgor shall be deemed upon
delivery thereof to have made the representations and warranties set forth in
Section 5 with respect to such Additional Collateral.

            (b) If any Pledgor shall receive, by virtue of such Pledgor's being
or having been an owner of any Pledged Collateral, any (i) stock certificate
(including, without limitation, any certificate representing a stock dividend or
distribution in connection with any increase or reduction of capital,
reclassification, merger, consolidation, sale of assets, combination of shares,
stock split, spin-off or split-off), or other instrument, (ii) option or right,
whether as an addition to, substitution for, or in exchange for, any Pledged
Collateral, or otherwise, (iii) dividends payable in cash (except such dividends
permitted to be retained by any such Pledgor pursuant to Section 7 hereof) or in
securities or other property or (iv) dividends or other distributions in
connection with a partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or paid-in surplus, such Pledgor
shall receive such stock certificate, instrument, option, right, payment or
distribution in trust for the benefit of the Pledgee, shall segregate it from
such Pledgor's other property and shall deliver it forthwith to the Pledgee, for
the benefit of itself and the Lenders, in the exact form received, with any
necessary endorsement and/or appropriate stock powers duly executed in blank, to
be held by the Pledgee as Pledged Collateral and as further collateral security
for the Obligations.

            (c) True, correct and complete copies of the limited liability
company agreement and the certificate of formation of each Issuer that is a
limited liability company have been delivered to Pledgee, for the benefit of
itself and the Lenders, on or prior to the execution and delivery of this
Agreement. There are and shall be no other agreements governing the formation,
organization or terms of the membership interests with respect to any such
Issuer.

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      SECTION 5. REPRESENTATIONS AND WARRANTIES. Each Pledgor jointly and
severally represents and warrants as follows:

            (a) Such Pledgor (i) is a corporation, limited liability company,
trust or limited partnership duly organized, validly existing and in good
standing under the laws of the state or jurisdiction of its organization, and
(ii) has all requisite power and authority to execute, deliver and perform this
Agreement.

            (b) The execution, delivery and performance by such Pledgor of this
Agreement and each other Loan Document to which such Pledgor is a party or will
be a party (i) have been duly authorized by all necessary action, (ii) do not
and will not contravene its charter or by-laws, its limited liability company or
operating agreement, its trust agreement or its certificate of partnership or
partnership agreement, as applicable, or any applicable law compliance with
which is material to the business of any Pledgor or any Material Contract or any
other contractual restriction binding on or otherwise affecting it or any of its
properties where the contravention of such other contractual restriction has or
could reasonably be expected to have a Material Adverse Effect, (iii) do not and
will not result in or require the creation of any Lien upon or with respect to
any of its properties other than pursuant to any Loan Document and (iv) do not
and will not result in any default, noncompliance, suspension, revocation,
impairment, forfeiture or nonrenewal of any permit, license, authorization or
approval applicable to it or its operations or any of its properties where such
default, noncompliance, suspension, revocation, impairment, forfeiture or
nonrenewal has or could reasonably be expected to have a Material Adverse
Effect.

            (c) The Pledged Shares to the extent applicable have been duly
authorized and validly issued and are fully paid and nonassessable and the
holders thereof are not entitled to any preemptive, first refusal or other
similar rights, except as otherwise expressly set forth in Schedule II hereto.
Except as noted in Schedule I hereto, the Pledged Shares constitute 100% of the
issued shares of Capital Stock, partnership interests, membership interests, or
other ownership interests, as applicable, of the Existing Issuers as of the date
hereof. All other shares of stock constituting Pledged Collateral will be duly
authorized and validly issued, fully paid and nonassessable.

            (d) Such Pledgor is and will be at all times the legal and
beneficial owner of its Pledged Collateral free and clear of any Lien except for
the Lien created by this Agreement and the Permitted Liens.

            (e) The exercise by the Pledgee of any of its rights and remedies in
accordance with the terms of this Agreement will not contravene any applicable
law compliance with which is material to the business of any Pledgor or any
Material Contract or any other contractual restriction binding on or otherwise
affecting such Pledgor or any of the properties of such Pledgor where the
contravention of such other contractual restriction has or could reasonably be
expected to have a Material Adverse Effect, and will not result in or require
the creation of any Lien (other than pursuant to this Agreement or the other
Loan Documents) upon or with respect to any of the properties of such Pledgor.

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            (f) No authorization or approval or other action by, and no notice
to or filing with, any Governmental Authority is required to be obtained or made
by such Pledgor for (i) the due execution, delivery and performance by such
Pledgor of this Agreement, (ii) the grant by any Pledgor, or the perfection, of
the Lien created hereby in the Pledged Collateral or (iii) the exercise by the
Pledgee, for the benefit of itself and the Lenders, of any of its rights and
remedies hereunder, except as may be required in connection with any sale of any
Pledged Collateral by laws affecting the offering and sale of securities
generally except for such notices, filings and other actions referred to in
Sections 4(m) and (n) of the Security Agreement dated as of November 8, 2006,
among Pledgors, certain of their affiliates and Pledgee.

            (g) This Agreement creates a valid Lien in favor of the Pledgee, for
the benefit of itself and the Lenders, in the Pledged Collateral as security for
the Obligations. The Pledgee's having possession of any certificates evidencing
the Pledged Shares, which constitute Investment Property (and not General
Intangibles), and all other certificates, which constitute Investment Property
(and not General Intangibles), instruments and cash constituting Pledged
Collateral from time to time results in the perfection of such Lien. Such Lien
is, or in the case of Pledged Collateral in which any Pledgor obtains rights
after the date hereof, will be, upon the Pledgee's having possession of the
certificates evidencing the Pledged Shares, which constitute Investment Property
(and not General Intangibles), and all other certificates, which constitute
Investment Property (and not General Intangibles), instruments and cash
constituting Pledged Collateral, a perfected, first priority Lien, subject only
to the Permitted Liens. All action necessary or desirable to perfect and protect
such Lien has been duly taken, except for the Pledgee's having possession of
certificates, which constitute Investment Property (and not General
Intangibles), instruments and cash constituting Pledged Collateral after the
date hereof and any filing required under the Code.

            (h) The shares of stock, membership and other ownership interests in
AmeRussia and FMI Holdco, described in Schedule 1 hereto, are not evidenced or
represented by any stock certificate, membership certificate, certificated
security or other instrument.

      SECTION 6. COVENANTS AS TO THE PLEDGED COLLATERAL. Unless and until the
Obligations have been Paid in Full, each Pledgor shall, unless the Pledgee shall
otherwise consent in writing:

            (a) keep adequate records concerning the Pledged Collateral and
permit the Pledgee or any agents, designees or representatives thereof at any
time or from time to time, subject to the terms of the Loan Agreement, to
examine and make copies of and abstracts from such records;

            (b) at the Pledgors' joint and several expense, promptly, and in any
event within five (5) days after receipt, deliver to the Pledgee a copy of each
material notice or other material communication received by it in respect of the
Pledged Collateral;

            (c) at the Pledgors' joint and several expense, defend the Pledgee's
right, title and security interest in and to the Pledged Collateral against the
claims of any Person;

            (d) at the Pledgors' joint and several expense, at any time and from
time to time, promptly execute and deliver all further instruments and documents
and take all further action

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that may be necessary or appropriate or that the Pledgee may reasonably request
in order to (i) perfect and protect, or maintain the perfection of, the security
interest and Lien purported to be created hereby, (ii) enable the Pledgee to
exercise and enforce its rights and remedies hereunder in respect of the Pledged
Collateral in accordance with the provisions hereof or (iii) otherwise effect
the purposes of this Agreement, including, without limitation, delivering to the
Pledgee, after the occurrence and during the continuation of an Event of
Default, irrevocable proxies in respect of the Pledged Collateral;

            (e) not sell, assign (by operation of law or otherwise), exchange or
otherwise dispose of any Pledged Collateral owned by it or any of its interest
therein other than as permitted under the Loan Agreement;

            (f) not create or suffer to exist any Lien upon or with respect to
any Pledged Collateral owned by it except for the Lien created hereby or for any
Permitted Lien;

            (g) not make or consent to any amendment or other modification or
waiver with respect to any Pledged Collateral except that any Pledgor may make
or consent to any amendment or other modification or waiver solely to the extent
necessary to reflect any merger or consolidation permitted under Section 6.02(d)
of the Loan Agreement or enter into any agreement or permit to exist any
restriction with respect to any Pledged Collateral other than under the Loan
Documents and the Noteholder Documents;

            (h) except as expressly permitted by the Loan Agreement, not permit
the issuance of (i) any additional shares of any class of Capital Stock,
partnership interests, member interests or other equity of any Existing Issuer
or any other Issuer that is also a Subsidiary, (ii) any securities convertible
voluntarily by the holder thereof or automatically upon the occurrence or
non-occurrence of any event or condition into, or exchangeable for, any such
shares of Capital Stock or (iii) any warrants, options, contracts or other
commitments entitling any Person to purchase or otherwise acquire any such
shares of Capital Stock;

            (i) not take or fail to take any action which would in any manner
impair the value or enforceability of the Pledgee's security interest in and
Lien on any Pledged Collateral;

            (j) not permit any Issuer, directly or indirectly, to (i) except as
permitted under the Loan Agreement, issue, sell, grant, assign, transfer or
otherwise dispose of, any additional membership interests of such Issuer or any
option or warrant with respect to, or other right or security convertible into,
any additional members interests, now or hereafter authorized, unless all such
additional membership interests, options, warrants, rights or other such
securities are made and shall remain part of the Pledged Collateral subject to
the pledge and security interest granted herein, (ii) take any action to
withdraw the authority of or to limit or restrict the authority of any Issuer's
managers or officers to deal and contract with Pledgee and to bind and obligate
any Issuer, or (iii) pay any interim distribution in cash or other assets to any
member that is not a Borrower, except as permitted in the Loan Agreement. Any
distribution by any Issuer other than as permitted in the Loan Agreement shall
constitute a "wrongful distribution" for purposes of applicable law;

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            (k) promptly notify Pledgee in writing of the occurrence of any
event specified in any Issuer's certificate of incorporation or other
organizational documents that may result in Issuer's dissolution or liquidation.

      SECTION 7. VOTING RIGHTS, DIVIDENDS, ETC. IN RESPECT OF THE PLEDGED
COLLATERAL.

            (a) So long as no Event of Default shall have occurred and be
continuing:

                  (i) each Pledgor may exercise any and all voting and other
consensual rights pertaining to any Pledged Collateral for any purpose not
inconsistent with the terms of this Agreement, the Loan Agreement or the other
Loan Documents; PROVIDED, HOWEVER, that (A) none of the Pledgors will exercise
or refrain from exercising any such right, as the case may be, if the Pledgee
has provided prior written notice to such Pledgors that, in the Pledgee's
judgment, such action (or inaction) could reasonably be expected to affect
adversely in any material respect the value of any Pledged Collateral or
otherwise could reasonably be expected to have a Material Adverse Effect and (B)
each Pledgor will give the Pledgee at least five (5) Business Days' notice of
the manner in which it intends to exercise, or the reasons for refraining from
exercising, any such right that could reasonably be expected to affect adversely
in any material respect the value of any Pledged Collateral or otherwise could
reasonably be expected to have a Material Adverse Effect;

                  (ii) each of the Pledgors may receive and retain any and all
dividends, interest or other distributions paid in respect of the Pledged
Collateral to the extent permitted by the Loan Agreement; PROVIDED, THAT, any
and all (A) dividends and interest paid or payable other than in cash in respect
of, and instruments and other property received, receivable or otherwise
distributed in respect of or in exchange for, any Pledged Collateral, (B)
dividends and other distributions paid or payable in cash in respect of any
Pledged Collateral in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital, capital surplus or
paid-in surplus, and (C) cash paid, payable or otherwise distributed in
redemption of, or in exchange for, any Pledged Collateral, together with any
dividend, interest or other distribution or payment which, in the case of each
of (A), (B) and (C) hereof, at the time of such payment or other distribution
was not permitted by the Loan Agreement, shall be, and shall forthwith be
delivered to the Pledgee to hold as, Pledged Collateral and shall, if received
by any of the Pledgors, be received in trust for the benefit of the Pledgee,
shall be segregated from the other property or funds of the Pledgors, and shall
be forthwith delivered to the Pledgee in the exact form received with any
necessary endorsement and/or appropriate stock powers duly executed in blank, to
be held by the Pledgee as Pledged Collateral and as further collateral security
for the Obligations; PROVIDED, THAT, the Pledgee shall return such amounts to
the Pledgors within ten (10) Business Days of a request from any Pledgor for
such return unless such amounts are applied to the Obligations in accordance
with the Loan Agreement during such ten (10) Business Day period; and

                  (iii) the Pledgee will execute and deliver (or cause to be
executed and delivered) to a Pledgor all such proxies and other instruments as
such Pledgor may reasonably request for the purpose of enabling the Pledgor to
exercise the voting and other rights which it is entitled to exercise pursuant
to Section 7(a)(i) hereof and to receive the dividends, interest and/or other
distributions which it is authorized to receive and retain pursuant to Section
7(a)(ii) hereof.

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            (b) Upon the occurrence and during the continuance of an Event of
Default:

                  (i) all rights of each Pledgor to exercise the voting and
other consensual rights which it would otherwise be entitled to exercise
pursuant to Section 7(a)(i) hereof, and to receive the dividends and interest
payments which it would otherwise be authorized to receive and retain pursuant
to Section 7(a)(ii) hereof, shall cease, and all such rights shall thereupon
become vested in the Pledgee which shall thereupon have the sole right to
exercise such voting and other consensual rights and to receive and hold as
Pledged Collateral such dividends and interest payments;

                  (ii) without limiting the generality of the foregoing, the
Pledgee may at its option exercise any and all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to any of the
Pledged Collateral as if it were the absolute owner thereof, including, without
limitation, the right to exchange, in its discretion, any and all of the Pledged
Collateral upon the merger, consolidation, reorganization, recapitalization or
other adjustment of any Issuer, or upon the exercise by any Issuer of any right,
privilege or option pertaining to any Pledged Collateral, and, in connection
therewith, to deposit and deliver any and all of the Pledged Collateral with any
committee, depository, transfer agent, registrar or other designated agent upon
such terms and conditions as it may determine; and

                  (iii) all dividends, distributions, interest and other
payments which are received by any of the Pledgors contrary to the provisions of
Section 7(b)(i) hereof shall be received in trust for the benefit of the Pledgee
shall be segregated from other funds of the Pledgors, and shall be forthwith
paid over to the Pledgee as Pledged Collateral in the exact form received with
any necessary endorsement and/or appropriate stock powers duly executed in
blank, to be held by the Pledgee as Pledged Collateral and as further collateral
security for the Obligations.

      SECTION 8. ADDITIONAL PROVISIONS CONCERNING THE PLEDGED COLLATERAL.

            (a) Each Pledgor (i) authorizes the Pledgee to file any financing
statements required hereunder or under any other Loan Document), and any
continuation statements or amendment with respect thereto, in any appropriate
filing office without the signature of such Pledgor and (ii) ratifies the filing
of any financing statement, and any continuation statement or amendment with
respect thereto, filed without the signature of such Pledgor prior to the date
hereof. A photocopy or other reproduction of this Agreement or any financing
statement covering the Pledge Collateral or any part thereof shall be sufficient
as a financing statement where permitted by law.

            (b) Each Pledgor hereby irrevocably appoints the Pledgee such
Pledgor's attorney-in-fact and proxy, with full authority in the place and stead
of such Pledgor and in the name of such Pledgor or otherwise, from time to time
in the Pledgee's discretion, to take any action and to execute any agreements,
instruments or other documents in such Pledgor's name and to file such
agreements, instruments or other documents in such Pledgor's name and to file
such agreements, instruments, or other documents in any appropriate filing
office, which the Pledgee may deem necessary or advisable to accomplish the
purposes of this Agreement (subject to the rights of such Pledgor under Section
7(a) hereof), including, without limitation, to receive, endorse and collect all
instruments made payable to such Pledgor representing any dividend, interest
payment

                                       10
<PAGE>

or other distribution in respect of any Pledged Collateral and to give full
discharge for the same. This power is coupled with an interest and is
irrevocable until all of the Obligations are Paid in Full after all Commitments
have been terminated.

            (c) If any Pledgor fails to perform any agreement or obligation
contained herein, the Pledgee itself may, after the occurrence and during the
continuance of an Event of Default, perform, or cause performance of, such
agreement or obligation, and the expenses of the Pledgee incurred in connection
therewith shall be jointly and severally payable by the Pledgors pursuant to
Section 11 hereof and shall be secured by the Pledged Collateral.

            (d) Other than the exercise of reasonable care to assure the safe
custody of the Pledged Collateral while held hereunder, the Pledgee shall have
no duty or liability to preserve rights pertaining thereto and shall be relieved
of all responsibility for the Pledged Collateral upon surrendering it or
tendering surrender of it to any of the Pledgors. The Pledgee shall be deemed to
have exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if the Pledged Collateral is accorded treatment
substantially equal to that which the Pledgee accords its own property, it being
understood that the Pledgee shall not have responsibility for (i) ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relating to any Pledged Collateral, whether or not the
Pledgee has or is deemed to have knowledge of such matters, or (ii) taking any
necessary steps to preserve rights against any parties with respect to any
Pledged Collateral.

            (e) The powers conferred on the Pledgee hereunder are solely to
protect its interest in the Pledged Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the safe custody of any Pledged
Collateral in its possession and the accounting for monies actually received by
it hereunder, the Pledgee shall have no duty as to any Pledged Collateral or as
to the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Pledged Collateral.

            (f) Upon the occurrence and during the continuation of any Default
or Event of Default, the Pledgee may at any time in its discretion (i) without
notice to any Pledgor, transfer or register in the name of the Pledgee or any of
its nominees any or all of the Pledged Collateral, subject only to the revocable
rights of such Pledgor under Section 7(a) hereof, and (ii) exchange certificates
or instruments constituting Pledged Collateral for certificates or instruments
of smaller or larger denominations.

      SECTION 9. NO ASSUMPTION OF LIABILITIES.

            (a) Nothing herein shall be construed to make Pledgee liable as a
member or owner of any Issuer and Pledgee by virtue of this Agreement or
otherwise shall not have any of the duties, obligations or liabilities of a
member or owner of any Issuer. The parties hereto expressly agree that this
Agreement shall not be construed as creating a partnership or joint venture
among Pledgee and Pledgors and/or Issuer.

            (b) By accepting this Agreement, Pledgee does not intend to become a
member of any Issuer or otherwise be deemed to be a co-venturer with respect to
any Pledgor or Issuer either before or after an Event of Default shall have
occurred. Pledgee shall have only those

                                       11
<PAGE>

powers set forth herein and shall assume none of the duties, obligations or
liabilities of any Issuer or Pledgor or of a member of Issuer. Pledgee shall not
be obligated to perform or discharge any obligation of any Pledgor as a result
of the pledge hereby effected.

            (c) The acceptance by Pledgee of this Agreement, with all of the
rights, powers, privileges and authority so created, shall not at any time or in
any event obligate Pledgee to appear in or defend any action or proceeding
relating to the Pledged Collateral to which it is not a party, or to take any
action hereunder or thereunder, or to expend any money or incur any expense or
perform or discharge any obligation, duty or liability hereunder or otherwise
with respect to the Pledged Collateral.

      SECTION 10. REMEDIES UPON DEFAULT. If any Event of Default shall have
occurred and be continuing:

            (a) The Pledgee may exercise in respect of the Pledged Collateral,
in addition to other rights and remedies provided for herein or otherwise
available to it, all of the rights and remedies of a secured party on default
under the Code then in effect in the State of New York; and without limiting the
generality of the foregoing and without notice except as specified below, sell
the Pledged Collateral or any part thereof in one or more parcels at public or
private sale, at any exchange or broker's board or elsewhere, at such price or
prices and on such other terms as the Pledgee may deem commercially reasonable.
Each Pledgor agrees that, to the extent notice of sale shall be required by law,
at least ten (10) days' notice to such Pledgor of the time and place of any
public sale of Pledged Collateral owned by such Pledgor or the time after which
any private sale is to be made shall constitute reasonable notification. The
Pledgee shall not be obligated to make any sale of Pledged Collateral regardless
of whether or not notice of sale has been given. The Pledgee may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.

            (b) In the event that the Pledgee determines to exercise its right
to sell all or any part of the Pledged Collateral pursuant to Section 10(a)
hereof, each Pledgor will, at such Pledgor's expense and upon request by the
Pledgee: execute and deliver, and cause each issuer of such Pledged Collateral
and the directors and officers thereof to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts and
things, as may be necessary or, in the opinion of the Pledgee, advisable to sell
such Pledged Collateral in accordance with the provisions of the Securities Act
of 1933, as amended (the "Securities Act"), as well as applicable "Blue Sky" or
other state securities laws. Each Pledgor acknowledges the difficulty of
ascertaining the amount of damages which would be suffered by the Pledgee by
reason of the failure by any Pledgor to perform any of the covenants contained
in this Section 10(b) and, consequently, agrees that, without limiting any other
rights or remedies of Pledgee, if any Pledgor fails to perform any of such
covenants, Pledgee shall be entitled to specific performance against the
Pledgors compelling performance of such covenants.

            (c) Notwithstanding the provisions of Section 10(b) hereof, each
Pledgor recognizes that the Pledgee may deem it impracticable to effect a public
sale of all or any part of the Pledged Shares or any other securities
constituting Pledged Collateral and that the Pledgee may, therefore, determine
to make one or more private sales of any such securities to a restricted

                                       12
<PAGE>

group of purchasers who will be obligated to agree, among other things, to
acquire such securities for their own account, for investment and not with a
view to the distribution or resale thereof. Each Pledgor acknowledges that any
such private sale may be at prices and on terms less favorable to the seller
than the prices and other terms which might have been obtained at a public sale
and, notwithstanding the foregoing, agrees that such private sales shall be
deemed to have been made in a commercially reasonable manner and that the
Pledgee shall have no obligation to delay sale of any such securities for the
period of time necessary to permit the issuer of such securities to register
such securities for public sale under the Securities Act. Each Pledgor further
acknowledges and agrees that any offer to sell such securities which has been
(i) publicly advertised on a bona fide basis in a newspaper or other publication
of general circulation in the financial community of New York, New York (to the
extent that such an offer may be so advertised without prior registration under
the Securities Act) or (ii) made privately in the manner described above to not
less than fifteen BONA FIDE offerees shall be deemed to involve a "public
disposition" for the purposes of Section 9-610(c) of the Code (or any successor
or similar, applicable statutory provision) as then in effect in the State of
New York, notwithstanding that such sale may not constitute a "public offering"
under the Securities Act, and that the Pledgee may, in such event, bid for the
purchase of such securities.

            (d) Any cash held by the Pledgee as Pledged Collateral and all cash
proceeds received by the Pledgee in respect of any sale of, collection from, or
other realization upon, all or any part of the Pledged Collateral may, in the
discretion of the Pledgee, be held by the Pledgee as collateral for, and/or then
or at any time thereafter applied (after payment of any amounts payable to the
Pledgee pursuant to Section 11 hereof) in whole or in part by the Pledgee
against, all or any part of the Obligations in such order as the Pledgee shall
elect consistent with the provisions of the Loan Agreement. Any surplus of such
cash or cash proceeds held by the Pledgee and remaining after the date all of
the Obligations have been Paid in Full after all Commitments have been
terminated shall be paid over to the Pledgors or to such Person as may be
lawfully entitled to receive such surplus.

            (e) In the event that the proceeds of any such sale, collection or
realization are insufficient to pay all amounts to which the Pledgee or any
Lender is legally entitled, the Pledgors shall be liable, jointly and severally,
for the deficiency, together with interest thereon at the highest rate specified
in the Loan Agreement for interest on overdue principal thereof or such other
rate as shall be fixed by applicable law, together with the costs of collection
and the reasonable fees, costs and expenses of any attorneys employed by the
Pledgee or any Lender to collect such deficiency.

      SECTION 11. INDEMNITY AND EXPENSES.

            (a) The Pledgors jointly and severally agree to indemnify, defend,
protect and hold harmless the Pledgee (and all of its respective officers,
directors, employees, attorneys, consultants and agents) from and against any
and all claims, damages, losses, liabilities obligations, penalties, fees, costs
and expenses (including, without limitation, reasonable legal fees, costs,
expenses and disbursements of counsel) to the extent that they arise out of or
otherwise result from this Agreement (including, without limitation, enforcement
of this Agreement), except, as to any such indemnified Person, claims, damages,
losses, liabilities, obligations, penalties, fees, costs and expenses resulting
solely and directly from such Person's

                                       13
<PAGE>

gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction.

            (b) The Pledgors jointly and severally agree to pay to the Pledgee
upon demand the amount of any and all reasonable costs and expenses, including
the reasonable fees, costs, expenses and disbursements of the Pledgee's counsel
and of any experts and agents, which the Pledgee may incur in connection with
(i) the preparation, negotiation, execution, delivery, recordation,
administration, amendment, waiver or other modification or termination of this
Agreement, (ii) the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any Pledged Collateral, (iii) the
exercise or enforcement of any of the rights of the Pledgee hereunder, or (iv)
the failure by any Pledgor to perform or observe any of the provisions hereof.

      SECTION 12. NOTICES, ETC. All notices and other communications provided
for hereunder shall be in writing and shall be mailed (by certified mail,
postage prepaid and return receipt requested), telecopied or delivered, if to
any Pledgor, to it at the address of the Borrower specified in the Loan
Agreement or as otherwise specified next to such Pledgor's signature below; if
to the Pledgee, to it at the address specified in the Loan Agreement; or as to
either such Person at such other address as shall be designated by such Person
in a written notice to such other Person complying as to delivery with the terms
of this Section 12. All such notices and other communications shall be effective
(a) if mailed (by certified mail, postage prepaid and return receipt requested),
when received or three (3) days after deposit in the mails, whichever occurs
first, (b) if telecopied, when transmitted and confirmation is received, or (c)
if delivered by overnight courier or by hand delivery upon delivery.

      SECTION 13. GOVERNING LAW; PROCESS AGENTS; CONSENT TO JURISDICTION, VENUE,
ETC.

            (a) THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, EXCEPT AS REQUIRED BY
MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT THE VALIDITY AND
PERFECTION OR THE PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF
THE SECURITY INTEREST CREATED HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK.

            (b) Each of the Pledgors (collectively, the "Process Agent
Entities") hereby irrevocably and unconditionally appoints Corporation Service
Company, 80 State Street, Albany, NY 12207-2543 (the "Process Agent") as its
agent to receive on behalf of such Process Agent Entity and its property service
of copies of the summons and complaint and any other process which may be served
in any such action, suit or proceeding, agrees that such service may be made by
mailing (by certified or registered mail, postage prepaid and return receipt
requested) or delivering a copy of such process to such Process Agent Entity in
care of the Process Agent at the Process Agent's above address, irrevocably
authorizes and directs the Process Agent to accept such service on its behalf
and as an alternative method of service, irrevocably consents to the service of
any and all process in any such action, suit or proceeding by the mailing of
copies of such process to such Process Agent Entity at its address specified
above, such service to

                                       14
<PAGE>

become effective ten (10) days after such mailing. The Pledgee hereby
irrevocably appoints the Secretary of State of the State of New York as its
agent for service of process in respect of any such action or proceeding and
further irrevocably consents to the service of process out of any of the
aforementioned courts and in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to the
Secretary of State of the State of New York, such service to become effective
ten (10) days after such mailing. Nothing herein shall affect the right of the
Pledgee to service of process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against any Pledgor in any other
jurisdiction.

            (c) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK
OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PLEDGOR HEREBY
IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
THE JURISDICTION OF THE AFORESAID COURTS. EACH PLEDGOR HEREBY IRREVOCABLY
APPOINTS PROCESS AGENT AS ITS AGENT FOR SERVICE OF PROCESS IN RESPECT OF ANY
SUCH ACTION OR PROCEEDING AND FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO SUCH PLEDGOR AT ITS ADDRESS FOR NOTICES HEREIN AND TO THE
PROCESS AGENT, SUCH SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH
MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF PLEDGEE AND THE LENDERS TO
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PLEDGOR IN ANY OTHER JURISDICTION.
EACH PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT ANY PLEDGOR HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH PLEDGOR
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.

            (d) Each Pledgor irrevocably and unconditionally waives any right it
may have to claim or recover in any legal action, suit or proceeding referred to
in this Section any special, exemplary, punitive or consequential damages.

      SECTION 14. WAIVER OF JURY TRIAL, ETC. EACH PLEDGOR (AND BY ITS ACCEPTANCE
OF THIS AGREEMENT, THE PLEDGEE) HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM

                                       15
<PAGE>

CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR UNDER
ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT
DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION THEREWITH, OR
ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS
AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH PLEDGOR CERTIFIES THAT NO
OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF PLEDGEE OR ANY LENDER HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT PLEDGEE OR ANY LENDER WOULD NOT, IN
THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE
FOREGOING WAIVERS. EACH PLEDGOR HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING INTO THIS AGREEMENT.

      SECTION 15. SECURITY INTEREST ABSOLUTE. All rights of the Pledgee and the
Lenders, all Liens and all obligations of each of the Pledgors hereunder shall
be absolute and unconditional irrespective of: (i) any lack of validity or
enforceability of the Loan Agreement, any other Loan Document or any other
agreement or instrument relating thereto, (ii) any change in the time, manner or
place of payment of, or in any other term in respect of, all or any of the
Obligations, or any other amendment or waiver of or consent to any departure
from the Loan Agreement or any other Loan Document, (iii) any exchange or
release of (except to the extent of any such release), or non-perfection of any
Lien on, any Collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Obligations, or (iv) any
other circumstance which might otherwise constitute a defense available to, or a
discharge of, any of the Pledgors in respect of the Obligations other than such
Obligations having been Paid in Full. All authorizations and agencies contained
herein with respect to any of the Pledged Collateral are irrevocable and powers
coupled with an interest.

      SECTION 16. MISCELLANEOUS.

            (a) No amendment of any provision of this Agreement shall be
effective unless it is in writing and signed by the Pledgee and the Pledgors,
and no waiver of any provision of this Agreement, and no consent to any
departure by any of the Pledgors therefrom, shall be effective unless it is in
writing and signed by the Pledgee and each Pledgor, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.

            (b) No failure on the part of the Pledgee or the Lenders to
exercise, and no delay in exercising, any right hereunder or under any Loan
Document shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The rights and remedies of the Pledgee and the
Lenders provided herein and in the Loan Documents are cumulative and are in
addition to, and not exclusive of, any rights or remedies provided by law. The
rights of the Pledgee and the Lenders under the applicable Loan Document against
any party thereto are not conditional or contingent on any attempt by the
Pledgee or the Lenders to exercise any of their rights under any other document
against such party or against any other Person.

                                       16
<PAGE>

            (c) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining portions hereof or thereof or affecting the validity or enforceability
of such provision in any other jurisdiction.

            (d) This Agreement shall create a continuing security interest in
and Lien on the Pledged Collateral and shall (i) remain in full force and effect
until the date the Obligations are Paid in Full and the Commitments are
terminated, and (ii) be binding on each Pledgor and, by its acceptance hereof,
the Pledgee, and its permitted successors and assigns, and shall inure, together
with all rights and remedies of the Pledgee and the Lenders hereunder, to the
benefit of Pledgee and the Lenders and their respective permitted successors,
transferees and assigns. Without limiting the generality of clause (ii) of the
immediately preceding sentence, the Pledgee and the Lenders may assign or
otherwise transfer their respective rights and obligations under this Agreement
and any other Loan Document to any other Person (to the extent permitted by the
Loan Agreement), and such other Person shall thereupon become vested with all of
the benefits in respect thereof granted to the Pledgee and the Lenders herein or
otherwise. Upon any such assignment or transfer, all references in this
Agreement to Pledgee or any Lender shall mean the assignee of Pledgee or any
such Lender. None of the rights or obligations of any of the Pledgors hereunder
may be assigned or otherwise transferred without the prior written consent of
the Pledgee, and any such assignment or transfer without such consent shall be
null and void.

            (e) On the date the Obligations have been Paid in Full and the Loan
Agreement and the other Loan Documents have been terminated (i) this Agreement
and the security interest and Lien created hereby shall terminate and all rights
to the Pledged Collateral shall revert to the Pledgors, and (ii) the Pledgee
will, at the Pledgors' expense, except as otherwise required by applicable law,
(A) return to any of the Pledgors such of the Pledged Collateral as shall not
have been sold or otherwise disposed of or applied pursuant to the terms hereof
and (B) execute and deliver to the Pledgors, without recourse, representation or
warranty, such documents as the Pledgors shall reasonably request to evidence
such termination and reversion of rights.

            (f) This Agreement shall be governed by and construed in accordance
with the law of the State of New York, except as required by mandatory
provisions of law and except to the extent that the validity and perfection or
the perfection and the effect of perfection or non-perfection of the security
interest and Lien created hereby, or remedies hereunder, in respect of any
particular Pledged Collateral are governed by the law of a jurisdiction other
than the State of New York.

            (g) This Agreement may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which shall be
deemed an original, but all such counterparts shall constitute one and the same
agreement.

            (h) All of the obligations of the Pledgors hereunder are joint and
several. The Pledgee may, in its sole and absolute discretion, enforce the
provisions hereof against any of the Pledgors and shall not be required to
proceed against all Pledgors jointly or seek payment from the Pledgors ratably.
In addition, the Pledgee may, in its sole and absolute discretion, select the
Pledged Collateral of any one or more of the Pledgors for sale or application to
the Obligations, without regard to the ownership of such Pledged Collateral, and
shall not be required to make

                                       17
<PAGE>

such selection ratably from the Pledged Collateral owned by all of the Pledgors.
The release or discharge of any Pledgor by the Pledgee shall not release or
discharge any other Pledgor from the obligations of such Person hereunder.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       18
<PAGE>

            IN WITNESS WHEREOF, the Pledgors have caused this Agreement to be
executed and delivered by their officer thereunto duly authorized, as of the
date first above written.

                                 PLEDGORS:

                                       AEROBIC CREATIONS, INC.

                                       By:______________________________________
                                          Name:_________________________________
                                          Title:________________________________

                                       MARITIME LOGISTICS US HOLDINGS INC.

                                       By:______________________________________
                                          Name:_________________________________
                                          Title:________________________________

                                       TUG USA, INC., formerly known as Dolphin
                                       US Logistics Inc

                                       By:______________________________________
                                          Name:_________________________________
                                          Title:________________________________

                                       AMR INVESTMENTS INC

                                       By:______________________________________
                                          Name:_________________________________
                                          Title:________________________________

                                       FMI HOLDCO I, LLC

                                       By:______________________________________
                                          Name:_________________________________
                                          Title:________________________________

                                       FMI INTERNATIONAL LLC

                                       By:______________________________________
                                          Name:_________________________________
                                          Title:________________________________

<PAGE>

                                       SEAMASTER LOGISTICS INC.

                                       By:______________________________________
                                          Name:_________________________________
                                          Title:________________________________

                                        2
<PAGE>

                                   SCHEDULE I

                                       TO

                          PLEDGE AND SECURITY AGREEMENT

                     PLEDGED SHARES AND MEMBERSHIP INTERESTS

--------------------------------------------------------------------------------
                                     NUMBER OF
PLEDGOR          NAME OF ISSUER      SHARES/UNITS   CLASS     CERTIFICATE NUMBER
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

<PAGE>

                                   SCHEDULE II

                                       TO

                          PLEDGE AND SECURITY AGREEMENT

                                PREEMPTIVE RIGHTS

<PAGE>

                                    EXHIBIT A

                                       TO

                          PLEDGE AND SECURITY AGREEMENT

                                PLEDGE AMENDMENT

            This Pledge Amendment, dated _______________, is delivered pursuant
to Section 4 of the Pledge and Security Agreement referred to below. The
undersigned hereby agrees that this Pledge Amendment may be attached to the
Pledge and Security Agreement, dated __2006 (as amended or otherwise modified
from time to time, the "Pledge Agreement"), by and among the undersigned and
certain affiliates of the undersigned in favor of Fortress Credit Corp., as
Agent, as Pledgee, and that the shares listed on this Pledge Amendment shall be
hereby pledged and assigned to the Pledgee and become part of the Pledged
Collateral referred to in such Pledge Agreement and shall secure all of the
Obligations referred to in such Pledge Agreement.

--------------------------------------------------------------------------------
                                  PLEDGED SHARES
--------------------------------------------------------------------------------
                                       NUMBER                        CERTIFICATE
    PLEDGOR      NAME OF ISSUER       OF SHARES         CLASS         NUMBER(S)
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

                                                   [PLEDGOR]

                                                   By:__________________________
                                                      Name:
                                                      Title:Exhibit 10.12

Recording requested by
and after recording, return to:
OTTERBOURG, STEINDLER, HOUSTON & ROSEN, P.C.:
230 Park Avenue
New York, New York 10169
Attention: Daniel P. Greenstein, Esq.

--------------------------------------------------------------------------------
                                                                      CALIFORNIA
                                                                Riverside County

                             LEASEHOLD DEED OF TRUST
                   ASSIGNMENT OF RENTS AND SECURITY AGREEMENT

                          Dated: As of October 31, 2006
                          Maximum Amount Unpaid
                          Principal Indebtedness of
                          $65,000,000

                                      FROM

                   FMI INTERNATIONAL LLC having an office at:
                              800 Federal Boulevard
                           Carteret, New Jersey 07008

                                  the Grantor,

                     FIRST AMERICAN TITLE INSURANCE COMPANY

                                  the Trustee,

                               FOR THE BENEFIT OF

              FORTRESS CREDIT CORP., as Agent having an office at:
                           1345 Avenue of the Americas
                            New York, New York 10105

                                the Beneficiary.

             NOTICE:   THE OBLIGATIONS SECURED HEREBY PROVIDE FOR
                       PERIODIC INCREASES AND/OR DECREASES
                       IN THE APPLICABLE INTEREST RATE.

                              Location of Premises:
                           3178 and 3355 Dulles Drive
                               County of Riverside
                               City of: Mira Loma
                              State of: California

<PAGE>

                             LEASEHOLD DEED OF TRUST
                   ASSIGNMENT OF RENTS AND SECURITY AGREEMENT

      THIS LEASEHOLD DEED OF TRUST,  ASSIGNMENT OF RENTS AND SECURITY  AGREEMENT
(this   "Leasehold  Deed  of  Trust")  made  as  of  October  31,  2006  by  FMI
INTERNATIONAL LLC, a Delaware limited liability company, having an office at 800
Federal Boulevard, Carteret, New Jersey 07008 (the "Grantor"), to FIRST AMERICAN
TITLE INSURANCE COMPANY (the "Trustee"), of Orange County, California, having an
office at 1 First American Way, Santa Ana,  California 92707, for the benefit of
FORTRESS CREDIT CORP., as Agent for the Lenders, having an office at 1345 Avenue
of the  Americas,  New York,  New York  10105,  for  itself and as agent for the
lenders  now  or  hereafter  named  in the  Loan  Agreement,  as  such  term  is
hereinafter  defined (the  "Beneficiary").  All  capitalized  terms used but not
defined in this Leasehold Deed of Trust shall have the meanings ascribed to them
in the Loan Agreement.

      WITNESSETH,  pursuant to the Loan and Security  Agreement dated as of even
date  herewith  (as  amended,  consolidated,  restated,  modified,  extended  or
supplemented from time to time, the "Loan Agreement") by and among Grantor, as a
Borrower,  the other Borrowers and Guarantors,  the Lenders and Beneficiary as a
Lender,  and as Agent for the  Lenders,  the Lenders have agreed to make and the
Grantor has agreed to accept  Loans  consisting  of (a)  Revolving  Loans in the
principal  amount of up to $10,000,000  advanced  pursuant to the Loan Agreement
and (b) Team Loans in the aggregate  principal  amount of  $55,000,000  advanced
pursuant to the Loan Agreement. The Loans shall mature on October 31, 2011.

      WITNESSETH,  that to secure the payment of the principal sum of SIXTY-FIVE
MILLION  DOLLARS  ($65,000,000)  lawful  money of the  United  States to be paid
according to the Loan  Agreement,  which is by this reference made a part hereof
as said Loan Agreement may be hereafter modified,  amended, extended, renewed or
substituted  for, and any and all sums,  amounts and expenses paid  hereunder or
thereunder by the  Beneficiary  and/or any Lender  according to the terms hereof
and all other  obligations  and  liabilities of the Grantor under this Leasehold
Deed of Trust or the  Loan  Agreement  together  with all  interest  on the said
indebtedness,  obligations,  liabilities, sums, amounts and expenses and any and
all other  obligations  and liabilities now due and owing or which may hereafter
be or become due and owing by the Grantor to the Lenders  (all of the  aforesaid
are hereinafter collectively, the "Indebtedness"), the Grantor hereby mortgages,
grants,  bargains,  sells,  warrants,  conveys,  alienates,  remises,  releases,
assigns,  sets over and  confirms to the Trustee and  irrevocably  grants to the
Trustee, in trust, with power of sale and right of entry and possession,  all of
Grantor's  estate,  right,  title and interest in, to and under, and does hereby
irrevocably grant to Beneficiary, for its benefit and the ratable benefit of the
Lenders, a security interest in:

            I.  All that  certain  leasehold  estate  (the  "Leasehold  Estate")
created by and the right,  title and  interest  of the  Grantor in, to and under
those certain leases  (individually,  a "Lease" and collectively,  the "Leases")
more  particularly  described  on  Schedule  A hereof  under  which  Leases  the
respective landlords (the "Landlords") demised and leased, for the term provided
therein, the following described premises:

<PAGE>

      All that certain lot,  piece or parcel of land  particularly  described in
SCHEDULE A annexed  hereto and made a part  hereof (the  "Land")  upon which the
demised  premises more  particularly  described in SCHEDULE B annexed hereto and
made a part hereof are located (the "Demised Premises") (the Land, together with
the  Demised   Premises  and  the  Leasehold   Estate   hereinafter   sometimes,
collectively, the "Real Property");

      Together with the  appurtenances,  including,  but not limited to, renewal
and option  rights,  and all the estate and rights of the  Grantor of, in and to
the Real Property under and by virtue of the Leases;

      Together with all right, title and interest of the Grantor, in and to: (i)
all  modifications,  extensions  and  renewals  of the  Leases and in and to all
rights  to renew or  extend  the term of the  Leases;  (ii) all  credits  to and
deposits of (other than security  deposits made by sublessees) the Granter under
the  Leases;  and (iii) all other  options,  privileges  and rights  granted and
demised to the Grantor under the Leases;

      Together  with all the right or  privilege  of the  Grantor to  terminate,
cancel, surrender, merge, modify, renew or amend the Leases; and

            II.  Subject to the terms and  conditions of the Leases,  all of the
right,  title and interest of the Grantor,  if any, in and to the  buildings and
improvements (hereinafter,  collectively,  together with all building equipment,
the "Improvements") now or hereafter located on the Real Property and all of its
right, title and interest,  if any, in and to the streets and roads abutting the
Real  Property  to the center  lines  thereof  and  strips  and gores  within or
adjoining the Real Property, the air space and right to use said air space above
the Real Property, all rights of ingress and egress by motor vehicles to parking
facilities  on or within  the Real  Property,  all  easements  now or  hereafter
affecting  the Real Property or the  Improvements,  all royalties and all rights
appertaining to the use and enjoyment of the Real Property or the  Improvements,
including,  without limitation,  alley,  drainage,  crop, timber,  agricultural,
horticultural, mineral, water, oil and gas rights; and

            III.  Subject to the terms and conditions of the Leases,  all of the
right,  title and  interest of the  Grantor,  if any, in and to all fixtures and
articles of personal  property and all  appurtenances  and additions thereto and
substitutions  or  replacements  thereof,  now  or  hereafter  attached  to,  or
contained in, the Real Property  and/or the  Improvements  or placed on any part
thereof though not attached thereto, including, but not limited to, all screens,
awnings,  shades,  blinds,  curtains,  draperies,  carpets,  rugs, furniture and
furnishings,   heating,  lighting,  plumbing,   ventilating,  air  conditioning,
refrigerating,  incinerator  and/or  compacting  and  elevator  plants,  stoves,
ranges, vacuum cleaning systems, call systems,  sprinkler systems and other fire
prevention and extinguishing apparatus and materials,  motors, machinery, pipes,
appliances,  equipment, fittings and fixtures, and the trade name, good will and
books and records relating to the business  operated on the Real Property and/or
the Improvements.  Without limiting the foregoing,  the Grantor hereby grants to
the  Beneficiary,  for its  benefit and the ratable  benefit of the  Lenders,  a
security  interest  in all of its present and future  "equipment"  and  "general
intangibles" (as said quoted terms are defined in the Uniform Commercial Code of
the State wherein the Real Property and/or the Improvements are located) and the
Beneficiary  shall have, in addition to all rights and remedies provided herein,
and in any other agreements, commitments

<PAGE>

and undertakings  made by the Grantor to the Beneficiary,  all of the rights and
remedies of a "secured  party" under the said Uniform  Commercial  Code.  To the
extent  permitted  under  applicable  law, this Leasehold Deed of Trust shall be
deemed  to be a  "security  agreement"  (as  defined  in the  aforesaid  Uniform
Commercial  Code).  If the lien of this  Leasehold Deed of Trust is subject to a
security  interest covering any such personal  property,  then all of the right,
title and interest of the Grantor in and to any and all such  property is hereby
assigned to the  Beneficiary,  for its  benefit  and the ratable  benefit of the
Lenders,  together  with  the  benefits  of all  deposits  and  payments  now or
hereafter made thereon by the Grantor, and

            IV. Subject to the terms and conditions.  of the Leases,  all of the
right,  title and  interest of the Grantor in and to all  leases,  lettings  and
licenses of the Real  Property,  the  Improvements  and/or any other property or
rights  encumbered  or conveyed  hereby,  or any part  thereof,  (other than the
Leases) now or hereafter  entered into and all right,  title and interest of the
Grantor thereunder, including, without limitation, cash and securities deposited
thereunder,  the right to receive  and  collect  the rents,  issues and  profits
payable  thereunder  and the right to  enforce,  whether  by action at law or in
equity or by other means, all, provisions, covenants and agreements thereof; and

            V.  Subject to the terms and  conditions  of the Leases,  all right,
title and  interest of the  Grantor in and to all  unearned  premiums,  accrued,
accruing. or to accrue under insurance policies now or hereafter obtained by the
Grantor and all proceeds of the  conversion,  voluntary or  involuntary,  of the
Real Property,  the Improvements  and/or any other property or rights encumbered
or  conveyed  hereby,  or any part  thereof,  into  cash or  liquidated  claims,
including,  without  limitation,  proceeds of hazard and title insurance and all
awards and  compensation  heretofore  and hereafter  made to the present and all
subsequent  owners  of the Real  Property,  the  Improvements  and/or  any other
property or rights  encumbered or conveyed  hereby by any  governmental or other
lawful authority for the taking by eminent domain, condemnation or otherwise, of
all or any part of the Real Property, the Improvements and/or any other property
or rights encumbered or conveyed hereby or any easement therein,  including, but
not limited to, awards for any change of grade of streets; and

            VI.  Subject to the terms and  conditions of the Leases,  all right,
title  and  interest  of the  Grantor  in and to all  extensions,  improvements,
betterments,  renewals,  substitutions and replacements of and all additions and
appurtenances to the Real Property,  the Improvements  and/or any other property
or rights  encumbered or conveyed hereby,  hereafter  acquired by or released to
the  Grantor  or  constructed,  assembled  or placed by the  Grantor on the Real
Property,  the  Improvements  and/or any other property or rights  encumbered or
conveyed hereby, and all conversions of the security  constituted thereby which,
immediately upon such acquisition, release, construction,  assembling, placement
or  conversion  as the case may be, and in each such case  without  any  further
mortgage,  conveyance,  assignment  or other act by the  Grantor,  shall  become
subject to the lien of this Leasehold Deed of Trust as fully and completely, and
with the same  effect,  as though  now  owned by the  Grantor  and  specifically
described  herein (the Real  Property and the  Improvements,  together  with the
fixtures and other  property,  rights,  privileges  and interests  encumbered or
conveyed hereby hereinafter, collectively, the "Premises").

<PAGE>

      TO HAVE  AND TO  HOLD  the  Premises  unto  the  Trustee  and  its  heirs,
successors and assigns until the Indebtedness is paid in full.

      IN TRUST, to secure the payment in full to the Beneficiary and the Lenders
of the Indebtedness,  and the performance of all covenants and agreements in the
Loan Agreement and this  Leasehold Deed of Trust,  whereupon this Leasehold Deed
of Trust shall cease and be void and the Premises  shall be released at the cost
of the Grantor.

      AND the Grantor  covenants and agrees with the Beneficiary and the Trustee
as follows:

                                    ARTICLE I

                  REPRESENTATIONS AND WARRANTIES OF THE GRANTOR

      The Grantor  represents  and warrants to the best of its  knowledge to the
Beneficiary as follows:

            Section 1.1 LEASES.  (i) The Grantor has a good and marketable title
to the  Leasehold  Estate  created  by each of the  Leases and is the owner of a
valid and  subsisting  interest as lessee under each of the Leases subject to no
lien,  exception,  charge  or  other  encumbrance,  except  for  any  easements,
covenants or  restrictions  of record;  (ii) each of the Leases is in full force
and effect and has not been assigned, modified, amended, cancelled, surrendered,
terminated,  supplemented  or extended in any way and except as may be disclosed
by Landlord in any document  delivered by Landlord to Lender in connection  with
the Loan; (iii) each of the Leases  represents the entire agreement  between the
parties thereto as to the leasing of the Premises; (iv) to the best of Grantor's
knowledge there is no default which has occurred and is continuing  under any of
the Leases nor has any act,  omission and/or event occurred which,  with notice,
the passage of time, or both, would constitute a default under any of the Leases
by either the lessor or the lessee thereunder; (v) all rental payments and other
charges  under the Leases which are due and owing from the lessee  thereunder as
of the date of the execution and delivery of this  Leasehold  Deed of Trust have
been  paid in  full,  including,  but not  limited  to,  the  security  deposits
specified therein; (vi) this Leasehold Deed of Trust is and will remain a legal,
valid,  binding and enforceable first lien on and prior security interest in the
Premises subject only to the exceptions referred to above; (vii) the Grantor has
full  right,  power and  authority  to  mortgage  the Leases to the  Beneficiary
pursuant  hereto subject to the terms and  conditions of the Leases;  (viii) the
Grantor knows of no adverse claim to the title and/or  possession of the Grantor
or the  Landlords;  and (ix) no fire or casualty has affected the Real  Property
and the Grantor knows of no actual or proposed  condemnation  or eminent  domain
proceeding or settlement in lieu thereof which may affect same.

            Section 1.2 LEASEHOLD  DEED OF TRUST  AUTHORIZED.  The execution and
delivery of this Leasehold Deed of Trust has been duly authorized by the Grantor
and there is no provision in the  certificate  of limited  liability  company or
operating  agreement of the Grantor requiring further consent for such action by
any other entity or person. The Grantor is duly organized,  validly existing and
is in good standing  under the laws of the state of its  formation,  and has (i)
all required licenses, authorizations,  registrations,  permits and/or approvals
and (ii)  full  power  and  authority  to own its  properties  and  carry on its
business as presently conducted

<PAGE>

and the  execution  and delivery by it of, and  performance  of its  obligations
under,  this  Leasehold  Deed of Trust will not result in the  Grantor  being in
default under any provision of its certificate of limited  liability  company or
operating  agreement or of any deed of trust,  mortgage,  lease, credit or other
agreement  to which it is a party or which  affects  it or its  interest  in the
Premises, or any part thereof

            Section 1.3 FLOOD INSURANCE STATUS.  The Premises are not located in
an area identified by the Secretary of Housing and Urban  Development as an area
having  special  flood  hazards  pursuant  to the  terms of the  National  Flood
Insurance Act of 1968, or the Flood Disaster Protection Act of 1973, as same may
have been amended to date.

            Section 1.4  OPERATION  OF THE PREMISES (i) To the best of Grantor's
knowledge, the Grantor has all required certificates,  licenses, authorizations,
registrations,  permits  and/or  approvals  required  for the  operation  of the
Premises or any part thereof,  and all required  environmental  permits,  all of
which as of the date of the signing  hereof are in full force and effect and, to
the knowledge of Grantor,  not subject to any  revocation,  amendment,  release,
suspension, forfeiture or the like, (ii) to the best of Grantor's knowledge, the
present  use and/or  occupancy  of the  Premises  and/or  Improvements  does not
conflict  with  or  violate  any  such  certificate,   license,   authorization,
registration, permit and/or approval, or any applicable law, ordinance, statute,
rule,  order,  requirement  or regulation and (iii) the Grantor has delivered to
the   Beneficiary,   prior  to  the  signing  hereof   duplicate   originals  or
appropriately   certified   copies   of   all   such   certificates,   licenses,
authorizations, registrations, permits and/or approvals.

                                   ARTICLE II

                            COVENANTS OF THE GRANTOR

            Section 2.1 PAYMENT OF THE INDEBTEDNESS. The Grantor will punctually
pay the Indebtedness in same day funds as provided  herein,  the Loan Agreement,
all in the coin and  currency  of the United  States of  America  which is legal
tender for the payment of public and private debts.

            Section 2.2 MAINTENANCE OF THE IMPROVEMENTS.

                  (i)  The  Grantor  shall  maintain  the  Improvements  in good
repair,  subject  to  ordinary  wear and  tear,  damage by  casualty,  taking by
condemnation  or eminent  domain,  shall  comply  with the  requirements  of any
governmental authority claiming jurisdiction over the Premises within the lesser
of thirty (30) days after an order (an "Order")  containing such requirement has
been issued by any such authority,  (unless such requirement  cannot be complied
with within such thirty (30) day period,  in which event the Grantor  shall have
such longer period as necessary to cause compliance,  PROVIDED HOWEVER, that the
Grantor shall  promptly  commence and  diligently  prosecute to completion  such
compliance  and  provided,  further,  that such period shall not exceed the time
required  pursuant to the terms of such Order) or the time required  pursuant to
the terms of such  Order and shall  permit  the  Beneficiary  to enter  upon the
Improvements  and inspect the  Improvements at all reasonable  hours and without
prior notice.  The Grantor shall not,  without the prior written  consent of the
Beneficiary,  threaten, commit, permit or suffer to occur any waste or except as
may be permitted under the terms of the Loan

<PAGE>

Agreement, the material alteration, demolition or removal of the Improvements or
any part  thereof;  PROVIDED,  HOWEVER,  that  fixtures and articles of personal
property  owned by the  Grantor  may be  removed  from the  Improvements  if the
Grantor concurrently  therewith replaces same with equivalent items which do not
reduce the value of the Premises or the  Improvements,  free of any lien, charge
or claim superior to the lien and/or security interest created hereby.

                  (ii) Nothing in this Section 2.2 shall require the  compliance
by the Grantor with any Order so long as (a) the failure so to do shall not be a
default or event of default under any other deed of trust,  mortgage or security
agreement affecting the Premises,  any part thereof or interest therein, (b) the
failure so to do shall not result in the voiding,  rescission or invalidation of
the  certificate  of  occupancy  or any other  license,  certificate,  permit or
registration  in respect  of the  Premises,  (c) the  failure so to do shall not
prevent,  hinder or unreasonably  interfere with the lawful use and occupancy of
the entirety of the  Improvements  for their present use and occupancy,  (d) the
failure so to do shall not void or invalidate  any  insurance  maintained by the
Grantor in respect of the  Premises,  or result in an  increase  of any  premium
therefor or a decrease in any coverage provided thereby,  and (e) the Grantor in
good  faith and at its own  expense  shall  contest  the  Order or the  validity
thereof by appropriate  legal  proceedings,  which  proceedings  must operate to
prevent  (1) the  occurrence  of any of the events  described  in the  preceding
clauses (a) through (d) of this  paragraph  (ii) and (2) the collection or other
realization on any sums due or payable as a consequence  of the Order,  the sale
of any lien arising in respect of the Order,  and/or the sale or  forfeiture  of
the  Premises,  any part  thereof or interest  therein,  or the sale of any lien
connected therewith; provided that during such contest the Grantor shall, at the
option  of the  Beneficiary  provide  security  reasonably  satisfactory  to the
Beneficiary assuring the discharge of the Grantor's obligations hereunder and of
any interest,  charge, fine, penalty, fee or expense arising from or incurred as
a result of such contest;  and provided  further if at any time  compliance with
any obligation  imposed upon the Grantor by the Order shall become  necessary to
prevent (1) the occurrence of any of the events described in clauses (a) through
(d) of this  paragraph (ii) or (2) the delivery of a deed conveying the Premises
or any portion thereof or interest therein because of noncompliance, or the sale
of a lien in connection therewith,  or (3) the imposition of any penalty,  fine,
charge,  fee, cost or expense on the Beneficiary,  then the Grantor shall comply
with the Order in sufficient  time to prevent the occurrence of any such events,
the delivery of such deed or the sale of such lien,  or the  imposition  of such
penalty, fine, charge, fee, cost or expense on the Beneficiary.

            Section   2.3   INSURANCE   COVERAGE.   Subject  to  the   insurance
requirements  of tenant  under the Leases and in  accordance  with the terms and
conditions  of the Loan  Agreement,  the  Grantor  shall  keep the  Improvements
insured against (i) damage by fire and the other hazards covered by the standard
extended  coverage  all risk  insurance  policy,  and (ii) damage by  vandalism,
malicious  mischief;  and such other hazards against which the Beneficiary shall
require  insurance,  and each  policy of  insurance  required  pursuant  to this
SECTION 2.3 shall be endorsed to name the Beneficiary as a mortgagee-loss  payee
thereunder,  as its  interest may appear,  with loss payable to the  Beneficiary
without contribution or assessment,  under a standard non-contributory mortgagee
clause.  All  insurance  policies  and  endorsements  required  pursuant to this
SECTION 2.3 shall be fully paid for,  nonassessable  and contain such provisions
(including,   without   limitation,   inflation  guard  and   replacement   cost
endorsements)  and  expiration  dates and shall be in such form and  amounts and
issued by such insurance companies with a rating of "A" or better as established
by Best's Rating Guide (or an equivalent rating with such other

<PAGE>

publication  of a  similar  nature  as shall be in  current  use) or such  other
companies,  as  shall  be  approved  by  the  Beneficiary.   The  Grantor  shall
additionally keep the Improvements insured against loss by flood if the Premises
are  located  in an area  identified  by the  Secretary  of  Housing  and  Urban
Development  as an area  having  special  flood  hazards  and in which the Flood
Insurance Act of 1968 and the Flood Disaster Protection Act of 1973, as the same
may have been or may hereafter be amended or modified  (and any  successor  acts
thereto)  in an amount at least  equal to the  outstanding  Indebtedness  or the
maximum limit of coverage  available with respect to the Improvements under said
Act,  whichever  is less,  and in a company or  companies  to be approved by the
Beneficiary.  In all events and without a  modification  of or limitation on the
foregoing  the Grantor  will assign and deliver the policy or policies  (or true
copies  thereof)  of all such  insurance  to the  Beneficiary,  which  policy or
policies  shall  have  endorsed  thereon a standard  non-contributory  mortgagee
clause  (PROVIDED,  HOWEVER,  the Beneficiary shall have thirty (30) days notice
from the insurer prior to the expiration,  cancellation or termination  (for any
reason whatsoever) of any policy) in the name of the Beneficiary, so and in such
manner and form that the Beneficiary and its successors and assigns shall at all
times have and hold said policy or policies as collateral  and further  security
for the payment of the Indebtedness  until the full payment of the Indebtedness.
Insurance  required  hereunder may be carried by the Grantor pursuant to blanket
policies,  provided that all other  requirements  herein set forth are satisfied
and that the  underlying  policy in  respect of the  Premises  is  assigned  and
delivered to the Beneficiary as herein  required.  In the event that the Grantor
fails to keep the Premises insured in compliance with the Loan Agreement or THIS
SECTION 2.3, the Beneficiary may but shall NOT be obligated to, obtain insurance
and pay the premiums  therefor and the Grantor shall,  on demand,  reimburse the
Beneficiary for all sums, advances and expenses incurred in connection therewith
and such sums,  advances and expenses  shall bear  interest at the  Post-Default
Rate until reimbursed. The Grantor shall deliver copies of all original policies
to the Beneficiary  together with the endorsements  thereto  required  hereunder
subject to the requirements  under the Leases. The proceeds of insurance paid on
account of any damage or  destruction  to the Premises or any part thereof shall
be  paid  over  to  the  Beneficiary  to be  applied  as  hereinafter  provided.
Notwithstanding anything to the contrary contained herein or in any provision of
applicable law, the proceeds of insurance  policies  corning into the possession
of the Beneficiary  shall not be deemed trust funds and the Beneficiary shall be
entitled to dispose of such proceeds as hereinafter provided in SECTION 2.4.

            Section  2.4  INSURANCE;   PROCEEDS.  The  Grantor  shall  give  the
Beneficiary  prompt notice of any loss covered by insurance and the  Beneficiary
shall  have the right to join the  Grantor  in  adjusting  any loss in excess of
$20,000.  Subject to and in accordance with the terms of the Loan Agreement, the
Beneficiary  shall  have the  option,  in its sole  discretion,  subject  to the
requirements  under the Leases,  to apply any insurance  proceeds it may receive
pursuant to SECTION 2.3, or otherwise,  to the payment of the Indebtedness or to
allow all or a portion of such  proceeds to be used for the  restoration  of the
Improvements,  subject, however, to the provisions of SECTION 2.6 hereof. In the
event any such insurance proceeds shall be used to reduce the Indebtedness,  the
same shall be applied by the  Beneficiary,  after the  deduction  therefrom  and
repayment to the Beneficiary of any and all costs incurred by the Beneficiary in
the  recovery  thereof;  in any  manner it shall  designate,  including  but not
limited to, the application of such proceeds to the then unpaid  installments of
the  principal  balance  of the  Indebtedness  in the  inverse  order  of  their
maturity, such that the regular payments, if any, under the Loan Agreement shall
not be  reduced  or altered  in any  manner.  In the event that the  Beneficiary
elects to allow the

<PAGE>

use of such proceeds for the restoration of the  Improvements,  then such use of
the proceeds shall be governed as hereinafter provided in SECTION 2.6.

            Section 2.5 RESTORATION OF THE IMPROVEMENTS.  In the event of damage
or destruction of the Improvements, or any part thereof as a result of casualty,
condemnation,  taking or other  cause,  the Grantor  shall give  prompt  written
notice thereof to the Beneficiary and (except in the event of  impossibility  of
restoration or repair in the event of  condemnation  or other taking) subject to
the  requirements  under the Leases,  provided that the  Beneficiary  shall make
available  to the Grantor the  insurance  proceeds  (if any) (or in the event of
condemnation or taking,  the award (if any) arising out of such  condemnation or
taking)  recovered by the  Beneficiary  as herein  provided,  the Grantor  shall
promptly commence and diligently continue to perform the repair, restoration and
rebuilding  of  that  portion  of  the  Improvements  so  damaged  or  destroyed
(hereinafter,  the "Work") so as to restore the  Improvements in full compliance
with all legal requirements and so that the Improvements shall be at least equal
in value and  general  utility as they were prior to the damage or  destruction,
and if the  Work  to be done  is  structural  or if the  cost  of the  Work,  as
estimated by the Beneficiary,  shall exceed $20,000 (hereinafter,  collectively,
"Major Work"),  the Grantor shall,  prior to the commencement of the Major Work,
furnish  to  the   Beneficiary   for  its  approval:   (i)  complete  plans  and
specifications  for the Major Work, with  satisfactory  evidence of the approval
thereof (a) by all governmental  authorities whose approval is required,  (b) by
all parties to or having an  interest  in the leases,  if any, of any portion of
the  Premises  whose  approval is required,  and (c) by an architect  reasonably
satisfactory to the Beneficiary  (hereinafter,  the "Architect") and which shall
be accompanied by the Architect's signed estimate, bearing the Architect's seal,
of the  entire  cost of  completing  the  Major  Work;  and  (ii)  certified  or
photostatic  copies of all permits and  approvals  required by law in connection
with the commencement of the Work and as and when obtainable, the conduct of the
Work. Beneficiary shall have thirty (30) days following receipt of the foregoing
within which to approve or disapprove the Major Work,  and if Beneficiary  fails
to respond such Major Work shall be deemed approved.

            The  Grantor  shall not  commence  any of the Major  Work  until the
Grantor shall have complied with the applicable requirements referred to in this
Section, and after commencing the Major Work the Grantor shall perform the Major
Work   diligently   and  in  good  faith  in  accordance   with  the  plans  and
specifications referred to in this SECTION 2.5, if applicable.

            Section 2.6 RESTORATION; ADVANCES. In the event that the Beneficiary
is required,  or in its sole discretion,  elects to apply insurance  proceeds to
the restoration of the Improvements,  the insurance proceeds (or, in the case of
condemnation or taking, the award therefor in the event that the Beneficiary, in
its sole discretion,  shall elect to apply such award to repair and restoration)
recovered  by the  Beneficiary  on  account  of  damage  or  destruction  to the
Improvements (if any) less the cost, if any, to the Beneficiary of such recovery
and of paying out such proceeds (including  reasonable attorneys' fees and costs
allocable to  inspecting  the Work and the plans and  specifications  therefor),
shall be applied by the  Beneficiary  to the payment of the cost of the Work and
shall be paid out from time to time to the Grantor and/or,  at the Beneficiary's
option exercised from time to time, directly to the contractor,  subcontractors,
materialmen,   laborers,  engineers,  architects  and  other  persons  rendering
services or materials for the Work, as said Work progresses  except as otherwise
hereinafter provided, but subject to the following conditions,  any of which the
Beneficiary may waive:

<PAGE>

                  (i) if the Work to be done is Major Work, as determined by the
Beneficiary, the Architect shall be in charge of the Work;

                  (ii) each request for payment  shall be made on seven (7) days
prior notice to the Beneficiary and shall be accompanied by (a) a certificate of
the authorized  officer of the Grantor,  as applicable,  specifying the party to
whom  (and  for the  account  of  which)  such  payment  is to be made and (b) a
certificate  of the  Architect  if one be  required  under  SECTION  2.5  above,
otherwise  by a  certificate  of  the  authorized  officer  of the  Grantor,  as
applicable,  stating  (a)  that  all of the  Work  completed  has  been  done in
compliance with the approved plans and specifications,  if any be required under
said SECTION  2.5, and in  accordance  with all  provisions  of law; (b) the sum
requested  is justly  required to  reimburse  the  Grantor  for  payments by the
Grantor to, or is justly due to, the  contractor,  subcontractors,  materialmen,
laborers, engineers, architects or other persons rendering services or materials
for the Work (giving a brief  description of such services and  materials),  and
that when added to all sums, if any, previously paid out by the Beneficiary does
not exceed the value of the Work done to the date of such  certificate,  and (c)
that the  amount of such  proceeds  remaining  in the hands of the  Beneficiary,
together  with any sums made  available  by the Grantor  will be  sufficient  on
completion  of the Work to pay for the same in full  (giving in such  reasonable
detail  as the  Beneficiary  may  require  an  estimate  of  the  cost  of  such
completion);

                  (iii) each request shall be  accompanied  by waivers of liens,
or if  unavailable,  lien  bonds,  reasonably  satisfactory  to the  Beneficiary
covering  that part of the Work  previously  paid for,  if any,  and by a search
prepared by the title insurance company insuring the lien of this Leasehold Deed
of Trust or by such other title company or licensed  abstractor  satisfactory to
the Beneficiary or by other evidence satisfactory to the Beneficiary, that there
has not been filed with  respect to the Premises  any  mechanic's  lien or other
lien or instrument for the retention of title in respect of any part of the Work
not  discharged of record and that there exist no  encumbrances  on or affecting
the Premises (or any part thereof) other than encumbrances,  if any, existing as
of the date hereof and which have been approved by the Beneficiary;

                  (iv) no event shall have occurred and be continuing which with
the passage of time or the giving of notice,  or both, would constitute an Event
of Default;

                  (v) the  request  for any  payment  after  the  Work  has been
completed shall be accompanied by certified copies of all certificates, permits,
licenses,  waivers  and/or other  documents  required by law (or pursuant to any
agreement  binding  upon the  Grantor  or  affecting  the  Premises  or any part
thereof) to render occupancy of the Premises legal; and

                  (vi) the Work can be  completed  not later  than one (1) month
prior to the Termination Date; and

                  (vii)  the  Grantor,  prior to the  commencement  of the Work,
shall have  deposited  with the  Beneficiary  an amount equal to the  difference
between  the  cost of the  Work,  as  estimated  by the  Architect,  and the net
insurance  proceeds  (or  condemnation  award,  as the  case may be)  after  the
deduction  therefrom of the cost, if any, to the Beneficiary of the recovery and
paying out of such proceeds (including  reasonable  attorneys' fees allocable to
inspecting the Work and the plans and specifications therefor).

<PAGE>

            Upon  completion of the Work and payment in full  therefor,  or upon
failure  on the part of the  Grantor  promptly  to  commence  or  diligently  to
continue the Work, or at any time upon request by the Grantor,  the  Beneficiary
may, at its option,  apply the amount of any such proceeds then or thereafter in
the hands of the  Beneficiary  to the  payment  of the  Indebtedness,  provided,
however,  that nothing  herein  contained  shall  prevent the  Beneficiary  from
applying at any time the whole or any part of such proceeds to the curing of any
Event of Default.

            In the event the Work to be done is not Major Work, as determined by
the  Beneficiary,  then the net insurance  proceeds held by the  Beneficiary for
application thereto shall be paid to the Grantor by the Beneficiary from time to
time upon submission to the  Beneficiary of bills and/or invoices  showing costs
incurred  in  connection  with the  Work,  subject,  however,  to the  foregoing
provisions of this SECTION 2.6.  except those which are  applicable  only if the
Work to be done is Major Work, as determined by the Beneficiary.

            Section  2.7  RESTORATION  BY THE  BENEFICIARY.  Provided  that  the
Beneficiary shall make available to the Grantor the insurance  proceeds (if any)
recovered by the  Beneficiary as herein  provided,  if within one hundred twenty
(120) days after the occurrence of any damage or destruction to the Improvements
requiring Major Work in order to restore the Improvements, the Grantor shall not
have submitted to the  Beneficiary  and received the  Beneficiary's  approval of
plans and  specifications  for the repair,  restoration  and  rebuilding  of the
Improvements  so damaged or  destroyed  (approved  by the  Architect  and by all
governmental  authorities and other persons or entities,  if any, whose approval
is  required),  or if, after such plans and  specifications  are approved by all
such  governmental  authorities  and other persons or entities,  if any, and the
Beneficiary,   the  Grantor  shall  fail  to  commence   promptly  such  repair,
restoration  and  rebuilding,  or if thereafter the Grantor fails  diligently to
continue such repair, restoration and rebuilding or is delinquent in the payment
to mechanics,  materialmen  or others of the costs  incurred in connection  with
such Major  Work,  or, in the case of any damage or  destruction  not  requiring
Major  Work,  as  determined  by  the  Beneficiary,  in  order  to  restore  the
Improvements,  if the Grantor shall fail to repair, restore and rebuild promptly
the Improvements so damaged or destroyed,  then, in addition to all other rights
herein set forth,  and after giving the Grantor ten (10) days written  notice of
the nonfulfillment of one or more of the foregoing conditions,  the Beneficiary,
or any lawfully  appointed  receiver of the  Premises,  may at their  respective
options,  perform  or  cause  to  be  performed  such  repair,  restoration  and
rebuilding, and may take such other steps as they deem advisable to perform such
repair,  restoration  and  rebuilding,  and upon  twenty-four  (24) hours' prior
written notice to the Grantor,  the Beneficiary may enter upon the  Improvements
to the extent  reasonably  necessary  or  appropriate  for any of the  foregoing
purposes,  and the Grantor hereby waives, for the Grantor and all others holding
under the Grantor,  any claim against the Beneficiary and such receiver  arising
out of ANYTHING done by the Beneficiary or such receiver  pursuant  hereto,  and
the Beneficiary may, at its option,  apply insurance  proceeds (without the need
by the  Beneficiary to fulfill any other  requirements of this Leasehold Deed of
Trust) to  reimburse  the  Beneficiary,  and/or  such  receiver  for all amounts
reasonably  expended or incurred by them,  respectively,  in connection with the
performance  of such Work,  and any excess costs shall be paid by the Grantor to
the  Beneficiary  upon demand,  and such payment of excess costs shall be deemed
part of the Indebtedness and shall be secured by the lien of this Leasehold Deed
of Trust.

<PAGE>

            Section 2.8  MAINTENANCE OF EXISTENCE.  The Grantor will, so long as
it is owner of the  Premises  (or any part  thereof  or  interest  therein)  and
subject to the terms and  conditions of the Leases,  do all things  necessary to
preserve and keep in full force and effect its existence, franchises, rights and
privileges  under the laws of the state of its  formation  and,  subject  to the
provisions of paragraph  (ii) of SECTION 2.2, will comply with all  regulations,
rules, ordinances, statutes, orders and decrees of any governmental authority or
court applicable to the Grantor, or to the Premises or any part thereof.

            Section 2.9 TAXES AND OTHER CHARGES.

                  (i) Subject to the terms and  conditions  of the Leases and to
the extent payable by Grantor, the Grantor shall, in accordance with the Leases,
pay and discharge by the last day payable  without  penalty or premium all taxes
of every kind and nature,  water  rates,  sewer rents and  assessments,  levies,
permits,  inspection  and license  fees and all other  charges  imposed  upon or
assessed  against the Premises or any part thereof or upon the revenues,  rents,
issues,  income  and  profits  of the  Premises  or  arising  in  respect of the
occupancy,  use  or  possession  thereof.  The  Grantor  shall  exhibit  to  the
Beneficiary  within ten (10) days after  request and after the same are required
to be paid  pursuant  to the  foregoing  sentence,  validated  receipts or other
evidence  satisfactory  to the  Beneficiary  showing  the payment of such taxes,
assessments,  water rates, sewer rents, levies, fees and other charges which may
be or become a lien on the Premises.  Should the Grantor  default in the payment
of any of the foregoing taxes,  assessments,  water rates, sewer rents,  levies,
fees or other charges,  the  Beneficiary  may, but shall not be obligated to pay
the same or any part thereof and the Grantor  shall,  on demand,  reimburse  the
Beneficiary  for all amounts so paid and such amounts shall bear interest at the
Post-Default Rate until reimbursed.

                  (ii) Nothing in this SECTION 2.9 shall  require the payment or
discharge of any  obligation  imposed upon the Grantor by subsection (i) of this
SECTION  2.9 so long as the  Grantor  shall in good faith and at its own expense
contest the same or the validity thereof by appropriate  legal proceedings which
proceedings must operate to prevent the collection  thereof or other realization
thereon, the sale of the lien thereof and the sale or forfeiture of the Premises
or any part thereof to satisfy the same;  provided  that during such contest the
Grantor shall, at the option of the Beneficiary,  establish reserves  reasonably
satisfactory  to the  Beneficiary,  assuring  the  discharge  of  the  Grantor's
obligation  hereunder and of any additional interest charge,  penalty or expense
arising from or incurred as a result of such  contest;  and  provided,  further,
that if at any time  payment  of any  obligation  imposed  upon the  Grantor  by
subsection  (i) of this shall become  necessary to prevent the delivery of a tax
deed  conveying the Premises or any portion  thereof or the sale of the tax lien
therefor because of non-payment, or the imposition of any penalty or cost on the
Beneficiary,  then the Grantor shall pay the same in sufficient  time to prevent
the  delivery of such tax deed or the sale of such lien,  or the  imposition  of
such penalty or cost on the Beneficiary.

                  (iii)  The  Grantor  shall pay when due all (a)  premiums  for
fire, hazard and other insurance required to be maintained by the Grantor on the
Premises  pursuant  to the terms of  SECTION  2.3  hereof,  (b) title  insurance
premiums  relating  to  the  insurance  to be  maintained  on  the  Premises  in
connection  with this Leasehold Deed of Trust,  and (c) any and all other costs,
expenses and charges expressly required to be paid hereunder, and subject to the

<PAGE>

provisions  hereof,  to be paid for the maintenance  and/or protection of, or on
account  of  any  other  collateral  delivered,  assigned,  pledged,  mortgaged,
transferred or hypothecated to the Beneficiary as security for the  Indebtedness
or in  connection  with the  execution  and delivery of this  Leasehold  Deed of
Trust.

            Section 2.10 MECHANICS' AND OTHER LIENS.

                  (i) Subject to the terms and  conditions  of the  Leases,  the
Grantor  shall pay, bond or discharge of record,  from time to time,  forthwith,
all liens (and all claims and  demands of  mechanics,  materialmen,  laborers or
others,  which, if unpaid,  might result in or permit the creation of a lien) on
or affecting the Premises or any part thereof,  or on or affecting the revenues,
rents, issues,  income or profits arising therefrom and, in general, the Grantor
forthwith  shall do,  at the cost of the  Grantor  and  without  expense  to the
Beneficiary,  everything  necessary to fully preserve the lien of this Leasehold
Deed of Trust.  In the event that the  Grantor  fail in a timely  manner to make
payment in full of, bond or discharge, such liens the Beneficiary may, but shall
not be obligated to, make payment,  bond or discharge such liens, upon notice to
the Grantor if  practicable in order to preserve the lien of this Leasehold Deed
of Trust or the  collateral  value of the  Premises  and the Grantor  shall,  on
demand,  reimburse the  Beneficiary for all sums so expended and such sums shall
bear interest at the Post-Default Rate until reimbursed.

                  (ii) Nothing in this SECTION 2.10 shall require the payment or
discharge of any  obligation  imposed upon the Grantor by subsection (1) of this
SECTION  2.10 so long as the  Grantor  shall bond or  discharge  any lien on the
Premises  arising from such  obligation  or in good faith and at its own expense
contest the same or the validity thereof by appropriate  legal proceedings which
proceedings must operate to prevent the collection  thereof or other realization
thereon, the sale of the lien thereof and the sale or forfeiture of the Premises
or any part thereof,  to satisfy the same; provided that during such contest the
Grantor shall, at the option of the Beneficiary,  provide security  satisfactory
to the Beneficiary, assuring the discharge of the Grantor's obligation hereunder
and of any  additional  interest  charge,  penalty  or expense  arising  from or
incurred as a result of such contest; and provided, further, that if at any time
payment of any  obligation  imposed upon the Grantor by  subsection  (i) of this
SECTION 2.10 shall become necessary (a) to prevent the sale or forfeiture of the
Premises or any portion thereof  because of  non-payment,  or (b) to protect the
lien of this  Leasehold  Deed of Trust,  then the Grantor  shall pay the same in
sufficient  time to prevent the sale or forfeiture of the Premises or to protect
the lien of this Leasehold Deed of Trust, as the case may be.

            Section 2.11  CONDEMNATION  AWARDS.  The Grantor,  immediately  upon
obtaining  knowledge of the institution of any proceedings for the  condemnation
of the  Premises or any portion  thereof,  will  notify the  Beneficiary  of the
pendency  of such  proceedings.  The  Beneficiary  may  participate  in any such
proceedings  and the Grantor from time to time will  deliver to the  Beneficiary
all  instruments  requested by it to permit such  participation.  Subject to the
terms and conditions of the Leases,  all awards and compensation  payable to the
Grantor as a result of any  condemnation,  or other  taking or  purchase in lieu
thereof,  of the Premises or any part thereof,  are hereby assigned to and shall
be paid to the  Beneficiary.  Subject to the terms and conditions of the Leases,
the Grantor hereby authorizes the Beneficiary to collect and receive such awards
and compensation,  to give proper receipts and acquittances therefor and, in the
Beneficiary's  sole  discretion,  to apply the same  toward  the  payment of the
Indebtedness, notwithstanding the fact

<PAGE>

that the Indebtedness may not then be due and payable,  or to the restoration of
the  Improvements.  In the event that any portion of the condemnation  awards or
compensation shall be used to reduce the Indebtedness,  same shall be applied by
the Beneficiary in any manner it shall designate, including, but not limited to,
the application of such award or compensation to then unpaid installments of the
principal  balance of the Indebtedness in the inverse order of their maturity so
that the  regular  payments  under the Loan  Agreement  shall not be  reduced or
altered in any manner. The Grantor, upon request by the Beneficiary, shall make,
execute  and  deliver  any and all  instruments  requested  for the  purpose  of
confirming  the  assignment  of the  aforesaid  awards and  compensation  to the
Beneficiary free and clear of any liens,  charges or encumbrances of any kind or
nature whatsoever.  The Beneficiary shall not be limited to the interest paid on
the proceeds of any award or compensation,  but shall be entitled to the payment
by the Grantor of interest at the applicable  rate provided for herein or in the
Loan Agreement.

      Notwithstanding  the voiding of the original  sale(s) or leasing(s) of all
or any  portion  of  the  Premises,  the  Grantor  shall  continue  to  pay  the
Indebtedness  at the time and in the manner provided for its payment in the Loan
Agreement and in this Leasehold Deed of Trust and the Indebtedness  shall not be
reduced until any payment therefor shall have been actually received and applied
by the  Beneficiary to the discharge of the  Indebtedness.  The  Beneficiary may
apply any such payment to the discharge of the Indebtedness  whether or not then
due and payable in such  priority  and  proportions  as the  Beneficiary  in its
discretion  shall  deem  to  be  proper.  If  the  Premises  are  sold,  through
foreclosure  or  otherwise,  prior to the  receipt  by the  Beneficiary  of such
payment,  the  Beneficiary  shall  have the right,  whether or not a  deficiency
judgment under the Loan Agreement  shall have been sought,  recovered or denied,
to  receive  said  payment,   or  a  portion  thereof   sufficient  to  pay  the
Indebtedness,  whichever is less. The Grantor, after obtaining the prior written
consent of the Beneficiary, shall file and prosecute its claim or claims for any
such  payment  in good  faith  and with due  diligence  and cause the same to be
collected and paid over to the Beneficiary,  and hereby  irrevocably  authorizes
and  empowers  the  Beneficiary,  in the name of the  Grantor or  otherwise,  to
collect and receipt for any such payment and to file and prosecute such claim or
claims,  and although it is hereby  expressly  agreed that the same shall not be
necessary in any event, the Grantor shall, upon demand of the Beneficiary, make,
execute and deliver any and all assignments  arid other  instruments  sufficient
for the purpose of assigning any such payment to the Beneficiary, free and clear
of any encumbrances of any kind or nature whatsoever.

            Section  2.12 COSTS OF  DEFENDING  AND  UPHOLDING  THE LIEN.  If any
action or proceeding is commenced to which action or proceeding the  Beneficiary
is made a party or in which it becomes necessary to defend or uphold the lien of
this  Leasehold  Deed of Trust,  the Grantor  shall,  on demand,  reimburse  the
Beneficiary  for  all  expenses  (including,   without  limitation,   reasonable
attorneys' fees and disbursements and reasonable  appellate  attorneys' fees and
disbursements)  incurred by the Beneficiary in any such action or proceeding and
such expenses shall bear interest at the Post-Default Rate until reimbursed.  In
any action or proceeding to foreclose this Leasehold Deed of Treat or to recover
or collect the Indebtedness, the provisions of law relating to the recovering of
costs, disbursements and allowances shall prevail unaffected by this covenant.

            Section  2.13  ADDITIONAL  ADVANCES AND  DISBURSEMENTS.  The Grantor
shall pay by the last day payable  without  premium or penalty all  payments and
charges on all liens,

<PAGE>

encumbrances, ground and other leases and security interests which affect or may
affect or attach or may  attach to the  Premises,  or any part  thereof,  and in
default  thereof,  the  Beneficiary  shall  have the  right,  but  shall  not be
obligated,  to pay, without notice to the Grantor, such payments and charges and
the Grantor shall, on demand,  reimburse the Beneficiary for amounts so paid. In
addition,  upon  default of the Grantor in the  performance  of any other terms,
covenants,  conditions or obligations  by it to be performed  hereunder or under
any such lien,  encumbrance,  lease or security interest,  the Beneficiary shall
have the  right,  but shall  not be  obligated,  with,  except in the case of an
emergency  condition,  prior notice to Grantor, to cure such default in the name
and on behalf of the  Grantor.  All  reasonable  sums  advanced  and  reasonable
out-of-pocket  expenses incurred at any time by the Beneficiary pursuant to this
SECTION 2.13 or as otherwise  provided  under the terms and  provisions  of this
Leasehold  Deed of Trust or under  applicable  law shall bear  interest from the
date that such sum is advanced or expenses  incurred,  to and including the date
of  reimbursement,  computed at the  Post-Default  Rate.  All  interest  payable
hereunder  shall be  computed  on the  basis of a 360-day  year over the  actual
number  of  days  elapsed.   Any  such  amounts  advanced  or  incurred  by  the
Beneficiary,  together  with the interest  thereon,  shall be payable on demand,
shall,  until paid, be secured by this  Leasehold Deed of Trust as a lien on the
Premises and shall be part of the Indebtedness.

            Section 2.14 COSTS OF  ENFORCEMENT.  The Grantor  agrees to bear and
pay all expenses (including, without limitation,  reasonable attorneys' fees and
disbursements  and reasonable  appellate  attorneys' fees and  disbursements for
legal  services of every kind) of or incidental to (i) any  amendment,  renewal,
modification,  consolidation,  supplement,  restatement or restructuring of this
Leasehold  Deed of Trust,  the Loan  Agreement or any  document  entered into in
connection  with the  Indebtedness,  or (ii) the  enforcement  of any  provision
hereof, by litigation or otherwise, or the enforcement, compromise of settlement
of this Leasehold Deed of Trust, the Loan Agreement or the Indebtedness, and for
the curing  thereof or (iii) for defending or asserting the rights and claims of
the  Beneficiary in respect  thereof by litigation or otherwise.  All rights and
remedies of the  Beneficiary  and the  Trustee  shall be  cumulative  and may be
exercised singly or concurrently.

            Section 2.15 FILING CHARGES, RECORDING FEES, TAXES, ETC. The Grantor
shall pay any and all taxes, charges,  filing,  registration and recording fees,
excises and levies  imposed upon the  Beneficiary  by reason of its ownership of
the Loan Agreement or this Leasehold Deed of Trust or any mortgage  supplemental
hereto,  any security  instrument with respect to any interest of the Grantor in
and to any fixture or personal  property at the  Premises or any  instrument  of
further  assurance,  other  than  income,  franchise,  succession,  inheritance,
business and similar taxes,  and shall pay all other taxes, if any,  required to
be paid on the debt  evidenced by the Loan  Agreement.  In the event the Grantor
fails to make such payment  within ten (10) days after written notice thereof to
the  Grantor,  then the  Beneficiary  shall  have the  right,  but  shall not be
obligated,  to pay the amount due, and the Grantor shall,  on demand,  reimburse
the Beneficiary for said amount,  together with interest thereon computed at the
Post-Default Rate.

            Section  2.16 TAX AND  INSURANCE  DEPOSITS.  If an Event of  Default
shall occur and be  continuing  hereunder or if the Grantor shall default in its
obligations  set forth in  Section  2.9  hereof,  then the  Beneficiary,  at its
option,  to be exercised by ten (10) days'  written  notice to the Grantor,  may
require that the Grantor  deposit  with the  Beneficiary,  monthly,  one-twelfth
(1/12th)

<PAGE>

of the annual charges for insurance premiums and real estate taxes, assessments,
water,  sewer and other  charges  which might become a lien upon the Premises or
any part  thereof (all of the  foregoing,  the  "Impositions"),  and the Grantor
shall,  accordingly,  make  such  deposits.  In  addition,  if  required  by the
Beneficiary,  the  Grantor  shall  simultaneously  therewith  deposit  with  the
Beneficiary  a sum  of  money  which  together  with  the  monthly  installments
aforementioned will be sufficient to make each of the payments aforementioned at
least  thirty  (30) days prior to the date such  payments  are due.  Should said
charges not be ascertainable at the time any deposit is required to be made with
the  Beneficiary,  the deposit shall be made on the basis of an estimate made by
the Beneficiary in its sole discretion,  and when the charges are fixed for then
current year, the Grantor shall deposit any deficiency with the Beneficiary. All
funds so deposited with the  Beneficiary  shall be held by it, but not in escrow
and,  except to the extent required by applicable law,  without  interest,  and,
provided  that no Event of  Default  shall  have  occurred,  shall be applied in
payment of the charges  aforementioned  when and as  payable,  to the extent the
Beneficiary shall have such funds on hand. Should an Event of Default occur, the
funds  deposited  with the  Beneficiary,  as  aforementioned,  may be applied in
payment of the charges for which such funds shall have been  deposited or to the
payment of the  Indebtedness or any other charges  affecting the security of the
Beneficiary,  as the  Beneficiary  sees fit,  but no such  application  shall be
deemed to have been made by operation of law or otherwise until actually made by
the  Beneficiary  as herein  provided,  nor shall any  application  be deemed to
affect any right or remedy of the Beneficiary  hereunder or under any statute or
rule of law. If deposits are being made with the Beneficiary,  the Grantor shall
furnish the  Beneficiary  with bills for the charges for which such deposits are
required to be made  hereunder  and/or such other  documents  necessary  for the
payment  of same,  at least  fifteen  (15)  days  prior to the date on which the
charges  first become  payable.  In the event that the Grantor  fails to pay any
such amount,  the  Beneficiary  may, but shall not be obligated to, make payment
thereof,  and the Grantor shall,  on demand,  reimburse the  Beneficiary for all
sums so expended,  together with interest  thereon  computed at the Post-Default
Rate.

            Section 2.17 RESTRICTIVE COVENANTS AND LEASING REQUIREMENTS.  Except
as may be expressly permitted under the terms of the Loan Agreement, without the
prior written consent of the Beneficiary,  the Grantor shall not: (i) execute or
permit  to exist  any  lease or  occupancy  of all or  substantially  all of the
Premises, (ii) modify, renew or amend any lease or occupancy agreement affecting
the Premises;  (iii) grant rent  concessions,  or discount any rents, or collect
any  rents for a period of more than one  month in  advance;  (iv)  execute  any
conditional  bill of  sale,  chattel  mortgage  or  other  security  instruments
covering any  furniture,  furnishings,  fixtures and  equipment,  intended to be
incorporated in the Premises or the appurtenances  thereto, or covering articles
of personal  property  placed in the Premises or purchase any of such furniture,
furnishings,  fixtures and equipment so that ownership of the same will not vest
unconditionally  in the  Grantor,  free from  encumbrances  on  delivery  to the
Premises; (v) further assign the leases and rents affecting the Premises;  (vii)
sell, transfer,  alienate,  grant, convey or assign any interest in the Premises
or  any  part  thereof;   or  (viii)  further  mortgage,   encumber,   alienate,
hypothecate, grant a security interest in or grant any other interest whatsoever
in the Premises or any part thereof, or interest therein.

            Section 2.18  ESTOPPEL  CERTIFICATES.  The Grantor,  within ten (10)
business  days  upon  request  in  person  or by  mail,  shall  furnish  to  the
Beneficiary a written statement, duly acknowledged, setting forth the amount due
on this Leasehold Deed of Trust, the terms of

<PAGE>

payment and the maturity date of the Loan Agreement,  the date to which interest
has been paid,  whether any offsets or defenses  exist against the  Indebtedness
and, if any are alleged to exist, a detailed description of the nature thereof.

            Section  2.19  TRUST  FUNDS.  To the  extent,  if any,  required  by
applicable  law or to preserve  the lien of this  Leasehold  Deed of Trust,  the
priority of the lien of this  Leasehold  Deed of Trust  and/or the rights of the
Beneficiary hereunder, the Grantor will receive the advances secured hereby, and
will hold the right to  receive  such  advances,  as a trust  fund to be applied
first for the purpose of paying the cost of the  improvement  and will apply the
same first to the payment of the cost of the  improvement  before using any part
of the total of such advances for any other purpose.

            Section 2.20 ASSIGNMENT OF RENTS.  Subject to the Landlord's  rights
under the Leases, Grantor hereby assigns to the Beneficiary, as further security
for the  payment of the  Indebtedness,  its  interest  in the rents,  issues and
profits of the  Premises,  together  with its  interest  in all leases and other
documents  evidencing such rents,  issues and profits now or hereafter in effect
and its interest in any and all deposits held as security under said leases, and
shall, upon demand,  deliver to the Beneficiary an executed  counterpart of each
lease or other  document to which it is a party and which  affects the Premises.
Nothing  contained  in the  foregoing  sentence  shall be  construed to bind the
Beneficiary to the performance of any of the covenants, conditions or provisions
contained  in any such  lease or other  document  or  otherwise  to  impose  any
obligation on the  Beneficiary  (including,  without  limitation,  any liability
under  the  covenant  of  quiet  enjoyment  contained  in  any  lease  or in any
applicable  state law in the event that any tenant  shall have been  joined as a
party  defendant in any action to  foreclose  this  Leasehold  Deed of Trust and
shall have been barred and foreclosed  thereby of all right,  title and interest
and equity of redemption in the Premises),  except that the Beneficiary shall be
accountable for any money actually  received  pursuant to such  assignment.  The
Grantor hereby further grants to the Beneficiary the right (i) to enter upon and
take  possession of the Premises for the purpose of  collecting  the said rents,
issues and profits,  (ii) to dispossess by the usual summary proceedings (or any
other proceedings of the  Beneficiary's  selection) any tenant defaulting in the
payment  thereof  to the  Beneficiary,  (iii) to let the  Premises,  or any part
thereof, and (iv) to apply said rents, issues and profits,  after payment of all
necessary charges and expenses on account of said Indebtedness.  Such assignment
and grant shall continue in effect until the Indebtedness is paid, the execution
of this Leasehold  Deed of Trust  constituting  and  evidencing the  irrevocable
consent of the Grantor to the entry upon and taking  possession  of the Premises
by the  Beneficiary  pursuant  to  such  grant,  whether  foreclosure  has  been
instituted or not and without  applying for a receiver.  Until the occurrence of
an Event of Default,  the Grantor shall have a revocable license to receive said
rents, issues and profits and otherwise manage the Premises.  The Grantor agrees
to hold said  rents,  issues and  profits in trust and to use the same fast,  in
payment of the cost of the improvement,  second,  in payment of the Indebtedness
to the extent the same is then due and owing,  and third,  in such manner as the
Beneficiary  may elect.  Such license of the Grantor to collect and receive said
rents,  issues and profits may be revoked by the Beneficiary upon the occurrence
of an Event of Default by giving not less than five (5) days' written  notice of
such revocation, served personally upon or sent by registered mail to the record
owner of the  Premises.  The Grantor  hereby  appoints  the  Beneficiary  as its
attorney-in-fact,  coupled  with an  interest,  to receive and collect all rent,
additional  rent and other  sums due under the terms of each  lease to which the
Grantor is a party and to direct any such tenant, by written

<PAGE>

notice or otherwise, to forward such rent, additional rent or other sums by mail
or in person to the Beneficiary.

            Section 2.21 INDEMNITY.  The Grantor agrees that it shall indemnify,
defend and hold harmless the  Beneficiary,  the Trustee and each Lender from and
against  all loss,  liability,  obligation,  claim,  damage,  penalty,  cause or
action, reasonable, out-of-pocket cost and expense, including without limitation
any assessments, levies, impositions,  judgments, reasonable attorneys' fees and
disbursements, cost of appeal bonds and printing costs, imposed upon or incurred
by or asserted against the Beneficiary, the Trustee and any other Lender, except
as may be caused by  Beneficiary's  gross  negligence  or willful  misconduct by
reason of (i)  ownership of this  Leasehold  Deed of Trust;  (ii) any  accident,
injury to or death of persons or loss of or damage to property  occurring  on or
about the Premises;  (iii) any use,  non-use or condition of the Premises;  (iv)
any  failure on the part of the  Grantor  to  perform or comply  with any of the
terms of this Leasehold Deed of Trust in any material  respect;  (v) performance
of any labor or services or the furnishing of any materials or other property in
respect  of the  Premises  or any part for  maintenance  or  otherwise  (vi) the
imposition of any mortgage, real estate or governmental tax incurred as a result
of this  Leasehold  Deed of Trust or the Loan  Agreement,  other than income tax
payable by, or other taxes personal to, the Beneficiary;  or (vii) any violation
or alleged violation by the Grantor of any law, in each case except if resulting
from the gross  negligence  or willful  misconduct of  Beneficiary.  Any amounts
payable  under this  SECTION  2.18 shall be due and  payable on demand and until
paid shall bear  interest  at the  Post-Default  Rate.  If any action is brought
against the  Beneficiary  and or the  Trustee by reason of any of the  foregoing
occurrences, the Grantor will, upon the Beneficiary's request, defend and resist
such  action,  suit or  proceeding,  at the  Grantor's  sole cost and expense by
counsel approved by the Beneficiary.

            Section  2.22  ENVIRONMENTAL  PROVISIONS.  For the  purposes of this
Section the  following  terms shall have the  following  meanings:  (i) the term
"Hazardous  Material" shall mean any material or substance that,  whether by its
nature or use, is subject to  regulation  under any  Environmental  Requirement,
(ii)  the  term   "Environmental   Requirements"  shall  collectively  mean  the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C. ss. 9601 ET SEQ.), the Hazardous Materials  Transportation Act (49 U.S.C.
ss. 1801 ET SEQ.),  the Resource  Conservation  and Recovery Act (42 U.S.C.  ss.
6901 ET SEQ.),  the Toxic  Substances  Control Act (15 U.S.C. ss. 2601 ET SEQ.),
the Clean Air Act (42 (U.S.C.  ss. 7401 et SEQ.) and the Federal Water Pollution
Control Act (33 U.S.C.  ss. 1251 ET SEQ.), all as presently in effect and as the
same may hereafter be amended,  any regulation  pursuant  thereto,  or any other
present  or  future  law,  ordinance,  rule,  regulation,   order  or  directive
addressing  environmental,  health  or safety  issues of or by any  Governmental
Authority,  (iii)  the term  "Governmental  Authority"  shall  mean the  Federal
government,  or any state or other political subdivision thereof, or any agency,
court  or  body  of  the  Federal  government,  any  state  or  other  political
subdivision thereof, exercising executive, legislative,  judicial, regulatory or
administrative  functions,  and (iv)) the term  "diligent  inquiry" shall mean a
level of inquiry at least  equal to any  environmental  site  assessment  of the
Premises conducted in accordance with the Beneficiary's  environmental  policies
and  procedures.  The Grantor hereby  represents and warrants to the Beneficiary
that to the best of its knowledge (a) no Hazardous Material is currently located
at, on, in, under or about the Premises in violation of any Environmental  Laws,
(b) no  Hazardous  Material  is  currently  or,  to the  best  of the  Grantor's
knowledge  after diligent  inquiry,  has been located at, in, on, under or about
the Premises in a manner which violates any Environmental Requirement, or which

<PAGE>

requires  cleanup  or  corrective  action  of any  kind  by  Grantor  under  any
Environmental Requirement, (c) no releasing,  emitting,  discharging,  leaching,
dumping or disposing of any  Hazardous  Material  from the Premises onto or into
any other  property  or from any other  property  onto or into the  Premises  is
occurring or, to the best of the Grantor's knowledge after diligent inquiry, has
occurred,  in  violation  of any  Environmental  Requirement,  (d) no  notice of
violation,  lien,  complaint,  suit,  order or other  notice with respect to the
environmental condition of the Premises is outstanding,  nor, to the best of the
Grantor's  knowledge  after  diligent  inquiry,  has any such notice been issued
which has not been fully  satisfied and complied with in a timely  fashion so as
to bring the Premises into full compliance with all Environmental  Requirements,
and will not generate,  store, handle,  process dispose of or otherwise use, and
(e)  Grantor  will not permit any tenant or other  occupant  of the  Premises to
generate,  store,  handle,  process,  dispose  of or  otherwise  use,  Hazardous
Materials  at, in, on,  under or about the  Premises in a manner in violation of
any Environmental Requirement. The Grantor shall notify the Beneficiary promptly
in the event of any spill or other release of any Hazardous Material at, in, on,
under or about the Premises  which is required to be reported to a  Governmental
Authority  under any  Environmental  Requirement,  will promptly  forward to the
Beneficiary  copies of any notices  received by the Grantor  relating to alleged
violations of any  Environmental  Requirement and will promptly pay when due any
fine or assessment against the Beneficiary, the Grantor or the Premises relating
to any  Environmental  Requirement.  If at any  time it is  determined  that the
operation  or  use  of  the  Premises  violates  any  applicable   Environmental
Requirement or that there are Hazardous  Materials  located at, in, on, under or
about the Premises which, under any Environmental  Requirement,  require special
handling in  collection,  storage,  treatment or disposal,  or any other form of
cleanup or corrective action by Grantor,  the Grantor shall,  within thirty (30)
days after receipt of notice thereof from any Governmental Authority or from the
Beneficiary,  take,  at its  sole  cost  and  expense,  such  actions  as may be
necessary to fully comply in all respects with all  Environmental  Requirements,
PROVIDED, HOWEVER, that if such compliance cannot reasonably be completed within
such thirty (30) day period,  the Grantor shall commence such  necessary  action
within  such  thirty  (30)  day  period  and  shall  thereafter  diligently  and
expeditiously  proceed to complete in a timely  fashion  with all  Environmental
Requirements.  If the  Grantor  fails  to  timely  take,  or to  diligently  and
expeditiously  proceed to complete in a timely  fashion,  any such  action,  the
Beneficiary may, in its sole and absolute discretion, but, except in the case of
any emergency condition,  with delivery of prior written notice to Grantor, make
advances or payments  towards the  performance or  satisfaction of the same, but
shall in no event be under  any  obligation  to do so.  All  reasonable  sums so
advanced or paid by the Beneficiary (including,  without limitation, counsel and
consultant  fees and expenses,  investigation  and laboratory fees and expenses,
and fines or other penalty payments) and all reasonable sums advanced or paid in
connection  with any  judicial or  administrative  investigation  or  proceeding
relating thereto, will immediately, upon demand, become due and payable from the
Grantor and shall bear interest at the Post-Default  Rate from the date any such
sums are so advanced or paid by the Beneficiary until the date any such sums are
repaid by the Grantor to the Beneficiary.  The Grantor will execute and deliver,
promptly upon request,  such instruments as the Beneficiary  reasonably may deem
useful or necessary to permit the Beneficiary to take any such action,  and such
additional  notes and mortgages,  as the  Beneficiary  may require to secure all
sums so  advanced  or paid by the  Beneficiary.  If a lien is filed  against the
Premises by any Governmental  Authority resulting from the need to expend or the
actual  expending  of  monies  arising  from  an  action  or  omission,  whether
intentional  or  unintentional,  of the  Grantor  or for  which the  Grantor  is
responsible,

<PAGE>

resulting in the releasing,  spilling,  leaking,  leaching,  pumping,  emitting,
pouring,  emptying or dumping of any Hazardous  Material into the waters or onto
land located  within or without the state where the  Premises are located,  then
the  Grantor  will,  within  thirty  (30) days from the date that the Grantor is
first  given  notice that such lien has been placed  against  the  Premises  (or
within such shorter  period of time as may be specified  by the  Beneficiary  if
such Governmental Authority has commenced steps to cause the Premises to be sold
pursuant  to such lien)  either  (a) pay the claim and  remove the lien,  or (b)
furnish a cash deposit,  bond, or such other security with respect thereto as is
satisfactory  in all respects to the  Beneficiary  and is sufficient to effect a
complete  discharge of such lien on the Premises.  The  Beneficiary  may, at its
option, if the Beneficiary  reasonably  believes that a Hazardous,;  Material or
other environmental condition violates or threatens to violate any Environmental
Requirement, except in the case of an emergency condition with delivery of prior
written  notice to  Grantor,  cause an  environmental  audit of the  Premises or
portions  thereof to be conducted to confirm the Grantor's  compliance  with the
provisions of this Section,  and the Grantor shall  cooperate in all  reasonable
ways with the  Beneficiary  in connection  with any such audit and shall pay all
costs and expenses  incurred in connection  therewith.  The Grantor will defend,
indemnify,  and hold  harmless  the  Beneficiary  and  each  Lender,  and  their
respective employees,  agents, officers, and directors, from and against any and
all  claims,  demands,   penalties,   causes  of  action,  fines,   liabilities,
settlements,  damages,  costs, or expenses of whatever kind or nature,  known or
unknown,  foreseen or unforeseen,  contingent or otherwise  (including,  without
limitation,  counsel  and  consultant  fees  and  expenses,   investigation  and
laboratory fees and expenses,  court costs, and litigation expenses) arising out
of,  or in any way  related  to,  (i) any  breach by the  Grantor  of any of the
provisions of this Section, (ii) the presence,  disposal,  spillage,  discharge,
emission,  leakage,  release, or threatened release of any Hazardous Material by
Grantor  which is at, in, on,  under,  about,  from or affecting  the  Premises,
including,  without  limitation,  any damage or injury  resulting  from any such
Hazardous  Material  to or  affecting  the  Premises  or the soil,  water,  air,
vegetation,  buildings,  personal  property,  persons or animals  located on the
Premises  or on any other  property  or  otherwise,  (iii) any  personal  injury
(including  wrongful death) or property damage (real or personal) arising out of
or  related  to any  such  Hazardous  Material,  (iv)  any  lawsuit  brought  or
threatened,  settlement reached, or order or directive of or by any Governmental
Authority  relating to such  Hazardous  Material,  or (v) any  violation  of any
Environmental Requirement or any policy or requirement of the Beneficiary except
if caused by the gross  negligence  or willful  misconduct of  Beneficiary,  its
employees, agents, officers, directors or representatives.  This indemnification
shall, notwithstanding any exculpatory or the provision of any nature whatsoever
to the contrary set forth in the Loan Agreement, this Leasehold Deed of Trust or
any other  document or  instrument  now or hereafter  executed and  delivered in
connection  with the loan  evidenced by the Loan  Agreement  and secured by this
Leasehold  Deed  of  Trust,   constitute  the  personal  recourse  undertakings,
obligations and  liabilities of the Grantor.  If this Leasehold Deed of Trust is
foreclosed or the Grantor  tenders a deed or assignment in lieu of  foreclosure,
the Grantor shall deliver the Premises to the purchaser at foreclosure or to the
Beneficiary,  its nominee, or wholly owned subsidiary,  as the case may be, in a
condition  that  complies  in  all  material  respects  with  all  Environmental
Requirements. The obligations and

<PAGE>

liabilities of the Grantor under this Section shall survive and continue in full
force and effect and shall not be terminated,  discharged or released,  in whole
or in part,  irrespective of whether the  Indebtedness has been paid in full and
irrespective of any foreclosure of this Leasehold Deed of Trust or acceptance by
the Beneficiary,  its nominee or wholly owned subsidiary of a deed or assignment
in lieu of foreclosure and irrespective of the discharge,  satisfaction, release
or  assignment  of  this  Leasehold  Deed  of  Trust  or of any  other  fact  or
circumstance of any nature whatsoever.

            Section 2.23 RIGHT OF ENTRY.  The  Beneficiary  and its agents shall
have the right to enter and inspect the Premises at all reasonable times.

            Section 2.24 WAIVER OF STATUTORY  RIGHTS.  Notwithstanding  anything
herein  contained to the  contrary,  the  Grantor:  (i) hereby  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
Loan  Agreement  , this  Leasehold  Deed  of  Trust  or any  other  document  or
instrument  now or hereafter  executed and delivered in connection  therewith or
the loan secured by this Leasehold  Deed of Trust;  and (ii) will not (a) at any
time insist upon, or plead,  or in any manner whatever claim or take any benefit
or  advantage of any stay or extension or  moratorium  law, any  exemption  from
execution or sale of the Premises or any part thereof,  wherever enacted, now or
at any time  hereafter  in force,  which may affect the  covenants  and terms of
performance of this Leasehold Deed of Trust, nor (b) claim,  take or insist upon
any benefit or advantage of any law now or hereafter in force  providing for the
valuation or appraisal of the Premises,  or any part thereof,  prior to any sale
or sales thereof which may be made pursuant to any provision hereof, or pursuant
to the decree, judgment or order of any court of competent jurisdiction; nor (c)
after any such sale or sales,  claim or  exercise  any right  under any  statute
heretofore  or  hereafter  enacted  to redeem the  property  so sold or any part
thereof; (i) hereby expressly waives all benefit or advantage of any such law or
laws;  and (ii)  covenants  not to hinder,  delay or impede the execution of any
power herein granted or delegated to the  Beneficiary,  but to suffer and permit
the  execution  of every  power as  though  no such law or laws had been made or
enacted.  The Grantor, for itself and all who may claim under it, waives, to the
extent  that it  lawfully  may,  all  right  to have the  Premises  (or any part
thereof) marshalled upon any foreclosure hereof.

            Section 2.25 LEASEHOLD DEED OF TRUST PROVISIONS.

                  (i) The  Grantor  covenants  and  agrees  as  follows:  (a) to
promptly pay, all rent, additional rent and other sums or charges required to be
paid by the tenant  under the Leases;  (b) to promptly and  faithfully  observe,
perform and comply with all the terms,  covenants and provisions  thereof on its
part to be  observed,  performed  and  complied  with,  at the  times  act forth
therein;  (c) not to do,  permit,  suffer or refrain  from doing  anything  as a
result of which,  there  could be a default  under or breach of any of the terms
thereof;  (d) not to cancel or  terminate  any of the  Leases,  nor to suffer or
permit such  cancellation  or  termination;  not to modify,  amend or in any way
alter or permit the  alteration  of any of the material  terms  thereof;  nor to
surrender the property demised thereunder, (e) to give the Beneficiary immediate
notice of any  default  by anyone  thereunder  and to  promptly  deliver  to the
Beneficiary copies of each notice of default and

<PAGE>

all other  notices,  communications,  plans,  specifications  and other  similar
instruments  received or delivered by the Grantor in connection  therewith;  (f)
not to waive, excuse or discharge any of the material obligations and agreements
of the landlord  thereunder;  (g) to furnish to the Beneficiary such information
and evidence as the Beneficiary may reasonably  request concerning the Grantor's
due  observance,  performance  and  compliance  with the  terms,  covenants  and
provisions  thereof and (h) that any material default of the tenant under any of
the Leases shall constitute a default under this Leasehold Deed of Trust.

                  (ii) In the event of any  material  default by the  Grantor in
the  performance of any of its obligations  under any of the Leases,  including,
without  limitation,  any default in the  payment of rent and other  charges and
impositions made payable by the tenant thereunder,  which default shall continue
beyond the  applicable  grace period,  if any, then, in each and every case, the
Beneficiary may, at its option and without notice, cause the default or defaults
to be remedied and  otherwise  exercise any and all of the rights of the Grantor
thereunder in the name of and on behalf of the Grantor.  The Grantor  shall,  on
demand,.  reimburse the Beneficiary for all advances made and expenses  incurred
by the Beneficiary in curing any such default  (including,  without  limitation,
reasonable  attorneys'  fees),  together with interest  thereon  computed at the
Post-Default  Rate from the date that an advance is made or expense is  incurred
to and including the date the same is paid. Upon receipt by the Beneficiary from
the Landlord of any written  notice of default on the part of the Grantor  under
any of the Leases,  the  Beneficiary may rely thereon and take any action as the
Beneficiary  shall deem necessary or desirable even though the existence of such
default or the nature  thereof  be  questioned  or denied by or on behalf of the
Grantor.

                  (iii)  That the fee  title  and the  leasehold  estate  in the
property  demised by each of the Leases shall not merge but shall always be kept
separate and distinct,  notwithstanding  the union of said estates in either the
landlord  thereunder,  the Grantor, the Beneficiary or a third party, whether by
purchase or otherwise.  If the Grantor  acquires any greater or further  estate,
title  or  interest  in  and to any of  the  fee of  property  now or  hereafter
constituting  a part of any of the Leases,  the lien of this  Leasehold  Deed of
Trust shall  automatically  and without the  necessity of the  execution  and/or
delivery of any further  instruments  or  documents  be spread to cover and be a
lien upon such acquired  estate,  title or interest and same shall  thereupon be
and  become  a part of the  Premises  with  the  same  force  and  effect  as if
specifically  encumbered  herein and as so spread  shall be prior to the lien of
any mortgage or deed of first placed on such acquired  estate  subsequent to the
date of this  Leasehold Deed of Trust.  Without  limitation or derogation of the
foregoing  sentence the Grantor  nevertheless  agrees to execute all instruments
and documents which the Beneficiary  may reasonably  require to ratify,  confirm
and further evidence the  Beneficiary's  lien on the acquired  estate,  title or
interest.  Furthermore, the Grantor hereby appoints the Beneficiary its true and
lawful  attorney-in-fact  to  execute  and  deliver  all  such  instruments  and
documents in the name and on behalf of the Grantor.  This power,  being  coupled
with an  interest,  shall be  irrevocable  as long as the  indebtedness  remains
unpaid.

                  (iv) The  Grantor  shall use its best  efforts  to obtain  and
deliver to the  Beneficiary  within  twenty  (20) days after  receipt of written
demand by the Beneficiary,  an estoppel certificate from the landlord under each
of the Leases setting forth (i) the name of the tenant thereunder, (ii) that the
respective Lease has not been modified or, if it has been modified,

<PAGE>

the date of each  modification  (together with copies of each such  modification
certified  as true and correct by the  landlord),  (iii) the basic rent  payable
under the Lease, (iv) the date to which all rental charges have been paid by the
tenant under the Lease,  and (v) whether  there are any alleged  defaults of the
tenant under the Leases and, if there are,  setting forth the nature  thereof in
reasonable detail.

                  (v) Notwithstanding anything to the contrary contained herein,
this  Leasehold  Deed of Trust shall not  constitute an assignment of any of the
Leases within the meaning of any provision  thereof  prohibiting  its assignment
and the Beneficiary  shall have no liability or obligation  thereunder by reason
of its  acceptance of this  Leasehold Deed of Trust.  The  Beneficiary  shall be
liable for the  obligations  of the tenant  arising  under any of the Leases for
only that period of time which the  Beneficiary is in possession of the Premises
or  has  acquired,  by  foreclosure  or  otherwise,  and is  holding  all of the
Grantor's right, title and interest therein.

                  (vi) In the event any of the Leases  shall be  terminated  and
the Beneficiary  SHALL require from the lessor under such Lease a new lease, the
Grantor  hereby waives any right,  title or interest in and to such new lease or
the leasehold  estate created  thereby,  waiving all rights of redemption now or
hereafter operable under any law.

                  (vii) The  Grantor  expressly  agrees  that if there  shall be
filed by or  against  any lessor  under any Lease any  petition,  action  and/or
proceeding under the Revised Bankruptcy Act of 1978, et seq., as amended and any
successor act thereto (the  "Bankruptcy  Code"),  or any other  similar  federal
and/or state law now or hereafter in effect  (collectively  hereinafter referred
to as the  "Landlord's  Bankruptcy"),  the Grantor shall not elect to treat such
Lease  as  terminated,  cancelled  and/or  surrendered  pursuant  to  applicable
provisions  of the  Bankruptcy  Code  including,  but not  limited  to,  Section
365(h)(1),  without the Beneficiary's prior written consent. In the event of the
Landlord's  Bankruptcy,  the Grantor expressly  covenants and agrees,  intending
that the  Beneficiary  rely  thereon,  that it shall  reaffirm  and  ratify  the
legality,  validity,  binding  effect  and  enforceability  of the Leases to the
Beneficiary  and the Grantor also  covenants  and agrees that it shall remain in
possession of the Premises and the leasehold  estate  created by the such Lease,
notwithstanding  any rejection thereof by the lessor under the such Lease and/or
any trustee, custodian, receiver or other similar official.

                  (viii) The lien of this  Leasehold  Deed of Trust  attaches to
all of the  Grantor's  rights and remedies now and  hereafter  arising  under or
pursuant to the Bankruptcy  Code,  including,  but not limited to, the Grantor's
right to elect to remain in possession of the Premises and the leasehold  estate
created by each of the Leases in the event of the Landlord's Bankruptcy pursuant
to Section  365(h)(1).  Any such election to terminate,  cancel and/or surrender
any Lease in the event of the Landlord's  Bankruptcy  without the  Beneficiary's
prior written consent shall be null and void.

                  (ix) The Grantor hereby  unconditionally  assigns,  transfers,
and sets over to the Beneficiary  (a) all of the Grantor's  claims and rights to
damages,  and any  other  remedies  in  connection  therewith  arising  from any
rejection of any Lease by the lessor thereunder  pursuant to the Bankruptcy Code
in the event of the  Landlord's  Bankruptcy,  and/or by any trustee,  custodian,
receiver or other similar official. The Beneficiary shall have the right,

<PAGE>

but not the  obligation,  to proceed  in its own name  and/or in the name of the
Grantor in respect of any claim, suit, action and/or proceeding relating to such
rejection  of such Lease,  including,  but not limited to, the right to file and
prosecute,  to the  exclusion  of the  Grantor,  any and all  proofs of  claims,
complaints,  notices and other documents is any case in respect of the lessor of
such Lease under and  pursuant to the  Bankruptcy  Code,  and (b) the  Grantor's
right of election to remain in  possession  of the  Premises in the event of the
Landlord's  Bankruptcy under and pursuant to Section 365(h)(1) of the Bankruptcy
Code.  This  assignment  constitutes  a  present,   absolute,   irrevocable  and
unconditional  assignment  of  the  foregoing  claims,  elections,   rights  and
remedies,  and shall  continue in full force and effect until the Loan Agreement
and the Indebtedness have been paid in full and this Leasehold Deed of Trust has
been  satisfied  and  discharged.  Any amounts  received by the  Beneficiary  as
damages  arising  out of the  rejection  of any Lease by the  Landlord  shall be
applied in the manner set forth in SECTION 3.2 of this Leasehold Deed of Trust.

                  (x) If,  pursuant to any applicable  section of the Bankruptcy
Code, the Grantor seeks to offset, counterclaim, deduct, and/or assert a defense
against the rent,  additional rent or other sums due under any Lease, the amount
of any damages caused by the non-observance and/or non-performance of the lessor
under such Lease, the Grantor shall, prior to such offset, counterclaim, defense
and/or  deduction  notify the  Beneficiary of its intent to do so, setting forth
with  specificity the amounts proposed to be offset,  counterclaimed,  deducted,
and/or defended against and for what purposes.  The Beneficiary  shall thereupon
have the  right,  but not the  obligation,  to object to all or any part of such
offset,  counterclaim and/or deduction and, in the event of such objection,  the
Grantor shall not effect any such offset counterclaim and/or deduction.  Neither
the  Beneficiary's  failure to object to any such  offset,  counterclaim  and/or
deduction nor any objection or other  communication  between the Beneficiary and
the Grantor  shall  constitute  an approval  of any such  offset,  counterclaim,
deduction  and/or defense by the  Beneficiary.  The Grantor  expressly agrees to
pay,  protect,  indemnify and save harmless the Beneficiary from and against any
and  all  claims,  demands,  actions,  suits,   proceedings,   damages,  losses,
liabilities,  judgments,  costs and expenses of every kind and nature (including
reasonable   attorneys'   fees)   arising   from  or  relating  to  any  offset,
counterclaim,  deduction  and/or assertion of a defense by the Grantor as herein
described.

                  (xi) If any action, proceeding,  motion and/or notice shall be
commenced or filed with respect to the Grantor or the Real Property, or any part
thereof;  in connection with the Bankruptcy Code, the Beneficiary shall have the
right, but not the obligation, to the exclusion of the Grantor, exercisable upon
five (5) days prior written  notice,  to conduct and control any litigation with
counsel of the Beneficiary's choice. The Beneficiary may proceed in its own name
or in the name of the Grantor in connection  with any such  litigation,  and the
Grantor  expressly  agrees to execute and deliver all and every power,  consent,
authorization  and other  documents  required by the  Beneficiary  in connection
therewith.  The Grantor shall pay to the Beneficiary on demand any and all costs
and expenses (including reasonable attorneys' fees) paid or incurred and payable
by the Beneficiary in connection  with such  litigation  shall be secured by the
lien of this  Leasehold  Deed of Trust.  The Grantor also agrees not to commence
any action,  suit,  proceeding  and/or case or file any  application or make any
motion in respect of any Lease in the event of the Landlord's Bankruptcy without
the prior written consent of the Beneficiary.

<PAGE>

                  (xii) The Grantor hereby irrevocably appoints the Beneficiary,
its agent and  attorney-in-fact  (which appointment is coupled with an interest)
to observe and perform on behalf of the Grantor  the  covenants  and  agreements
contained  in  this  section,  and  any  advances  made  by the  Beneficiary  in
connection  with such  performance or observance  shall be repaid by the Grantor
within ten (10) days of demand with  interest at the  Post-Default  Rate and the
amount so advanced,  and interest thereon, shall be a lien upon the Premises and
shall be secured by this Leasehold Deed of Trust. Such performance or observance
by the Beneficiary shall not prevent the Grantor's failure to perform or observe
from constituting an Event of Default.

                  (xiii) The Grantor  shall give the  Beneficiary  notice of its
intention  to exercise  each and every option to extend the term of any Lease at
least twenty (20) but not more than sixty (60) days prior to the  expiration  of
the time to exercise  such option under the terms of such Lease.  If the Grantor
intends to extend the term of such Lease,  it shall deliver to the  Beneficiary,
together  with the notice of such  decision,  a copy of the notice of  extension
delivered  to  the  Landlord  If,   following  the  occurrence  and  during  the
continuance  of an Event of Default,  the Grantor  does not intend to extend the
term of such Lease, the Beneficiary may, at its option, in the connection with a
foreclosure or other  enforcement of this Leasehold Deed of Trust,  exercise the
option  to  extend  in the name and on  behalf  of the  Grantor.  In any  event,
following the occurrence and during the continuance of an Event of Default,  the
Grantor hereby appoints the Beneficiary as its  attorney-in-fact  to execute and
deliver,  for and in the name of the Grantor,  all  instruments  and  agreements
necessary  under each Lease or otherwise  to cause any  extension of the term of
each  such  Leases.  This  power,  being  coupled  with an  interest,  shall  be
irrevocable as long as the indebtedness secured hereby remains unpaid.

                                   ARTICLE III

                              DEFAULT AND REMEDIES

            Section  3.1  EVENTS OF  DEFAULT.  The  following  shall  constitute
"Events of Default" under this  Leasehold  Deed of Trust:  (a) the occurrence of
any Event of Default under the Loan Agreement or any of the Financing Agreements
(as  defined in  Section  5.10  hereof),  or (b)  failure by the  Grantor in the
payment of any  amounts  required  to be paid  hereunder;  or (c) failure by the
Grantor in the due observance or  performance of any of the terms,  covenants or
conditions  contained herein,  subject to any applicable grace periods contained
in the Loan  Agreement;  or (d) should any  representation  or warranty  made by
Grantor herein or by any guarantor prove to be untrue in any material respect at
the time when made; or (e)except as may be expressly  permitted  under the terms
and conditions of the Loan Agreement,  the further  assignment or encumbrance by
the Grantor of the leases or rents of the Premises or any part  thereof  without
in each instance the prior written consent of the Beneficiary;  or (f) except as
may be expressly permitted under the terms and conditions of the Loan Agreement,
if the Grantor  leases all or part of the Premises  without in each instance the
prior written  consent of the  Beneficiary;  or (g) subject to the provisions of
paragraph (i) of Section 2.9 hereof  permitting the Grantor to contest the same,
the  failure  by the  Grantor  to pay (or  cause to be paid),  before  any fine,
penalty,  interest or cost may be added thereto all franchise taxes and charges,
and other governmental charges, general and special, ordinary and extraordinary,
unforeseen as well as foreseen,  of any kind and nature  whatsoever,  including,
but not limited to,  assessments  for public  improvements or benefits which are
assessed, levied, confirmed, imposed or become a lien upon

<PAGE>

the Premises or any part thereof or become  payable  during the term of the Loan
Agreement  or this  Leasehold  Deed of Trust or if the  Grantor  enters into any
agreement, either written or oral, which has the effect of deferring the payment
of any taxes or other charges which are or can be assessed,  levied,  confirmed,
imposed or become a lien on the Premises or any part  thereof or become  payable
during the term of the Loan Agreement or this  Leasehold  Deed of Trust;  or (h)
except as may be expressly  permitted under the terms and conditions of the Loan
Agreement,  the further  mortgage,  pledge or  encumbrance by the Grantor of the
Premises or any part thereof or any interest  therein  without in each  instance
the prior written  consent of the  Beneficiary;  or if any  mortgage,  pledge or
encumbrance  affecting  the  Premises or any part  thereof or  interest  therein
(whether prior or subordinate to the lien of this Leasehold Deed of Trust) shall
be amended, modified,  refinanced,  increased in amount, replaced or substituted
for, PROVIDED,  HOWEVER, that nothing herein contained shall be deemed to permit
the Grantor to create,  grant or suffer to exist any such mortgage,  pledge,  or
encumbrance;  or (i) if a default occurs under any leasehold deed of trust which
is prior or  subordinate to the lien of this Leasehold Deed of Trust (beyond the
applicable  notice and grace period,  if any) or the beneficiary  under any such
prior or subordinate  leasehold  deed of trust  commences a foreclosure or other
enforcement  action in  connection  with said  Leasehold  Deed of Trust;  or (j)
except as may be expressly  permitted under the terms and conditions of the Loan
Agreement if the  Premises,  or any part thereof or interest  therein,  is sold,
transferred,  assigned,  conveyed, granted or alienated without in each instance
the prior written consent of the Beneficiary.

            Section 3.2 REMEDIES.

                  (i) Upon the  occurrence of any Event of Default,  the Trustee
or the  Beneficiary  may, in addition to any rights or remedies  available to it
hereunder,  take inch  action as it deems  advisable  to protect and enforce its
rights  against  the  Grantor  and in and to the  Premises,  including,  but not
limited to, the following actions,  each of which may be pursued concurrently or
otherwise,  at such time and in such order as the Beneficiary may determine,  in
its sole discretion,  without impairing or otherwise  affecting the other rights
and remedies of the Beneficiary:  (1) declare the entire unpaid  Indebtedness to
be immediately due and payable;  or (2) enter into or upon the Premises,  either
personally or by its agents,  nominees or attorneys and  dispossess  the Grantor
and its agents and servants therefrom,  and thereupon the Beneficiary or Trustee
may (a) use, operate,  manage, control,  insure,  maintain,  repair, restore and
otherwise  deal with all sad every part of the Premises and conduct the business
thereat;  (b) complete any  construction on the Premises in such manner and form
as the Beneficiary deems advisable; (c) make alterations,  additions,  renewals,
replacements  and  improvements to or on the Improvements and the balance of the
Premises;  (d) exercise all rights and powers of the Grantor with respect to the
Premises,  whether in the name of the Grantor or otherwise,  including,  without
limitation,  the right to make,  cancel,  enforce or modify  leases,  obtain and
evict tenants, and sue for, collect and receive all earnings,  revenues,  rents,
issues, profits and other income of the Premises and every part thereof; and (c)
apply the receipts from the Premises to the payment of the  Indebtedness,  after
deducting  therefrom  all expenses  (including  reasonable  attorneys'  fees and
disbursements)  incurred in  connection  with the aforesaid  operations  and all
amounts necessary to pay the taxes, assessments,  insurance and other charges in
connection with the Premises,  as well as just and reasonable  compensation  for
the services of the Beneficiary or Trustee,  its counsel,  agents and employees;
or (3) institute proceedings for the complete foreclosure of this Leasehold Deed
of Trust in which case the Premises may be sold for cash or

<PAGE>

credit in one or more  parcels;  or (4) with or without entry and, to the extent
permitted,  and pursuant to the procedures provided by applicable law, institute
proceedings for the partial  foreclosure of this Leasehold Deed of Trust for the
portion of the  Indebtedness  then due and payable,  subject to the lien of this
Leasehold Deed of Trust continuing unimpaired and without loss of priority so as
to secure the  balance of the  Indebtedness  not then due; or (5)  institute  an
action,  suit or  proceeding  in  equity  for the  specific  performance  of any
covenants,  condition or agreement contained herein or in the Loan Agreement; or
(6) recover judgment on the Loan Agreement or any guaranty either before, during
or after or in lieu of any  proceedings  for the  enforcement  of this Leasehold
Deed  of  Trust;  or (7)  apply  for the  appointment  of a  trustee,  receiver,
liquidator or  conservator  of the Premises,  without regard for the adequacy of
the security  for the  Indebtedness  and without  regard for the solvency of the
Grantor,  any  guarantor or of any person,  firm or other entity  liable for the
payment  of the  Indebtedness  to which  appointment  the  Grantor  does  hereby
consent;  or (8) sell the Premises,  or any part thereof to the extent permitted
and  pursuant to the  procedures  provided by the laws of the State in which the
Premises are  located,  and all estate,  right,  title and  interest,  claim and
demand  therein,  and right of  redemption  thereof;  at one or more sales as an
entity or in parcels,  and at such time and place upon such terms and after such
notice  thereof as may be required by  applicable  law; or (9) pursue such other
remedies as the Beneficiary  may have under  applicable law. In the event of any
sale of the  Premises  under the  terms of this  Leasehold  Deed of  Trust,  the
Grantor shall pay (in addition to taxable costs) a reasonable fee to the Trustee
which shall be in lieu of all other fees and commissions permitted by statute or
custom to be paid,  reasonable  attorneys'  fees and all  expenses  incurred  in
obtaining or continuing abstracts of title for the purpose of any such sale; or

                  (ii) The  purchase  money  proceeds or avails of any sale made
under or by virtue of this ARTICLE III,  together with any other sums which then
may be held by the  Beneficiary  or Trustee under this  Leasehold Deed of Trust,
whether under the provisions of this ARTICLE III or otherwise,  shall be applied
as follows:

                        First To the  payment of the costs and  expenses  of any
                  such sale, or the costs and expenses of entering upon,  taking
                  possession of; removal from,  holding,  operating and managing
                  the  Premises  or any  part  thereof,  as  the  case  may  be,
                  including  reasonable  compensation  to the  Trustee  and  the
                  Beneficiary,  its  agents  and  counsel,  and of any  judicial
                  proceedings wherein the same may be made, and of all expenses,
                  liabilities  and  advances  made or incurred by the Trustee or
                  the Beneficiary  under this Leasehold Deed of Trust,  together
                  with  interest as provided  herein on all advances made by the
                  Beneficiary  and all taxes or  assessments,  except any taxes,
                  assessments  or other  charges  subject to which the  Premises
                  shall have been sold.

                        Second:  To the  payment of the whole  amount  then due,
                  owing or unpaid  upon the Loan  Agreement  for  principal  and
                  interest  with  interest on the unpaid  principal  at the rate
                  herein  specified from and after the happening of any Event of
                  Default  from the due date of any such  payment  of  principal
                  until the same is paid.

<PAGE>

                        Third:  To the payment of any other sums  required to be
                  paid  by  the  Grantor  pursuant  to  any  provision  of  this
                  Leasehold Deed of Trust or of the Loan Agreement.

                        Fourth:  To the  payment  of the  surplus,  if  any,  to
                  whomsoever  may be  lawfully  entitled  to  receive  the same.
                  Except as may be  otherwise  provided  by  applicable  law, no
                  purchaser of all or any part of the Premises shall be required
                  to see the proper application of the purchase money,  proceeds
                  or avails of such sale.

            The Beneficiary, the Trustee and any receiver of the Premises or any
part thereof shall be liable to account for only those rents, issues and profits
actually received by it.

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

                  (iv)  Upon the  completion  of any  sale or sales  made by the
Trustee or the Beneficiary  under or by virtue of this ARTICLE III, the Trustee,
or an officer of any court  empowered to do so, shall execute and deliver to the
accepted purchaser or purchasers a good and sufficient  instrument,  or good and
sufficient instruments, conveying, assigning and transferring all estate, right,
title and interest in and to the property and rights sold. The Trustee is hereby
irrevocably  appointed  the  true and  lawful  attorney-in-fact  of the  Grantor
(coupled  with an  interest),  in its name  and  stead,  to make  all  necessary
conveyances, assignments, transfers and deliveries of the Premises and rights so
sold, and for that purpose the Trustee may execute all necessary  instruments of
conveyance, assignment and transfer, and may substitute one or more persons with
like power,  the  Grantor  hereby  ratifying  and  confirming  all that its said
attorney or such  substitute or substitutes  shall lawfully do by virtue hereof.
Nevertheless,  the Grantor,  if so requested by the Trustee or the  Beneficiary,
shall ratify and confirm any such sale or sales by executing  and  delivering to
the Trustee or to such  purchaser or purchasers  all such  instruments as may be
advisable, in the judgment of the Trustee or the Beneficiary,  for that purpose,
and as may be designated  in such request.  Any such sale or sales made under or
by virtue of this  ARTICLE  III,  whether  made  under the power of sale  herein
granted or under or by virtue of judicial proceedings or of a judgment or decree
of foreclosure and sale, shall operate to divest all the estate,  right,  title,
interest,  claim and demand  whatsoever,  whether  at law or in  equity,  of the
Grantor in and to the  properties  and rights so sold,  and shall be a perpetual
bar both at law and in  equity  against  the  Grantor  and  against  any and all
persons claiming or who may claim the same, or any part thereof from, through or
under the Grantor.

                  (v) In the event of any sale  made  under or by virtue of this
ARTICLE III (whether made by virtue of judicial  proceedings or of a judgment or
decree of foreclosure and sale), the entire Indebtedness,  if not previously due
and payable,  immediately  thereupon shall, anything in the Loan Agreement or in
this  Leasehold  Deed of Trust to the contrary  notwithstanding,  become due and
payable.

<PAGE>

                  (vi) Upon any sale made under or by virtue of this ARTICLE III
(whether  made under the power of sale  herein  granted or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale), the Beneficiary
may bid for and acquire the Premises or any part thereof or interest therein and
in lieu of paying ash therefor  may make  settlement  for the purchase  price by
crediting upon the Indebtedness of the Grantor secured by this Leasehold Deed of
Trust the net sales price after deducting therefrom the expenses of the sale and
the costs of the action and any other sums which the  Beneficiary  or Trustee is
authorized to deduct under this Leasehold Deed of Trust.

                  (vii) The Beneficiary shall be entitled to recover judgment as
aforesaid  either before or after or during the pendency of any  proceedings for
the enforcement of the provisions of this Leasehold Deed of Trust; and the right
of the  Beneficiary  to recover such judgment shall not be affected by any entry
or sale  hereunder,  or by the  exercise  of any right,  power or remedy for the
enforcement  of  the  provisions  of  this  Leasehold  Deed  of  Trust,  or  the
foreclosure of the lien hereof;  and in the event of a sale of the Premises,  or
any part  thereof,  and of the  application  of the proceeds of sale, as in this
Leasehold Deed of Trust provided, to the payment of the debt hereby secured, the
Beneficiary  shall be entitled to enforce payment of, and to receive all amounts
then remaining due and unpaid upon, the Loan  Agreement,  and to enforce payment
of all other charges, payments and costs due under this Leasehold Deed of Trust,
and shall be entitled to recover  judgment for any portion of the debt remaining
unpaid,  with interest at the Post-Default  Rate. In case of the commencement of
any case against the Grantor under any  applicable  bankruptcy,  insolvency,  or
other  similar  law  now or  hereafter  in  effect  or any  proceedings  for its
reorganization or involving the liquidation of its assets,  then the Beneficiary
shall be entitled to prove the whole amount of  principal  and interest due upon
the Loan Agreement to the full amount thereof;  and all other payments,  charges
and costs due under this Leasehold Deed of Trust,  without  deducting  therefrom
any proceeds  obtained  from the sale of the whole or any part of the  Premises,
PROVIDED,  HOWEVER,  that in no case shall,  the  Beneficiary  receive a greater
amount than such  principal  and interest and such other  payments,  charges and
costs from the aggregate  amount of the proceeds of the sale of the Premises and
the distribution from the estate of the Grantor.

                  (viii) No recovery of any judgment by the  Beneficiary  and no
levy of an  execution  under any  judgment  upon the  Premises or upon any other
property of the Grantor shall affect in any manner or to any extent, the lien of
this Leasehold Deed of That upon the Premises or any pert thereof, or any liens,
rights, powers or remedies of the Beneficiary hereunder, but such liens, rights,
powers and remedies of the Beneficiary shall continue unimpaired as before.

                  (ix) It is understood  and agreed that neither the  assignment
of  income,  rents,  royalties,   revenue,   issues,  profits  and  proceeds  to
Beneficiary  nor the  exercise by  Beneficiary  of any of its rights or remedies
under  this  Leasehold  Deed of Trust  shall be  deemed  to make  Beneficiary  a
"mortgagee-in-possession"  or otherwise responsible or liable in any manner with
respect to the Premises or the use, occupancy,  enjoyment or operation of all or
any  portion  thereof~  unless  and  until  Beneficiary,  in person or by agent,
assumes actual possession  thereof,  nor shall appointment of a receiver for the
Premises by any court at the request of Beneficiary or by agreement with Grantor
or the  entering  into  possession  of the  Premises or any part thereof by such
receiver be deemed to make Beneficiary a "mortgagee-in-possession"  or otherwise
responsible  or liable in any manner  with  respect to the  Premises or the use,
occupancy,

<PAGE>

enjoyment or operation of all or any portion thereof.

            Section  3.3  PAYMENT  OF  INDEBTEDNESS  AFTER  DEFAULT.   Upon  the
occurrence of any Event of Default and the  acceleration of the maturity hereof,
if at any time  prior to  foreclosure  sale,  the  Grantor  or any other  person
tenders payment of the amount  necessary to satisfy the  Indebtedness,  the same
shall  constitute  an evasion of the  payment  terms  hereof  and/or of the Loan
Agreement and shall be deemed to be a voluntary prepayment  hereunder,  in which
case such  payment  must  include  the  premium  and/or fee  required  under the
prepayment provision,  if any, contained herein, or in the Loan Agreement.  This
provision  shall be of no force or effect  if at the time  that  such  tender of
payment is made, the Grantor has the right under this leasehold Deed of Trust or
the Loan Agreement to prepay the Indebtedness without penalty or premium.

            Section 3.4  POSSESSION OF THE PREMISES.  Upon the occurrence of any
Event of Default hereunder, it is agreed that the Grantor, if it is the occupant
of the Premises or any part thereof,  shall immediately  surrender possession of
the Premises so occupied to the Beneficiary,  and if the Grantor is permitted to
remain in possession, the possession shall be as a taunt of the Beneficiary and,
on  demand,  Grantor  shall  pay to  the  Beneficiary  monthly,  in  advance,  a
reasonable  rental for the apace so occupied and in default  thereof Grantor may
be dispossessed by the usual summary proceedings. The covenants herein contained
may be enforced by a receiver of the  Premises or any part  thereof.  Nothing in
this  SECTION  3.4  shall be deemed  to be a waiver  of the  provisions  of this
Leasehold  Deed of  Trust  prohibiting  the  sale or  other  disposition  of the
Premises without the Beneficiary's prior written consent.

            Section 3.5 INTEREST AFTER DEFAULT.  If any payment due hereunder or
under the Loan  Agreement  is not paid when due  subject  to any grace or notice
periods,  whether on any stated due date, any  accelerated due date or any other
date or at any other  time  specified  under any of the terms  hereof or thereof
then,  and in  such  event,  the  Grantor  shall  pay  interest  on  the  entire
outstanding and unpaid principal balance of Indebtedness from and after the date
on which  such  payment  first  becomes  due at the  Post-Default  Rate and such
interest shall be due and payable,  on demand,  at such rate until such Event of
Default  shall have been cured or, if such Event of Default  shall not have been
cured,  until the  entire  amount due is paid to the  Beneficiary  and the other
Lenders, whether or not any action shall have been taken or proceeding commenced
to recover the same or to foreclose this Leasehold Deed of Trust. All unpaid and
accrued  interest  shall be secured by this Leasehold Deed of Trust as a part of
the Indebtedness.  Nothing in this SECTION 3.5 or in any other provision of this
Leasehold Deed of Trust shall  constitute an extension of the time of payment of
the Indebtedness.

            Section 3.6 GRANTOR'S ACTIONS AFTER DEFAULT.  After the happening of
any Event of Default and immediately upon the  commencement of any action,  suit
or other legal  proceedings by the Trustee or the Beneficiary to obtain judgment
for the  Indebtedness,  or of any other nature in aid of the  enforcement of the
Loan Agreement or of this  Leasehold  Deed of Trust,  the Grantor will (i) waive
the issuance and service of process and enter its  voluntary  appearance in such
action,  suit or proceeding,  (ii) waive the right to trial by jury and (iii) if
required  by the  Beneficiary,  consent  to the  appointment  of a  receiver  or
receivers of the  Premises and of all the  earnings,  revenues,  rents,  issues,
profits and income thereof.

<PAGE>

            Section 3.7 CONTROL BY BENEFICIARY  AFTER  DEFAULT.  Notwithstanding
the appointment of any receiver, liquidator or trustee of the Grantor, or of any
of its property,  or of the Premises or any part thereof,  the Beneficiary shall
be entitled to retain  possession  and control of all property now and hereafter
covered by this Leasehold Deed of Trust.

                                   ARTICLE IV
                             CONCERNING THE TRUSTEE

            Section 4.8  ACCEPTANCE BY TRUSTEE.  The Trustee,  by its acceptance
hereof,  covenants  faithfully to perform and fulfill the trusts herein created,
being liable,  however,  only for willful  negligence or misconduct,  and hereby
waives any statutory fee and agrees to accept reasonable  compensation,  in lieu
thereof; for any services rendered by him in accordance with the terms hereof

            Section 4.9  RESIGNATION  OF TRUSTEE.  The Trustee may resign at any
time upon  giving  thirty  (30) days notice in writing to the Grantor and to the
Beneficiary.

            Section 4.10 REMOVAL OF TRUSTEE.

                  (i)  Beneficiary  shall have the  irrevocable  power to remove
Trustee, and to appoint one or more additional or substitute  trustees,  without
notice and without specifying any reason therefor.  Such power of appointment of
successor  trustees may be exercised as often as and whenever  Beneficiary deems
it  advisable,  and the  exercise  of such power of  appointment,  no matter how
often,  shall not be an exhaustion  thereof Grantor,  for itself; its successors
and  assigns,  and Trustee  herein named or that may be  substituted  hereunder,
expressly  waives  notice of the  exercise  of such power and any  necessity  of
making oath or giving bond of any Trustee  hereunder.  Upon the  recordation  of
such  instrument  or  instruments  of  appointment,  each trustee or trustees so
appointed shall thereupon  without any further act or deed or conveyance  become
fully vested with  identically the same title and estate in and to the Premises,
and with all the  rights,  powers,  trusts,  and  duties  of  their,  his or its
predecessor  in the trust  hereunder,  with like effect as if  originally  named
Trustee  hereunder.  No such substitute Trustee shall be required to give a bond
for the faithful  performance of their,  his or its duties unless required to do
so by the Beneficiary.

                  (ii) The term "Trustee" shall be construed to mean all persons
or entities from time to time acting as Trustee hereunder, whether the person or
entity named initially as Trustee,  or one or more successors in the trust.  All
title,  estate,   rights,   powers,   trusts  and  duties  hereunder  given,  or
appertaining to or devolving upon Trustee shall be in each trustee  hereunder so
that any action hereunder or purporting to be hereunder of the original,  or any
successor,  trustee shall for all purposes be considered to be, and as effective
as, the action of Trustee.

                                    ARTICLE V

                                  MISCELLANEOUS

            Section 5.1 CREDITS  WAIVED.  The Grantor  will not claim not demand
nor be entitled to any credit or credits against the Indebtedness for so much of
the taxes assessed against

<PAGE>

the  Premises or any part  thereof,  as is equal to the tax rate  applied to the
amount  due on  this  Leasehold  Deed  of  Trust  or any  part  thereof;  and no
deductions  shall  otherwise  be made or claimed  from the taxable  value of the
Premises or any part  thereof by reason of this  Leasehold  Deed of Trust or the
Indebtedness secured hereby.

            Section 5.2 NO RELEASES.  The Grantor agrees,  that in the event the
Premises (or any part thereof or interest  therein) are sold and the Beneficiary
enters into any agreement with the then owner of the Premises extending the time
of payment of the  Indebtedness,  or otherwise  modifying the terms hereof,  the
Grantor  shall  continue to be liable to pay the  Indebtedness  according to the
tenor of any such agreement unless expressly  released and discharged in writing
by the Beneficiary.

            Section 5.3 NOTICES.  All notices  hereunder shall be in writing and
shall be deemed to have been sufficiently  given or served for all purposes when
sent to any party  hereto at its address  above  stated in  accordance  with the
terms and conditions of the Loan Agreement.

            Section 5.4 BINDING  OBLIGATIONS.  The  provisions  and covenants of
this Leasehold Deed of Trust shall run with the land,  shall be binding upon the
Grantor and shall inure to the benefit of the Beneficiary, subsequent holders of
this Leasehold Deed of Trust,  and the respective  successors and assigns of the
foregoing.  For the purpose of this Leasehold  Deed of Trust,  the tam "Grantor"
shall include and refer to the Grantor named herein,  any  subsequent  owners of
the  Premises  (or any part  thereof or interest  therein),  and its  respective
successors and assigns; the term "Loan Agreement" shall include and refer to the
Loan  Agreement  and any other  evidence  of the  indebtedness  secured  by this
Leasehold Deed of Trust; and the term  "Beneficiary"  shall include and refer to
the Beneficiary named herein and its respective successors and assigns.

            Section 5.5 LEGAL  CONSTRUCTION.  This Leasehold Deed of Trust shall
be governed by and construed  and enforced in accordance  with the local laws of
the State of New York;  provided  that the local laws of the State of California
shall apply with respect to the  procedural  aspects of  foreclosure of the real
property  encumbered  hereby  but in no  event  shall  California  Code of Civil
Procedure  Sections 726 and/or  580(a)  and/or 580(b) and/or 580(d) apply to any
such foreclosure or the right of the Beneficiary to obtain a deficiency judgment
following such foreclosure.

            Nothing in this  Leasehold  Deed of Trust,  the Loan Agreement or in
any other agrees rent between the Grantor and the Beneficiary  shall require the
Grantor to pay, or the Beneficiary to accept,  interest in an amount which would
subject the  Beneficiary to any penalty or forfeiture  under  applicable law. In
the event that the payment of any charges,  fees or other sums due  hereunder or
under the Loan Agreement or any such other  agreement which are or could be held
to be in the nature of interest and which would subject the  Beneficiary  to any
penalty or forfeiture  under  applicable law, then ipso facto the obligations of
the Grantor to make such payment shall be reduced to the highest rate authorized
under  applicable law.  Should the  Beneficiary  receive any payment which is or
would be in excess of the highest rate authorized  under law, such payment shall
have  been,  and  shall  be  deemed  to have  bean,  made  in  error  and  shall
automatically  be held by the  Beneficiary as additional cash collateral for the
Indebtedness.

<PAGE>

            Section 5.6 CAPTIONS. The captions of the Sections of this Leasehold
Deed of Trust are for the purpose of convenience only and are not intended to be
a part of this  Leasehold  Deed of Trust and  shall  not be  deemed  to  modify,
explain, enlarge or restrict any of the provisions hereof.

            Section  5.7 FURTHER  ASSURANCES.  The  Grantor  shall do,  execute,
acknowledge  and deliver,  at the sole cost and expense of the Grantor,  all and
ever such further acts, deeds,  conveyances,  mortgages,  assignments,  estoppel
certificates, notices of assignment, transfers and assurances as the Beneficiary
or the Trustee may require from time to time in order to better assure,  convey,
grant,  assign,  transfer  and confirm unto the  Beneficiary,  the rights now or
hereafter  intended to be granted to the Trustee  under this  Leasehold  Deed of
Trust, any other  instrument  executed in connection with this Leasehold Deed of
Trust or any other  instrument  under which the Grantor may be or may  hereafter
become  bound to convey,  mortgage or assign to the Trustee for carrying out the
intention of facilitating the performance of the terms of this Leasehold Deed of
Trust.  The  Grantor  hereby  appoints  the  Beneficiary  and  the  Trustee  its
attorney-in-fact to execute,  acknowledge and deliver for and in the name of the
Grantor any and all of the  instruments  mentioned  in this SECTION 5.7 and this
power, being coupled with an interest, shall be, irrevocable as long as any part
of the Indebtedness remains unpaid.

            Section 5.8  SEVERABILITY.  Any provision of this  Leasehold Deed of
Trust which is prohibited or  unenforceable in any jurisdiction or prohibited or
unenforceable  as to any  person  or entity or  circumstance  shall,  as to such
jurisdiction,  person or entity or  circumstance be ineffective to the extent of
such  prohibition  or  unenforceability   without  invalidating  the,  remaining
provisions hereof or affecting the validity or enforceability of such provisions
in any other jurisdiction or as to any other person or entity or circumstance.

            Section  5.9  ABSOLUTE  AND  UNCONDITIONAl  OBLIGATION.  The Grantor
acknowledges that the Grantor's obligation to pay the Indebtedness in accordance
with the  provisions of the Loan  Agreement and this  Leasehold Deed of Trust is
and  shall  at all  times  continue  to be  absolute  and  unconditional  in all
respects,  and shall at all times be valid and  enforceable  irrespective of any
other agreements or circumstances of any nature whatsoever which might otherwise
constitute a defense to the Loan  Agreement or this  Leasehold  Deed of Trust or
the  obligation  of the  Grantor  thereunder  to  pay  the  Indebtedness  or the
obligations of any other person relating to the Loan Agreement or this Leasehold
Deed of Trust or the obligations of the Grantor under the Loan Agreement or this
Leasehold  Deed of Trust or otherwise  with respect to the loan secured  hereby.
The Grantor absolutely, unconditionally and irrevocably waives any and all right
to  assert  any  defense,  setoff,  counterclaim  or  crossclaim  of any  nature
whatsoever with respect to the obligation of the Grantor to pay the Indebtedness
in accordance  with the provisions of the Loan Agreement and this Leasehold Deed
of Trust or the  obligations of any other person  relating to the Loan Agreement
or this  Leasehold  Deed of Trust or  obligations  of the Grantor under the Loan
Agreement or this  Leasehold Deed of Trust or otherwise with respect to the loan
secured hereby, or in any action or proceeding brought by the Grantor to collect
the Indebtedness,  or any portion thereof, or to enforce,  foreclose and realize
upon the lien and Security  interest  created by this Leasehold Deed of Trust or
any other  document or instrument  securing  repayment of the  Indebtedness,  in
whole or in part.

<PAGE>

            Section 5.10 GENERAL CONDITIONS.

                  (i) All  covenants  hereof  shall be construed as affording to
the Beneficiary  rights additional to and not exclusive of the rights :conferred
under the provisions of any other applicable law.

                  (ii) This Leasehold Deed of Trust cannot be altered,  amended,
modified or discharged  orally and no executory  agreement shall be effective to
modify or discharge  it in whole or in part,  unless it is in writing and signed
by the party against whom enforcement of the modification, alteration, amendment
or discharge is sought.  The Mortgagor  acknowledges that the Loan Agreement and
this Mortgage and the other documents and instruments  executed and delivered in
connection therewith or otherwise in connection with the loan secured hereby set
forth the entire agreement and  understanding of the Mortgagor and the Mortgagee
with  respect to the loan secured  hereby and that no oral or other  agreements,
understanding,  representation  or  warranties  exist  with  respect to the loan
secured hereby other than those set forth in the Loan  Agreement,  this Mortgage
and such other executed and delivered documents and instruments.

                  (iii) No  remedy  herein  conferred  upon or  reserved  to the
Beneficiary  is intended to be exclusive of any other.  remedy or remedies,  and
each and every such  remedy  shall be  cumulative,  and shall be in  addition to
every other  remedy given  hereunder  or now or hereafter  existing at law or in
equity or by statute.  No delay or omission of the Beneficiary in exercising any
right or power accruing upon any Event of Default shall impair any such right or
power, or shall be construed to be a waiver of any such Event of Default, or any
acquiescence  therein.  Acceptance of any payment (other than a monetary payment
in cure of a monetary default) after the occurrence of an Event of Default shall
not be deemed a waiver of or a cure of such Event of Default and every power and
remedy given by this Leasehold Deed of Trust to the Beneficiary may be exercised
from  time to time as  often  as may be  deemed  expedient  by the  Beneficiary.
Nothing in this Leasehold Deed of Trust or in the Loan Agreement  shall limit or
diminish the obligation of the Grantor to pay the Indebtedness in the manner and
at the time and place therein respectively expressed.

                  (iv) No waiver by the Beneficiary  will be effective unless it
is in writing and then only to the extent specifically stated.  Without limiting
the  generality  of the  foregoing,  any  payment  made by the  Beneficiary  for
insurance premiums, taxes, assessments, water rates, sewer rentals, levies, fees
or any other charges  affecting the Premises,  shall not  constitute a waiver of
the  Grantor's  default  in making  such  payments  and shall not  obligate  the
Beneficiary to make any further payments.

                  (v) The  Beneficiary  shall  have the  right to  appear in and
defend any action or proceeding,  in the name and on behalf of the grantor which
the Beneficiary,  in its reasonable  discretion,  feels may adversely affect the
Premises or this Leasehold Deed of Trust.  The  Beneficiary  shall also have the
right to  institute  any  action or  proceeding  which the  Beneficiary,  in its
discretion,  feels  should be brought to protect its interest in the Premises or
its rights  hereunder.  All costs and expenses  incurred by the  Beneficiary  in
connection  with such actions or  proceedings,  including,  without  limitation,
reasonable  attorneys'  fees and  expenses  and  appellate  attorneys'  fees and
expenses,  shall be paid by the  Grantor  on demand and shall be secured by this
Leasehold Deed of Trust.

<PAGE>

                  (vi)  In the  event  of the  passage  after  the  date of this
Leasehold  Deed  of  Trust  of  any  law of any  governmental  authority  having
jurisdiction  hereof or the Premises,  deducting  from the value of land for the
purpose of taxation,  affecting any lien thereon or changing in any way the laws
for the taxation of mortgages or debts secured by mortgages  for federal,  state
or local  purposes,  or the manner of the collection of any such taxes, so as to
affect this  Leasehold  Deed of Trust,  the Grantor  shall  promptly  pay to the
Beneficiary,  on demand,  all taxes, costs and charges for which the Beneficiary
is or may be liable as a result thereof;  provided that if said payment shall be
prohibited by law,  render the Loan Agreement  usurious or subject the Mortgagee
to any penalty or forfeiture,  then and in such event the Indebtedness shall, at
the option of the Mortgagee, be immediately due and payable.

                  (vii) The  Grantor  hereby  appoints  the  Beneficiary  as its
attorney-in-fact  in connection with the personal  property and fixtures covered
by this Leasehold Deed of Trust,  where  permitted by law, to file on its behalf
any financing  statements or other  statements in connection  therewith with the
appropriate public office. This power, being coupled with an interest,  shall be
irrevocable so long as any part of the Indebtedness remains unpaid.

                  (viii) If the Beneficiary purchases the Premises pursuant to a
trustee's sale or a foreclosure under this Leasehold Deed of Trust, or accepts a
deed to the Premises in lieu of a trustee's sale or a  foreclosure,  the Grantor
hereby  authorizes  the  Beneficiary  to  withhold  the  amount of tax,  if any,
required to be withheld under Section 1445 of the Internal Revenue Code of 1986,
as amended (or any successor provision thereto),  out of any sums payable to the
Grantor from such  foreclosure  sale or assignment in lieu thereof,  as the case
may be, after  payment of all parties other than the Grantor who are entitled to
be paid out of any foreclosure or assignment proceeds,  as if the Grantor were a
foreign person,  unless the Grantor  certifies its nonforeign status at the time
of such  foreclosure  sale or  assignment,  as the case may be, by executing and
delivering to the Beneficiary a certificate satisfactory to the teary.

                  (ix) The  information  set forth on the cover hereof is hereby
incorporated

                  (x) The Grantor  acknowledges that it has received a true copy
of this Leasehold Deed of Trust provided without charge.

                  (xi) For purposes of this  Leasehold  Deed of Trust,  whenever
the  circumstances  or the context of this  Leasehold Deed of Trust so requires,
the singular shall be construed as the plural,  the masculine shall be construed
as the feminine and/or the neuter and vice versa.

                  (xii) The Beneficiary is hereby irrevocably  authorized at any
time and from time to time, to the fullest  extent  permitted by law, to set off
and apply any and all deposits (general or special, time or demand,  provisional
or  final)  other  than  tenant  security  accounts  at any  time  held or other
indebtedness  any time  owing by the  Beneficiary  to or for the  credit  or the
account of the Grantor against any and all of the obligations of the Grantor now
or her after existing under this Leasehold Deed of Trust and/or Loan  Agreement.
The Beneficiary agrees promptly to notify the Grantor after any such set-off and
application,  provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of the

<PAGE>

Beneficiary  under this  paragraph  are in addition to other rights and remedies
(including,  without limitation,  other rights of set-off) which the Beneficiary
may have.

                  (xiii)  If  at  any  time  the  Mortgagor  believes  that  the
Mortgagee has not acted  reasonably in granting or  withholding  any approval or
consent  under  the Loan  Agreement,  this  Mortgage  or any other  document  or
instrument  now or hereafter  executed and delivered in connection  therewith or
otherwise  with  respect to the loan  secured  hereby,  as to which  approval or
consent either the Mortgagee has expressly  agreed to act reasonably,  or absent
such agreement, a court of law having jurisdiction over the subject matter would
require the Mortgagee to act reasonably,  then the Mortgagor'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  circumstances  be
maintained by the Mortgagor against the Mortgagee.

            Section 5.11 MULTIPLE REAL ESTATE TRANSACTION.  Grantor acknowledges
that this  Leasehold  Deed of Trust is one of a number of other  deeds of trust,
mortgages  and  assignments  of leases  and rents and other  security  documents
(hereinafter   collectively  the  "Financing   Agreements")   which  secure  the
Indebtedness  in whole or in part Grantor specs that the liar of this  Leasehold
Deed of Trust shall be absolute and unconditional and shall not in any manner be
affected or impaired by any acts or omissions  whatsoever  of  Beneficiary  and,
without  limiting the  generality  of the foregoing the lien hereof shall not be
impaired by any acceptance by Beneficiary of any security for or guarantors upon
any of the  Indebtedness  or by any failure,  neglect or omission on the part of
Beneficiary to realize upon or protect any of the Indebtedness or any collateral
security therefor including the Financing Agreements.  The lien hereof shall not
in any manner be impaired or affected by any release  (except as to the property
released), sale, pledge, surrender, compromise,  settlement, renewal, extension,
indulgence,  alteration, changing, modification or any disposition of any of the
Indebtedness  or of any of  the  collateral  security  therefor,  including  the
Financing Agreements or of any guarantee thereof. Trustee or Beneficiary may, at
its  discretion,  foreclose,  exercise  any power of sale or exercise  any other
remedy  available  to it under any or all of the  Financing  Agreements  without
first exercising or enforcing any of its rights and remedies  hereunder,  or may
foreclose,  or exercise any power of sale, or exercise any other right available
under this Leasehold Deed of Trust without first  exercising or enforcing any of
its rights  and  remedies  under any or all of the  Financing  Agreements.  Such
exercise of Beneficiary's  rights and remedies under any or all of the Financing
Agreements  shall  not in any  manner  impair  the  Indebtedness  or lien of the
Leasehold  Deed  of  Trust,  and any  exercise  of the  rights  or  remedies  of
Beneficiary  hereunder  shall  not  impair  the  lien  of any  of the  Financing
Agreements  or any of  Beneficiary's  rights and  remedies  thereunder.  Grantor
specifically  consents and agrees that  Beneficiary  may exercise its rights and
remedies hereunder and under the Financing Agreements separately or concurrently
and in any order that Beneficiary may deem appropriate.

            Section 5.12 LOAN AGREEMENT PARAMOUNT. If and to the extent that any
provisions  of  this   Leasehold   Deed  of  Trust  conflict  or  are  otherwise
inconsistent  with any provisions of the Loan  Agreement,  the provisions of the
Loan Agreement shall prevail.

<PAGE>

                                   ARTICLE VI

CERTAIN  MATTERS  RELATING  TO THE  LEASEHOLD  ESTATE  LOCATED  IN THE  STATE OF
CALIFORNIA.  With respect to the Trust Property which is located in the State of
California:

            Section 6.13 Grantor  shall pay and perform the  Obligations  at the
times and places and in the manner specified in the Loan Agreement. This Deed of
Trust shall secure  unpaid  balances of all loans and other such  extensions  of
credit made after this Deed of Trust is recorded,  whether  made  pursuant to an
obligation of  Beneficiary  to make such loans or extensions or otherwise.  Such
loans  and  other  extensions  of credit  may or may not be  evidenced  by notes
executed pursuant to the Loan Agreement or the other Financing  Agreements.  All
future  advances  will  have the same  priority  as the  original  advance.  Any
agreement hereafter made by Grantor and Trustee or Beneficiary  pursuant to this
Deed of Trust shall be  superior to the rights of the holder of any  intervening
lien or encumbrance to the extent allowed by law.

            Section 6.14 In the event of damage to or  destruction  of the Trust
Property from any cause actually  covered under insurance  maintained by Grantor
hereunder,  then  Beneficiary  shall make available to Grantor the net insurance
proceeds  available as a result of such damage or destruction  (after  deducting
costs and expenses  incurred by Beneficiary in connection with the settlement or
recovery of any proceeds) for use by Grantor,  in the  reconstruction and repair
of the damaged  improvements to the condition  approved by  Beneficiary,  on the
terms and conditions hereafter set forth in Section 2.6. In the event any of the
conditions  to  Grantor's  right to utilize  the net proceed  hereunder  are not
satisfied or fulfilled at any time,  then such net proceeds  shall be applied as
provided in Section 2.4 hereof with  respect to  insurance  proceeds and Section
2.11 hereof with respect to condemnation proceeds. Any net proceed not disbursed
under this Section 6.2 shall be disbursed in accordance  with Section .24 hereof
with  respect to  insurance  proceeds  and Section  2.11 hereof with  respect to
condemnation proceeds.

            Section  6.15 It is the intent of  Grantor  and  Beneficiary  in the
execution of this Deed of Trust and all other instruments evidencing or securing
the  Obligations to contract in strict  compliance with the relevant usury laws.
In furtherance thereof, Beneficiary and Grantor stipulate and agree that none of
the terms and provisions contained in this Deed of Trust shall ever be construed
to create a contract for the use,  forbearance  or detention of money  requiring
payment of interest at a rate in excess of the maximum  interest rate  permitted
to be charged by relevant law.

            Section 6.16 Upon  foreclosure  of this Deed of Trust or exercise of
the power of sale  granted  herein,  if Trustee so elects,  Trustee may sell the
Trust  Property  at one or  more  separate  sales  in any  manner  permitted  by
applicable  California  law, and the exercise of the powers herein granted shall
not  extinguish or exhaust such powers,  until the entire Trust Property is sold
or the  entire  indebtedness  secured  hereby  is paid  in  full.  In  addition,
Beneficiary  may  sell the  Equipment  that may be  assembled  for such  sale by
Beneficiary  on the Land or elsewhere,  in the sole  discretion of  Beneficiary.
Nothing in this Section dealing with foreclosure  procedures which specifies any
particular  action  to be taken by  Trustee  or  Beneficiary  shall be deemed to
contradict  the  requirements  and  procedures  (now or  hereafter  existing) of
California  law,  and any  such  contradiction  shall  be  resolved  in favor of
California law applicable at the time of foreclosure.

            Section 6.17 If  Beneficiary  shall for any reason  desire to remove
the Trustee or any of his successors as Trustee hereunder,  and to appoint a new
Trustee in his place or stead,

<PAGE>

Beneficiary  shall have and is hereby granted full power and authority to remove
the  Trustee  and to appoint  his  successor  by  instrument  in  writing,  duly
acknowledged  or proved so as to entitle  the same to be  recorded  and such new
Trustee shall thereupon  become successor to the title to the Trust Property and
the same shall  become  vested in him in trust for the  purposes  and objects of
these presents,  with all the power,  duties and obligations herein conferred on
the  Trustee,  in the same manner and to the same effect as though he or it were
named herein as Trustee.

            Section 6.18 All Trust  property  acquired by Grantor after the date
of this Deed of Trust  which by its terms of this Deed of Trust shall be subject
to the lien and security  interest  created hereby,  shall  immediately upon the
acquisition  thereof by Grantor  and without  further  mortgage,  conveyance  or
assignment become subject to the lien and security interest created by this Deed
of Trust. Nevertheless,  Grantor shall execute, acknowledge,  deliver and record
or file, as  appropriate,  all and every such  mortgages,  security  agreements,
financing  statements,  assignments and assurances as Beneficiary  shall require
for accomplishing the purposes of this Deed of Trust.

            Section  6.19  Trustee  accepts  this Trust when this Deed of Trust,
duly executed and acknowledged, is made a public record as provided by law.

            Section 6.20 From time to time upon written  request of  Beneficiary
and  presentation of this Deed of Trust for endorsement,  and without  affecting
the  liability  of any  person or entity  for  payment  of any  indebtedness  or
performance of the Obligations  secured hereby,  Trustee may, without  liability
therefor and without notice reconvey all or any part of the Property; consent to
the making of any map or plat  thereof;  join in granting any easement  thereon;
join in any declaration of covenants and restrictions;  or join in any extension
agreement or any agreement  subordinating the lien or charge hereof. Trustee (or
Beneficiary) may from time to time apply in any court of competent  jurisdiction
for aid and direction in the execution of the trusts and the  enforcement of the
rights and remedies available hereunder, and Trustee (or Beneficiary) may obtain
orders or decrees  directing,  confirming or approving  acts in the execution of
such trusts and the enforcement of such remedies.  All costs and expenses of any
such  proceeding  (including  reasonable  attorneys'  fees)  shall  be  borne by
Grantor.  Trustee shall not be obligated to notify any party of any pending sale
of the  Property,  or any  portion  thereof,  under any  other  deed of trust or
otherwise,  or of any action or  proceeding  in which  Grantor,  Beneficiary  or
Trustee shall be a party,  unless Trustee or  Beneficiary  brings such action or
unless held or commenced  and  maintained by Trustee or  Beneficiary  under this
Deed  of  Trust.  Grantor  shall  pay to  Trustee  reasonable  compensation  and
reimbursement for all services and expenses in the  administration of the trusts
created hereunder, including reasonable attorneys' fees.

            Section 6.21 Upon Beneficiary's  written request, and upon surrender
to Trustee for  cancellation  of this Deed of Trust and any note or  instruments
setting forth all obligations  secured hereby,  Trustee shall reconvey,  without
warranty,  the Trust Property,  or that portion thereof then held hereunder.  To
the extent  permitted by law, the  reconveyance may describe the grantee as "the
person or persons legally  entitled  thereto."  Neither  Beneficiary nor Trustee
shall have any duty to determine  the rights of persons  claiming to be rightful
grantees of any reconveyance. When the Trust Property has been fully reconveyed,
the last such reconveyance  shall operate as a reassignment of all future rents,
issues and  profits  of the Trust  Property  to the  person or  persons  legally
entitled thereto, unless such reconveyance expressly provides to the

<PAGE>

contrary.

            Section 6.22 Subject to the terms of the Loan Agreement,  if Grantor
shall fail, refuse or neglect to make any payment or perform any act required by
this  Deed  of  Trust  or the  other  Financing  Agreements,  then  at any  time
thereafter, and without notice to or demand upon Grantor, other than as same may
be provided  for in this Deed of Trust,  and without  waiving or  releasing  any
other  right,  remedy  or  recourse,  Beneficiary  may  have  because  of  same,
Beneficiary  may (but shall not be obligated  to) make such  payments or perform
such act for the account of and at the  expense of  Grantor,  and shall have the
right to enter the Land and  Improvements  for such purpose and to take all such
action  thereon and with respect to the Trust  Property as it may deem necessary
or appropriate.  If Beneficiary shall elect to pay any Taxes or Charges or other
sums due with reference to the Trust Property, Beneficiary may do so in reliance
on any bill, statement or assessment procured from the appropriate  governmental
authority  or other  issuer  thereof  without  inquiring  into the  accuracy  or
validity  thereof.  Similarly,  in making any  payments to protect the  security
intended to be created by the  Financing  Agreements,  Beneficiary  shall not be
bound to inquire into the validity of any apparent or threatened  adverse title,
lien, encumbrance,  claim, or charge before making an advance for the purpose of
preventing or removing the same.  Grantor shall  indemnify  Beneficiary  for all
losses,  expenses,  damages,  claims and causes of action,  including attorneys'
fees,  incurred  or  accruing  by reason of any acts  performed  by  Beneficiary
pursuant  to the  provisions  of this  Section  6.10 or by  reason  of any other
provision  in the  other  Financing  Agreements.  All sums  paid by  Beneficiary
pursuant to this Section  6.10,  and all other sums expended by  Beneficiary  to
which it  shall  be  entitled  to be  indemnified,  together  with  interest  or
expenditure,  shall constitute additions to the Obligations, shall be secured by
the liens,  security  interests and rights  created by this Deed of Trust or the
other  Financing  Agreements  and shall be paid by Grantor to  Beneficiary  upon
demand.

            Section  6.23 All  Obligations  contained  in this Deed of Trust are
intended by the parties to be, and shall be construed as, covenants running with
the Trust Property.

            Section 6.24 Grantor  agrees,  to the full extent  permitted by law,
that,  in case of the  occurrence  and  during the  continuation  of an Event of
Default on the part of Grantor  hereunder,  neither  Grantor nor anyone claiming
through or under  Grantor  will set up,  claim or seek to take  advantage of any
moratorium,   reinstatement,   forbearance,   appraisement,   valuation,   stay,
extension,  homestead, exemption, insolvency or redemption laws now or hereafter
in force in order to prevent or hinder the  enforcement  or  foreclosure  of the
Deed of Trust or the  absolute  sale of the  Trust  Property,  the  delivery  of
possession thereof immediately after such sale to the purchaser at such sale, or
the exercise of any other remedy hereunder;  and Grantor, for itself and all who
may to any extent  that it may  lawfully  so do,  waive the  benefit of all such
laws, and any and all right to have assets  subject to the security  interest of
the Deed of Trust marshalled upon any foreclosure or sale under the power herein
granted or a sale in inverse order of alienation.

            Section  6.25  Each and all of the  Obligations  shall  survive  the
execution and delivery of this Deed of Trust and the other Financing Agreements,
and the  consummation  of the  loans and  financial  accommodations  called  for
therein, and shall continue in full force and effect until the Obligations shall
have been indefeasibly paid in full; PROVIDED,  HOWEVER,  that nothing contained
in this  Section  43(m)  shall  limit the  obligations  of Grantor  which are to
continue after

<PAGE>

indefeasible  payment in full of the Obligations where so stated in this Deed of
Trust.

            Section  6.26 Time is of the essence  with respect to each and every
covenant, agreement and obligation of Grantor under this Deed of Trust.

            Section  6.27 If any or all of the  proceeds  of the loans and other
financial accommodations made and extended under the Loan Agreement or the other
Financing  Agreements  have  been  used  to  extinguish,  extend  or  renew  any
indebtedness previously existing against the Trust Property, then, to the extent
of such funds so used,  Beneficiary  shall be  subrogated  to all of the rights,
claims,  liens,  titles and  interests  heretofore  existing  against  the Trust
Property to secure the  indebtedness so extinguished,  extended or renewed,  and
the former rights, claims, liens, titles and interests,  if any, are not waived,
but rather,  are continued in full force and effect in favor of Beneficiary  and
are merged with the lien and  security  interest  created  herein as  cumulative
security for the repayment and satisfaction of the Obligations.

            Section 6.28 No portion of the indebtedness  secured by this Deed of
Trust  shall be or be deemed to be offset or  compensated  by all or any part of
any claim, cause of action, counterclaim, or cross-claim,  whether liquidated or
unliquidated,  which  Grantor  may have or claim  to have  against  Beneficiary.
Grantor waives,  to the fullest extent permitted by applicable law, the benefits
of California Code of Civil Procedure section 431.70, which provides:

      "Where  cross-demands  for money have existed between persons at any point
      in time when neither demand was barred by the statute of limitations,  and
      an action is thereafter commenced by one such person, the other person may
      assert in the answer the  defense of payment in that the two  demands  are
      compensated  so far as they  equal  each  other,  notwithstanding  that an
      independent  action  asserting  the  person's  claim  would at the time of
      filing  the  answer  be  barred  by the  statute  of  limitations.  If the
      cross-demand would otherwise be barred by the statute of limitations,  the
      relief  accorded  under  this  section  shall not  exceed the value of the
      relief granted to the other party. The defense provided by this section is
      not available if the  cross-demand is barred for failure to assert it in a
      prior action under Section  426.30.  Neither person can be deprived of the
      benefits of this section by the assignment or death of the other.  For the
      purposes of this section, a money judgment is a "demand for money" and, as
      applied  to a money  judgment,  the  demand is barred  by the  statute  of
      limitations  when  enforcement  of the judgment is barred under  Chapter 3
      (commencing with Section 683.010) of Division I of Title 9."

            Section 6.29 Grantor hereby  authorizes and empowers  Beneficiary in
its sole discretion, without any notice or demand and without affecting the lien
and  charge of this  Deed of  Trust,  to  exercise  any  right or  remedy  which
Beneficiary  may have available to it,  including,  but not limited to, judicial
foreclosure,  exercise of rights of power of sale without  judicial action as to
any  collateral  security  for  the  Obligations,   whether  real,  personal  or
intangible  property.  Grantor expressly waives any defense or benefits that may
be available under  California  Code of Civil  Procedure  Section 580 and in its
subdivisions,  Section 726, or  comparable  provisions  of the laws of any other
state,  as well as all surety  defenses  that Grantor may have under  California

<PAGE>

;law and the laws of any other state.  Without  limiting the foregoing,  Grantor
specifically   agrees  that  any  action   maintained  by  Beneficiary  for  the
appointment of any receiver,  trustee or custodian to collect  rents,  issues or
profits or to obtain  possession of the Trust  Property  shall not constitute an
"action"  within  the  meaning of Section  726 of the  California  Code of Civil
Procedure.

            Section 6.30 Grantor  represents  that no part of the Trust Property
constitutes residential homestead.

Any  inconsistency  or conflict between this Article VI and any other provisions
or terms  contained  herein  shall be construed in favor of and governed by this
Article VI

<PAGE>

            IN WITNESS  WHEREOF,  this  Leasehold  Deed of Trust,  Assignment of
Rents and  Security  Agreement  has been duly  executed by the Grantor as of the
date first above written.

            TRUSTOR  PLEASE  NOTE:  IN THE EVENT OF YOUR  DEFAULT,  THIS DEED OF
TRUST AND APPLICABLE LAW PERMIT THE TRUSTEE TO SELL THE TRUST PROPERTY AT A SALE
HELD WITHOUT SUPERVISION BY ANY COURT AFTER EXPIRATION OF A PERIOD PRESCRIBED BY
LAW.  UNLESS YOU  PROVIDE AN  ADDRESS  FOR THE GIVING OF NOTICE,  YOU MAY NOT BE
ENTITLED TO OTHER NOTICE OF THE COMMENCEMENT OF SALE  PROCEEDINGS.  BY EXECUTION
OF THIS DEED OF TRUST, YOU CONSENT TO THIS PROCEDURE.  IF YOU HAVE ANY QUESTIONS
CONCERNING IT, YOU SHOULD CONSULT YOUR LEGAL  ADVISOR.  BENEFICIARY  AND TRUSTEE
URGE YOU TO GIVE BENEFICIARY PROMPT NOTICE OF ANY CHANGE IN YOUR ADDRESS SO THAT
YOU MAY RECEIVE ANY NOTICE OF DEFAULT AND NOTICE OF SALE GIVEN  PURSUANT TO THIS
DEED OF TRUST.

ATTEST:                                             GRANTOR:

                                                    FMI INTERNATIONAL LLC

___________________________                         By: ________________________
Name:                                                   Name:  _________________
                                                        Title: _________________

WITNESSES:

___________________________
Name: _____________________

___________________________
Name: _____________________

<PAGE>

                                 ACKNOWLEDGMENT

STATE OF____________________)
                            )ss..
COUNTY OF___________________)

      On the _______ day of October 2006, before me, __________________________,
Notary Public, personally appeared ____________________, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

Witness my hand and official seal

_________________________________
          SIGNATURE                          [seal]

<PAGE>

                                   SCHEDULE A

                              DESCRIPTION OF LEASES

Land and Building Lease Agreement, dated to be effective as of July 20, 2004, by
and between Thrifty Oil Co., as Landlord and FMI International LLC, as Tenant

<PAGE>

                                                                      CALIFORNIA
                                                                Riverside County

                                   SCHEDULE B

      That certain real property located at and commonly known as 3355 Dulles
Drive, Mira Loma, California, and more particularly described as follows:

PARCELS 14 THROUGH 19, INCLUSIVE OF PARCEL MAP NO. 26365 IN THE COUNTY OF
RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 172, PAGES 36
THOUGH 41 INCLUSIVE, OF PARCEL MAPS, IN THE OFFICE OF THE RIVERSIDE COUNTY
RECORDER.

EXCEPTING THEREFROM ALL MINERALS, OIL, GAS AND OTHER HYDROCARBON SUBSTANCES,
TOGETHER WITH THE RIGHT TO EXPLORE FOR, DEVELOP, PRODUCE AND EXTRACT THE SAME,
BUT WITHOUT THE RIGHT OF ENTRY UPON THE SURFACE OF SAID REAL PROPERTY OR ANY
PORTION OF SAID REAL PROPERTY ABOVE A PLANE 500 FEET BELOW THE PRESENT SURFACE
OF SAID REAL PROPERTY, AND IN SUCH A MANNER AS NOT TO DAMAGE THE SURFACE OF SAID
REAL PROPERTY, AS RESERVED BY JAMES F. LIEBENGUTH, A MARRIED MAN, BY DEED
RECORDED JANUARY 29, 1968 AS INSTRUMENT NO. 8206, OFFICIAL RECORDS.

ALSO EXCEPTING THEREFROM ALL MINERALS, OIL, GAS AND OTHER HYDORCARBON
SUBSTANCES, TOGETHER WITH THE RIGHT TO EXPLORE FOR, DEVELOP, PRODUCE AND EXTRACT
THE SAME, BUT WITHOUT THE RIGHT OF ENTRY UPON THE SURFACE OF SAID REAL PROPERTY
OR ANY PORTION OF SAID REAL PROPERTY ABOVE A PLANE 500 FEET BELOW THE PRESENT
SURFACE OF SAID REAL PROPERTY, AND IN SUCH A MANNER AS NOT TO DAMAGE THE SURFACE
OF SAID REAL PROPERTY, AS RESERVED BY FRED J. RUSSELL, AN UNMARRIED MAN, BY DEED
RECORDED JANUARY 29, 1968 AS INSTRUMENT NO. 8207, OFFICIAL RECORDS.

ALSO EXCEPTING THEREFROM TO THE EXTENT NOT RESERVED BY JAMES F. LIEBENGUTH,
MARRIED MAN, BY DEED RECORDED JANUARY 29, 1968 AS INSTRUMENT NO. 8206 OFFICIAL
RECORDS OF RIVERSIDE COUNTY, CALIFORNIA, OR BY FRED J. RUSSELL, AN UNMARRIED
MAN, BY DEED RECORDED JANUARY 29, 1968, AS INSTRUMENT NO. 8207 OFFICIAL RECORDS
OF RIVERSIDE COUNTY, CALIFORNIA, ALL MINERALS AND ALL MINERAL RIGHTS OF EVERY
KIND AND CHARACTER NOW KNOWN TO EXIST OR HEREAFTER DISCOVERED, INCLUDING,
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, OIL AND GAS ANY RIGHTS THERETO
TOGETHER WITH THE SOLE, EXCLUSIVE AND PERPETUAL RIGHT TO EXPLORE FOR, REMOVE AND
DISPOSE OF, SAID MINERALS BY MEANS OR METHODS SUITABLE TO GRANTOR, ITS
SUCCESSORS AND ASSIGNS, BUT WITHOUT ENTERING UPON OR USING THE SURFACE OF THE
LANDS HEREBY CONVEYED, AND IN SUCH MANNER AS NOT TO DAMAGE THE SURFACE OF SAID
LANDS OR TO INTERFERE WITH THE USE THEREOF BY GRANTEE, ITS

<PAGE>

SUCCESSORS OR ASSIGNS, PROVIDED, HOWEVER, THAT GRANTOR, ITS SUCCESSORS OR
ASSIGNS, WITHOUT THE PRIOR WRITTEN PERMISSION OF GRANTEE, ITS SUCCESSORS OK
ASSIGNS, SHALL NOT CONDUCT ANY MINING ACTIVITIES OF WHATSOEVER NATURE ABOVE A
PLANE OF FIVE HUNDRED FEET (500') BELOW THE SURFACE OF THE LANDS AS RESERVED BY
UPLAND INDUSTRIES CORPORATION, A NEVADA CORPORATION BY DEED RECORDED MAY 1,1990
AS INSTRUMENT NO. 90-158886 OFFICIAL RECORDS.

SAID PARCELS WERE MERGED BY RIVERSIDE COUNTY PLANNING DEPARTMENT CERTIFICATE OF
PARCEL MERGER NO. 1242, RECORDED _APRIL 15, 2001 AS INSTRUMENT NO. 01-158266
OFFICIAL RECORDS.

APN: 156-360-012-2 (AFFECTS: PARCEL 14), 156-360-013-3 (AFFECTS: PARCEL 15) AND
156-360-016-6 (AFFECTS PARCELS 16 THROUGH 19)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}]]