<PAGE>

                                                                   EXHIBIT 10.13

            THIS MORTGAGE AND SECURITY AGREEMENT (this "MORTGAGE") is made as
of the 1 day of July, 2004, by FOSS (NH) QRS 16-3, INC., A Delaware
corporation, whose address is c/o W.P. Carey & Co, LLC, 50 Rockefeller Plaza
2(nd) Floor, New York, New York 10020 ("Mortgagor"), in favor of CIBC INC., a
Delaware corporation ("Mortgagee"), whose address is 622 Third Avenue, 8th
Floor, Attn: Real Estate Finance Group, New York, New York, 10017.

                                   WITNESSETH:

            THAT FOR AND IN CONSIDERATION OF THE SUM OF TEN AND NO/100 DOLLARS
($10.00), AND OTHER VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH
IS HEREBY ACKNOWLEDGED, MORTGAGOR HEREBY IRREVOCABLY MORTGAGES, GRANTS,
BARGAINS, SELLS, CONVEYS, TRANSFERS, PLEDGES, SETS OVER AND ASSIGNS, AND GRANTS
A SECURITY INTEREST TO MORTGAGEE, ITS SUCCESSORS AND ASSIGNS, in all of
Mortgagor's estate, right, title and interest in to and under any and all of
the following described property, whether now owned or hereafter acquired
(collectively, the "Property"):

            A. All that certain real property situated at 380 Lafayette Road,
Hampton, New Hampshire (as more particularly described as Tract II on Exhibit A
attached hereto), 390 Lafayette Road, Hampton, New Hampshire (as more
particularly described as Tract I on Exhibit A attached hereto) and 11 Merrill
Industrial Drive, Hampton, New Hampshire (as more particularly described as
Tract III on Exhibit A attached hereto) and that certain 13.1 acre tract of real
property located in Hampton, New Hampshire (as more particularly described as
Tract IV on Exhibit A attached hereto) and that certain 21 acre tract of real
property located in Hampton, New Hampshire (as more particularly described as
Tract V on Exhibit A attached hereto) (collectively, as described on Exhibit A
attached hereto and incorporated herein by this reference, the "Land"). together
with all of the casements, rights, privileges, franchises, tenements,
hereditaments and appurtenances now or hereafter thereunto belonging or in any
way appertaining and all of the estate, right, title, interest, claim and demand
whatsoever of Mortgagor therein or thereto, either at law or in equity, in
possession or in expectancy, now or hereafter acquired;

            B. All structures, buildings and improvements of every kind and
description now or at any time hereafter located or placed on the Land (the
"Improvements");

            C. All furniture, furnishings, fixtures, goods, equipment, inventory
or personal property owned by Mortgagor and now or hereafter located on,
attached to or used in and about the Improvements, including, but not limited
to, all machines, engines, boilers, dynamos, elevators, stokers, tanks,
cabinets, awnings, screens, shades, blinds, carpets, draperies, lawn mowers,
and all appliances, plumbing, heating, air conditioning, lighting, ventilating,
refrigerating, disposal and incinerating equipment, and all fixtures and
appurtenances thereto, and such other goods and chattels and personal property
owned by Mortgagor as are now or hereafter used or furnished in operating the
Improvements, or the activities conducted therein, and all building materials
and equipment hereafter situated on or about the Land or

<PAGE>

Improvements, and all warranties and guaranties relating thereto, and all
additions thereto and substitutions and replacements therefor (exclusive of any
of the foregoing owned or leased by tenants of space in the Improvements):

            D. All easements, rights-of-way, strips and gores of land, vaults,
streets, ways, alleys, passages, sewer rights, air rights and other development
rights now or hereafter located on the Land or under or above the same or any
part or parcel thereof, and all estates, rights, titles, interests, tenements,
hereditaments and appurtenances, reversions and remainders whatsoever, in any
way belonging, relating or appertaining to the Land and/or Improvements or any
part thereof, or which hereafter shall in any way belong, relate or be
appurtenant thereto, whether now owned or hereafter acquired by Mortgagor,

            E. All water, ditches, wells, reservoirs and drains and all water,
ditch, well, reservoir and drainage rights which are appurtenant to, located on,
under or above or used in connection with the Land or the Improvements, or any
part thereof, whether now existing or hereafter created or acquired;

            F. All minerals, crops, timber, trees, shrubs, flowers and
landscaping features now or hereafter located on, under or above the Land;

            G. All cash funds, deposit accounts and other rights and evidence of
rights to cash, now or hereafter created or held by Mortgagee pursuant to this
Mortgage or any other of the Loan Documents. (as hereinafter defined),
including, without limitation, all funds now or hereafter on deposit in the
Payment Reserve, the Impound Account, the Leasing Reserve, the Repair and
Remediation Reserve, the Environmental Reserve, the LC Assignment Reserve and
the Replacement Reserve, each as hereafter defined (collectively, the
"Reserves");

            H. All leases (including. without limitation, (a) that certain lease
dated as of July _, 2004 between Mortgagor, as lessor, and FOSS MANUFACTURING
COMPANY, INC., as lessee (the "Primary Tenant") (as the same may be modified and
in effect from time to time, the "Primary Lease") and (b) oil, gas and mineral
leases), licenses, concessions and occupancy agreements of all or any part of
the Land or the Improvements now or hereafter entered into (each, a "Lease" and
collectively, the "Leases") and all rents, royalties, issues, profits, revenue,
income and other benefits (collectively, the "Rents and Profits") of the Land
or the Improvements, now or hereafter arising from the use or enjoyment of all
or any portion thereof or from any present or future Lease or other agreement
pertaining thereto or arising from any of the Contracts (as hereinafter defined)
or any of the General Intangibles (as hereinafter defined) and all cash or
securities (including, without limitation, the "Security Deposit", "Cash
Security Deposit" and the "Letter of Credit" as such terms are defined in
Paragraph 39 of the Primary Lease), deposited to secure performance by the
tenants, Lessees or licensees, as applicable (each a "Tenant" and collectively,
the "Tenants"), of their obligations under any such Leases, whether said cash or
securities are to be held until the expiration of the terms of said Leases or
applied to one or more of the installments of rent coming due prior to the
expiration of said terms, subject, however, to the provisions contained in
Section 1.11 hereinbelow;

                                       2
<PAGE>
            I. All contracts and agreements now or hereafter entered into
covering any part of the Land or the Improvements (collectively, the
"Contracts") and all revenue, income and Other benefits thereof, including,
without limitation, management agreements, service contracts, maintenance
contracts, equipment leases, personal property leases and any contracts or
document's relating to construction on any part of the Land or the Improvements
(including plans, drawings, surveys, tests, reports, bonds and governmental
approvals) or to the management or operation of any part of the Land or the
Improvements;

            J. All present and future monetary deposits given to any public or
private utility with respect to utility services furnished to any part of the
Land or the Improvements;

            K. All present and future funds, accounts, Instruments, accounts
receivable, documents, causes of action, claims, general intangibles (including
without limitation, trademarks, trade names, servicemarks and symbols now or
hereafter used in connection with any part of the Land or the Improvements, all
names by which the Land or the Improvements may be operated or known, all rights
to carry on business under such names, and all rights, interest and privileges
which Mortgagor has or may have as developer or declarant under any covenants,
restrictions or declarations now or hereafter relating to the Land or the
Improvements) and all notes or chattel paper now or hereafter arising from or by
virtue of any transactions related to the Land or the Improvements
(collectively, the "General Intangibles");

            L. All water taps, sewer taps, certificates of occupancy, permits,
licenses, franchises, certificates, consents, approvals, and other rights and
privileges now or hereafter obtained in connection with the Land or the
Improvements and all present and future warranties and guaranties relating to
the Improvements or to any equipment, fixtures, furniture, furnishing, personal
property or components of any of the foregoing now or hereafter located or
installed on the Land or the Improvements;

            M. All building materials, supplies and equipment now or hereafter
placed on the Land, or in the Improvements and all architectural renderings,
models, drawings, plans, specifications, studies and data now or hereafter
relating to the Land or the Improvements;

            N. All right, title and interest of Mortgager in any insurance
policies or binders now or hereafter relating to the Property including any
unearned premiums thereon;

            O. All proceeds, products, substitutions and accessions (including
claims and demands therefor) of the conversion, voluntary or involuntary, of any
of the foregoing into cash or liquidated claims, including, without limitation,
proceeds of insurance and condemnation awards and proceeds of refunds of any
taxes or assessments levied against the Property with respect to any period in
which this Mortgage encumbers the Property; and

            P. All other or greater rights and interests of every nature in the
Land or the Improvements and in the possession or use thereof and income
therefrom, whether now owned or hereafter acquired by Mortgagor.

            FOR THE PURPOSE OF SECURING:

                                       3
<PAGE>

            (1) The debt evidenced by that certain promissory note (such
promissory note, together with any and all renewals, modifications,
consolidations and extensions thereof, is hereinafter referred to as the
"Note") of even date with this Mortgage, made by Mortgagor to the order of
Mortgagee in the original principal amount of SEVENTEEN MILLION AND 00/100
DOLLARS ($17,000,000), together with interest as therein provided;

            (2) The full and prompt payment and performance of all of the
provisions, agreements, covenants and obligations herein contained and contained
in any other agreements, documents or instruments now or hereafter evidencing,
guarantying, securing or otherwise relating to the indebtedness evidenced by the
Note, excluding only the Indemnity and Guaranty Agreement dated of even date
with this Mortgage executed by Corporate Property Associates 16-Global
Incorporated, a Maryland corporation ("Guarantor") in favor of Mortgagee (the
"Guaranty") and that certain separate Hazardous Substances Indemnity Agreement
(as hereinafter defined), which are unsecured obligations of Mortgagor and
Guarantor (the Note, this Mortgage and such other agreements, documents and
instruments, including the Guaranty and the Hazardous Substances Indemnity
Agreement, together with any and all renewals, amendments, extensions and
modifications thereof, are hereinafter collectively referred to as the "Loan
Documents") and the payment of all other sums therein covenanted to be paid;

            (3) Any and all additional advances made by Mortgagee to protect or
preserve the Property or the lien or security interest created hereby on the
Property, or for taxes, assessments or insurance premiums as hereinafter
provided or for performance of any of Mortgagor's obligations hereunder or under
the other Loan Documents or for any other purpose provided herein or in the
other Loan Documents (whether or not the original Mortgagor remains the owner of
the Property at the time of such advances); and

            (4) Any and all other indebtedness now owing or which may hereafter
be owing by Mortgagor to Mortgagee, including, without limitation, all
prepayment fees, however and whenever incurred or evidenced, whether express or
implied, direct or indirect, absolute or contingent, or due or to become due,
and all renewals, modifications, consolidations, replacements and extensions
thereof, it being contemplated by Mortgagor and Mortgagee that Mortgagor may
hereafter become so indebted to Mortgagee.

            (All of the sums referred to in Paragraphs (1) through (4) above are
herein sometimes referred to as the "secured indebtedness" or the "indebtedness
secured hereby").

            TO HAVE AND TO HOLD the Property unto Mortgagee, its successors and
assigns forever, for the purposes and uses herein set forth.

            PROVIDED, HOWEVER, that if the principal and interest and all other
sums due or to become due under the Note and the other Loan Documents,
including, without limitation, any prepayment fees required pursuant to the
terms of the Note, shall have been paid at the time and in the manner stipulated
therein and all other sums payable hereunder and all other indebtedness secured
hereby shall have been paid and all other covenants contained in the Loan
Documents shall have been performed, then, in such case, this Mortgage shall be
satisfied and the estate, right, title and interest of Mortgagee in the Property
shall cease, and upon payment to

                                       4
<PAGE>

Mortgagee of all costs and expenses incurred for the preparation of the release
hereinafter referenced and all recording costs if allowed by law, Mortgagee
shall release this Mortgage and the lien hereof by proper instrument.

                                    ARTICLE I

                             COVENANTS OF MORTGAGOR

            For the purpose of further securing the indebtedness secured hereby
and for the protection of the security of this Mortgage, for so long as the
indebtedness secured hereby or any part thereof remains unpaid, Mortgagor
covenants and agrees as follows:

            Section 1.1 Warranties of Mortgagor. Mortgagor, for itself and its
successors and assigns, does hereby represent, warrant and covenant to and with
Mortgagee, its successors and assigns, that:

            (a) Organization and Existence. Mortgagor is duly organized and
validly existing as a corporation in good standing under the laws of Delaware,
is duly qualified as a foreign corporation in the state in which the Property is
located and in all other jurisdictions in which Mortgagor is transacting
business.

            (b) Authorization. Mortgagor has the power and authority to execute,
deliver and perform the obligations imposed on it under the Loan Documents and
to consummate the transactions contemplated by the Loan Documents and has taken
all necessary actions in furtherance thereof including, without limitation, that
those partners or members of Mortgagor whose approval is required by the terms
of Mortgagor's organizational documents have duly approved the transactions
contemplated by the Loan Documents and have authorized execution and delivery
thereof by the respective signatories. To the best of Mortgagor's knowledge, no
other consent by any local, state or federal agency is required in connection
with the execution and delivery of the Loan Documents.

            (c) Valid Execution and Delivery. All of the Loan Documents
requiring execution by Mortgagor have been duly and validly executed and
delivered by Mortgagor.

            (d) Enforceability. All of the Loan Documents constitute valid,
legal and binding obligations of Mortgagor and are fully enforceable against
Mortgagor in accordance with their terms, subject only to bankruptcy laws and
general principles of equity.

            (e) No Defenses. The Note, this Mortgage and the other Loan
Documents are not subject to any right of rescission, set-off, counterclaim or
defense, nor would the operation of any of the terms of the Note, this Mortgage
or any of the other Loan Documents, or the exercise of any right thereunder,
render this Mortgage unenforceable, in whole or in part, or subject to any right
of rescission, set-off, counterclaim or defense, including the defense of usury.

                                       5
<PAGE>

            (f) Defense of Usuary. Mortgagor knows of no facts that would
support a claim of usury to defeat or avoid its obligation to repay the
principal of, interest on, and other sums or amounts due and payable under, the
Loan Documents.

            (g) No Conflict/Violation of Law. The execution, delivery and
performance of the Loan Documents by the Mortgagor will not cause or constitute
a default under or conflict with the organizational documents of Mortgagor, any
indemnitor or any general partner or managing member or shareholder of Mortgagor
or, to Mortgagor's knowledge, any shareholder of indemnitor. The execution,
delivery and performance of the obligations imposed on Mortgagor under the Loan
Documents will not cause Mortgagor to be in default, including after due notice
or lapse of time or both, under the provisions of any agreement, judgment or
order to which Mortgagor is a party or by which Mortgagor is bound.

            (h) Compliance with Applicable Laws and Regulations. To Mortgagor's
knowledge, (i) all of the Improvements and the use of the Property by the
Mortgagor comply with all applicable statutes, rules, regulations and private
covenants now or hereafter relating to the ownership, construction, use or
operation of the Property, including all applicable statutes, rules and
regulations pertaining to requirements for equal opportunity,
anti-discrimination, fair housing, environmental protection, zoning and land
use; (ii) the Improvements comply with applicable health, fire and building
codes; (iii) in all material respects there is no evidence of any illegal
activities relating to controlled substances on the Property; (iv) all
certifications, permits, licenses and approvals, including, without limitation,
certificates of completion and occupancy permits required for the legal use,
occupancy and operation of the Property for the use currently being made thereof
have been obtained and are in full force and effect; and (v) all of the
Improvements comply with all material requirements of any applicable zoning and
subdivision laws and ordinances.

            (i) Consents Obtained. All consents, approvals, authorizations,
orders or filings with any court or governmental agency or body, if any,
required for the execution, delivery and performance of the Loan Documents by
Mortgagor have been obtained or made.

            (j) No Litigation. There are no pending or, to the best of
Mortgagor's knowledge, threatened actions, suits or proceedings, arbitrations or
governmental investigations against the Property, Mortgagor or any guarantor of
Mortgagor, an adverse outcome of which would materially affect the Mortgagor's
performance under the Note, the Mortgage or the other Loan Documents.

            (k) Title. The Mortgagor has good and indefeasible fee simple title
to the Property, subject only to those matters expressly listed as exceptions to
title or subordinate matters in the title insurance policy accepted by Mortgagee
in connection with this Mortgage, excepting therefrom all preprinted and/or
standard exceptions (the "Permitted Exceptions"). Further, Mortgagor has full
power and lawful authority to grant, bargain, sell, convey, assign, transfer and
mortgage its interest in the Property in the manner and form hereby done or
intended. Mortgagor will preserve its interest in and title to the Property and
will forever warrant and defend the same to Mortgagee against any and all claims
whatsoever and will forever warrant and defend the validity and priority of the
lien and security interest created herein

                                       6
<PAGE>

against the claims of all persons and parties whomsoever, subject to the
Permitted Exceptions. The foregoing warranty of title shall survive the
foreclosure of this Mortgage and shall inure to the benefit of and be
enforceable by Mortgagee in the event Mortgagee acquires title to the Property
pursuant to any foreclosure.

            (l) Permitted Exceptions. The Permitted Exceptions do not and will
not materially and adversely affect (1) the ability of the Mortgagor to pay in
full the principal and interest on the Note in a timely manner or (2) the use of
the Property for the use currently being made thereof, the operation of the
Property as currently being operated or, to the best of Mortgagor's knowledge,
the value of the Property.

            (m) First Lien. Upon the execution by the Mortgagor and the
recording of this Mortgage, and upon the execution and filing of UCC-1 financing
statements or amendments thereto, the Mortgagee will have a valid first lien on
the Property and a valid security interest in all personal property encumbered
hereby, subject to no liens, charges or encumbrances other than the Permitted
Exceptions.

            (n) ERISA. The Mortgagor has made and shall continue to make all
required contributions to all employee benefit plans, if any, and the Mortgagor
has no knowledge of any material liability which has been incurred by the
Mortgagor which remains unsatisfied for any taxes or penalties with respect to
any employee benefit plan or any multi-employer plan, and each such plan has
been administered in compliance with its terms and the applicable provisions of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA") and
any other federal or state law.

            (o) Contingent Liabilities. The Mortgagor has no known material
contingent liabilities.

            (p) No Other Obligations. The Mortgagor has no material financial
obligation under any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Mortgagor is a party or by which the
Mortgagor or the Property is otherwise bound, other than obligations incurred in
the ordinary course of the operation of the Property and other than obligations
under this Mortgage, the Note and the other Loan Documents.

            (q) Fraudulent Conveyance. The Mortgagor (1) has not entered into
the loan evidenced by the Note (the "Loan") or any Loan Document with the actual
intent to hinder, delay, or defraud any creditor and (2) received reasonably
equivalent value in exchange for its obligations under the Loan Documents.
Giving effect to the Loan contemplated by the Loan Documents, the fair saleable
value of the Mortgagor's assets exceed and will, immediately following the
execution and delivery of the Loan Documents, exceed the Mortgagor's total
liabilities, including, without limitation, subordinated, unliquidated, disputed
or contingent liabilities. The fair saleable value of the Mortgagor's assets is
and will, immediately following the execution and delivery of the Loan
Documents, be greater than the Mortgagor's probable liabilities, including the
maximum amount of its contingent liabilities or its debts as such debts become
absolute and matured. The Mortgagor's assets do not and, immediately following
the execution and delivery of the Loan Documents will not, constitute
unreasonably small capital to

                                       7
<PAGE>

carry out its business as conducted or as proposed to be conducted. The
Mortgagor does not intend to, and does not believe that it will, incur debts and
liabilities (including, without limitation, contingent liabilities and other
commitments) beyond its ability to pay such debts as they mature (taking into
account the timing and amounts to be payable on or in respect of obligations of
the Mortgagor).

            (r) Investment Company Act. The Mortgagor is not (1) an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended; (2) a "holding
company" or a "subsidiary company" of a "holding company" or an "affiliate" of
either a "holding company" or a "subsidiary company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended; or (3) subject to any
other federal or state law or regulation which purports to restrict or regulate
its ability to borrow money.

            (s) Access/Utilities. The Property has rights of access to public
ways and is served by water, sewer, sanitary sewer and storm drain facilities.
All public utilities necessary to the continued use and enjoyment of the
Property as presently used and enjoyed are located in the public right-of-way
abutting the Property or irrevocable easements serving the Property, and all
such utilities are connected so as to serve the Property without passing over
other property (other than an irrevocable easement serving the Property). All
roads, and access to such roads, necessary for the full utilization of the
Property for its current purpose have been completed and dedicated to public use
and accepted by all governmental authorities or are the subject of access
easements for the benefit of the Property without any further condition or cost
to Mortgagor or Tenants.

            (t) Taxes Paid. Mortgagor has filed all federal, state, county and
municipal tax returns required to have been filed by Mortgagor, and has paid all
taxes which have become due pursuant to such returns or to any notice of
assessment received by Mortgagor, and Mortgagor has no knowledge of any basis
for additional assessment with respect to such taxes. Further, the Property is
free from delinquent water charges, sewer rents, taxes and assessments.

            (u) Single Tax Lot. Based solely on the title insurance policy
accepted by Mortgagee in connection with this Mortgage, the Property consists of
a single lot or multiple tax lots; no portion of said tax lot(s) covers property
other than the Property or a portion of the Property and no portion of the
Property lies in any other tax lot.

            (v) Special Assessments. Except as disclosed in the title insurance
policy, there are no pending or, to the knowledge of the Mortgagor, proposed
special or other assessments for public improvements or otherwise affecting the
Property, nor, to the knowledge of the Mortgagor, are there any contemplated
improvements to the Property that may result in such special or other
assessments.

            (w) Flood Zone. The Property is not located in a flood hazard area
as defined by the Federal Insurance Administration.

            (x) Intentionally Omitted.

                                       8
<PAGE>

            (y) Misstatements of Fact. No statement of fact made in the Loan
Documents contains any untrue statement of a material fact or omits to state any
material fact necessary to make statements contained herein or therein not
misleading. There is no fact presently known to the Mortgagor which has not been
disclosed which materially adversely affects, nor as far as the Mortgagor can
foresee, might materially adversely affect the business, operations or condition
(financial or otherwise) of the representing party. Further, and in
clarification of the foregoing, all reports, certificates, affidavits,
statements and other data furnished by or on behalf of Mortgagor to Mortgagee,
or their respective agents, in connection with the Loan are true and correct in
all material respects and do not omit to state any fact or circumstance
necessary to make the statements contained therein misleading.

            (z) Condition of Improvements. To Mortgagor's knowledge, the
Property has not been damaged by fire, water, wind or other cause of loss or any
previous damage to the Property has been fully restored. To Mortgagor's
knowledge, the Improvements are structurally sound, in good repair and free of
defects in materials and workmanship and have been constructed and installed in
substantial compliance with the plans and specifications relating thereto. All
major building systems located within the Improvements, including, without
limitation, the heating and air conditioning systems and the electrical and
plumbing systems, are in working order and condition.

            (aa) No Insolvency or Judgment. Neither Mortgagor, nor any general
partner, member or shareholder of Mortgagor, nor any guarantor of the Loan is
currently (a) the subject of or a party to any completed or pending bankruptcy,
reorganization or insolvency proceeding; or (b) the subject of any judgment
unsatisfied of record or docketed in any court of the state in which the
Property is located or in any other court located in the United States. The
proposed Loan will not render the Mortgagor nor any general partner, member or
shareholder of Mortgagor insolvent. As used in this Certificate, the term
"insolvent" means that the sum total of all of an entity's liabilities (whether
secured or unsecured, contingent or fixed, or liquidated or unliquidated) is in
excess of the value of all such entity's non-exempt assets, i.e., all of the
assets of the entity that are available to satisfy claims of creditors.

            (bb) No Condemnation. To Mortgagor's knowledge, no part of any
property subject to the Mortgage has been taken in condemnation or other like
proceeding to an extent which would impair the value of the Property, the
Mortgage or the Loan or the usefulness of such property for the purposes
contemplated by the loan application relating to the Loan (the "Loan
Application"), nor, except as disclosed to Mortgagee, is any proceeding pending,
threatened or known to be contemplated for the partial or total condemnation or
taking of the Property.

            (cc) No Labor or Materialmen Claims. To Mortgagor's knowledge, all
parties furnishing labor and materials have been paid in full and, except for
such liens or claims insured against by the policy of title insurance to be
issued in connection with the Loan, there are no mechanics', laborers' or
materialmen's liens or claims outstanding for work, labor or materials affecting
the Property, whether prior to, equal with or subordinate to the lien of the
Mortgage.

                                       9
<PAGE>

            (dd) No Purchase Options. No tenant, person, party, firm,
corporation or other entity has an option, right of first offer, or right of
first refusal, to purchase the Property, any portion thereof or any interest
therein (except for Primary Tenant's right to purchase all or a portion of the
"Excess Land", as defined in the Primary Lease, pursuant to and in accordance
with the terms of Section 37 of the Primary Lease).

            (ee) Leases. The Property is not subject to any leases, subleases,
licenses, concessions or other agreements related to the leasing or renting of
the Property or any portion thereof, except the Primary Lease. No person has any
possessory interest in the Property or right to occupy the same, except pursuant
to the Leases. As of the date hereof, (i) the Mortgagor is the owner and holder
of the landlord's interest under the Leases; (ii) there are no prior assignments
of all or any portion of the Leases or any portion of the Rents and Profits
which are presently outstanding and have priority over the assignment of leases
and rents contained herein in Section 1.11 given by Mortgagor to Mortgagee; and
(iii) there are no offsets or defenses to the payment of any portion of the
Rents. The representations set forth in this paragraph (ee) are in addition to
those set forth in Section 1.12 of this Mortgage.

            (ff) Forfeiture. There has not been committed by Mortgagor and shall
never be committed by Mortgagor any act or omission affording the federal
government or any state or local government the right of forfeiture as against
the Property or any part thereof or any monies paid in performance of
Mortgagor's obligations under any of the Loan Documents.

            (gg) Use of Rents and Profits. All Rents and Profits generated by or
derived from the Property shall first be utilized solely for current expenses
directly attributable to the ownership and operation of the Property and payable
by Mortgagor under the Primary Lease, including, without limitation, current
expenses relating to Mortgagor's liabilities and obligations with respect to
this Mortgage and the other Loan Documents, and none of the Rents and Profits
generated by or derived from the Property shall be diverted by Mortgagor and
utilized for any other purposes unless all such current expenses attributable to
the ownership and operation of the Property and payable by Mortgagor under the
Primary Lease have been fully paid and satisfied.

            (hh) No Broker. No financial advisors, brokers, underwriters,
placement agents, agents or finders have been dealt with by the Mortgagor in
connection with the Loan, except for any broker whose full commission was paid
out of the proceeds of the Loan and is set forth in the written instructions
from Mortgagor to Mortgagee regarding disbursement of the proceeds of the Loan.

            (ii) Work. All work to be performed by Mortgagor under any Lease has
been substantially performed, all contributions to be made by Mortgagor to the
Tenant have been made and all other conditions precedent to the Tenant's
obligations thereunder have been satisfied.

            (jj) Security Agreements. There are no security agreements or
financing statements affecting any of the Property made by Mortgagor other than
(i) as disclosed in writing by Mortgagor to Mortgagee prior to the date hereof
and (ii) the security agreements and financing statements created in favor of
Mortgagee.

                                       10
<PAGE>

            (kk) Homestead. The Property forms no part of any property owned,
used or claimed by Mortgagor as a residence or business homestead and is not
exempt from forced sale under the laws of the State in which the Property is
located. Mortgagor hereby disclaims and renounces each and every claim to all or
any portion of the Property as a homestead.

            (ll) Contracts. Mortgagor will comply with all of its obligations
under all Contracts which are material to the operation of the Property in
accordance with Mortgagor's current practice, and with all material obligations
under all other Contracts.

            Section 1.2 Defense of Title. If, while this Mortgage is in force,
the title to the Property or the interest of Mortgagee therein shall be the
subject, directly or indirectly, of any action at law or in equity, or be
attacked directly or indirectly, or endangered, clouded or adversely affected in
any manner, Mortgagor, at Mortgagor's expense, shall take all necessary and
proper steps for the defense of said title or interest, including the employment
of counsel approved by Mortgagee, the prosecution or defense of litigation, and
the compromise or discharge of claims made against said title or interest.
Notwithstanding the foregoing, in the event that Mortgagee determines that
Mortgagor is not adequately performing its obligations under this Section,
Mortgagee may, without limiting or waiving any other rights or remedies of
Mortgagee hereunder, take such steps with respect thereto as Mortgagee shall
deem necessary or proper; any and all reasonable costs and expenses incurred by
Mortgagee in connection therewith, together with interest thereon at the Default
Interest Rate (as defined in the Note) from the date incurred by Mortgagee until
actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and
shall be secured by this Mortgage and by all of the other Loan Documents
securing all or any part of the indebtedness evidenced by the Note.

            Section 1.3 Performance of Obligations. Mortgagor shall pay when due
the principal of and the interest on the indebtedness evidenced by the Note.
Mortgagor shall also pay all charges, fees and other sums required to be paid by
Mortgagor as provided in the Loan Documents, and shall observe, perform and
discharge all obligations, covenants and agreements to be observed, performed or
discharged by Mortgagor set forth in the Loan Documents in accordance with their
terms. Further, Mortgagor shall promptly and strictly perform and comply with or
cause to be performed and complied with all covenants, conditions, obligations
and prohibitions required of Mortgagor in connection with any other document or
instrument affecting title to the Property, or any part thereof, regardless of
whether such document or instrument is superior or subordinate to this Mortgage.

            Section 1.4 Insurance. The provisions of Section 1.4(A) hereof shall
only be applicable from and after the Primary Lease Termination Date (as defined
in Section 1.4(B)). Prior to the Primary Lease Termination Date, the provisions
of Section 1.4(B) shall be applicable and to the extent any conflict exists
between the provisions of Section 1.4(A) and Section 1.4(B), the provisions of
Section 1.4(B) shall control during such period.

            (A) Insurance Coverage Requirements After Primary Lease Termination
Date. Mortgagor shall, at Mortgagor's expense, maintain in force and effect on
the Property at all times while this Mortgage continues in effect the following
insurance:

                                       11
<PAGE>

                  (a) Insurance against loss or damage to the Property by fire,
windstorm, tornado and hail and against loss or damage by such other, further
and additional risks as may be now or hereafter embraced by an "all-risk" form
of insurance policy. The amount of such insurance shall be not less than one
hundred percent (100%) of the full replacement (insurable) cost of the
Improvements, furniture, furnishings, fixtures, equipment and other items
(whether personalty or fixtures) included in the Property and owned by Mortgagor
from time to time, without reduction for depreciation. The determination of the
replacement cost amount shall be adjusted annually to comply with the
requirements of the insurer issuing such coverage or, at Mortgagee's election,
by reference to such indices, appraisals or information as Mortgagee determines
in its reasonable discretion. Full replacement cost, as used herein, means, with
respect to the Improvements, the cost of replacing the Improvements without
regard to deduction for depreciation, exclusive of the cost of excavations,
foundations and footings below the lowest basement floor, and means, with
respect to such furniture, furnishings, fixtures, equipment and other items, the
cost of replacing the same, in each case, with inflation guard coverage to
reflect the effect of inflation, or annual valuation. Each policy or policies
shall contain a replacement cost endorsement and either an agreed amount
endorsement (to avoid the operation of any co-insurance provisions) or a waiver
of any co-insurance provisions, all subject to Mortgagee's approval.

                  (b) Comprehensive Commercial General Liability Insurance for
personal injury, bodily injury, death and property damage liability in amounts
not less than $1,000,000 per occurrence, $2,000,000 in the aggregate and
$10,000,000 umbrella coverage. During any construction on the Property,
Mortgagor's general contractor for such construction shall also provide the
insurance required in this subsection (b). Mortgagee hereby retains the right to
periodically review the amount of said liability insurance being maintained by
Mortgagor and to require an increase in the amount of said liability insurance
should Mortgagee deem an increase to be reasonably prudent under then existing
circumstances.

                  (c) General boiler and machinery insurance coverage is
required if steam boilers or other pressure-fired vessels are in operation at
the Property. Minimum liability amount per accident must equal the greater of
the replacement (insurable) value of the Improvements housing such boiler or
pressure-fired machinery or $2,000,000.

                  (d) If the Property or any part thereof is identified by the
Director of the Federal Emergency Management Agency as being situated in an area
now or subsequently designated as having special flood hazards (including,
without limitation, those areas designated as Zone A or Zone V), flood insurance
in an amount equal to the lesser of: (i) the minimum amount required, under the
terms of coverage, to compensate for any damage or loss on a replacement basis
(or the unpaid balance of the indebtedness secured hereby if replacement cost
coverage is not available for the type of building insured); or (ii) the maximum
insurance available under the appropriate National Flood Insurance
Administration program.

                  (e) During the period of any construction on the Property or
renovation or alteration of the Improvements, a so-called "Builder's All-Risk
Completed Value" or "Course of Construction" insurance policy in non-reporting
form for any Improvements under construction,

                                       12
<PAGE>

renovation or alteration in an amount approved by Mortgagee and Worker's
Compensation Insurance covering all persons engaged in such construction,
renovation or alteration.

                  (f) Loss of rents or loss of business income insurance in
amounts sufficient to compensate Mortgagor for all Rents and Profits during a
period of not less than eighteen (18) months in which the Property may be
damaged or destroyed. The amount of coverage shall be adjusted annually to
reflect the Rents and Profits or income payable during the succeeding eighteen
(18) month period.

                  (g) Any other insurance coverage required by Mortgagee in
connection with the making of the Loan and in effect as of the date hereof.

                  (h) Such other insurance on the Property or on any
replacements or substitutions thereof or additions thereto as may from time to
time be required by Mortgagee against other insurable hazards or casualties
which at the time are commonly insured against in the case of property similarly
situated including, without limitation, Sinkhole, Mine Subsidence, Earthquake,
Terrorism (to the extent available at commercially reasonable rates as
determined by Mortgagee in its reasonable discretion) and Environmental
insurance, due regard being given to the height and type of buildings, their
construction, location, use and occupancy.

            All such insurance shall (i) be with insurers authorized to do
business in the state within which the Property is located and who have and
maintain a rating of at least "AA" from Standard & Poor's and at least "A-X" per
Best's Key Rating Guide, (ii) contain the complete address of the Property (or a
complete legal description), (iii) be for terms of at least one year, (iv)
contain deductibles which do not exceed (y) $25,000.00 if the original principal
balance of the Loan is less than $9,000,000 and (z) $50,000.00 if the original
principal balance of the Loan is $9,000,000 or greater and (v) be subject to the
approval of Mortgagee as to insurance companies, amounts, content, forms of
policies, method by which premiums are paid and expiration dates which approval
shall not be unreasonably withheld or delayed.

            To the extent that at any time Mortgagee agrees to accept insurance
from an insurer that is rated less than the foregoing, Mortgagee may terminate
its waiver and reassert the aforesaid minimum rating requirements upon any
renewal of any insurance coverage, or at any time if the rating of any insurer
is reduced or Mortgagee reasonably determines that any other material adverse
event has occurred with respect to the financial condition of such insurer.

            Mortgagor shall as of the date hereof deliver to Mortgagee evidence
that said insurance policies have been paid current as of the date hereof and
certified copies of such insurance policies and original certificates of
insurance signed by an authorized agent of the applicable insurance companies
evidencing such insurance satisfactory to Mortgagee. Mortgagor shall renew all
such insurance and deliver to Mortgagee certificates evidencing such renewals at
least thirty (30) days before any such insurance shall expire. Without limiting
the required endorsements to the insurance policies, Mortgagor further agrees
that all such policies shall include a standard, non-contributory, mortgagee
clause naming:

                                    CIBC INC.

                                       13
<PAGE>

                           its successors and assigns
                          as their interests may appear
                        Attn: Real Estate Finance Group,
                          622 Third Avenue, 8th Floor,
                            New York, New York, 10017

(x) as an additional insured under all liability insurance policies, (y) as the
first mortgagee on all property insurance policies and (z) as the loss payee on
all loss of rents or loss of business income insurance policies. Mortgagor
further agrees that all such insurance policies: (1) shall provide for at least
thirty (30) days' prior written notice to Mortgagee prior to any cancellation or
termination thereof and prior to any modification thereof which affects the
interest of Mortgagee; (2) shall contain an endorsement or agreement by the
insurer that any loss shall be payable to Mortgagee in accordance with the terms
of such policy notwithstanding any act or negligence of Mortgagor which might
otherwise result in forfeiture of such insurance; (3) shall waive all rights of
subrogation against Mortgagee; (4) in the event that the Land or the
Improvements constitutes a legal non-conforming use under applicable building,
zoning or land use laws or ordinances, shall include an ordinance or law
coverage endorsement which will contain Coverage A: "Loss Due to Operation of
Law" (with a minimum liability limit equal to Replacement Cost With Agreed Value
Endorsement), Coverage B: "Demolition Cost" and Coverage C: "Increased Cost of
Construction" coverages; and (5) may be in the form of a blanket policy provided
that, in the event that any such coverage is provided in the form of a blanket
policy, Mortgagor hereby acknowledges and agrees that failure to pay any portion
of the premium therefor which is not allocable to the Property or by any other
action not relating to the Property which would otherwise permit the issuer
thereof to cancel the coverage thereof, would require the Property to be insured
by a separate, single-property policy. The blanket policy must properly identify
and fully protect the Property as if a separate policy were issued for 100% of
Replacement Cost at the time of loss and otherwise meet all of Mortgagee's
applicable insurance requirements set forth in this Section 1.4. The delivery to
Mortgagee of the insurance policies or the certificates of insurance as provided
above shall constitute an assignment of all proceeds payable under such
insurance policies relating to the Property by Mortgagor to Mortgagee as
further security for the indebtedness secured hereby. In the event of
foreclosure of this Mortgage, or other transfer of title to the Property in
extinguishment in whole or in part of the secured indebtedness, all right, title
and interest of Mortgagor in and to all proceeds payable under such policies
then in force concerning the Property shall thereupon vest in the purchaser at
such foreclosure, or in Mortgagee or other transferee in the event of such other
transfer of title. Approval of any insurance by Mortgagee shall not be a
representation of the solvency of any insurer or the sufficiency of any type or
amount of insurance. In the event Mortgagor fails to provide, maintain, keep in
force or deliver and furnish to Mortgagee the policies of insurance required by
this Mortgage or evidence of their renewal as required herein, Mortgagee may,
but shall not be obligated to, procure such insurance and Mortgagor shall pay
all amounts advanced by Mortgagee therefor, together with interest thereon at
the Default Interest Rate from and after the date advanced by Mortgagee until
actually repaid by Mortgagor, promptly upon demand by Mortgagee. Any amounts so
advanced by Mortgagee, together with interest thereon, shall be secured by this
Mortgage and by all of the other Loan Documents securing all or any part of the
indebtedness secured hereby. Mortgagee shall not be responsible for nor incur
any liability for

                                       14
<PAGE>

the insolvency of any insurer or other failure of any insurer to perform, even
though Mortgagee has caused the insurance to be placed with such insurer after
failure of Mortgagor to furnish such insurance. Mortgagor shall not obtain
insurance for the Property in addition to that required by Mortgagee without the
prior written consent of Mortgagee, which consent will not be unreasonably
withheld provided that (i) Mortgagee is a named insured and loss payee on such
insurance, (ii) Mortgagee receives complete copies of all policies evidencing
such insurance, and (iii) such insurance complies with all of the applicable
requirements set forth herein. Mortgagee acknowledges that all or a portion of
the insurance coverage may be provided by the Primary Tenant and Mortgagee
agrees to accept same so long as such coverage complies with the requirements
set forth above.

            (B) Insurance Coverage Requirements Prior to Primary Lease
Termination Date. Prior to the Primary Lease Termination Date (as defined
below), Mortgagor shall, at its sole cost and expense, (x) keep or cause to be
kept in full force and effect the insurance coverage required by Article 16 of
the Primary Lease (or, if applicable, the analogous section of the Replacement
Primary Lease [as defined below] governing insurance requirements) and
compliance therewith shall be deemed compliance with the provisions of this
Section 1.4 of this Mortgage and (y) provide or cause to be provided to
Mortgagee certificates evidencing renewal of all insurance required by Article
16 of the Primary Lease (or, if applicable, the analogous section of the
Replacement Primary Lease governing insurance requirements) not later than seven
(7) business days before any such insurance shall expire; provided, however,
that in all instances Mortgagor shall diligently enforce the terms and
provisions of the Primary Lease (or, if applicable, the Replacement Primary
Lease) with respect to such insurance coverage and shall take such actions as
shall be necessary to cause Primary Tenant (or, if applicable, the tenant under
the Replacement Primary Lease) to comply with the provisions thereof and,
provided, further, that to the extent that the Primary Tenant (or, if
applicable, the tenant under the Replacement Primary Lease) does not comply with
any or all of the terms and conditions of the Primary Lease, (or, if applicable,
the Replacement Primary Lease), such non-compliance shall in no way relieve
Mortgagor of its affirmative obligations under this Section 1.4(B) or the
requirements to procure and maintain the insurance required by Article 16 of the
Primary Lease (or, if applicable, the analogous section of the Replacement
Primary Lease governing insurance requirements).

            As used herein, "Primary Lease Termination Date" shall mean the
earlier to occur of (i) the date on which the Primary Lease expires pursuant to
its terms and (ii) the date on which the Primary Lease is sooner terminated;
provided, however, that if subsequent to the occurrence of the Primary Lease
Termination Date, Mortgagor enters into a Replacement Primary Lease, then from
and after the effective date of such Replacement Primary Lease, the Primary
Lease Termination Date shall be deemed to mean the earlier to occur of (i) the
date on which the Replacement Primary Lease expires pursuant to its terms and
(ii) the date on which the Replacement Primary Lease is sooner terminated.

            As used herein, "Replacement Primary Lease" shall mean a Lease other
than the Primary Lease which demises to the tenant thereunder (the 'Replacement
Primary Tenant") the entire premises demised to the Primary Tenant as of the
date hereof under the Primary Lease and

                                       15
<PAGE>

which satisfies the following conditions: (i) Mortgagee shall have approved in
writing, in its sole discretion, such Lease and the tenant thereunder and (ii)
the insurance requirements thereunder shall be no less favorable to Mortgagor
and Mortgagee (as determined by Mortgagee) as the insurance requirements under
the Primary Lease as of the date hereof.

            Section 1.5 Payment of Taxes. Mortgagor shall pay or cause to be
paid, except to the extent provision is actually made therefor pursuant to
Section 1.6 or Section 1.7 of this Mortgage, all taxes and assessments which are
or may become a lien on the Property or which are assessed against or imposed
upon the Property. Mortgagor shall furnish Mortgagee with receipts (or if
receipts are not immediately available, with copies of canceled checks
evidencing payment with receipts to follow promptly after they become available)
showing payment of such taxes and assessments not later than thirty (30) days
after the due date therefor. Notwithstanding the foregoing, Mortgagor may in
good faith, by appropriate proceedings and upon notice to Mortgagee, contest the
validity, applicability or amount of any asserted tax or assessment so long as
(a) such contest is diligently pursued, (b) Mortgagee determines, in its
reasonable opinion, that such contest suspends the obligation to pay the tax and
that nonpayment of such tax or assessment will not result in the sale, loss,
forfeiture or diminution of the Property or any part thereof or any interest of
Mortgagee therein, and (c) prior to the earlier of the commencement of such
contest or the delinquency date of the asserted tax or assessment, Mortgagor
deposits in the Impound Account an amount determined by Mortgagee to be adequate
to cover the payment of such tax or assessment and a reasonable additional sum
to cover possible interest, costs and penalties; provided, however, that
Mortgagor shall promptly cause to be paid any amount adjudged by a court of
competent jurisdiction to be due, with all interest, costs and penalties
thereon, promptly after such judgment becomes final; and provided, further, that
in any event each such contest shall be concluded, the taxes, assessments,
interest, costs and penalties shall be paid prior to the date any writ or order
is issued under which the Property may be sold, lost or forfeited. Mortgagor's
rights under this Section 1.5 to contest taxes or assessments with respect to
the Property may be exercised by Primary Tenant (or by a Replacement Primary
Tenant, if applicable), provided same shall not relieve Mortgagor of any of its
obligations under this Section 1.5.

            Section 1.6 Tax and Insurance Impound Account. Mortgagor shall
establish and maintain at all times while this Mortgage continues in effect an
impound account (the "Impound Account") with Mortgagee for payment of real
estate taxes and assessments and insurance on the Property and as additional
security for the indebtedness secured hereby, provided, however, that, prior to
a Sale (as defined in Section 1.13 hereof) of the Property to an entity which is
not directly or indirectly controlled by W.P. Carey & Co. LLC, so long as the
Primary Lease or Replacement Primary Lease, as applicable, shall remain in full
force and effect and no monetary Event of Default (as defined in the Primary
Lease or such comparable term in the Replacement Primary Lease, as applicable)
exists thereunder:

            (i) Mortgagor shall not be obligated to make deposits in the Impound
      Account on account of real estate taxes and assessments so long as
      Mortgagor (1) shall cause Primary Tenant (or, if applicable, the tenant
      under the Replacement Primary Lease) to pay or cause to be paid all taxes
      and assessments which are or may become a lien on

                                       16
<PAGE>

      the Property or which are assessed against or imposed upon the Property
      and (2) shall have furnished Mortgagee with receipts (or if receipts are
      not immediately available, with copies of canceled checks evidencing
      payment with receipts to follow promptly after they become available)
      showing payment of such taxes and assessments prior to the applicable
      delinquency date therefor and prior to any penalties being due thereon;
      and

            (ii) to the extent that Primary Tenant (or, if applicable, the
      tenant under the Replacement Primary Lease) provides an allocable portion,
      or all, of the insurance coverage set forth in Section 1.4 hereof,
      Mortgagor shall not be required to make deposits into the Impound Account
      for the amounts of the coverages provided by Primary Tenant (or, if
      applicable, the tenant under the Replacement Primary Lease), so long as
      Mortgagor shall cause Primary Tenant (or, if applicable, the tenant under
      the Replacement Primary Lease) to provide evidence of such coverage being
      in full force and effect;

it being expressly agreed that if either of the foregoing subclauses (i) or (ii)
shall cease to be satisfied, then Mortgagor shall be obligated, within five (5)
business days after written demand therefor, to deposit in the Impound Account
an amount determined by Mortgagee to be necessary to ensure that there will be
on deposit with Mortgagee an amount which, when added to the monthly payments
subsequently required to be (and actually) deposited with Mortgagee hereunder on
account of real estate taxes, assessments and insurance premiums, will result in
there being on deposit with Mortgagee in the Impound Account an amount
sufficient to pay the next due periodic installment of real estate taxes and
assessment on the Property at least one (1) month prior to the delinquency date
thereof and the next due periodic insurance premiums with respect to the
Property at least one (1) month prior to the due date thereof. Mortgagor
acknowledges that, if Mortgagor is providing insurance coverage by a blanket
policy, or by a combination of policies provided by Mortgagor and Primary
Tenant, any insurance which Mortgagee is permitted pursuant to the terms of this
Mortgage to purchase, if Mortgagor shall fail to provide the coverage required
under Section 1.4 hereof, may be substantially more costly than the insurance
coverage Mortgagor had provided and Mortgagor agrees that Mortgagee may require
the deposit into the Impound Account in respect of insurance to be increased to
cover such possible increased costs. Commencing on the first Payment Date under
the Note (subject to clauses (i) and (ii) of this Section 1.6) and continuing
thereafter on each monthly payment date under the Note, Mortgagor shall pay to
Mortgagee, concurrently with and in addition to the monthly payment due under
the Note and until the Note and all other indebtedness secured hereby is fully
paid and performed, deposits in an amount equal to one-twelfth (1/12) of the
amount of the annual real estate taxes and assessments that will next become due
and payable on the Property, plus one-twelfth (1/12) of the amount of the annual
premiums that will next become due and payable on insurance policies which
Mortgagor is required to maintain hereunder, each as estimated and determined by
Mortgagee. So long as no Event of Default (as defined in Section 2.1 hereunder)
has occurred and is continuing, all sums in the Impound Account shall be held by
Mortgagee in the Impound Account to pay said taxes, assessments and insurance
premiums in one installment before the same become delinquent. Mortgagor shall
be responsible for ensuring the receipt by Mortgagee, at least thirty (30) days
prior to the respective due date for payment thereof, of all bills, invoices and
statements for all taxes, assessments and insurance premiums to be paid from the
Impound Account, and so long as no Event of Default

                                       17
<PAGE>

has occurred and is continuing, Mortgagee shall pay the governmental authority
or other party entitled thereto directly to the extent funds are available for
such purpose in the Impound Account. In making any payment from the Impound
Account, Mortgagee shall be entitled to rely on any bill, statement or estimate
procured from the appropriate public office or insurance company or agent
without any inquiry into the accuracy of such bill, statement or estimate and
without any inquiry into the accuracy, validity, enforceability or
contestability of any tax, assessment, valuation, sale, forfeiture, tax lien or
title or claim thereof. The Impound Account shall not, unless otherwise
explicitly required by applicable law, be or be deemed to be escrow or trust
funds, but, at Mortgagee's option and in Mortgagee's discretion, may either be
held in a separate account or be commingled by Mortgagee with the general funds
of Mortgagee. No interest on the funds contained in the Impound Account shall be
paid by Mortgagee to Mortgagor. The Impound Account is solely for the protection
of Mortgagee and entails no responsibility on Mortgagee's part beyond the
payment of taxes, assessments and insurance premiums following receipt of bills,
invoices or statements therefor in accordance with the terms hereof and beyond
the allowing of due credit for the sums actually received. Upon assignment of
this Mortgage by Mortgagee, any funds in the Impound Account shall be turned
over to the assignee and any responsibility of Mortgagee, as assignor, with
respect thereto shall terminate. If the total funds in the Impound Account shall
exceed the amount of payments actually applied by Mortgagee for the purposes of
the Impound Account, such excess may be credited by Mortgagee on subsequent
payments to be made hereunder or, at the option of Mortgagee, refunded to
Mortgagor. If, however, the Impound Account shall not contain sufficient funds
to pay the sums required when the same shall become due and payable, Mortgagor
shall, within ten (10) days after receipt of written notice thereof, deposit
with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail
to deposit with Mortgagee the full amount of such deficiency as provided above,
Mortgagee shall have the option, but not the obligation, to make such deposit
and all amounts so deposited by Mortgagee, together with interest thereon at the
Default Interest Rate from the date incurred by Mortgagee until actually paid by
Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured
by this Mortgage and by all of the other Loan Documents securing all or any part
of the indebtedness evidenced by the Note. Upon an Event of Default, Mortgagee
may, but shall not be obligated to, apply at any time the balance then remaining
in the Impound Account against the indebtedness secured hereby in whatever order
Mortgagee shall subjectively determine. No such application of the Impound
Account shall be deemed to cure any Event of Default hereunder, and any such
application shall not limit Mortgagor's obligation to deposit any deficiency of
which Mortgagee gives notice. Upon full payment of the indebtedness secured
hereby in accordance with its terms or at such earlier time as Mortgagee may
elect, the balance of the Impound Account then in Mortgagee's possession shall
be paid over to Mortgagor and no other party shall have any right or claim
thereto.

            Section 1.7 Payment Reserve. Contemporaneously with the execution
hereof, Mortgagor has established with Mortgagee a reserve in the amount equal
to one (1) regular monthly installment of principal and interest under the Note
(the "Payment Reserve"). Mortgagor understands and agrees that,
notwithstanding the establishment of the Payment Reserve as herein required, all
of the proceeds of the Note have been, and shall be considered, fully disbursed
and shall bear interest and be payable on the terms provided therein. No
interest

                                       18
<PAGE>

on funds contained in the Payment Reserve shall be paid by Mortgagee to
Mortgagor. For so long as no Default has occurred hereunder, Mortgagee shall on
the first Payment Date (as defined in the Note) under the Note, advance from the
Payment Reserve to itself the amount due and payable by Mortgagor under the Note
on such Payment Date. Nothing contained herein, including, without limitation,
the existence of the Payment Reserve, shall release Mortgagor of any obligation
to make payments under the Note, this Mortgage or the other Loan Documents
strictly in accordance with the terms hereof or thereof.

            Section 1.8 Replacement Reserve; Security Interest in Reserves.

                  (a) At Mortgagee's option, as additional security for the
indebtedness secured hereby, commencing with the first Payment Date (as defined
in the Note) following the earlier to occur of (i) the Primary Lease Termination
Date, (ii) Mortgagor entering into a Replacement Primary Lease pursuant to which
the tenant thereunder is not solely responsible for the performance of all
Repairs (as defined below), or (iii) for so long as the Primary Lease (or, if
applicable, the Replacement Primary Lease) shall remain in force, Mortgagor's
failure to perform, or to cause Primary Tenant (or, if applicable, the tenant
under the Replacement Primary Lease) to perform, all of the Repairs strictly
when required pursuant to any applicable provisions of the Loan Documents (the
"Replacement Reserve Commencement Date"), Mortgagor shall establish and
thereafter maintain at all times while this Mortgage continues in effect a
repair reserve (the "Replacement Reserve") with Mortgagee for payment of certain
non-recurring types of costs and expenses incurred by Mortgagor for interior and
exterior work to the Property, including without limitation, performance of work
to the roofs, chimneys, gutters, downspouts, paving, curbs, driveways, ramps,
balconies, porches, patios, exterior walls, exterior doors and doorways,
windows, elevators and mechanical and HVAC equipment (collectively, the
"Repairs") provided such costs and expenses are incurred for repairs (i) not
incurred for ordinary wear and tear at the Property and (ii) categorized under
generally accepted accounting principles as a capital expense and not as an
operating expense. Commencing on the first Payment Date following the
Replacement Reserve Commencement Date, and continuing on each Payment Date
thereafter, Mortgagor shall pay Mortgagee, concurrently with and in addition to
the monthly payment due under the Note and until the Note and all other
indebtedness secured hereby is fully paid and performed, a deposit to the
Replacement Reserve in an amount equal to one-twelfth (1/12th) of fifteen cents
($0.15) per rentable square foot of the Property, as such square footage shall
have been determined by Mortgagee in its reasonable discretion. So long as no
Event of Default has occurred and is continuing, all sums in the Replacement
Reserve shall be held by Mortgagee in the Replacement Reserve to pay the costs
and expenses of Repairs. So long as no Event of Default has occurred and is
continuing, Mortgagee shall, to the extent funds are available for such purpose
in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred by
Mortgagor in performing such Repairs within ten (10) days following: (a) the
receipt by Mortgagee of a written request from Mortgagor for disbursement from
the Replacement Reserve and a certification by Mortgagor in the form attached
hereto as Exhibit B that the applicable item of Repair has been completed, (b)
the delivery to Mortgagee of invoices, receipts or other evidence satisfactory
to Mortgagee verifying the cost of performing the Repairs; (c) for disbursement
requests in excess of $10,000.00, the delivery to Mortgagee of affidavits, lien
waivers or other evidence reasonably satisfactory to Mortgagee showing that all

                                       19
<PAGE>

materialmen, laborers, subcontractors and any other parties who might or could
claim statutory or common law liens and are furnishing or have furnished
material or labor to the Property have been paid all amounts due for labor and
materials furnished to the Property; (d) for disbursement requests in excess of
$10,000.00, delivery to Mortgagee of a certification from an inspecting
architect or other third party acceptable to Mortgagee describing the completed
Repairs and verifying the completion of the Repairs and the value of the
completion of the Repairs and the value of the completed Repairs; (e) for
disbursement requests in excess of $lO,OOO,OO, delivery to Mortgagee of a new
certificate of occupancy for the portion of the Improvements covered by such
Repairs, if said new certificate of occupancy is required by law, or a
certification by Mortgagor that no new certificate of occupancy is required; and
(f) the receipt by Mortgagee of an administrative fee in the amount of $150.00.
Mortgagee shall not be required to make advances from the Replacement Reserve
more frequently than once in any sixty (60) day period. In making any payment
from the Replacement Reserve, Mortgagee shall be entitled to rely on such
request from Mortgagor without any inquiry into the accuracy, validity or
contestability of any such amount. Mortgagee may, at Mortgagor's expense, make
or cause to be made during the term of this Mortgage an annual inspection at the
Property to determine the need, as determined by Mortgagee in its reasonable
judgment, for further Repairs of the Property. In the event that such inspection
reveals that further Repairs of the Property are required, Mortgagee shall
provide Mortgagor with a written description of the required Repairs and
Mortgagor shall complete such Repairs to the reasonable satisfaction of
Mortgagee within ninety (90) days after the receipt of such description from
Mortgagee, or such later date as may be approved by Mortgagee in its sole
discretion. The Replacement Reserve shall not, unless otherwise explicitly
required by applicable law, be or be deemed to be escrow or trust funds, but, at
Mortgagee's option and in Mortgagee's discretion, may either be held in a
separate account or be commingled by Mortgagee with the general funds of
Mortgagee. Interest on the funds contained in the Replacement Reserve shall be
credited to Mortgagor as provided in Section 4.31 hereof. The Replacement
Reserve is solely for the protection of Mortgagee and entails no responsibility
on Mortgagee's part beyond the payment of the costs and expenses described in
this Section in accordance with the terms hereof and beyond the allowing of due
credit for the sums actually received. In the event that the amounts on deposit
or available in the Replacement Reserve are inadequate to pay the cost of the
Repairs, Mortgagor shall pay the amount of such deficiency. Upon assignment of
this Mortgage by Mortgagee, any funds in the Replacement Reserve shall be turned
over to the assignee and any responsibility of Mortgagee, as assignor, with
respect thereto shall terminate. Upon an Event of Default, Mortgagee may, but
shall not be obligated to, apply at any time the balance then remaining in the
Replacement Reserve against the indebtedness secured hereby in whatever order
Mortgagee shall subjectively determine. No such application of the Replacement
Reserve shall be deemed to cure any Event of Default hereunder. Upon full
payment of the indebtedness secured hereby in accordance with its terms or at
such earlier time as Mortgagee may elect, the balance of the Replacement Reserve
then in Mortgagee's possession shall be paid over to Mortgagor and no other
party shall have any right or claim thereto.

                  (b) As additional security for the payment and performance by
Mortgagor of all duties, responsibilities and obligations under the Note and the
other Loan Documents (excluding the Hazardous Substances Indemnity Agreement),
Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges,
mortgages, transfers, delivers, deposits, sets over and

                                       19
<PAGE>

confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in,
(i) the Reserves (as defined in Paragraph G of the granting clause of this
Mortgage), (ii) the accounts into which the Reserves have been deposited, (iii)
all insurance of said accounts, (iv) all accounts, contract rights and general
intangibles or other rights and interests pertaining thereto, (v) all sums now
or hereafter therein or represented thereby, (vi) all replacements,
substitutions or proceeds thereof, (vii) all instruments and documents now or
hereafter evidencing the Reserves or such accounts, (viii) all powers, options,
rights, privileges and immunities pertaining to the Reserves (including the
right to make withdrawals therefrom), and (ix) all proceeds of the foregoing.
Mortgagor hereby authorizes and consents to the account into which the Reserves
have been deposited being held in Mortgagee's name or the name of any entity
servicing the Note for Mortgagee, and hereby acknowledges and agrees that
Mortgagee, or at Mortgagee's election, such servicing agent, shall have
exclusive control over said account. Notice of the assignment and security
interest granted to Mortgagee herein may be delivered by Mortgagee at any time
to the financial institution wherein the Reserves have been established, and
Mortgagee, or such servicing entity, shall have possession of all passbooks or
other evidences of such accounts. Mortgagor hereby assumes all risk of loss with
respect to amounts on deposit in the Reserves. Mortgagor hereby knowingly,
voluntarily and intentionally stipulates, acknowledges and agrees that the
advancement of the funds from the Reserves as set forth herein is at Mortgagor's
direction and is not the exercise by Mortgagee of any right of set-off or other
remedy upon an Event of Default. Mortgagor hereby waives all right to withdraw
funds from the Reserves, and all right to receive disbursements from the
Reserves except in compliance with the Loan Documents. Upon an Event of Default,
then Mortgagee may, without notice or demand on Mortgagor, & its option: (A)
withdraw any or all of the funds (including, without limitation, interest) then
remaining in the Reserves and apply the same, after deducting all costs and
expenses of safekeeping, collection and delivery (including, but not limited to,
reasonable attorneys' fees, costs and expenses) to the indebtedness evidenced by
the Note or any other obligations of Mortgagor under the other Loan Documents
(excluding the Hazardous Substances Indemnity Agreement) in such manner or as
Mortgagee shall deem appropriate in its sole discretion, and the excess, if any,
shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a
secured party under any applicable Uniform Commercial Code, and/or (C) exercise
any other remedies available at law or in equity. No such use or application of
the funds contained in the Reserves shall be deemed to cure any Event of Default
hereunder or under the other Loan Documents.

            Section 1.9 Casualty and Condemnation. Mortgagor shall give
Mortgagee prompt written notice of the occurrence of any casualty affecting, or
the institution of any proceedings for eminent domain or for the condemnation
of, the Property or any portion thereof; provided that with respect to any
casualty affecting the Property, Mortgagor shall only be required to provide
Mortgagee with written notice thereof if the reasonably estimated insurance
proceeds for such casualty are equal to or exceed $250,000, or Mortgagor
otherwise receives or should reasonably have notice of such casualty. All
insurance proceeds on the Property, and all causes of action, claims,
compensation, awards and recoveries for any damage, condemnation or taking of
all or any part of the Property or for any damage or injury to it or any loss or
diminution in value of the Property, are hereby assigned to and shall be paid to
Mortgagee; provided that so long as (x) the Primary Lease is in full force and
effect and there are no defaults thereunder, (y) no Event of Default hereunder
shall have occurred and be continuing and (z) such

                                       21
<PAGE>

insurance proceeds or compensation for any such condemnation do not, in the
aggregate, exceed $250,000, then such insurance proceeds or compensation for any
such condemnation (but in no event, in the aggregate, more than $250,000) shall
not be assigned to Mortgagee so long as same are assigned to Primary Tenant and
used by Primary Tenant for the restoration or repair of the Property. Mortgagee
may participate in any suits or proceedings relating to any such proceeds,
causes of action, claims, compensation, awards or recoveries and Mortgagee is
hereby authorized, in its own name or in Mortgagor's name, to adjust any loss
covered by insurance or any condemnation claim or cause of action, and to settle
or compromise any claim or cause of action in connection therewith, and
Mortgagor shall from time to time deliver to Mortgagee any instruments required
to permit such participation; provided, however, that Mortgagee shall not have
the right to participate in the adjustment of any loss which is not in excess of
the lesser of (i) ten percent (10%) of the then outstanding principal balance of
the Note and (ii) $500,000.00. Mortgagee shall apply any sums received by it
under this Section first to the payment of all of its costs and expenses
(including, but not limited to, reasonable legal fees and disbursements)
incurred in obtaining those sums, and then, as follows:

                  (a) Except to the extent otherwise provided in Section 1.9(c)
hereof, in the event of a taking of not more than fifteen percent (15%) of the
Improvements or a casualty damaging not more than thirty percent (30%) of the
Improvements then if:

                        (1) no Event of Default is then continuing hereunder,
      and

                        (2) the Property can, in Mortgagee's judgment, with
      diligent restoration or repair, be returned to a condition at least equal
      to the condition thereof that existed prior to the casualty or partial
      taking causing the loss or damage within the earlier to occur of (i) six
      (6) months after the receipt of insurance proceeds or condemnation awards
      by either Mortgagor or Mortgagee and (ii) six (6) months prior to the
      Maturity Date (as defined in the Note), and

                        (3) all necessary governmental approvals can be obtained
      to allow the rebuilding and reoccupancy of the Property as described in
      Section 1.9(a)(2) above, and

                        (4) there are sufficient sums available (through
      insurance proceeds or condemnation awards and contributions by Mortgagor,
      the full amount of which shall at Mortgagee's option have been deposited
      with Mortgagee) for such restoration or repair (including, without
      limitation, for any costs and expenses of Mortgagee to be incurred in
      administering said restoration or repair) and for payment of principal and
      interest to become due and payable under the Note during such restoration
      or repair, and

                        (5) the economic feasibility of the Improvements after
      such restoration or repair (and including the impact of the termination or
      amendment of any Leases due to such casualty or condemnation) will be such
      that income from their operation is reasonably anticipated to be
      sufficient to pay operating expenses of the Property and debt service on
      the indebtedness secured hereby in full with the same

                                       22
<PAGE>

      coverage ratio considered by Mortgagee in its determination to make the
      loan secured hereby, and

                        (6) Mortgagor shall have delivered to Mortgagee, at
      Mortgagor's sole cost and expense, an appraisal report in form and
      substance reasonably satisfactory to Mortgagee appraising the value of the
      Property as proposed to be restored or repaired to be not less than the
      appraised value of the Property considered by Mortgagee in its
      determination to make the loan secured hereby,

                        (7) Mortgagor so elects by written notice delivered to
      Mortgagee within fifteen (15) days after settlement of the aforesaid
      insurance or condemnation claim,

                        (8) Mortgagee receives from each tenant then occupying
      10% or more of the Improvements an estoppel certificate and agreement in
      form, scope and substance acceptable to Mortgagee in its sole discretion
      confirming that such tenant shall reoccupy the portion of the Improvements
      demised to it, on all of the terms of its lease in effect immediately
      prior to such taking or destruction (including payment of rent) upon such
      restoration or repair, and

                        (9) Mortgagee receives confirmation or an estoppel
      certificate or other evidence acceptable to Mortgagee from the tenant
      under the Primary Lease that it shall reoccupy the Improvements pursuant
      to the terms of the Primary Lease as in effect on the date hereof or as
      otherwise approved by Mortgagee,

then, Mortgagee shall, solely for the purposes of such restoration or repair,
advance so much of the remainder of such sums as may be required for such
restoration or repair, and any funds deposited by Mortgagor therefor, to
Mortgagor in the manner and upon such terms and conditions as would be required
by a prudent interim construction lender, including, but not limited to, the
prior approval by Mortgagee of plans and specifications, contractors and form of
construction contracts and the furnishing to Mortgagee of permits, bonds, lien
waivers, invoices, receipts and affidavits from contractors and subcontractors
in form and substance reasonably satisfactory to Mortgagee in its discretion,
with any remainder being applied by Mortgagee for payment of the indebtedness
secured hereby in whatever order Mortgagee directs in its absolute discretion.

                  (b) Except to the extent otherwise provided in Section 1.9(c)
hereof, in the event that Mortgagor does not elect to restore or repair the
Property pursuant to clause (a) above, or if the taking or casualty is of a
greater portion of the Improvements than specified in clause (a) above, or
otherwise fails to meet the requirements of clause (a) above, then in any of
such events, Mortgagee shall elect, in Mortgagee's absolute discretion and
without regard to the adequacy of Mortgagee's security, to do either of the
following: (1) accelerate the maturity date of the Note and declare any and all
indebtedness secured hereby to be immediately due and payable (without
prepayment penalty so long as no Event of Default has occurred) and apply the
remainder of such sums received pursuant to this Section to the payment of the
indebtedness secured hereby in whatever order Mortgagee directs in its absolute
discretion, with any remainder being paid to

                                       23
<PAGE>

Mortgagor, or (2) notwithstanding that Mortgagor may have elected not to restore
or repair the Property pursuant to the provisions of Section 1.9(a)(7) above,
require Mortgagor to restore or repair the Property (a "Required Restoration")
in the manner and upon such terms and conditions as would be required by a
prudent interim construction lender, including, but not limited to the deposit
by Mortgagor with Mortgagee, within thirty (30) days after demand therefor, of
any deficiency necessary in order to assure the availability of sufficient funds
to pay for such restoration or repair, including Mortgagee's costs and expenses
to be incurred in connection therewith, the prior approval by Mortgagee of plans
and specifications, contractors and form of construction contracts and the
furnishing to Mortgagee of permits, bonds, lien waivers, invoices, receipts and
affidavits from contractors and subcontractors in form and substance
satisfactory to Mortgagee in its discretion, and apply the remainder of such
sums toward such restoration and repair, with any balance thereafter remaining
being applied by Mortgagee for payment of the indebtedness secured hereby in
whatever order Mortgagee directs in its absolute discretion.

The following terms, as used in this Deed of Trust, shall have the following
meanings:

            "380 Lafayette Property" shall mean the certain real property
situated at 380 Lafayette Road, Hampton, New Hampshire, as more particularly
described as Tract II on Exhibit A attached hereto, together with all buildings
and improvements now or hereafter located thereon.

            "390 Lafayette Property" shall mean the certain real property
situated at 390 Lafayette Road, Hampton, New Hampshire, as more particularly
described as Tract I on Exhibit A attached hereto, together with all buildings
and improvements now or hereafter located thereon.

            "11 Merrill Property" shall mean the certain real property situated
at 11 Merrill Industrial Drive, Hampton, New Hampshire, as more particularly
described as Tract III on Exhibit A attached hereto, together with all buildings
and improvements now or hereafter located thereon.

            "Individual Property" shall mean any of the 380 Lafayette Property,
the 390 Lafayette Property or the 11 Merrill Property.

Notwithstanding anything in this Section 1.9(b) to the contrary:

                        (i) In the event that Mortgagee notifies Mortgagor that
it shall be required to perform a Required Restoration (a "Required Restoration
Notice"), Mortgagor shall not be required to perform such Required Restoration
if (x) a Termination Event (as defined in the Primary Lease or a comparable
provision in a Replacement Primary Lease) shall have occurred with respect to
either the 390 Lafayette Property or the 11 Merrill Property and the Primary
Tenant shall have delivered a Termination Notice (as defined in the Primary
Lease or a comparable provision in a Replacement Primary Lease) with respect to
the 390 Lafayette Property or the 11 Merrill Property and (y) Mortgagor pays to
Mortgagee the remaining unpaid

                                       24
<PAGE>

principal balance of the Note, together with all unpaid interest accrued thereon
(through and including the date of prepayment) and any other fees and expenses
then owing to Mortgagee by Mortgagor pursuant hereto, the Note and the other
Loan Documents without any penalty or any prepayment consideration otherwise set
forth in this Mortgage or in the Note; provided, however, that such prepayment
must occur, if at all, within ninety (90) days after the delivery by Mortgagee
to Mortgagor of the Required Restoration Notice. Upon receipt of such payment
Mortgagee will execute and deliver any agreements reasonably requested by
Mortgagor to release and terminate this Mortgage,

                        (ii) In the event that the casualty or condemnation for
which Mortgagee delivers a Required Restoration Notice is limited solely to the
380 Lafayette Property but not any other Individual Property (such Individual
Property which is the subject of such casualty or condemnation is hereinafter
referred to as a "Type 1 Affected Individual Parcel"), then Mortgagor shall not
be required to perform such Required Restoration with respect to the Type 1
Affected Individual Parcel if (x) a Termination Event (as defined in the Primary
Lease or a comparable provision in a Replacement Primary Lease) shall have
occurred with respect to the Type 1 Affected Individual Parcel and the Primary
Tenant shall have delivered a Termination Notice (as defined in the Primary
Lease or a comparable provision in a Replacement Primary Lease) with respect to
the Type 1 Affected Individual Parcel, (y) Mortgagor satisfies all of the
Individual Property Release Conditions (as defined in Exhibit F annexed hereto
and made a part hereof) with respect to the Type 1 Affected Individual Parcel
and (z) Mortgagor pays to Mortgagee the applicable Allocated Loan Amount as set
forth on Schedule I hereof with respect to the Type 1 Affected Individual
Parcel, together with all unpaid interest accrued under the Note (through and
including the date of prepayment) and any other fees and expenses then owing to
Mortgagee by Mortgagor pursuant hereto, the Note and the other Loan Documents
without any penalty or any prepayment consideration otherwise set forth in this
Mortgage or in the Note; provided, however, that such prepayment must occur, if
at all, within ninety (90) days after the delivery by Mortgagee to Mortgagor of
the Required Restoration Notice. Upon receipt of such payment Mortgagee will
execute and deliver any agreements reasonably requested by Mortgagor to release
the Type 1 Affected Individual Parcel from the lien of this Mortgage, and

                        (iii) In the event that the casualty or condemnation for
which Mortgagee delivers a Required Restoration Notice is limited solely to the
390 Lafayette Property or the 11 Merrill Property, but not any other Individual
Property (such Individual Property which is the subject of such casualty or
condemnation is hereinafter referred to as a "Type 2 Affected Individual
Parcel"), then Mortgagor shall not be required to perform such Required
Restoration with respect to the Type 2 Affected Individual Parcel if (w) the
Property shall not have been submitted to a condominium form of ownership prior
to the occurrence of the Termination Event and Primary Tenant irrevocably waives
any rights under the Primary Lease to construct (or cause to be constructed) the
Additional Improvements (as defined in Section 5.34 hereof) and/or to convert
the Property to a condominium form of ownership, (x) a Termination Event (as
defined in the Primary Lease or a comparable provision in a Replacement Primary
Lease) shall have occurred with respect to the Type 2 Affected Individual Parcel
and the Primary Tenant shall have delivered a Termination Notice (as defined in
the Primary Lease or a comparable provision in a Replacement Primary Lease) with
respect to the Type 2 Affected Individual Parcel, (y)

                                       25
<PAGE>

Mortgagor satisfies all of the Individual Property Release Conditions (as
defined in Exhibit F annexed hereto and made a part hereof) with respect to the
Type 2 Affected Individual Parcel and (z)Mortgagor pays to Mortgagee the
applicable Allocated Loan Amount as set forth on Schedule I hereof with respect
to the Type 2 Affected Individual Parcel, together with all unpaid interest
accrued under the Note (through and including the date of prepayment) and any
other fees and expenses then owing to Mortgagee by Mortgagor pursuant hereto,
the Note and the other Loan Documents without any penalty or any prepayment
consideration otherwise set forth in this Mortgage or in the Note; provided,
however, that such prepayment must occur, if at all, within ninety (90) days
after the delivery by Mortgagee to Mortgagor of the Required Restoration Notice.
Upon receipt of such payment Mortgagee will execute and deliver any agreements
reasonably requested by Mortgagor to release the Type 2 Affected Individual
Parcel from the lien of this Mortgage.

                  (c) Notwithstanding the foregoing provisions of Section 1.9(a)
and Section 1.9(b) hereof, for so long as the Primary Lease (or, if applicable,
the Replacement Primary Lease) shall be in full force and effect and Mortgagee
shall have received a current estoppel certificate from Primary Tenant
certifying that the Primary Lease (or, if applicable, the Replacement Primary
Lease) is in full force and effect, that, to Primary Tenant's (or, if
applicable, Replacement Primary Tenant's) best knowledge, there are no defaults
beyond any applicable notice and cure period, and that a Termination Event (as
defined in the Primary Lease) (or, if applicable, in the case of the Replacement
Primary Lease, any event which would allow a termination of the Replacement
Primary Lease) has not occurred, Mortgagee shall apply any sums received by it
under this Section 1.9 first to the payment of all of its costs and expenses
(including, but not limited to, legal fees and disbursements) incurred in
obtaining those sums, and shall apply the remainder of such sums toward the
restoration and repair of the Property in the manner set forth in the Primary
Lease (or, if applicable, the Replacement Primary Lease provided that such lease
contains substantially the same restoration requirements as the original Primary
Lease), and in such event Mortgagee shall require Mortgagor to restore or repair
(or cause Primary Tenant (or, if applicable, the Replacement Primary Tenant) to
restore or repair) the Property in the manner and upon such terms and conditions
as required by the Primary Lease (or, if applicable, the Replacement Primary
Lease) and (to the extent not in conflict with the Primary Lease (or, if
applicable, the Replacement Primary Lease provided that such lease contains
substantially the same restoration requirements as the original Primary Lease))
as would be required by a prudent interim construction lender, including, but
not limited to (i) the deposit by Mortgagor with Mortgagee, within thirty (30)
days after demand therefor, of any deficiency necessary in order to assure the
availability of sufficient funds to pay for such restoration or repair,
including Mortgagee's costs and expenses to be incurred in connection therewith,
(ii) the prior approval by Mortgagee of plans and specifications, contractors
and form of construction contracts, and (iii) the furnishing to Mortgagee of
permits, bonds, lien waivers, invoices, receipt and affidavits from contractors
and subcontractors in form and substance reasonably satisfactory to Mortgagee in
its discretion, with any balance thereafter remaining being disbursed as
follows: (i) if such casualty shall occur prior to the fifteenth anniversary of
the date hereof, any such remainder shall be disbursed to Mortgagor, so long as
no Event of Default exists, and (ii) if such casualty shall occur on or after
the fifteenth anniversary of the date hereof, any such remainder shall be
disbursed to Mortgagee for payment of the indebtedness secured hereby (without
any

                                       26
<PAGE>

prepayment penalty so long as no Event of Default has occurred) in whatever
order Mortgagee directs in its absolute discretion, and in the event the
reduction in principal is greater than thirty-five percent (35%) of the then
outstanding balance of the Note, the scheduled installments of principal and
interest shall be recalculated accordingly.

                  (d) In the event that a Termination Event has not occurred and
Mortgagor does not restore or repair the Property in accordance with the
foregoing provisions, the same shall, after expiration of the notice and cure
period set forth in Section 2.l(c) hereof, be an Event of Default hereunder and
Mortgagee may, in Mortgagee's absolute discretion and without regard to the
adequacy of Mortgagee's security, elect to accelerate the maturity date of the
Note and declare any and all indebtedness secured hereby to be immediately due
and payable and apply the remainder of such sums received pursuant to this
Section 1.9 to the payment of the indebtedness secured hereby in whatever order
Mortgagee directs in its absolute discretion.

                  (e) (i) With respect to any casualty or condemnation proceeds
received by Mortgagee in connection with a casualty or condemnation affecting
either the 390 Lafayette Property or the 11 Merrill Property, provided (1) no
Event of Default shall exist and be continuing at the time that Mortgagee has
the right to, and does, elect to apply any sums received by it pursuant to this
Section 1.9 to the payment of the indebtedness secured hereby (rather than
making such sums available for repair, restoration or rebuilding of the
Property), or at the time that Mortgagee actually applies such sums to the
payment of the indebtedness secured hereby and (2) a Termination Event (as
defined in the Primary Lease or a comparable provision in a Replacement Primary
Lease) shall have occurred with respect to the 390 Lafayette Property or the 11
Merrill Property and the Primary Tenant shall have delivered a Termination
Notice (as defined in the Primary Lease or a comparable provision in a
Replacement Primary Lease) with respect to the 390 Lafayette Property or the 11
Merrill Property, then, notwithstanding anything to the contrary contained
herein, in the Note, Mortgagor shall be permitted to prepay the remaining unpaid
principal balance of the Note, together with all unpaid interest accrued thereon
(through and including the date of prepayment) and any other fees and expenses
then owing to Mortgagee by Mortgagor pursuant hereto, the Note and the other
Loan Documents without any penalty or any prepayment consideration otherwise set
forth in this Mortgage or in the Note; provided, however, that such prepayment
must occur, if at all, within ninety (90) days after the delivery by Mortgagee
to Mortgagor of written notice of Mortgagee's application of such sums to the
indebtedness secured hereby in accordance with the terms hereof. Upon receipt of
such payment Mortgagee will execute and deliver any agreements reasonably
requested by Mortgagor to release and terminate this Mortgage.

                        (ii) With respect to any casualty or condemnation
proceeds received by Mortgagee in connection with a casualty or condemnation
affecting the 380 Lafayette Property, provided no Event of Default shall exist
and be continuing at the time that Mortgagee has the right to, and does, elect
to apply any sums received by it pursuant to this Section 1.9 to the payment of
the indebtedness secured hereby (rather than making such sums available for
repair, restoration or rebuilding of the Property), or at the time that
Mortgagee actually applies such sums to the payment of the indebtedness secured
hereby, then, notwithstanding anything to the contrary contained herein, in the
Note, or in the other Loan

                                       27
<PAGE>

Documents, (x) such application shall be deemed to reduce the Allocated Loan
Amount (as set forth in Schedule I hereof) with respect to the 380 Lafayette
Property and (y) so long as (1) a Termination Event (as defined in the Primary
Lease or a comparable provision in a Replacement Primary Lease) shall have
occurred with respect to the 380 Lafayette Property and the Primary Tenant shall
have delivered a Termination Notice (as defined in the Primary Lease or a
comparable provision in a Replacement Primary Lease) with respect to the 380
Lafayette Property and (2) Mortgagor satisfies all of the Individual Property
Release Conditions (as defined in Exhibit F annexed hereto and made a part
hereof) with respect to the 380 Lafayette Property, Mortgagor shall be permitted
to prepay the remaining unpaid principal balance of the Allocated Loan Amount
with respect to the 380 Lafayette Property, together with all unpaid interest
accrued thereon (through and including the date of prepayment) and any other
fees and expenses then owing to Mortgagee by Mortgagor pursuant hereto, the Note
and the other Loan Documents without any penalty or any prepayment consideration
otherwise set forth in this Mortgage or in the Note (and if a Termination Event
shall have occurred under the Primary Lease with respect to the 380 Lafayette
Property, then, so long as Mortgagor satisfies all of the Individual Property
Release Conditions (as defined in Exhibit F annexed hereto and made a part
hereof) with respect to the 380 Lafayette Property, Mortgagor shall have the
right to accept the rejectable offer from Primary Tenant to pay the Termination
Amount (as defined in the Primary Lease) with respect to the 380 Lafayette
Property so long as the Termination Amount is sufficient to pay the foregoing
amounts in full); provided, however, that such prepayment must occur, if at all,
within ninety (90) days after the delivery by Mortgagee to Mortgagor of written
notice of Mortgagee's application of such sums to the indebtedness secured
hereby in accordance with the terms hereof. Upon receipt of such payment
Mortgagee will execute and deliver any agreements reasonably requested by
Mortgagor to release and terminate this Mortgage solely with respect to the 380
Lafayette Property, and

                        (iii) With respect to any casualty or condemnation
proceeds received by Mortgagee in connection with a casualty or condemnation
affecting the 390 Lafayette Property or the 11 Merrill Property, provided no
Event of Default shall exist and be continuing at the time that Mortgagee has
the right to, and does, elect to apply any sums received by it pursuant to this
Section 1.9 to the payment of the indebtedness secured hereby (rather than
making such sums available for repair, restoration or rebuilding of the
Property), or at the time that Mortgagee actually applies such sums to the
payment of the indebtedness secured hereby, then, notwithstanding anything to
the contrary contained herein, in the Note, or in the other Loan Documents, (x)
such application shall be deemed to reduce the Allocated Loan Amount (as set
forth in Schedule I hereof) with respect to the applicable Type 2 Affected
Individual Parcel and (y) so long as (1) the Property shall not have been
submitted to a condominium form of ownership prior to the occurrence of the
Termination Event and Primary Tenant irrevocably waives any rights under the
Primary Lease to construct (or cause to be constructed) the Additional
Improvements (as defined in Section 5.34 hereof) and/or to convert the Property
to a condominium form of ownership, (2) a Termination Event (as defined in the
Primary Lease or a comparable provision in a Replacement Primary Lease) shall
have occurred with respect to the Type 2 Affected Individual Parcel and the
Primary Tenant shall have delivered a Termination Notice (as defined in the
Primary Lease or a comparable provision in a Replacement Primary Lease) with
respect to the Type 2 Affected Individual Parcel and (3) Mortgagor satisfies all
of

                                       28
<PAGE>

the Individual Property Release Conditions (as defined in Exhibit F annexed
hereto and made a part hereof) with respect to the Type 2 Affected Individual
Parcel, Mortgagor shall be permitted to prepay the remaining unpaid principal
balance of the Allocated Loan Amount with respect to such Type 2 Affected
Individual Parcel, together with all unpaid interest accrued thereon (through
and including the date of prepayment) and any other fees and expenses then owing
to Mortgagee by Mortgagor pursuant hereto, the Note and the other Loan Documents
without any penalty or any prepayment consideration otherwise set forth in this
Mortgage or in the Note (and if a Termination Event with respect to the Type 2
Affected Individual Parcel shall have occurred under the Primary Lease, then, so
long as (X) Mortgagor satisfies all of the Individual Property Release
Conditions (as defined in Exhibit F annexed hereto and made a part hereof) with
respect to the Type 2 Affected Individual Parcel and (Y) the Property shall not
have been submitted to a condominium form of ownership prior to the occurrence
of the Termination Event and Primary Tenant irrevocably waives any rights under
the Primary Lease to construct (or cause to be constructed) the Additional
Improvements (as defined in Section 5.34 hereof) and/or to convert the Property
to a condominium form of ownership, Mortgagor shall have the right to accept the
rejectable offer from Primary Tenant to pay the Termination Amount (as defined
in the Primary Lease) with respect to the Type 2 Affected Individual Parcel so
long as the Termination Amount is sufficient to pay the foregoing amounts in
full); provided, however, that such prepayment must occur, if at all, within
ninety (90) days after the delivery by Mortgagee to Mortgagor of written notice
of Mortgagee's application of such sums to the indebtedness secured hereby in
accordance with the terms hereof. Upon receipt of such payment Mortgagee will
execute and deliver any agreements reasonably requested by Mortgagor to release
and terminate this Mortgage solely with respect to the Type 2 Affected
Individual Parcel.

                  (f) Any reduction in the indebtedness secured hereby resulting
from Mortgagee's application of any sums received by it hereunder shall take
effect only when Mortgagee actually receives such sums and elects to apply such
sums to the indebtedness secured hereby and, in any event, the unpaid portion of
the indebtedness secured hereby shall remain in full force and effect and
Mortgagor shall not be excused in the payment thereof. Except as otherwise
provided herein, partial payments received by Mortgagee, as described in the
preceding sentence, shall be applied first to the final payment due under the
Note and thereafter to installments due under the Note in the inverse order of
their due date. If Mortgagor elects, or Mortgagee directs Mortgagor, to restore
or repair the Property after the occurrence of a casualty or partial taking of
the Property as provided above, Mortgagor shall promptly and diligently, at
Mortgagor's sole cost and expense and regardless of whether the insurance
proceeds or condemnation award, as appropriate, shall be sufficient for the
purpose, restore, repair, replace and rebuild the Property as nearly as possible
to its value, condition and character immediately prior to such casualty or
partial taking in accordance with the foregoing provisions and Mortgagor shall
pay to Mortgagee all costs and expenses of Mortgagee incurred in administering
said rebuilding, restoration or repair, provided that Mortgagee makes such
proceeds or award available for such purpose. Mortgagor agrees to execute and
deliver from time to time such further instruments as may be reasonably
requested by Mortgagee to confirm the foregoing assignment to Mortgagee of any
award, damage, insurance proceeds, payment or other compensation. Mortgagee is
hereby irrevocably constituted and appointed the attorney-in-fact of Mortgagor
(which power of attorney shall be irrevocable so long as any indebtedness
secured

                                       29
<PAGE>
hereby is outstanding, shall be deemed coupled with an interest, shall
survive the voluntary or involuntary dissolution of Mortgagor and shall not be
affected by any disability or incapacity suffered by Mortgagor subsequent to the
date hereof), with full power of substitution, subject to the terms of this
section, to settle for, collect and receive any such awards, damages, insurance
proceeds, payments or other compensation from the parties or authorities making
the same, to appear in and prosecute any proceedings therefor and to give
receipts and acquittances therefor.

                  (g) Without limiting any of the foregoing, Mortgagor agrees
that in no event shall Mortgagor, without Mortgagee's prior written consent,
accept any rejectable offer by Primary Tenant to pay the Termination Amount with
respect to any Individual Property if (i) the Individual Property Release
Conditions have not been satisfied with respect to such Individual Property or
(ii) (x) such Individual Property is either the 390 Lafayette Property or the 11
Merrill Property and (y) (1) the Property shall have been submitted to a
condominium form of ownership prior to the occurrence of the Termination Event
or (2) Primary Tenant shall not have irrevocably waived any rights under the
Primary Lease to construct (or cause to be constructed) the Additional
Improvements (as defined in Section 5.34 hereof) and/or to convert the Property
to a condominium form of ownership.

            Section 1.10 Mechanics' Liens. Mortgagor shall pay or cause to be
paid when due all claims and demands of mechanics, materialmen, laborers and
others for any work performed or materials delivered for the Land or
Improvements; provided, however, that Mortgagor shall have the right to contest
in good faith any such claim or demand, so long as it does so diligently, by
appropriate proceedings and without prejudice to Mortgagee, and provided that
neither the Property nor any interest therein would be in any danger of sale,
loss or forfeiture as a result of such proceeding or contest. In the event
Mortgagor shall contest any such claim or demand, Mortgagor shall promptly
notify Mortgagee of such contest and thereafter shall, upon Mortgagee's request,
promptly provide a bond, cash deposit or other security reasonably satisfactory
to Mortgagee to protect Mortgagee's interest and security should the contest be
unsuccessful. If Mortgagor shall fail to promptly discharge or provide security
against any such claim or demand as aforesaid, Mortgagee may do so and any and
all expenses incurred by Mortgagee, together with interest thereon at the
Default Interest Rate from the date incurred by Mortgagee until actually paid by
Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured
by this Mortgage and by all of the other Loan Documents securing all or any part
of the indebtedness evidenced by the Note.

            Section 1.11 Rents and Profits. As additional and collateral
security for the payment of the indebtedness secured hereby and cumulative of
any and all rights and remedies herein provided for, Mortgagor hereby absolutely
and presently assigns to Mortgagee all existing and future Leases, and all
existing and future Rents and Profits. Mortgagor hereby grants to Mortgagee the
sole, exclusive and immediate right, without taking possession of the Property,
to demand, collect (by suit or otherwise), receive and give valid and sufficient
receipts for any and all of said Rents and Profits, for which purpose Mortgagor
does hereby irrevocably make, constitute and appoint Mortgagee its
attorney-in-fact with full power to appoint substitutes or a trustee to
accomplish such purpose (which power of attorney shall be irrevocable so long as
any indebtedness secured hereby is outstanding, shall be deemed to be coupled
with an interest, shall

                                       30
<PAGE>
 survive the voluntary or involuntary dissolution of Mortgagor and shall not be
affected by any disability or incapacity suffered by Mortgagor subsequent to the
date hereof). Mortgagee shall be without liability for any loss which may arise
from a failure or inability to collect Rents and Profits, proceeds or other
payments. However, until the occurrence of an Event of Default under this
Mortgage, Mortgagor shall have a license to collect and receive the Rents and
Profits when due and prepayments thereof for not more than one month prior to
due date thereof (or, for not more than three months prior to the due date
thereof with respect to Rents paid quarterly in advance). Upon the occurrence of
an Event of Default, Mortgagor's license shall automatically terminate Without
notice to Mortgagor and Mortgagee may thereafter, without taking possession of
the Property, collect the Rents and Profits (including, without limitation, the
Cash Security Deposit and any Letter of Credit) itself or by an agent or
receiver. From and after the termination of such license, Mortgagor shall be the
agent of Mortgagee in collection of the Rents and Profits and all of the Rents
and Profits so collected by Mortgagor shall be held in trust by Mortgagor for
the sole and exclusive benefit of Mortgagee and Mortgagor shall, within one (1)
business day after receipt of any Rents and Profits, pay the same to Mortgagee
to be applied by Mortgagee as hereinafter set forth, Neither the demand for or
collection of Rents and Profits by Mortgagee, nor the exercise of Mortgagee's
rights as assignee of the Leases, shall constitute any assumption by Mortgagee
of any obligations under any Lease or other agreement relating thereto.
Mortgagee is obligated to account only for such Rents and Profits as are
actually collected or received by Mortgagee. Mortgagor irrevocably agrees and
consents that the respective payors of the Rents and Profits shall, upon demand
and notice from Mortgagee of an Event of Default hereunder, pay said Rents and
Profits to Mortgagee without liability to determine the actual existence of any
Event of Default claimed by Mortgagee. Mortgagor hereby waives any right, claim
or demand which Mortgagor may now or hereafter have against any such payor by
reason of such payment of Rents and Profits to Mortgagee, and any such payment
shall discharge such payor's obligation to make such payment to Mortgagor. All
Rents and Profits collected or received by Mortgagee may be applied against all
expenses of collection, including, without limitation, reasonable attorneys'
fees, against costs of operation and management of the Property and against the
indebtedness secured hereby, in whatever order or priority as to any of the
items so mentioned as Mortgagee directs in its sole subjective discretion and
without regard to the adequacy of its security. Neither the exercise by
Mortgagee of any rights under this Section nor the application of any Rents and
Profits to the secured indebtedness shall cure or be deemed a waiver of any
Event of Default hereunder. The assignment of Leases and of Rents and Profits
hereinabove granted shall continue in full force and effect during any period of
foreclosure or redemption with respect to the Property. As additional security
for the indebtedness secured hereby, Mortgagor has executed an Assignment of
Leases and Rents dated of even date herewith (as hereafter amended, consolidated
or modified from time to time, the "Assignment") in favor of Mortgagee covering
all of the right, title and interest of Mortgagor, as landlord, lessor or
licensor, in and to any Leases. All rights and remedies granted to Mortgagee
under the Assignment shall be in addition to and cumulative of all rights and
remedies granted to Mortgagee hereunder.

      Section 1.12 Leases.

                                       31
<PAGE>

            (a)   Lease Requirements. Prior to execution of any Leases after the
date hereof, Mortgagor shall submit to Mortgagee, for Mortgagee's prior
approval, which approval shall not be unreasonably withheld so long as no Event
of Default exists hereunder, a copy of the form lease Mortgagor plans to use in
leasing space in the Improvements. Each Lease executed after the date hereof
affecting any of the Land or the Improvements must provide, in a manner approved
by Mortgagee, that (i) such Lease is subject and subordinate to this Mortgage,
and (ii) the tenant, lessee or licensee, as appropriate, will attorn to, and
recognize as its landlord, lessor or licensor, any person succeeding to the
interest of Mortgagor in such Lease upon any foreclosure of this Mortgage or
deed in lieu of foreclosure. Each such Lease shall also provide that, upon
request of said successor-in-interest, the tenant, lessee or licensee shall
execute and deliver an instrument or instruments confirming its attornment as
provided for in this Section 1.12; provided, however, that neither Mortgagee nor
any successor-in-interest shall be bound by any payment of rental for more than
one (1) month in advance (or more than three (3) months in advance if rent is
paid on a quarterly basis), or any amendment or modification of said Lease made
without the express written consent of Mortgagee or said successor-in-interest.
No Lease shall contain any right of first refusal or any option to purchase all
or any portion of the Property. No Lease shall contain any right of first
refusal to lease all or any portion of the Property. No Lease shall contain any
right to terminate the term thereof (except in the event of the destruction or
taking of all or substantially all of the Property).

            (b)   Acts Requiring Consent of Mortgagee. Mortgagor shall not,
without the prior written consent of Mortgagee, (i) enter into any Lease of all
or any portion of the Property, except for renewals of the Primary Lease on the
terms set forth therein; (ii) cancel, terminate, abridge or otherwise modify the
terms of the Primary Lease, or accept a surrender thereof; (iii) consent to any
assignment of, or subletting of all or any portion of the premises demised
under, the Primary Lease unless required by the terms thereof (provided,
however, that in the event that Mortgagor is required pursuant to the provisions
of the Primary Lease to not unreasonably withhold or delay its consent to any
such requested assignment or subletting, then Mortgagee shall not unreasonably
withhold or delay its consent to Mortgagor's so consenting, so long as such
assignment or subletting does not (x) release Primary Tenant from any of its
obligations under the Primary Lease or (y) release any guarantor of the Primary
Lease from any of its obligations to guaranty the Primary Tenant's obligations
under the Primary Lease); or (iv) cancel, terminate, abridge, release or
otherwise modify any guaranty of the Primary Lease or the terms thereof. The
request for approval of each such proposed Lease shall be made to Mortgagee in
writing. As part of such request, Mortgagor shall furnish to Mortgagee (and any
loan servicer specified from time to time by Mortgagee): (1) such biographical
and financial information about the proposed tenant as Mortgagee may require in
conjunction with its review, (2) a copy of the proposed Lease, and (3) a summary
of the material terms of such proposed Lease (including, without limitation,
rental terms and the term of the proposed Lease and any options).Notwithstanding
anything to the contrary contained in this Mortgage, Mortgagor shall have the
right at any time or from time-to-time, in its sole and absolute discretion, to
waive, amend or modify the provisions of Paragraphs 22(a)(iv), (v), (vi) and
(xv) of the Primary Lease and Exhibit "G" of the Primary Lease.

                                       32
<PAGE>

            (c)   Affirmative Covenants Regarding Leases. Mortgagor shall at all
times promptly and faithfully perform, or cause to be performed, all of the
covenants, conditions and agreements contained in all Leases, now or hereafter
existing, on the part of the landlord, lessor or licensor thereunder to be kept
and performed. Mortgagor shall promptly send copies to Mortgagee of (y) all
notices of default which Mortgagor shall send or receive under any Lease and (z)
all financial statements required to be provided by the Primary Tenant pursuant
to the Primary Lease. Mortgagor, at no cost or expense to Mortgagee, shall
enforce, short of termination, the performance and observance of each and every
condition and covenant of each of the other parties under each Lease. Mortgagor
shall furnish to Mortgagee, within thirty (30) days after a request by Mortgagee
to do so, but not more than twice annually and in any event by January 1 of each
year in which any Lease other than the Primary Lease shall be in effect, a
current rent roll certified by Mortgagor as being true and correct containing
the names of all tenants, lessees and licensees with respect to the Property,
the terms of their respective Leases, the spaces occupied and the rentals or
fees payable thereunder and the amount of each tenant's security deposit. Upon
the request of Mortgagee, Mortgagor shall deliver to Mortgagee (i) a copy of
each Lease; and (ii) an estoppel certificate from the tenant under each Lease
(provided that Mortgagor shall not be required to deliver such certificates more
frequently than twice in any calendar year).

            (d)   Negative Covenants Regarding Leases. Mortgagor shall not enter
into any Lease (i) without the prior written consent of Mortgagee where such
consent is required pursuant to this Mortgage; (ii) except on terms consistent
with the terms for similar leases in the market area of the Land, including,
without limitation as to the rental rate, security deposit, tenant improvement
and work letter terms, and free rent periods; (iii) other than with a
third-party tenant unrelated to Mortgagor or any Affiliate (as defined herein)
of Mortgagor; or (iv) except for an actual occupancy by the tenant, lessee or
licensee thereunder. Mortgagor shall not do or suffer to be done any act that
might result in a default by the landlord, lessor or licensor under any Lease or
allow the tenant, lessee or licensee thereunder to withhold payment or rent and
shall not further assign any Lease or any Rents and Profits. Mortgagor shall
not, without the prior written consent of Mortgagee (1) modify any Lease; (2)
terminate or accept the surrender of any Lease (except in connection with the
payment of a "Termination Amount," as such term is defined in the Primary
Lease); or (3) waive or release any other party from the performance or
observance of any obligation or condition under any Lease. Mortgagor shall not
solicit or accept the prepayment of any rents under any Lease for more than one
(1) month prior to the due date thereof (or 3 months prior to the due date there
of if rent is collected on a quarterly basis). Mortgagor shall not execute any
other assignment of the lessor's interest in the Leases or the Rents and
Profits.

            (e)   Security Deposits. To the extent permitted hereunder to be
held by Mortgagor, all security deposits of tenants, whether held in cash
(including, without limitation, the Cash Security Deposit) or in any other form,
shall not be commingled with any other funds of Mortgagor or any other person
and, if cash, shall be deposited by Mortgagor at such commercial or savings bank
or banks, or otherwise held in compliance with applicable law, as may be
reasonably satisfactory to Mortgagee. To the extent permitted hereunder to be
held by Mortgagor, any letter of credit (including, without limitation, any
letter of credit), bond or other

                                       33
<PAGE>
instrument which Mortgagor is permitted to hold in lieu of cash security
deposits under any applicable legal requirement shall be maintained in full
force and effect in the full amount of such deposits unless replaced by cash
deposits as hereinabove described; shall be issued by an institution reasonably
satisfactory to Mortgagee; shall, if permitted pursuant to any applicable legal
requirements, name Mortgagee as payee or mortgagee thereunder or, at Mortgagee's
option, be assigned or fully assignable to Mortgagee; and shall, in all
respects, comply with any applicable legal requirements and otherwise be
reasonably satisfactory to Mortgagee. Mortgagor shall, upon request, provide
Mortgagee with evidence reasonably satisfactory to Mortgagee of Mortgagor's
compliance with the foregoing. Upon an Event of Default under this Mortgage,
Mortgagor shall, immediately upon Mortgagee's request (if permitted by
applicable law), deliver to Mortgagee the security deposits (and any interest
previously earned thereon and not disbursed to the person(s) lawfully entitled
to receive same) with respect to all or any portion of the Property, to be held
by Mortgagee subject to the terms of the Leases.

            (f)   Rights of Mortgagee Upon Default. Upon an Event of Default,
whether before or after the whole principal sum secured hereby becomes or is
declared to be immediately due or whether before or after the institution of
legal proceedings to foreclose this Mortgage, forthwith, upon demand of
Mortgagee, Mortgagor shall surrender to Mortgagee and, subject to the rights of
tenants under the Leases, Mortgagee shall be entitled to take actual
possession of the Property or any part thereof personally, or by its agent or
attorneys. In such event, Mortgagee shall have, and Mortgagor hereby gives and
grants to Mortgagee, the right, power and authority to make and enter into
Leases for such rents and for such periods of occupancy and upon conditions and
provisions as Mortgagee may deem desirable in its sole discretion, and
Mortgagor expressly acknowledges and agrees that the term of such Lease may
extend beyond the date of any foreclosure sale of the Property; it being the
intention of Mortgagor that in such event Mortgagee shall be deemed to be and
shall be the attorney-in-fact of Mortgagor for the purpose of making and
entering into Leases for the rents and upon the terms, conditions and provisions
deemed desirable to Mortgagee in its sole discretion and with like effect as if
such Leases had been made by Mortgagor as the owner in fee simple of the
Property free and clear of any conditions or limitations established by this
Mortgage. The power and authority hereby given and granted by Mortgagor to
Mortgagee shall be deemed to be coupled with an interest, shall not be revocable
by Mortgagor so long as any indebtedness secured hereby is outstanding, shall
survive the voluntary or involuntary dissolution of Mortgagor and shall not be
affected by any disability or incapacity suffered by Mortgagor subsequent to the
date hereof. In connection with any action taken by Mortgagee pursuant to this
Section, Mortgagee shall not be liable for any loss sustained by Mortgagor
resulting from any failure to let the Property, or any part thereof, or from any
other act or omission of Mortgagee in managing the Property except for
Mortgagee's gross negligence or willful misconduct, nor shall Mortgagee be
obligated to perform or discharge any obligation, duty or liability under any
Lease or under or by reason of this instrument or the exercise of rights or
remedies hereunder. Mortgagor shall, and does hereby, indemnify Mortgagee for,
and hold Mortgagee harmless from, any and all claims, actions, demands,
liabilities, loss or damage which may or might be incurred by Mortgagee under
any such Lease or under this Mortgage or by the exercise of rights or remedies
hereunder and from any and all claims and demands whatsoever which may be
asserted against Mortgagee by reason of any alleged obligations or undertakings
on its part to perform or

                                       34
<PAGE>
discharge any of the terms, covenants or agreements contained in any such Lease
other than those finally determined to have resulted solely from the gross
negligence or willful misconduct of Mortgagee. Should Mortgagee incur any such
liability, the amount thereof, including, without limitation, costs, expenses
and attorneys' fees, together with interest thereon at the Default Interest Rate
from the date incurred by Mortgagee until actually paid by Mortgagor, shall be
immediately due and payable to Mortgagee by Mortgagor on demand and shall be
secured hereby and by all of the other Loan Documents securing all or any part
of the indebtedness evidenced by the Note. Nothing in this Section shall impose
on Mortgagee any duty, obligation or responsibility for the control, care,
management or repair of the Property, or for the carrying out of any of the
terms and conditions of any such Lease, nor shall it operate to make Mortgagee
responsible or liable for any waste committed on the Property by the tenants or
by any Other parties or for any dangerous or defective condition of the
Property, or for any negligence in the management, upkeep, repair or control of
the Property. Mortgagor hereby assents to, ratifies and confirms any and all
actions of Mortgagee with respect to the Property taken under this Section. The
foregoing rights are in addition to all other rights and remedies granted to
Mortgagee pursuant to this Mortgage.

            (g)   Representations Regarding Leases. Mortgagor hereby represents
and warrants as follows:

                  (i)   Mortgagor has delivered a true, correct and complete
      copy of the Primary Lease (including all amendments thereto and
      modifications thereof) and there are no other Leases entered into by
      Mortgagor affecting the Property as of the date hereof;

                  (ii)  The Primary Lease constitutes the legal, valid and
      binding obligation of Mortgagor and, to the best of Mortgagor's knowledge
      and belief, is enforceable against the Tenant thereof. No default exists,
      or, to the best of Mortgagor's knowledge, with the passing of time or the
      giving of notice or both would exist, under the Primary Lease which would,
      in the aggregate, have a material adverse effect on Mortgagor or the
      Property;

                  (iii) The Primary Tenant has not, as of the date hereof, paid
      rent more than three (3) months in advance, and the rents under such
      Leases have not been waived, released, or otherwise discharged or
      compromised;

                  (iv)  All work to be performed by Mortgagor under the Primary
      Lease has been performed, all contributions to be made by Mortgagor to
      Primary Tenant have been made and all other conditions precedent to the
      Primary Tenant's obligations thereunder have been satisfied;

                  (v)   The Primary Tenant has entered into occupancy of the
      demised premises under the Primary Lease;

                                       35
<PAGE>

                  (vi)  To the best of Mortgagor's knowledge and belief, the
      Primary Tenant is free from bankruptcy, reorganization or arrangement
      proceedings or a general assignment for the benefit of creditors; and

                  (vii) The Primary Lease does not provide any party with the
      right to obtain a lien or encumbrance upon the Property superior to the
      lien of this Mortgage.

                  (Viii) None of the Leases shall contain (1) any option to
      purchase, (2) any right of first refusal to lease or purchase or (3) any
      right to terminate the lease term (other than the right to terminate the
      Lease in connection with a Termination Event [as defined in the Primary
      Lease]). For so long as the Property remains subject to this Mortgage
      (e.g., unless the Loan has been duly prepaid or defeased subject to and in
      accordance with the provisions of this Mortgage and the other Loan
      Documents), in the event that the Primary Tenant purports to exercise any
      right to purchase all or any part of the Property, (except in the event of
      the destruction or condemnation of all or substantially all of the
      Property), such event shall be an Event of Default hereunder unless done
      in accordance with the provisions of this Mortgage relating to transfers
      of interests in the Property, including, without limitation, the
      requirement that the mortgagor of the Property be a single purpose,
      bankruptcy remote entity otherwise complying with the provisions of
      Section 1.33 hereof).

            (h)   Contemporaneously with the execution hereof, Mortgagor has
delivered to Mortgagee the Security Deposit (as defined in the Primary Lease) in
the form of a letter of credit in the amount of $1,597,283 (as defined in the
Primary Lease, the "Letter of credit"), to be held and applied in accordance
with the following provisions of this subsection 1.12(h);

                  (i)   The Letter of Credit and/or Cash Security Deposit (as
      defined in the Primary Lease), shall be held in accordance with applicable
      Laws and as required by the Primary Lease. Mortgagor hereby pledges to
      Mortgagee any and all cash, bonds and other instruments (including,
      without limitation, the Cash Security Deposit and the Letter of Credit, if
      any) obtained as security in connection with the Primary Lease as
      additional security for the payment of the indebtedness secured hereby,
      subject in all events to the rights of Primary Tenant under the terms of
      the Primary Lease.

                  (ii)  if at any time Primary Tenant shall replace the Letter
      of Credit with any replacement Letter of Credit then (x) Mortgagor shall
      deliver the replacement Letter of Credit to Mortgagee, (y) the replacement
      Letter of Credit shall name Mortgagee as beneficiary, and (z) Mortgagor
      shall cause the replacement Letter of Credit to be maintained in full
      force and effect without modification or reduction throughout the Term
      (except as otherwise expressly provided in the Primary Lease as in effect
      on the date hereof). Mortgagor shall fully cooperate with Mortgagee so
      that Mortgagee obtains a first priority

                                       36
<PAGE>

      perfected security interest in the Letter of Credit or any other security
      for the Primary Lease, including, without limitation, the execution and
      delivery of all transfer documents, security agreements, blank draw
      requests, notices to issuers, all as Mortgagee may reasonably require in
      connection with such perfection, subject in all events to the rights of
      Primary Tenant under the terms of the Primary Lease.

                  (iii) If the Primary Tenant fails to renew or increase the
      Letter of Credit as required by the Primary Lease, Mortgagee may at any
      Time after the thirtieth day before the expiration date of Such Letter of
      Credit, draw upon and deposit the cash proceeds thereof as a cash security
      deposit (as defined in the Primary Lease, the "Cash Security Deposit") in
      an account in Mortgagee's name and in accordance with Section 5.31
      hereof.

                  (iv)  Promptly upon the occurrence of any event or
      circumstance in which the Mortgagor becomes entitled under the terms of
      the Primary Lease to draw on the Letter of Credit (or the Cash Security
      Deposit, as applicable), Mortgagor shall so notify Mortgagee. With or
      without notice from Mortgagor upon the occurrence of any such event or
      circumstance, Mortgagee may draw on the Letter of Credit (or the Cash
      Security Deposit, as applicable) in accordance with the terms and
      conditions of the Primary Lease; and apply the proceeds of such draw as
      provided in the Primary Lease; provided, however, that if there is no such
      requirement with respect to such application, or if the proceeds are to be
      applied to rent or other Primary Tenant payment obligations under the
      Primary Lease, then Mortgagee shall, at its option, be entitled to (i)
      apply such proceeds (A) to the Leasing Reserve, or (B) If any Event of
      Default shall then have occurred and be continuing (at Mortgagee's
      option), in reduction of the Mortgagor's obligations under the Note and
      other Loan documents in such order and amount as Mortgagee shall
      determine, or (ii) retain and hold same to be applied against rent or
      other payment obligations then next coming due from Primary Tenant (but
      only to the extent such rent or other payment obligation is not paid by
      the Primary Tenant when due). No such application of proceeds of the
      Letter of Credit (or the Cash Security Deposit, as applicable) shall be
      deemed to cure any Event of Default hereunder. Upon an assignment of the
      Loan, Mortgagee shall have the right to transfer the Letter of Credit (or
      the Cash Security Deposit, as applicable) to the assignee or transferee.
      Within ten (10) days after notice from Mortgagee of any such anticipated
      assignment, Mortgagor, at its sole cost, shall arrange for the transfer of
      the Letter of Credit (or the Cash Security Deposit, as applicable) to the
      assignee or transferee, as designated by Mortgagee in the foregoing
      notice, or to have the Letter of Credit reissued in the name of the
      assignee or transferee, and thereafter Mortgagor shall look solely to the
      assignee or transferee for the return of the Letter of Credit (or the Cash
      Security Deposit, as applicable). The provisions of this Section l.l2(h)
      shall apply to every assignment made of the Loan to an assignee or
      transferee. Mortgagor will not assign or encumber, or attempt to assign or
      encumber, the Letter of Credit (or the Cash

                                       37
<PAGE>

      Security Deposit, as applicable), and neither Mortgagee nor its successors
      or assigns shall be bound by any such actual or attempted assignment or
      encumbrance.

                  (v)   In the event that, pursuant to the provisions of the
      Primary Lease as in effect on the date hereof, Primary Tenant shall be
      entitled to a return of a portion of the Cash Security Deposit or to
      reduce the amount of the Letter of Credit, Mortgagee shall, upon delivery
      of evidence reasonably satisfactory to Mortgagee of Primary Tenant's
      satisfaction of all applicable conditions of such return or reduction,
      cooperate with Mortgagor in turning over to Mortgagor the same for
      application in accordance with the terms of the Primary Lease (it being
      acknowledged and agreed by Mortgagor that, other than pursuant to Section
      39(c) of the Primary Lease, the Primary Lease does not afford Primary
      Tenant the right to reduce any Letter of Credit which has been delivered
      to Mortgagee pursuant to this Section 1.12(h). Mortgagor acknowledges that
      in the event that (i) there is a reduction of the Letter of Credit or the
      Cash Security Deposit pursuant to Section 39(c) of the Primary Lease and
      (ii) subsequent to such reduction the obligation of the Primary Tenant to
      maintain the initial Security Deposit as required under Paragraph 39 of
      the Primary Lease is reinstated, then Mortgagor shall cause a new Letter
      of Credit or the Cash Security Deposit reflecting such increased amount to
      be delivered to Mortgagee and same shall be held and applied in accordance
      with the provisions of this subsection 1.12(h).

                  (vi)  Contemporaneously with the execution hereof, Mortgagor
      has established with Mortgagee a reserve in the amount of $________ (the
      "LC ASSIGNMENT RESERVE") by depositing such amount with Mortgagee. In
      connection with a Secondary Market Transaction (as hereinafter defined),
      Mortgagee may apply any funds then on deposit in the LC Assignment Reserve
      to the payment of any fees or expenses incurred by Mortgagee in connection
      with the assignment of the Letter of Credit to the transferee of the
      Mortgagee's interest under the Loan Documents (the "LC ASSIGNMENT FEES").
      Mortgagor shall be responsible for the payment of any and all LC
      Assignment Fees, regardless of whether there are sufficient funds in the
      LC Assignment Reserve for the payment of same.

            (i)   Approval Procedures. If Mortgagee's consent is required by the
terms of this Section 1.12, Mortgagee's consent shall be deemed withheld absent
notice from Mortgagee to the contrary unless Mortgagor complies with the
following procedures: Mortgagor shall request such consent by delivering notice
to Mortgagee in accordance with Section 5.5 of this Mortgage, with the following
legend on such request: THIS IS A REQUEST FOR CONSENT UNDER THE LOAN BY CIBC
INC. TO FOSS (NH) QRS 10-3, INC. FAILURE TO RESPOND TO THIS REQUEST WILL RESULT
IN THE REQUEST BEING DEEMED GRANTED. If, within ten (10) business days of
delivery of notice as aforesaid, Mortgagee has not responded (either
affirmatively or negatively) to Mortgagor with respect to such written request,
then such request shall be deemed granted.

                                       38
<PAGE>

      Section 1.13 Alienation and Further Encumbrances.

(a)   Mortgagor acknowledges that Mortgagee has relied upon the principals of
Mortgagor and their experience in owning and operating properties similar to the
Property in connection with the closing of the loan evidenced by the Note.
Accordingly, except as specifically allowed hereinbelow in this Section and
notwithstanding anything to the contrary contained in Section 5.6 hereof, in the
event that the Property or any part thereof or interest of Mortgagor therein
shall be sold, subject to and in accordance with the provisions hereof
(including, without limitation, the provisions of Section 1.13(b) hereof, it
being agreed that, without limiting the foregoing, the assumption fee identified
in Section 1.13(b)(3) hereof shall be payable in connection with any such sale),
conveyed, disposed of, alienated, hypothecated, leased (except to Tenants under
Leases which are approved, or deemed approved, in accordance with the provisions
of Section 1.12 hereof), assigned, pledged, mortgaged, further encumbered or
otherwise transferred or Mortgagor shall be divested of its title to the
Property or any interest therein, in any manner or way, whether voluntarily or
involuntarily, without the prior written consent of Mortgagee being first
obtained, which consent may be withheld in Mortgagee's sole discretion, then,
the same shall constitute an Event of Default hereunder and Mortgagee shall have
the right, at its option, to declare any or all of the indebtedness secured
hereby, irrespective of the maturity date specified in the Note, immediately due
and payable and to otherwise exercise any of its other rights and remedies
contained in Article III hereof. If such acceleration is during any period when
a prepayment fee is payable pursuant to the provisions set forth in the Note,
then, in addition to all of the foregoing, such prepayment fee shall also then
be immediately due and payable to the same end as though Mortgagor were
prepaying the entire indebtedness secured hereby on the date of such
acceleration. For the purposes of this Section 1.13 (a): (i) in the event either
Mortgagor or any of its general partners or managing members is a corporation or
trust, the sale, conveyance, transfer or disposition of more than 10% of the
issued and outstanding capital stock of Mortgagor or any of its general partners
or managing members or of the beneficial interest of such trust (or the issuance
of new shares of capital stock in Mortgagor or any of its general partners or
managing members so that immediately after such issuance the total capital stock
then issued and outstanding is more than 110% of the total immediately prior to
such issuance) shall be deemed to be a transfer of an interest in the Property,
and (ii) in the event Mortgagor or any general partner or managing member of
Mortgagor is a limited or general partnership, a joint venture or a limited
liability company, a change in the ownership interests in any general partner,
any joint venturer or any member, either voluntarily, involuntarily or
otherwise, or the sale, conveyance, transfer, disposition, alienation,
hypothecation or encumbering of all or any portion of the interest of any such
general partner, joint venturer or member in Mortgagor or such general partner
(whether in the form of a beneficial or partnership interest or in the form of a
power of direction, control or management, or otherwise), shall be deemed to be
a transfer of an interest in the Property. Notwithstanding the foregoing, (1)
limited partnership and/or non-managing member and/or non-controlling
shareholder interests in Mortgagor or in any general partner or managing member
of Mortgagor shall be freely transferable without the consent of Mortgagee to a
wholly-owned subsidiary of any Affiliate (as defined in Section 1.33) of
Mortgagor which has a net worth of at least $50,000,000 at the time of transfer,
$50,000,000 as determined by Mortgagee in its sole discretion, provided

                                       39
<PAGE>

that at least ten (10) days notice of such transfer is given to Mortgagee,
together with evidence reasonably satisfactory to Mortgagee of such net worth,
(2) any involuntary transfer caused by the death of Mortgagor or any general
partner, shareholder, joint venturer, or beneficial owner of a trust shall not
be a default under this Mortgage so long as Mortgagor is reconstituted, if
required, following such death and so long as those persons responsible for the
management of Mortgagor and the Property remain unchanged as a result of such
death or any replacement management is approved by Mortgagee, (3) gifts for
estate planning purposes of any individual's interests in Mortgagor or in any
of Mortgagor's general partners, managing members or joint venturers to the
spouse or any lineal descendant of such individual, or to a trust for the
benefit of any one or more of such individual, spouse or lineal descendant,
shall not be an Event of Default under this Mortgage so long as Mortgagor is
reconstituted, if required, following such gift and so long as those persons
responsible for the management of the Property and Mortgagor remain unchanged
following such gift or any replacement management is approved by Mortgagee and
(4) the sale or transfer of stock or interest in Corporate Property Associates
14 Incorporated, Corporate Property Associates 15 Incorporated, Corporate
Property Associates 12 Incorporated, Corporate Property Associates 16-Global
Incorporated, Carey Institutional Properties Incorporated or W.P. Carey & Co.
LLC shall not be an Event of Default under this Mortgage so long as the
applicable company whose stock or interest is being sold or transferred is
required to file, with respect to the equity interests of such company, periodic
reports with the Securities and Exchange Commission under Section 13 or Section
15(d) of the Securities Exchange Act of 1934, as amended.

            (b)   Notwithstanding the foregoing provisions of this Section
Mortgagee shall consent to a one time sale, conveyance or transfer of the
Property in its entirety (hereinafter, "Sale") to any person or entity, and to
one further Sale of by such person or entity, provided that in case of each such
Sale each of the following terms and conditions are satisfied:

                  (1)   No Event of Default is then continuing;

                  (2)   Mortgagor gives Mortgagee written notice of the terms
      of such prospective Sale not less than forty-five (45) days before the
      date on which such Sale is scheduled to close and, concurrently therewith,
      gives Mortgagee all such information concerning the proposed transferee of
      the Property (hereinafter, the "Buyer") as Mortgagee would require in
      evaluating an initial extension of credit to a borrower and pays to
      Mortgagee a non-refundable application fee in the amount of $5,000,00.
      Mortgagee shall have the right to approve or disapprove the proposed
      Buyer. In determining whether to give or withhold its approval of the
      proposed Buyer, Mortgagee shall consider the Buyer's experience and track
      record in owning and operating facilities similar to the Property, the
      Buyer's financial strength, the Buyer's general business standing and the
      Buyer's relationships and experience with contractors, vendors, tenants,
      lenders and other business entities; provided, however, that,
      notwithstanding Mortgagee's agreement to consider the foregoing factors in
      determining whether to give or withhold such approval, such approval shall
      be given or withheld based on what Mortgagee, in its sole discretion,
      determines to be commercially reasonable (it being acknowledged that
      Mortgagee shall not be obligated to approve any proposed Buyer unless
      Mortgagee

                                       40
<PAGE>

      receives confirmation in writing from each of the Rating Agencies (as
      defined herein) that such Sale will not result in a qualification,
      downgrade or withdrawal of any rating in effect immediately prior to such
      Sale for any securities issued in connection with a Secondary Market
      Transaction (as defined herein) and, if given, may be given subject to
      such conditions as Mortgagee may deem appropriate; provided further,
      however, that any entity that (x) satisfies all of the other requirements
      of this Section 1.13(b) and (y) is either (i) a wholly owned subsidiary of
      W.P. Carey & Co. LLC or (ii) a wholly owned subsidiary of an entity which
      is controlled by W.P. Carey & Co. LLC (including, without limitation, a
      wholly owned subsidiary of any Of the following entities so long as such
      entities are controlled by W.P. Carey & Co. LLC: Corporate Property
      Associates 14 Incorporated, Corporate Property Associates 15 Incorporated,
      Corporate Property Associates 12 Incorporated, Corporate Property
      Associates 16 - Global Incorporated or Carey Institutional Properties
      Incorporated), shall be deemed to be an acceptable Buyer for purposes of
      this Section 1.13(b)(2) (an entity that satisfied the requirements of
      clauses (x) and (y) above shall be referred to herein as a "Pre-approved
      Buyer");

                  (3)   Mortgagor pays Mortgagee, concurrently with the closing
      of such Sale, a nun-refundable assumption fee in an amount equal to (x)
      all out-of-pocket costs and expenses, including, without limitation,
      reasonable attorneys' fees, incurred by Mortgagee in connection with the
      Sale plus (y) so long as the Buyer is not a Pre-approved Buyer, an amount
      equal to one percent (1.0%) of the then outstanding principal balance of
      the Note;

                  (4)   The Buyer assumes and agrees to pay the indebtedness
      secured hereby subject to the provisions of Section 5.27 hereof and, prior
      to or concurrently with the closing of such Sale, the Buyer executes,
      without any cost or expense to Mortgagee such documents and agreements as
      Mortgagee shall reasonably require to evidence and effectuate said
      assumption and delivers such legal opinions as Mortgagee may reasonably
      require;

                  (5)   Mortgagor and the Buyer execute, without any cost or
      expense to Mortgagee, new financing statements or financing statement
      amendments and any additional documents reasonably requested by Mortgagee;

                  (6)   A party associated with the Buyer approved by Mortgagee
      in its sole discretion assumes the obligations of the current guarantor
      and indemnitor under its guaranty or indemnity agreements and such party
      associated with the Buyer executes, without any cost or expense to
      Mortgagee, a new guaranty or indemnity agreement in form and substance
      satisfactory to Mortgagee and delivers such legal opinions as Mortgagee
      may reasonably require;

                  (7)   Mortgagor delivers to Mortgagee, without any cost or
      expense to Mortgagee, such endorsement to Mortgagee's title insurance
      policy, hazard insurance endorsements or certificates and other similar
      materials as Mortgagee may deem necessary at the time of the Sale, all in
      form and substance reasonably satisfactory to Mortgagee, to the extent
      available, including, without limitation, an endorsement or

                                       41
<PAGE>

      endorsements to Mortgagee's title insurance policy insuring the lien of
      this Mortgage, extending the effective date of such policy to the date of
      execution and delivery (or, if later, of recording) of the assumption
      agreement referenced above in subparagraph (4) of this Section with no
      additional exceptions added to such policy and insuring that fee. simple
      title to the Property is vested in the Buyer;

                  (8)   Mortgagor executes and delivers to Mortgagee, without
      any cost or expense to Mortgagee, a release of Mortgagee, its officers,
      directors, employees and agents, from all claims, and liability relating
      to the transactions evidenced by the Loan Documents through and including
      the date of the closing of the Sale, which agreement shall be in form and
      substance reasonably satisfactory to Mortgagee and shall be binding upon
      the Buyer;

                  (9)   Subject to the provisions of Section 5.27 hereof, such
      Sale is not construed so as to relieve Mortgagor of any personal liability
      under the Note or any of the other Loan Documents for any acts or events
      occurring or obligations arising prior to or simultaneously with the
      closing of such Sale and Mortgagor executes, without any cost or expense
      to Mortgagee, such documents and agreements as Mortgagee shall reasonably
      require to evidence and effectuate the ratification of said personal
      liability. Mortgagor shall be released from and relieved of any personal
      liability under the Note or any of the other Loan Documents for any acts
      or events occurring or obligations arising after the closing of such Sale
      which are not caused by or arising out of any acts of events occurring or
      obligations arising prior to or simultaneously with the closing of such
      Sale;

                  (10)  Such Sale is not construed so as to relieve any current
      indemnitor of its obligations under any guaranty or indemnity agreement
      for any acts or events occurring or obligations arising prior to or
      simultaneously with the closing of such Sale and each such current
      guarantor and indemnitor executes, without any cost or expense to
      Mortgagee, such documents and agreements as Mortgagee shall reasonably
      require to evidence and effectuate the ratification of each such guaranty
      and indemnity agreement. Each such current indemnitor shall be released
      from and relieved of any of its obligations under any guaranty or
      indemnity agreement executed in connection with the loan secured hereby
      for any acts or events occurring or obligations arising after the closing
      of such Sale which are not caused by or arising out of any acts or events
      occurring or obligations arising prior to or simultaneously with the
      closing of such Sale; and

                  (11)  The Buyer shall furnish, if the Buyer is a corporation,
      limited liability company, partnership or other entity, all appropriate
      papers evidencing the Buyer's capacity and good standing, and the
      qualification of the signers to execute the assumption of the indebtedness
      secured hereby, which papers shall include certified copies of all
      documents relating to the organization and formation of the Buyer and of
      the entities, if any, which are partners of the Buyer. The Buyer and such
      constituent partners, members or shareholders of Buyer (as the case may
      be), as Mortgagee shall require, shall

                                       42
<PAGE>
      be single purpose, "bankruptcy remote" entities, whose formation documents
      shall be approved by counsel to Mortgagee.

                  (c)   Notwithstanding (and without limiting) the foregoing
provisions of this Section 1.13, no transfer of any direct or indirect ownership
interests in Mortgagor may be made such that the transferee owns, in the
aggregate with the ownership interests in Mortgagor of transferee's Affiliates,
more than a forty-nine percent (49%) interest in Mortgagor unless such transfer
is conditioned upon the delivery of a nonconsolidation opinion acceptable to the
Mortgagee and any applicable rating Agency.

      Section 1.14 Payment of Utilities, Assessments, Charges, Etc. Mortgagor
shall pay or cause to be paid when due all utility charges which are incurred by
Mortgagor or Primary Tenant or which may become a charge or lien against any
portion of the Property for gas, electricity, water and sewer services furnished
to the Land and/or the Improvements and all other assessments or charges of a
similar nature, or assessment payable pursuant to any restrictive covenants,
whether public or private, affecting the Land and/or the Improvements or any
portion thereof, whether or not such assessments or charges are or may become
liens thereon.

      Section 1.15 Access Privileges and Inspections. Mortgagee and the agents,
representative and employees of Mortgagee shall, subject to the rights of
tenants, have full and free access to the Land and the Improvements and any
other location where books and records concerning the Property are kept at all
reasonable times for the purposes of inspecting the Property and of examining,
copying and making extracts from the books and records of Mortgagor relating to
the Property. Mortgagor shall lend assistance to all such agents,
representatives and employees of Mortgagee.

      Section 1.16 Waste; Alteration of Improvements. Mortgagor shall not
commit, suffer or permit any waste on the Property nor take any actions that
might invalidate any insurance carried on the Property. Mortgagor shall maintain
or cause the Property to be maintained in good condition and repair. No part of
the Improvements may be removed, demolished or materially altered, without the
prior written consent of Mortgagee, which consent shall not be unreasonably
withheld; provided, however, that to the extent Primary Tenant is permitted to
make alterations in accordance with the terms of the Primary Lease (or the
tenant under a Replacement Primary Lease is so permitted) at no cost to
Mortgagor and without the consent or approval of Mortgagor thereunder,
Mortgagee's consent hereunder shall not be required, but Mortgagor shall
deliver to Mortgagee a copy of any written notice delivered by the Primary
Tenant in connection therewith. Without the prior written consent of Mortgagee
Mortgage shall not commence construction of any improvements on the Land other
than improvements required for the maintenance or repair of the Property.

      Section 1.17 Zoning. Without the prior written consent of Mortgagee,
Mortgagor shall not seek, make, suffer, consent to or acquiesce in any change in
the zoning or conditions of use of the Land or the Improvements. Mortgagor shall
comply with and make all payments required under the provisions of any
covenants, conditions or restrictions affecting Ihe Land or the Improvements.
Mortgagor shall comply with all existing and future requirements of all
governmental authorities having jurisdiction over the Property. Mortgagor shall
keep all

                                       43
<PAGE>

licenses, permits, franchises and other approvals necessary for the operation
of the Property in full force and effect. Mortgagor shall operate the Property
in accordance with its current usage or any other lawful use, for so long as the
indebtedness secured hereby is outstanding. If, under applicable zoning
provision, the use of all or any part of the Land or the Improvements is or
becomes a nonconforming use, Mortgagor shall not cause or permit such use to be
discontinued or abandoned without the prior written consent of Mortgagee.
Without limiting the foregoing, in no event shall Mortgagor take any action that
would reduce or impair either (a) the number of parking spaces, at the Property,
or (b) the access to the Property from adjacent public roads. Further, without
Mortgagee's prior written consent, Mortgagor shall not file or subject any part
of the Land or the Improvements to any declaration of condominium or
co-operative or convert any part of the Land or the Improvements to a
condominium, co-operative or other form of multiple ownership and governance.

      Section 1.18 Financial Statements and Books and Records. Mortgagor shall
keep accurate books and records of account of the Property and its own financial
affairs sufficient to permit the preparation of financial statements therefrom
in accordance with generally accepted accounting principles. Mortgagee and its
duly authorized representatives shall have the right to examine, copy and audit
Mortgagor's records and books of account at all reasonable times and upon
reasonable prior notice. So long as this Mortgage continues in effect, Mortgagor
shall provide to Mortgagee, in addition to any other financial statements
required hereunder or under any of the other Loan Documents, the following
financial statements and information, all of which must be certified to
Mortgagee as being true and correct by Mortgagor or the person or entity to
which they pertain, as applicable, be prepared in accordance with generally
accepted accounting principles consistently applied and be in form and substance
acceptable to Mortgagee:

            (a)   monthly operating statements for the Property (including a
current Rent Roll to the extent required under Paragraph 1.12(c) above), within
ten (10) days after the end of each month during the first twelve (12) months of
the term of the Loan Or until the occurrence of a Secondary Market Transaction;

            (b)   quarterly operating statements for the Property within twenty
(20) days after the end of each calendar quarter;

            (c)   annual operating statements for the Property and financial
statements for the Guarantor within ninety (90) days after the end of each
calendar year, each certified by the chief financial officer of Mortgagor (or
Guarantor, as the case may be) to be true, complete and correct and, if
requested by Mortgagee, such statements shall be audited, by an independent
certified public accountant reasonably acceptable to Mortgagee; and

            (d)   such other information with respect to the Property,
Mortgagor, the principals or general partners Or managing members, as
applicable, in Mortgagor, and each indemnitor and guarantor under any indemnity
or guaranty executed in connection with the loan secured hereby, which may be
reasonably requested from time to time by Mortgagee, within a reasonable time
after the applicable request.

                                       44
<PAGE>

If any of the aforementioned materials are not furnished to Mortgagee within the
applicable time periods or Mortgagee is in good faith dissatisfied with the
contents of any of the foregoing, in addition to any other rights and remedies
of Mortgagee contained herein, Mortgagee shall have the right, but not the
obligation, to obtain the same by means of an audit by an independent certified
public accountant selected by Mortgagee, in which event Mortgagor agrees to
pay, or to reimburse Mortgagee for, any expense of such audit and further agrees
to provide all necessary information to said accountant and to otherwise
cooperate in the making of such audit.

      Section 1.19 Further Documentation.

            (a)   Mortgagor shall, on the request of Mortgagee and at the
expense of Mortgagor (1) promptly correct any defect, error or omission which
may be discovered in the contents of this Mortgage or in the contents of any of
the other Loan Documents; (2) promptly execute, acknowledge, deliver and record
or file such further instruments (including, without limitation, further
mortgages, deeds of trust, security deeds, security agreements, financing
statements continuation statements and assignments of rents or leases) and
promptly do such further acts as may be reasonably necessary, desirable or
proper to carry out more effectively the purposes of this Mortgage and the
other Loan Documents and to subject to the liens and security interests hereof
and thereof any property intended by the terms hereof and thereof to be covered
hereby and thereby, including specifically, but without limitation, any
renewals, additions, substitutions, replacements or appurtenances to the
Property; (3) promptly execute, acknowledge, deliver, procure and record or file
any document or instrument (including specifically any financing statement)
deemed reasonably advisable by Mortgagee to protect, continue or perfect the
liens or the security interests hereunder against the rights or interests of
third persons; and (4) promptly furnish to Mortgagee, upon Mortgagee's request,
a duly acknowledged written statement and estoppel certificate addressed to such
party or parties as directed by Mortgagee and in form and substance supplied by
Mortgagee, setting forth all amounts due under the Note, stating whether any
Event of Default has occurred or whether any event has occurred or any state of
facts exist, which, with the giving of notice and/or the passage of time, would
constitute an Event of Default (such event or state of facts, a "Default" ),
stating whether any offsets or defenses exist against the indebtedness secured
hereby and containing such other matters as Mortgagee may reasonably require.

            (b)   Mortgagor acknowledges that Mortgagee and its successors
and assigns may effectuate a Secondary Market Transaction. Mortgagor shall
cooperate in good faith with Mortgagee in effecting any such Secondary Market
Transaction and shall cooperate in good faith to implement all requirements
imposed by any Rating Agency (as defined herein) involved in any Secondary
Market Transaction including, without limitation, all structural or other
changes to the indebtedness secured hereby, modifications to any documents
evidencing or securing the loan; provided, however, that Mortgagor shall not be
required to modify any documents evidencing or securing the indebtedness
secured hereby which would modify (A) the interest rate payable under the Note,
(B) the stated maturity of the Note, (C) the amortization of principal of the
Note, or (D) any other material economic term of the indebtedness secured hereby
including, without limitation, notice and cure periods and assignment and other
transfer rights. Mortgagor shall provide such information, and documents
relating to Mortgagor, any

                                       45
<PAGE>
guarantor or indemnitor, the Property and any tenants of the Improvements in
Mortgagor's possession (or readily obtainable by Mortgagor) as Mortgagee may
reasonably request in connection with such Secondary Market Transaction.
Mortgagor shall make available to Mortgagee all information concerning its
business and operations that Mortgagee may reasonably request. Mortgagor shall
not be required to expend in excess of $10,000 in actual, direct out-of-pocket
costs in complying with the foregoing provisions of this Section 1.19. Mortgagee
shall be permitted to share all such information with the investment banking
firms, Rating Agencies, accounting firms, Law firms and other third-party
advisory firms involved with the Loan Documents or the applicable Secondary
Market Transaction. It is understood that the information provided by Mortgagor
to Mortgagee may ultimately be incorporated into the offering documents for the
Secondary Market Transaction and thus various investors may also see some or all
of the information. Mortgagee and all of the aforesaid third-party advisors and
professional firms shall be entitled to rely on the information supplied by, or
on behalf of, Mortgagor and Mortgagor indemnifies Mortgagee as to any losses,
claims, damages or liabilities that arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in such
information or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated in such information or
necessary in order to make the statements in such information, or in light of
the circumstances under which they were made, not misleading. Mortgagee may
publicize the existence of the indebtedness secured hereby in connection with
its marketing for a Secondary Market Transaction or otherwise as part of its
business development. For purposes hereof, a "Secondary Market Transaction"
shall be (1) any sale of the Mortgage, Note and Other Loan Documents to one or
more investors as a whole loan, (2) a participation of the indebtedness secured
hereby to one or more investors, (3) any deposit of the Mortgage, Note and other
Loan Documents with a trust or other entity which may sell certificates or other
instruments to investors evidencing an ownership interest in the assets of such
trust or other entity, or (4) any other sale or transfer of the indebtedness
secured hereby or any interest therein to one or more investors. For purposes
hereof, "Rating Agency" shall mean any nationally-recognized statistical rating
organization that has been designated by Mortgagee or that provides a rating on
Mortgagor, the loan evidenced by any interests therein or any securities
evidencing an interest in, inter alia, a trust or other entity which is the
holder of the Note.

      Section 1.20 Payment of Costs: Reimbursement to Mortgagee. Mortgagor shall
pay all reasonable costs and expenses of every character incurred in connection
with the closing of the loan evidenced by the Note and secured hereby or
otherwise attributable or chargeable to Mortgagor as the owner of the Property,
including, without limitation, appraisal fees, recording fees, documentary,
stamp, mortgage or intangible taxes, brokerage fees and commissions, title
policy premiums, and title search fees, uniform commercial code/tax
lien/litigation search fees, escrow fees and reasonable attorneys' fees. If
Mortgagor defaults in any such payment, which default is not cured within any
applicable grace or cure period, Mortgagee may pay the same and Mortgagor shall
reimburse Mortgagee on demand for all such costs and expenses incurred or paid
by Mortgagee, together with such interest thereon at the Default Interest Rate
from and after the date of Mortgagee's making such payment until reimbursement
thereof by Mortgagor. Any such sums disbursed by Mortgagee, together with such
interest thereon, shall be additional indebtedness of Mortgagor secured by this
Mortgage and by all of the other Loan Documents

                                       46
<PAGE>

securing all or any part of the indebtedness evidenced by the Note. Further,
Mortgagor shall promptly notify Mortgagee in writing of any litigation or
threatened litigation affecting the Property, or any other demand or claim
which, if enforced, could impair or threaten to impair Mortgagee's security
hereunder, in each case of which Mortgagor is aware. Without limiting or waiving
any other rights and remedies of Mortgagee hereunder, if Mortgagor fails to
perform any of its covenants or agreements contained in this Mortgage or in any
of the other Loan Documents and such failure is not cured within any applicable
grace of cure period, or if any action or proceeding of any kind (including, but
not limited to, any bankruptcy, insolvency, arrangement, reorganization or other
debtor relief proceeding) is commenced which might affect Mortgagee's interest
in the Property or Mortgagee's, right to enforce its security, then Mortgagee
may, at its option, with or without notice to Mortgagor, make any appearances,
disburse any sums and take any actions as may be necessary or desirable to
protect or enforce the security of this Mortgage or to remedy the failure of
Mortgagor to perform its covenants and agreements (without, however, waiving any
default of Mortgagor). Mortgagor agrees to pay on demand all expenses of
Mortgagee incurred with respect to the foregoing (including, but not limited to,
reasonable fees and disbursements of counsel), together with interest thereon at
the Default Interest Rate from and after the date on which Mortgagee incurs such
expenses until reimbursement thereof by Mortgagor. Any such expenses so incurred
by Mortgagee, together with interest thereon as provided above, shall be
additional indebtedness of Mortgagor secured by this Mortgage and by all of the
other Loan Documents securing all or any part of the indebtedness evidenced by
the Note. The necessity for any such actions and of the amounts to be paid shall
be determined by Mortgagee in its reasonable discretion. Subject to the rights
to tenants under the leases, Mortgagee is hereby empowered to enter and to
authorize others to enter upon the Property or any part thereof for the purpose
of performing or observing any such defaulted term, covenant or condition
without thereby becoming liable to Mortgagor or any person in possession holding
under Mortgagor. Mortgagor hereby acknowledges and agrees that the remedies set
forth in this Section 1.20 shall be exercisable by Mortgagee, and any and all
payments made or costs or expenses incurred by Mortgagee in connection
therewith shall be secured hereby and shall be, without demand, immediately
repaid by Mortgagor with interest thereon at the Default Interest Rate,
notwithstanding the fact that such remedies were exercised and such payments
made and costs incurred by Mortgagee after the filing by Mortgagor of a
voluntary case or the filing against Mortgagor of an involuntary case pursuant
to or within the meaning of the Bankruptcy Reform Act of 1978, as amended, Title
11 U.S.C. (as amended from time to time, the "Bankruptcy Code"), or after any
similar action pursuant to any other debtor relief law (whether statutory,
common law, case law or otherwise) of any jurisdiction whatsoever, now or
hereafter, in effect, which may be or become applicable to Mortgagor, Mortgagee,
any guarantor or indemnitor, the secured indebtedness or any of the Loan
Documents. Mortgagor hereby indemnifies and holds Mortgagee harmless from and
against all Loss, cost and expenses with respect to any Event of Default hereof,
any liens (i.e., judgments, mechanics' and materialmen's liens, or otherwise),
charges and encumbrances filed against the Property, and from any claims and
demands for damages or injury, including claims for property damage, personal
injury or wrongful death, arising out of or in connection with any accident or
fire or other casualty on the Land or the Improvements or any nuisance made or
suffered thereon, including, in any case, reasonable attorneys' fees costs and
expenses as aforesaid, whether at pretrial, trial or appellate level, and such
indemnity shall survive payment in full of the

                                       47
<PAGE>

indebtedness secured hereby. This Section shall not be construed to require
Mortgagee to incur any expenses, make any appearances or take any actions.

      Section 1.21 Security Interest. This Mortgage is also intended to encumber
and create a security interest in, and Mortgagor hereby grants to Mortgagee a
security interest in all sums on deposit with Mortgagee pursuant to the
provisions of Sections 1.6 and 1.8 hereof or any other Section hereof and all
fixtures, chattels, accounts, equipment, inventory, contract rights, general
intangibles and other personal property included within the Property, all
renewals, replacements of any of the aforementioned items, or articles in
substitution therefor or in addition thereto or the proceeds thereof(said
property is hereinafter referred to collectively as the "Collateral"), whether
or not the same shall be attached to the Land or the Improvements in any manner.
It is hereby agreed that to the extent permitted by law, all of the foregoing
property is to be deemed and held to be a part of and affixed to the Land and
the Improvements. The foregoing security interest shall also cover Mortgagor's
leasehold interest in any of the foregoing property which is leased by
Mortgagor. Notwithstanding the foregoing, all of the foregoing property shall be
owned by Mortgagor and no leasing or installment sales or other financing or
title retention agreement in connection therewith shall be permitted without the
prior written approval of Mortgagee. Mortgagor shall, from time to time upon the
request of Mortgagee, supply Mortgagee with a current inventory of all of the
property in which Mortgagee is granted a security interest hereunder, in such
detail is Mortgagee may require. Mortgagor shall promptly replace all of the
Collateral subject to the lien or security interest of this Mortgage when worn
or obsolete with Collateral comparable to the worn out or obsolete Collateral
when new and win not, without the prior written consent of Mortgagee, remove
from the Land or the Improvements any of the Collateral subject to the lien or
security interest of this Mortgage except such as is replaced by an article of
equal suitability and value as above provided, owned by Mortgagor free and clear
of any lien or security interest except that created by this Mortgage and the
other Loan Documents and except as otherwise expressly permitted by the terms of
Section 1.13 of this Mortgage. All of the Collateral shall be kept at the
location of the Land except as otherwise required by the terms of the Loan
Documents. Mortgagor shall not use any of the Collateral in violation of any
applicable statute, ordinance or insurance policy.

      Section 1.22 Security Agreement. This Mortgage constitutes a security
agreement between Mortgagor and Mortgagee with respect to the Collateral in
which Mortgagee is granted a security interest hereunder, and, cumulative of all
other rights and remedies of Mortgagee hereunder, Mortgagee shall have all of
the rights and remedies of a secured party under any applicable Uniform
Commercial Code. Mortgagor hereby agrees to execute and deliver on demand and
hereby irrevocably constitutes and appoints Mortgagee the attorney-in-fact of
Mortgagor to execute and deliver and, if appropriate, file with the appropriate
filing officer or office such security agreements, financing statements,
continuation statements or other instruments as Mortgagee may reasonably request
or require in order to impose, perfect or continue the perfection of the lien or
security interest created hereby. Except with respect to Rents and Profits to
the extent specifically provided herein to the contrary, Mortgagee shall have
the right of possession of all cash, securities, instruments, negotiable
instruments, documents, certificates and any other evidences of cash or other
property or evidences of rights to cash rather than property, which are now or
hereafter a part of the Property and Mortgagor shall promptly

                                       48
<PAGE>

deliver the same to Mortgagee, endorsed to Mortgagee, without further notice
from Mortgagee. Mortgagor agrees to furnish Mortgagee with notice of any change
in the name, identity, organizational structure, residence, or principal place
of, business or mailing address of Mortgagor within ten (10) days (or thirty
(30) days, if the change is a change of principal place of business or mailing
address and such place or address remains within the County of New York) of the
effective date of any such change. Upon an Event of Default, Mortgagee shall
have the rights and remedies as prescribed in this Mortgage, or as prescribed by
general law, or as prescribed by any applicable Uniform Commercial Code, all at
Mortgagee's election. Any disposition of the Collateral may be conducted by an
employee or agent of Mortgagee. Any person, including both Mortgagor and
Mortgagee, shall be eligible to purchase any part or all of the Collateral at
any such disposition. Expenses of retaking, holding, preparing for sale, selling
or the like (including, without limitation, Mortgagee's reasonable attorneys'
fees and legal expenses), together with interest thereon at the Default Interest
Rate from the date incurred by Mortgagee until actually paid by Mortgagor, shall
be paid by Mortgagor on demand and shall be secured by this Mortgage and by all
of the other Loan Documents securing all or any part of the indebtedness
evidenced by the Note. Subject to the rights of tenants under the Leases,
Mortgagee shall have the right to enter upon the Land and the Improvements or
any real property where any of the property which is the subject of the security
interest granted herein is located to take possession of, assemble and collect
the same or to render it unusable, or Mortgagor, upon demand of Mortgagee, shall
assemble such property and make it available to Mortgagee at the Land, a place
which is hereby deemed to be reasonably convenient to Mortgagee and Mortgagor.
If notice is required by law, Mortgagee shall give Mortgagor at least ten (10)
days' prior written notice of the time and place of any public sale of such
property or of the time of or after which any private sale or any other intended
disposition thereof is to be made, and if such notice is sent to Mortgagor, as
the same is provided for the mailing of notices herein, it is hereby deemed that
such notice shall be and is reasonable notice to Mortgagor. No such notice is
necessary for any such property which is perishable, threatens to decline
speedily in value or is of a type customarily sold on a recognized market. Any
sale made pursuant to the provisions of this Section shall be deemed to have
been a public sale conducted in a commercially reasonable manner if held
contemporaneously with the foreclosure sale as provided in Section 3.1(e) hereof
upon giving the same notice with respect to the sale of the Property hereunder
as is required under said Section 3.1(e). Furthermore, to the extent permitted
by law, in conjunction with, in addition to or in substitution for the rights
and remedies available to Mortgagee pursuant to any applicable Uniform
Commercial Code:

            (a) In the event of a foreclosure sale, the Property may, at the
option of Mortgagee, be sold as a whole or in parts, as determined by Mortgagee
in its sole discretion; and

            (b) It shall not be necessary that Mortgagee take possession of the
aforementioned Collateral, or any part thereof, prior to the time that any sale
pursuant to the provisions of this Section is conducted and it shall not be
necessary that said Collateral, or any part thereof, be present at the location
of such sale; and

                                       49
<PAGE>

            (c) Mortgagee may appoint or delegate any one or more persons as
agent to perform any act or acts necessary or incident to any sale held by
Mortgagee, including the sending of notices and the conduct of the sale, but in
the name and on behalf of Mortgagee.

      The name and address of Mortgagor (as Debtor under any applicable
Uniform Commercial Code) are:

               FOSS(NH)QRS 16-3, INC.
               c/o W.P. Carey & Co. LLC,
               50 Rockefeller Plaza, 2nd Floor,
               New York, New York 10020

      The name and address of Mortgagee (as Secured Party under any applicable
Uniform Commercial Code) are:

               CIBC INC., a Delaware corporation
               622 Third Avenue, 8th Floor
               Attn: Real Estate Finance Group
               New York, New York 10017

      Section 1.23 Easements and Rights-of-Way. Mortgagor shall not grant any
easement or right-of-way with respect to all or any portion of the Land or the
Improvements without the prior written consent of Mortgagee (which shall not be
unreasonably withheld) other than easements or rights-of-way which could not in
any respect impair the value or utility of the Property or the lien of the Loan
Documents thereon, with inspect to which Mortgagor shall give. Mortgagee ten
(10) days' prior written notice, together with a detailed and accurate
description thereof. The purchaser at any foreclosure sale hereunder may, at its
discretion, disaffirm any easement or right-of-way granted in violation of any
of the provisions of this Mortgage and may take immediate possession of the
Property free from, and despite, the terms of, such grant of easement or
right-of-way. If Mortgagee consents to the grant of an easement or
right-of-way, Mortgagee agrees to grant such consent and to subordinate the lien
of this Mortgage to such easement provided that Mortgagee is paid a reasonable
standard review fee together with all other expenses, including, without
limitation, reasonable attorneys' fees, incurred by Mortgagee in the review of
Mortgagor's request and in the preparation of documents effecting the
subordination. Mortgagor shall at all times comply with all easement agreements,
reciprocal easement agreements, declarations, restrictive covenants and any
other similar types of agreements now or hereafter affecting the Property, and
Mortgagor shall not amend, modify or terminate any such easement agreements,
reciprocal easement agreements, declarations, restrictive covenants or any other
similar types of agreements without Mortgagee's prior written consent, which
such consent shall not be unreasonably withheld. If Mortgagee's consent is
required by the terms of this Section 1.23, Mortgagee's consent shall be deemed
withheld absent notice from Mortgagee to the contrary unless Mortgagor complies
with the following procedures: Mortgagor shall request such consent by
delivering notice to Mortgagee in accordance with Section 5.5 of this, Mortgage,
with the following legend on such request: THIS IS A REQUEST FOR CONSENT UNDER
THE LOAN BY CIBC INC. TO FOSS (NH) QRS 16-3, INC. FAILURE TO RESPOND TO THIS
REQUEST WILL RESULT IN THE REQUEST BEING

                                       50
<PAGE>

DEEMED GRANTED. If, within fifteen (15) business days of delivery of notice as
aforesaid, Mortgagee has not responded (either affirmatively or negatively) to
Mortgagor With respect to such written request, then such request shall be
deemed granted.

      Section 1.24 Compliance with Laws: ERISA. (a) Mortgagor shall at all times
comply or cause compliance with (i) all statutes, ordinances, orders, rules,
regulations and other governmental or quasi-governmental requirements and
private covenants now or hereafter relating to the ownership, construction, use
or operation of the Property, including all applicable statutes, rules and
regulations pertaining to requirements for equal opportunity,
anti-discrimination, fair housing, environmental protection, zoning, land use
and health, fire and building codes (collectively, "Laws"), including, but not
limited to, those concerning employment and compensation of persons engaged in
operation and maintenance of the Properly and any environmental or ecological
requirements, even if such compliance shall require structural changes to the
Property; provided, however, that Mortgagor may, upon providing Mortgagee with
security satisfactory to Mortgagee, proceed diligently and in good faith to
contest the validity or applicability of any such statute, ordinance, regulation
or requirement so long as during such contest the Property shall not be subject
to any lien, charge, fine or other liability and shall not be in danger of being
forfeited, lost or closed. Mortgagor shall not use or occupy, or allow the use
or occupancy of, the Property in any manner which violates any Lease of or any
other agreement applicable to the Property or any applicable law, rule,
regulation or under or which constitutes a public or private nuisance or which
makes void, voidable or cancelable, or increases the premium of, any insurance
then in force with respect thereto.

            (b) Mortgagor has made and shall continue to make all required
contributions to all employee benefit plans, if any, and Mortgagor has no
knowledge of any material liability which has been incurred by Mortgagor which
remains, unsatisfied for any taxes or penalties with respect to any employee
benefit plan or any multi-employer plan, and each such plan has been
administered in compliance with its terms and the applicable provisions of ERISA
and any other federal or state law.

      Section 1.25 Additional Taxes. In the event of the enactment after this
date of any law of the state where the Property is located or of any other
governmental entity deducting from the value of the Property for the purpose of
taxation any lien or security interest thereon, or imposing upon Mortgagee the
payment of the whole or any part of the taxes or assessments or charges of liens
herein required to be paid by Mortgagor, or changing in any way the laws
relating to the taxation of deeds of trust, mortgages or security agreements or
debts secured by deeds of trust, mortgages or security agreements or the
interest of the beneficiary, mortgagee or secured party in the property covered
thereby, or the manner of collection of such taxes, so as to adversely affect
this Mortgage or the indebtedness secured hereby or Mortgagee, then, and in any
such event, Mortgagor, upon demand by Mortgagee, shall pay such taxes,
assessments, charges or liens, or reimburse Mortgagee therefor; provided,
however, that if in the opinion of counsel for Mortgagee (a) it might be
unlawful to require Mortgagor to make such payment, or (b) the making of such
payment might result in the imposition of interest beyond the maximum amount
permitted by law, then and in either such event, Mortgagee may elect, by notice
in writing given to Mortgagor, to declare all of the indebtedness secured hereby
to be and become due and

                                       51
<PAGE>

payable in full one hundred twenty (120) days from the giving of such notice.
Provided no Event of Default shall exist and be continuing at the time that
Mortgagee makes any such election, nor at the time that such indebtedness
actually becomes due and payable pursuant to such notice, then, notwithstanding
anything to the contrary contained herein, in the Note, or in the other Loan
Documents, Mortgagor shall be permitted to prepay the entire unpaid principal
balance of the Note, together with all unpaid interest accrued thereon (through
and including the date of prepayment) and any other fees and expenses then owing
to Mortgagee by Mortgagor pursuant hereto, the Note and the other Loan
Documents without any penalty or any prepayment consideration otherwise set
forth in this Mortgage or in the Note, provided, however, that such prepayment
must occur, if at all, on the date set forth in such notice for such
prepayment.

      Section 1.26 Secured Indebtedness. It is understood and agreed that this
Mortgage shall secure payment of not only the indebtedness evidenced by the
Note but also any and all substitutions, replacements, renewals, restatements,
amendments and extensions of the Note, any and all indebtedness and obligations
arising pursuant to the terms hereof and any and all indebtedness and obligation
arising pursuant to the terms of any of the other Loan Documents (excluding the
Hazardous Substances Indemnity Agreement), all of which indebtedness is equally
secured with and his the same priority as any amounts advanced as of the date
hereof. It is agreed that any future advances made by Mortgagee to or for the
benefit of Mortgagor from time to time under this Mortgage or the other Loan
Documents and whether or not such advances are obligatory or are made at the
option of Mortgagee, or otherwise, made for any purpose, and all interest
accruing thereon, shall be equally secured by this Mortgage and shall have the
same priority as all amounts, if any, advanced as of the date hereof and shall
be subject to all of the terms and provisions of this Mortgage.

      Section 1.27 Mortgagor's Waivers. To the full extent permitted by law,
Mortgagor agrees that Mortgagor shall not at any time insist upon, plead, claim
or take the benefit or advantage of any law now or hereafter in force providing
for any appraisement, valuation, stay, moratorium or extension, or any law now
or hereafter in force providing for the reinstatement of the indebtedness
secured hereby prior to any sale of the Property to be made pursuant to any
provisions contained herein or prior to the entering of any decree, judgment or
order of any court of competent jurisdiction, or any right under any statute to
redeem all or any part of the Property so sold. Mortgagor, for Mortgagor and
Mortgagor's successors and assigns, and for any and all persons ever claiming
any interest in the Property, to the full extent permitted by law, hereby
knowingly, intentionally and voluntarily with and upon the advice of competent
counsel: (a) waives, releases, relinquishes and forever forgoes all rights of
valuation, appraisement, stay of execution, reinstatement and notice of election
or intention to mature or declare due the secured indebtedness (except such
notices as are specifically provided for herein); (b) waives, release,
relinquishes and forever forgoes all right to a marshalling of the assets of
Mortgagor, including the Property, to a sale in the inverse order of alienation,
or to direct the order in which any of the Property shall be sold in the event
of foreclosure of the liens and security interests hereby created and agrees
that any court having jurisdiction to foreclose such liens and security
interests may order the Property sold as an entirety; and (c) waives, releases,
relinquishes and forever forgoes all rights and periods of redemption provided
under applicable law. To the full extent permitted by Jaw, Mortgagor shall not
have or assert any right

                                       52
<PAGE>

under any statute or rule of law pertaining to the exemption of homestead or
other exemption under any federal, state or local law now or hereafter in
effect, the administration of estates of decedents or other matters whatever to
defeat, reduce or affect the right of Mortgagee under the terms of this Mortgage
to a sale of the Property, for the collection of the secured indebtedness
without any prior or different resort for collection, or the right of Mortgagee
under the terms of this Mortgage to the payment of the indebtedness secured
hereby out of the proceeds of sale of the Property in preference to every other
claimant whatever. Further, Mortgagor hereby knowingly, intentionally and
voluntarily, with and upon the advice of competent counsel, waives, releases,
relinquishes and forever forgoes all present and future statutes of limitations
as a defense to any action to enforce the provisions of this Mortgage or to
collect any of the indebtedness secured hereby to the fullest extent permitted
by law. Mortgagor covenants and agrees that upon the commencement of a
voluntary or involuntary bankruptcy proceeding by or against Mortgagor,
Mortgagor shall not seek a supplemental stay or otherwise shall not seek
pursuant to 11 U.S.C. Section 105 or any other provision of the Bankruptcy Code,
or any other debtor relief law (whether statutory, common law, case law, or
otherwise) of any jurisdiction whatsoever, now or hereafter in effect, which may
be or become applicable, to stay, interdict, condition, reduce or inhibit the
ability of Mortgagee to enforce any rights of Mortgagee against any guarantor or
indemnitor of the secured obligations or any other party liable with respect
thereto by virtue of any indemnity, guaranty or otherwise.

      Section 1.28 SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL

            (a) MORTGAGOR, TO THE FULL EXTENT PERMITTED BY LAW, HEREBY
KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT
COUNSEL, (i) SUBMITS TO PERSONAL JURISDICTION IN THE STATE OF NEW HAMPSHIRE OVER
ANY SUIT, ACTION OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THE
NOTE, THIS MORTGAGE OR ANY OTHER OF THE LOAN DOCUMENTS, (ii) AGREES THAT ANY
SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION OVER THE COUNTY IN WHICH THE LAND IS LOCATED, (iii)
SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND, (iv) TO THE FULLEST EXTENT
PERMITTED BY LAW, AGREES THAT IT WILL NOT BRING ANY ACTION, SUIT OR PROCEEDING
IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF MORTGAGEE TO
BRING ANY ACTION, SUIT OR PROCEEDING IK ANY OTHER FORUM). MORTGAGOR FURTHER
CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS
IN ANY SUCH SUIT, ACTION OR PROCEEDING BY REGISTERED OR CERTIFIED U.S. MAIL,
POSTAGE PREPAID, TO THE MORTGAGOR AT THE ADDRESS FOR NOTICES DESCRIBED IN
SECTION 5.5 HEREOF, AMD CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE
IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT
THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY
LAW).

                                       53
<PAGE>

            (b) MORTGAGEE AND MORTGAGOR, TO THE FULLEST EXTENT PERMITTED BY LAW,
HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF
COMPETENT COUNSEL, WAIVE, RELINQUISH AND FOREVER FOREGO THE RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY
RELATING TO THIS MORTGAGE OR ANY CONDUCT, ACT OR OMISSION OF MORTGAGEE OR
MORTGAGOR OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, PARTNERS, MEMBERS,
MANAGERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER PERSONS AFFILIATED WITH
MORTGAGEE OR MORTGAGOR, IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE.

      Section 1.29 Contractual Statute of Limitations. Mortgagor hereby agrees
that any claim or cause of action by Mortgagor against Mortgagee, or any of
Mortgagee's directors, officers, employees, agents, accountants or attorneys,
based upon, arising from or relating to the indebtedness secured hereby, or any
other matter, cause or thing whatsoever, whether or not relating thereto,
occurred, done, omitted or suffered to be done by Mortgagee or by Mortgagee's
directors, officers, employees, agents, accountants or attorneys, whether
sounding in contract or in tort or otherwise, shall be barred unless asserted by
Mortgagor by the commencement of an action or proceeding in a court of competent
jurisdiction by the filing of a complaint within two (2) years after Mortgagor
first acquires or reasonably should have acquired knowledge of the first act,
occurrence or omission upon which such claim or cause of action, or any part
thereof, is based and service of a summons and complaint on an officer of
Mortgagee or any other person authorized to accept service of process on behalf
of Mortgagee, within thirty (30) days thereafter. Mortgagor agrees that such
two (2) year period of time is reasonable and sufficient time for a borrower to
investigate and act upon any such claim or cause of action. The two (2) year
period provided herein shall not be waived, tolled or extended except by the
specific written agreement of Mortgagee. This provision shall survive any
termination of this Mortgage or any of the other Loan Documents.

      Section 1.30 Management. Except as provided in the following sentence, the
management of the Property shall be by either: (a) Mortgagor or an entity
affiliated with Mortgagor approved by Mortgagee for so long as Mortgagor or said
affiliated entity is managing the Property in a first class manner; or (b) a
professional property management company approved by Mortgagee. Mortgagor hereby
represents and warrants that Primary Tenant will self-manage the Property (it
being agreed that, for so long as such self-management constitutes performance
by Primary Tenant or, if applicable, any Replacement Primary Tenant, of all
Mortgagor's obligations hereunder and under the other Loan Documents in respect
of the maintenance, management and repair of the Property in accordance with the
terms hereof and thereof, Mortgagee shall accept such performance by Primary
Tenant as if performed by Mortgagor). Any right of payment of Mortgagor (or any
manager other than Primary Tenant) (or of Primary Tenant on receive any payment
from Mortgagor or any affiliate thereof) arising out of or in any way connected
with the management and ownership of the Property shall be fully and completely
subordinated to the lien of this Mortgage and the other Loan Documents, and to
Mortgagee's right to payment under the Note and the other Loan Documents.
Mortgagor shall

                                       54
<PAGE>

not enter into any agreement relating to the management or operation of the
property with any other party without the express written consent of Mortgagee
in Mortgagee's sole discretion. If management is by an affiliated entity of
Mortgagor or Primary Tenant or a professional property management company, such
management shall be pursuant to a written agreement approved by Mortgagee. In no
event shall any manager be removed or replaced or the terms of any management
agreement modified or amended without the prior written consent of Mortgagee,
which consent shall not be unreasonably withheld or delayed. After an Event of
Default hereunder or a default under any management contract then in effect,
which default is not cured within any applicable grace or cure period, Mortgagee
shall have the right to terminate, or to direct Mortgagor to terminate (or cause
Primary Tenant to terminate), such management contract upon thirty (30) days'
notice and to retain, or to direct Mortgagor to retain (or to cause Primary
Tenant to retain), a new management agent approved by Mortgagee (provided that
if Primary Tenant or a Replacement Primary Tenant, if applicable, is not in
default under the Primary Lease or Replacement Primary Lease, if applicable,
then such tenant may continue to self-manage the Property). All Rents and
Profits generated by or derived from the Property shall first be utilized
solely for current expenses directly attributable to the ownership and operation
of the Property, including, without limitation, current expenses relating to
Mortgagor's liabilities and obligations with respect to this Mortgage and the
other Loan Documents, and none of the Rents and Profits generated by or derived
from the Property shall be diverted by Mortgagor and utilized for any other
purposes unless all such current expenses attributable to the ownership and
operation of the Property have been fully paid and satisfied. It shall be a
condition of Mortgagee's consent to any management agreement, whether with an
affiliate of Mortgagor or a professional property management company, that such
manager enter into an agreement with Mortgagee whereby the manager acknowledges
and agrees to the aforesaid rights of Mortgagee, and as to such other matters as
Mortgagee may require.

      Section 1.31 Hazardous Substances.

            (a) Mortgagor hereby represents and warrants to Mortgagee that, to
Mortgagor's knowledge, except as disclosed in the Phase I Environmental Site
Assessment, prepared by Professional Service Industries, Inc., dated June 14,
2004 (the "Environmental Report") and delivered to Mortgagee,: (i) to the best
of Mortgagor's knowledge, information and belief, the Property is not in
violation of any applicable local, state or federal law, rule or regulation
pertaining to environmental regulation, contamination or clean-up (collectively,
"Environmental Laws"), including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C.
Section 9601 et seq. and 40 CFR Section 302.1 et seq.), the Resource
Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq. and 40 CFR
Section 116.1 et seq.), those relating to lead based paint, and the Hazardous
Materials Transportation Act (49 U.S.C. Section 1801 et seq.), and the
regulations promulgated pursuant to said laws, all as amended; (ii) to the best
of Mortgagor's knowledge, information and belief, no hazardous, toxic or harmful
substances, wastes, materials, pollutants or contaminants (including, without
limitation, asbestos, lead based paint, polychlorinated biphenyls, petroleum
products, flammable explosives, radioactive materials, infectious substances or
raw materials which include hazardous constituents) or any other substances or
materials which are included under or regulated by

                                       55
<PAGE>

Environmental Laws, or any molds, spores or fungus or other harmful microbial
matter (collectively, 'Hazardous Substances") are located on or have been
handled, generated, stored, processed or disposed of on or released or
discharged from the Property (including underground contamination) except for
those substances used by Mortgagor or Mortgagor's tenants in the ordinary
course of its business and in compliance with all applicable Environmental Laws;
(iii) to the best of Mortgagor's knowledge, information and belief, the Property
is not subject to any private or governmental lien or judicial or administrative
notice or action relating to Hazardous Substances; (iv) there are no existing or
closed underground storage tanks or other underground storage receptacles for
Hazardous Substances on the property; (v) Mortgagor has received no notice of,
and to the best of Mortgagor's knowledge and belief, there exists no
investigation, action, proceeding, or claim by any agency, authority or unit of
government or by any third party which could result in any liability, penalty,
sanction or judgement under any Environmental Laws with respect to any
condition, use or operation of the Property nor does Mortgagor know of any basis
for such a claim; (vi) Mortgagor has received no notice of and, to the best of
Mortgagor's knowledge and belief, there has been no claim by any party that any
use, operation or condition of the Property has caused any nuisance or any other
liability or adverse condition on any other property nor does Mortgagor know of
any basis for such a claim.

            (b) Mortgagor shall keep or cause the Property to be kept (i) free
from Hazardous Substances (except those substances as they relate to specific
conditions disclosed in the Environmental Report or used by Mortgagor or its
tenants in the ordinary course of its business and in compliance with all
applicable Environmental laws), and (ii) in compliance with all applicable
Environmental Laws, shall not install or use (unless already installed as of the
date hereof and used in compliance with all applicable Environmental Laws) any
underground storage tanks, shall expressly prohibit the use, generation,
handling, storage, production, processing and disposal of Hazardous Substances
by all tenant of space in the Improvements (except those substances used by
Mortgagor or its tenants in the ordinary course of business and in compliance
with all applicable Environmental Laws) and, without limiting the generality of
the foregoing, during the term of this Mortgage, shall not install in the
Improvements or permit to be installed in the Improvements asbestos or any
substance containing asbestos.

            (c) Mortgagor shall promptly notify Mortgagee if Mortgagor shall
become aware of the existence (or probable existence) of any Hazardous
Substances on the Property (except those substances as they relate to specific
conditions disclosed in the Environmental Report or used by Mortgagor or its
tenants in the ordinary course of business and in compliance with all applicable
Environmental Laws) or if Mortgagor shall become aware that the Property is or
may be in violation of any applicable Environmental Laws. Further, within five
(5) business days after receipt of the same, Mortgagor shall deliver to
Mortgagee copies of any and all orders, notices, permits, applications, reports,
and other communications, documents and instruments received by Mortgagor (it
being agreed that Mortgagor shall use all reasonable efforts to cause Primary
Tenant to deliver to Mortgagor copies of any such items received by Primary
Tenant) pertaining to the actual, alleged or potential presence or existence of
any Hazardous Substances (except those substances used by Mortgagor or its
tenants in the ordinary course of business and in compliance with all applicable
Environmental Laws) at, on, about, under, within, near or in connection with the
Property. Mortgagor shall, promptly and when and as required by

                                       56
<PAGE>

Mortgagee, at Mortgagor's sole cost and expense, take all actions as shall be
necessary, in Mortgagee's discretion, for the clean-up as required by applicable
Environmental Laws of any and all portions of the Property or other affected
property in or on which Hazardous Substances from the Property have come to be
located, including, without limitation, all investigative, monitoring, removal,
containment and remedial actions in accordance with all applicable Environmental
Laws (and in all events in a manner reasonably satisfactory to Mortgagee), and
shall further pay or cause to be paid, at no expense to Mortgagee, all clean-up,
administrative and enforcement costs of applicable governmental agencies which
may be asserted against the Property. In the event Mortgagor fails to do so,
Mortgagee may, but shall not be obligated to, cause the Property or other
affected property in or on which Hazardous Substances from the Property have
come to be located, to be brought into compliance with applicable Environmental
Laws and any and all costs and expenses incurred by Mortgagee in connection
therewith, together with interest thereon at the Default Interest Rate from the
date incurred by Mortgagee until actually paid by Mortgagor, shall be
immediately paid by Mortgagor on demand and shall be secured by this Mortgage
and by all of the other Loan Documents securing all or any pant of the
indebtedness evidenced by the Note. Mortgagor hereby grants to Mortgagee and its
agents and employees access to the Property and a license to remove or remediate
any Hazardous Substances (except those substances as they relate to specific
conditions disclosed in the Environmental Report or used by Mortgagor or its
tenants in the ordinary course of business and in compliance with all applicable
Environmental Laws) determined to be in violation of any applicable
Environmental Laws and to do all things Mortgagee shall deem necessary to bring
the Property in conformance with applicable Environmental Laws. Mortgagor
covenants and agrees, at Mortgagor's sole cost and expense, to indemnify, defend
(at trial and appellate levels, and with attorneys, consultants and experts
reasonably acceptable to Mortgagee), and hold Mortgagee harmless from and
against any and all liens, damages, losses, liabilities, obligations, settlement
payments, penalties, assessments, citations, directives, claims, litigation,
demands, defenses, judgments, suits, proceedings, costs, disbursements or
expenses of any kind or of any nature whatsoever (including, without limitation,
reasonable attorneys', consultants' and experts' fees and disbursements actually
incurred in investigating, defending, setting or prosecuting any claim,
litigation or proceeding) ("Claims") which may at any time be imposed upon,
incurred by or asserted or awarded against Mortgagee or the Property, and
arising directly or indirectly from or out of: (i) the presence, release or
threat of release of any Hazardous Substances on, in, under or affecting all or
any portion of the Property or any surrounding areas, regardless of whether or
not caused by or within the control of Mortgagor; (ii) the violation of any
Environmental Laws relating to or affecting the Property, whether or not caused
by or within the control of Mortgagor; (iii) the failure by Mortgagor to comply
fully with the terms and conditions of this Section 1.31; (iv) the breach of any
representation or warranty contained in this Section 1.31; or (v) the
enforcement of this Section 1.31, including, without limitation, the cost of
assessment, containment and/or removal of any and all Hazardous Substances from
all or any portion of the Property or any surrounding areas in or on which
Hazardous Substances from the Property have come to be located, the cost of any
actions taken in response to the presence, release, or threat of release of any
Hazardous Substances on, in, under or affecting any portion of the Property or
any surrounding areas to prevent or minimize such release or threat of release
so that it does not migrate or otherwise cause or threaten danger to present or
future public health, safety, welfare or the environment, and costs incurred to
comply with applicable Environmental Laws in

                                       57
<PAGE>

connection with all any portion of the Property or any surrounding areas in or
on which Hazardous Substances from the Property have come to be located. The
indemnity set forth in this Section 1.31(c) shall also include any diminution in
the value of the security afforded by the Property or any future reduction in
the sales price of the Property by reason of any matter set forth in this
Section 1.31(c). Mortgagee's rights under this Section shall survive payment in
full of the indebtedness hereby and shall be in addition to all other rights of
Mortgagee under this Mortgage, the Note and the other Loan Documents; provided
that Mortgagor shall have no obligation to indemnify Mortgagee against any
claims arising solely due to (x) the gross negligence or willful misconduct of
Mortgagee or (y) hazardous Substance or violations of Environmental Laws in
connection with any condition that first arises from and after the date on which
Mortgagee acquires title to the Property at a foreclosure sale or other transfer
in lieu of foreclosure.

            (d) Upon Mortgagee's request, at any time after the occurrence of an
Event of Default hereunder or at such other time as Mortgagee has reasonable
grounds to believe that Hazardous Substances (except those substances used by
Mortgagor or its tenants in the ordinary course of business and in compliance
with all applicable Environmental Laws) are or have been released, stored or
disposed of on or around the Property in violation of any applicable
Environmental Laws or that the Property may be in violation of applicable
Environmental Laws, Mortgagor shall provided, at Mortgagor's sole cost and
expense, an inspection or audit of the Property prepared by a hydrogeologist or
environmental engineer or other appropriate consultant reasonably approved by
Mortgagee indicating the presences or absence of Hazardous Substances on the
Property in violation of applicable Environmental Laws or an inspection or audit
of the Improvements prepared by an engineering or consulting firm approved by
Mortgagee indicating the presence or absence of friable asbestos or substances
containing asbestos on the Property. If Mortgagor fails to provide such
inspection or audit within thirty (30) days after such request, Mortgagee may
order the same, and Mortgagor hereby grants to Mortgagee and its employees and
agents access to the Property and a license to undertake such inspection or
audit. The cost of such inspection or audit, together with interest thereon at
the Default Interest Rate from the date incurred by Mortgagee until actually
paid by Mortgagor, shall be immediately due and payable to Mortgagee by
Mortgagor on demand and shall be secured hereby and by all of the other Loan
Documents securing all or any parts of the indebtedness evidenced by the Note.

            (e) Reference is made to that certain Hazardous Substances Indemnity
Agreement of even date herewith by and among by Mortgagor, Guarantor and
Mortgagee (as hereafter amended or modified from time to time, the "Hazardous
Indemnity Agreement"). The Hazardous Indemnity Agreement is a separate
obligation of Mortgagor which is not secured by this Mortgage and, except as
otherwise provided herein, it shall survive any foreclosure of this Mortgage.

      Section 1.32 Indemnification; Subrogation

            (a) Mortgagor shall indemnify, defend and hold Mortgagee harmless
against: (i) any and all claims for brokerage, leasing, finders or similar fees
which may be made relating to the Property or the secured indebtedness, and (ii)
any and all liability, obligations,

                                       58
<PAGE>
losses, damages, penalties, claims, actions, suits, costs and expenses
(including Mortgagee's reasonable attorneys' fees, together with reasonable
appellate counsel fees, if any) of whatever kind or nature which may be asserted
against, imposed on or incurred by Mortgagee in connection with the secured
indebtedness, this Mortgage, the Property, or any part thereof, or the exercise
by Mortgagee of any rights or remedies granted to it under this Mortgage;
provided, however, that nothing herein shall be construed to obligate Mortgagor
to indemnify, defend and hold harmless Mortgagee from and against any and all
liabilities, obligations, losses, damages, Mortgagee by reason of Mortgagee's
willful misconduct or gross negligence.

            (b) If Mortgagee is made a party defendant to any litigation or any
claim is threatened or brought against Mortgagee concerning the secured
indebtedness, this Mortgage, the Property, or any part thereof, or any interest
therein, or the construction, maintenance, operation or occupancy or use
thereof, then Mortgagor shall indemnify, defend and hold Mortgagee harmless from
and against all liability by reason of said litigation or claims, including
reasonable attorneys' fees (together with reasonable appellate counsel fees, if
any) and expenses incurred by Mortgagee in any such litigation or claim, whether
or not any such litigation or claim is prosecuted to judgment. If Mortgagee
commences an action against Mortgagor to enforce any of the terms hereof or to
prosecute any breach by Mortgagor of any of the terms hereof or of any of the
other Loan Documents, or to recover any sum secured hereby, Mortgagor shall pay
to Mortgagee its reasonable attorneys' fees (together with reasonable appellate
counsel fees, if any) and expenses. The right to such attorneys' fees (together
with reasonable appellate counsel fees, if any) and expenses shall be deemed to
have accrued on the commencement of such action, and shall be enforceable
whether or not such action is prosecuted to judgment. If Mortgagor breaches any
term of this Mortgage, Mortgagee may engage the services of an attorney or
attorneys to protect its rights hereunder, and in the event of such engagement
following any breach by Mortgagor, Mortgagor shall pay Mortgagee reasonable
attorneys' fees (together with reasonable appellate counsel fees, if any) and
expenses incurred by Mortgagee, whether or not an action is actually commenced
against Mortgagor by reason of such breach. All references to "attorneys" in
this Subsection and elsewhere in this Mortgage shall include without limitation
any attorney or law firm engaged by Mortgagee and Mortgagee's in-house counsel,
and all references to "fees and expenses" in this Subsection and elsewhere in
this Mortgage shall include without limitation any fees of such attorney or law
firm.

            (c)Mortgagor covenants that a waiver of subrogation shall be
obtained from the insurance carriers or carriers providing insurance at the
Property and, consequently, Mortgagor waives any and all right to claim or
recover against Mortgagee, its officers, employees, agents and representatives,
for loss of or damage to Mortgagor, the Property, Mortgagor's property or the
property of others under Mortgagor's control from any cause insured against or
required to be insured against by the provisions of this Mortgage.

      Section 1.33 Negative Covenants with Respect to Indebtedness, Operations
and Fundamental Changes of Mortgagor. Mortgagor hereby represents, warrants and
covenants as of the date hereof and until such time as the indebtedness secured
hereby is paid in full, that Mortgagor;

                                       59
<PAGE>

            (a) will not, nor will any general partner, member of shareholder
thereof, as applicable, amend, modify or otherwise change its partnership
certificate, partnership agreement, articles of incorporation, bylaws,
operating agreement, articles of organization, or other formation agreement or
document, as applicable, in any material term or manner or in a manner which
adversely effects Mortgagor's existence as a single purpose bankruptcy remote
entity;

            (b) will not enter into any transaction of merger or consolidation,
or liquidate or dissolve itself (or suffer any liquidation or dissolution), or
acquire by purchase or otherwise all or substantially all the business or
assets, or any stock or other evidence of beneficial ownership of, any entity;

            (c) has not and will not guarantee, pledge its assets for the
benefit of, or otherwise become liable on or in connection with any obligation
of any other person or entity;

            (d) has not owned, does not own and will not own any asset other
than (i) the Property, and (ii) incidental personal property necessary for the
operation of the Property;

            (e) has not engaged, is not engaged and will not engage, directly or
indirectly, in any business other than the ownership, financing , management and
operation of the Property;

            (f) will not enter into any contract or agreement with any general
partner, managing member or shareholder, as applicable, principal or Affiliate
(as hereinafter defined) of Mortgagor or any Affiliate of the general partner,
managing member or shareholder, as applicable , of Mortgagor except upon terms
and conditions that are intrinsically fair and substantially similar to those
that would be available on an arms-length basis with third parties other than
such general partner, managing member, shareholder, principal or Affiliate;

            (g) has not incurred and will not incur any debt, secured or
unsecured, direct or contingent (including guaranteeing any obligation), other
than (i) the indebtedness secured hereby, and (ii) trade Payables or accrued
expenses incurred in the ordinary course of business of operating the Property,
provided that such debt (1) is not evidenced by a note, (2) is not outstanding
for more than sixty (60) days with trade creditors and in amounts as are normal
and reasonable under the circumstances, and (3) does not exceed in the aggregate
an amount equal to two percent (2.00%) of the original principal balance of the
Note; no other debt may be secured (senior, subordinate or pari passu) by the
Property;

            (h) has not made and will not make any loans or advances to any
third party (including any Affiliate);

            (i) is solvent and will pay its debt from its assets as a same Shall
become due;

            (j) has done or cost to be done and will do all things necessary to
preserve its existence, and will not , nor will any partner, limited or general,
or shareholder

                                       60
<PAGE>

thereof, amend, modify or otherwise change its partnership certificate,
partnership agreement, articles, of incorporation or bylaws in a manner which
adversely affects Mortgagor's existence as a single purpose bankruptcy remote
entity;

            (k) will conduct and operate its business as presently conducted and
operated;

            (l) will maintain financial statements, books and records and
bank accounts separate from those of its Affiliates, including its general
partners, managing members or shareholders, as applicable, except that
Mortgagor's financial position, assets, liabilities, net worth and operating
results may be included in the consolidated financial statements of Corporate
Property Associates 16-Global Incorporated;

            (m) will be, and at all times will hold itself out to the
public as, a legal entity separate and distinct from any other entity (including
any Affiliate thereof, including the general partner, managing member or
shareholders, as applicable, or any Affiliate of the general partner. managing
member or shareholders, as applicable, of Mortgagor);

            (n) to the extent that Mortgagor is required to file tax
returns, it will file its own tax returns (unless required or permitted
otherwise by applicable legal requirements);

            (o) will maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations;

            (p) will not seek the dissolution or winding up, in whole or
in part, of Mortgagor;

            (q) will not commingle the funds and other assets of Mortgagor with
those of any general partner, managing member or shareholder, as applicable, any
Affiliate or any other person;

            (r) has and will maintain its assets in such a manner that it
is not costly or difficult to segregate, ascertain or identify its individual
assets from those of any Affiliate or any other person;

            (s) does not and will not hold itself out to be responsible for the
debts or obligations of any other person;

            (t) will not do any act which would make it impossible to carry on
the ordinary business of Mortgagor;

            (u) will not possess or assign the Property or incidental
personal property necessary for the operation of the Property for other than a
business or company purpose;

                                       61

<PAGE>

            (v) will not sell, encumber or otherwise dispose of all or
substantially all of the Property or incidental personal property necessary for
the operation of the Property;

            (w) will not hold title to Mortgagor's assets other than in
Mortgagor's name;

            (x) will not, without the affirmative vote of all of its directors,
members, partners or shareholders, as applicable, including any independent
directors or independent members of the Mortgagor or the Mortgagor's general
partner or managing member, as applicable, institute proceedings to be
adjudicated bankrupt or insolvent; or consent to the institution of bankruptcy
or insolvency proceedings against it; or file a petition seeking, or consent to,
reorganization or relief under any applicable, federal or State law relating to
bankruptcy; or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of Mortgagor or a substantial
part of Mortgagor's property; or make any assignment for the benefit of
creditors; Or admit in writing its inability to pay its debts generally as they
become due; or take any action in furtherance of any such action;

            (y) will, at the option of Mortgagor and to the extent Mortgagor
actually uses office space, either (i) maintain its principal executive office
and Telephone and facsimile numbers separate from that of any Affiliate of same
and conspicuously identify such office and numbers as its own or (ii) allocate
fairly and reasonably any rent, overhead and expenses for shared office space;

            (z) shall make investments in the name of Mortgagor directly by
Mortgagor or on its behalf by brokers engaged and paid by Mortgagor or its
agents;

            (aa) shall pay or cause to be paid its own liabilities and expenses
of any kind, including but not limited to salaries of its employees, only out of
its own separate funds and assets;

            (bb) shall correct any misunderstanding that is known by Mortgagor
regarding its name or separate identity;

            (cc) shall not fail to observe all customary formalities regarding
the corporate existence of the Mortgagor, including holding meetings of or
obtaining the consent of its board of directors, as appropriate, and its
Stockholders and maintaining current accurate minute books separate from those
of any Affiliate;

            (dd) At least one (1) of the directors of the Mortgagor shall be an
Independent Director. Independent Director means a natural person who has not
been, and during the continuation of his or her services as Independent Director
(i) except in the capacity as an Independent Director of the Mortgagor, is not a
present or former employee, officer, director, shareholder, partner, member,
counsel, accountant, advisor or agent of the Mortgagor or any Affiliate of same,
(ii) is not a present or former customer or supplier of the Mortgagor or any
Affiliate of same, or other person or entity who derives or is entitled to
derive any of its profits or revenues or any payments (other than any fee paid
to such director as compensation for such

                                       62

<PAGE>
director to serve as an Independent Director) from the Mortgagor or any
Affiliate of same, (iii) is not (and is not affiliated with an entity that is) a
present or former advisor or consultant to the Mortgagor or any Affiliate of
same, (iv) is not a spouse, parent, child, grandchild or sibling of, or
otherwise related (by blood or by law) to, any of (i), (ii) or (iii) above, and
(v) is not affiliated with a person or entity of which the Mortgagor or any
Affiliate of same is a present or former customer or supplier, provided,
however, that an entity that provides independent directors as a service for a
fee is not prohibited under this paragraph from providing one or more
independent directors to the Mortgagor. In the event of the death, incapacity,
resignation or removal of an Independent Director, the Board of Directors of the
Mortgagor shall promptly appoint a replacement Independent Director and no
action requiring the consent of the Independent Director shall be taken until a
replacement Independent Director has been appointed. In addition, no Independent
Director may be removed unless his or her successor satisfying the definition
hereunder has been appointed;

            (ee) Mortgagor shall, and shall cause Corporate Property Associates
16-Global Incorporated to, conduct its business so as to cause all of the
assumptions set forth in that certain legal opinion of Reed Smith LLP with
respect to substantive consolidation and similar matters dated on or about the
date hereof, to be true, correct and complete; and

            (ff) shall not invest any of the Mortgagor's funds in securities
issued by any Affiliate.

      "Affiliate" means, with respect to a person or entity, any other person or
entity (i) which owns beneficially, directly or indirectly, more than ten
percent (10%) of the outstanding shares of Common Stock or which is otherwise in
control of the person or entity in question, (ii) of which more than ten percent
(10%) of the outstanding voting securities are owned beneficially, directly or
indirectly, by such person or entity or by any entity described in clause (i)
above, or (iii) which is controlled by an entity described in clause (i) above;
provided that for the purposes of this definition the term "control" and
"controlled by" shall have the meanings assigned to them in Rule 405 under the
Securities Act of 1933, as amended.

                                   ARTICLE II

                               EVENTS OF DEFAULT

       Section 2.1 Events of Default. The occurrence of any of the following
shall be an "Event of Default" hereunder:

            (a) Mortgagor fails to punctually perform any convenant, agreement,
obligation, term or condition of the Note, this Mortgage or any other Loan
Document which requires payment of any money to Mortgagee, and such failure
continues for the applicable period set forth therein or, if no period is set
forth, for seven (7) days after such payment becomes due or, if due on demand,
seven (7) days after such payment is demanded in writing (except those regarding
payments to be made under the Note, which failure is subject to any grace
periods set forth in the Note).

                                       63

<PAGE>

            (b) Mortgagor fails to provide insurance as required by Section 1.4
hereof or fails to perform any covenant, agreement, obligation, term or
condition set forth in Section 1.5 or 1.33 hereof unless, with respect to
Section 1.33, within ten (10) days after notice from Mortgagee thereof, such
failure is cured.

            (c) Mortgagor fails to perform any other covenant, agreement,
obligation, term or condition set forth herein other than those otherwise
described in this Section 2.1 and, to the extent such failure or default is
susceptible of being cured, the continuance of such failure or default for
thirty (30) days after written notice thereof from Mortgagee to Mortgagor;
provided, however, that if such default is susceptible of cure but such cure
cannot be accomplished with reasonable diligence within said period of time, and
if Mortgagor commences to cure such default promptly after receipt of notice
thereof from Mortgagee, and thereafter prosecutes the curing of such default
with reasonable diligence, such period of time shall be extended for such period
of time as may be necessary to cure such default with reasonable diligence, but
not to exceed ninety (90) days in the aggregate.

            (d) Any representation or warranty made herein, in or in connection
with any application or commitment relating to the loan evidenced by the Note,
or in any of the other Loan Documents to Mortgagee by Mortgagor, by any
principal or general partner, managing member or shareholder, as applicable, in
Mortgagor or by any indemnitor or guarantor under any indemnity or guaranty
executed in connection with the indebtedness secured hereby is determined by
Mortgagee to have been false or misleading in any material respect at the time
made.

            (e) There shall be a sale, conveyance, disposition, alienation,
hypothecation, leasing, assignment, pledge, mortgage, granting of a security
interest in or other transfer or further encumbrancing of the Property,
Mortgagor or its general partners, managing members or shareholder, as
applicable, or any portion thereof or any interest therein, in violation of
Section 1.13 hereof.

            (f) A default occurs under any of the other Loan Documents which has
not been cured within any applicable notice, grace or cure period therein
provided.

            (g) Mortgagor, any principal or general partner or managing member,
as applicable, in Mortgagor or any indemnitor or guarantor under any indemnity
or guaranty executed in connection with the indebtedness secured hereby shall
make a transfer in fraud of creditors, or shall make an assignment for the
benefit of creditors, shall file a petition in bankruptcy, shall voluntarily be
adjudicated insolvent or bankrupt, shall petition or apply to any tribunal for
or shall consent to or shall not contest the appointment of a receiver, trustee,
custodian or similar officer for Mortgagor, for any such principal or general
partner or managing member, as applicable, of Mortgagor or for any such
indemnitor or guarantor or for a substantial part of the assets of Mortgagor, of
any such principal or general partner or managing member, as applicable, of
Mortgagor or of any such indemnitor or guarantor, or shall commence any case,
proceeding or other action under any bankruptcy, reorganization, arrangement,
readjustment or debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect.

                                       64

<PAGE>



              (h) A petition is filed or any case, proceeding or other action is
commenced against Mortgagor, against any principal or general partner or
managing member, as applicable, of Mortgagor or against any indemnitor or
guarantor under any indemnity or guaranty executed in connection with the
indebtedness secured hereby seeking to have an order for relief entered against
it as debtor or seeking reorganization, arrangement, adjustment, liquidation,
dissolution or composition of it or its debts or other relief under any law
relating to bankruptcy, insolvency, arrangement, reorganization, receivership or
other debtor relief under any law or statute of any jurisdiction whether now or
hereafter in effect or a court of competent jurisdiction enters an order for
relief against Mortgagor, against any principal or general partner or managing
member, as applicable, of Mortgagor or against any indemnitor or guarantor under
any indemnity or guaranty executed in connection with the loan secured hereby,
as debtor, or an order, judgment or decree is entered appointing, with or
without the consent of Mortgagor, of any such principal or general partner or
managing member, as applicable, of Mortgagor or of any such indemnitor or
guarantor, a receiver, trustee, custodian or similar officer for Mortgagor, for
any such principal or general partner or managing member, as applicable, of
Mortgagor or for any such indemnitor or guarantor, or for any substantial part
of any of the properties of Mortgagor, of any such principal or general partner
or managing member, as applicable, of Mortgagor or of any such indemnitor or
guarantor, and if any such event shall occur, such petition, case, proceeding,
action, order, judgment or decree shall not be dismissed within sixty (60) days
after being commenced.

            (i) The Property or any material part thereof shall be taken on
execution or other process of law in any action against Mortgagor (but expressly
executing any taking by power of eminent domain).

            (j) Mortgagor abandons all or a portion of the Property.

            (k) The holder of any lien or security interest on the Property
(without implying the consent of Mortgagee to the existence or creation of any
such lien or security interest), whether superior or subordinate to this
Mortgage or any of the other Loan Documents, declares a default and such default
is not cured within any applicable grace or cure period set forth in the
applicable document and such holder institutes foreclosure or other proceedings
for the enforcement of its remedies thereunder.

            (l) The Property, or any part thereof, is subjected to actual waste
or to removal, demolition or material alteration so that the value of the
Property is materially diminished hereby and Mortgagee determines (in its
subjective determination) that it is not adequately protected from any loss,
damage or risk associated therewith.

            (m) Any dissolution, termination, partial or complete liquidation,
merger or consolidation of Mortgagor or any general partner or Guarantor.

            (n) Mortgagor defaults under the Primary Lease, and such default
continues beyond any applicable notice and/or cure period thereunder.

                                       65

<PAGE>

                                   ARTICLE III

                                    REMEDIES

      Section 3.1 Remedies Available. If there shall occur on Event of Default
under this Mortgage, then this Mortgage is subject to foreclosure as provided by
law and Mortgagee may, at its option and by or through a trustee nominee,
assignee or otherwise, to the fullest extent permitted by law, exercise any or
all of the following rights, remedies and recourses, either successively or
concurrently:

            (a) Acceleration. Accelerate the maturity date of the Note and
declare any or all of the indebtedness secured hereby to be immediately due and
payable without any presentment, demand, protest, notice or action of any kind
whatever (each of which is hereby expressly waived by Mortgagor), whereupon the
same shall become immediately due and payable. Upon any such acceleration,
payment of such accelerated amount shall constitute a prepayment of the
principal balance of the Note and any applicable prepayment fee provided for in
the Note shall then be immediately due and payable.

            (b) Entry on the Property. Either in person or by agent, with or
without bringing any action or proceeding, or by a receiver appointed by a court
and without regard to the adequacy of its security, enter upon and take
possession of the Property, or any part thereof, without force or with such
force as is permitted by law and without notice or process or with such notice
or process as is required by law unless such notice and process is waivable, in
which case Mortgagor hereby waives such notice and process, and do any and all
acts and perform any and all work which may be desirable or necessary in
Mortgagee's judgment to complete any unfinished construction on the Land, to
preserve the value, marketability or rentability of the Property, to increase
the income therefrom, to manage and operate the Property or to protect the
security hereof and all sums expended by Mortgagee therefor, together with
interest thereon at the Default Interest Rate, shall be immediately due and
payable to Mortgagee by Mortgagor on demand and shall be secured hereby and by
all of the other Loan Documents securing all or any part of the indebtedness
evidenced by the Note.

            (c) Collect Rents and Profits. With or without taking possession of
the Property, sue or otherwise collect the Rents and Profits, including those
past due and unpaid.

            (d) Appointment of Receiver. Upon, or at any time prior to or after,
initiating the exercise of any power of sale, instituting any judicial
foreclosure or instituting any other foreclosure of the liens and security
interests provided for herein or any other legal proceedings hereunder, make
application to a court of competent jurisdiction for appointment of a receiver
for all or any part of the Property, as a matter of strict right and without
notice to Mortgagor and without regard to the adequacy of the Property for the
repayment of the indebtedness secured hereby or the solvency of Mortgagor or any
person or persons liable for the payment of the indebtedness secured hereby, and
Mortgagor does hereby irrevocably consent to such appointment, waives any and
all noticed of and defenses to such appointment and agrees not to oppose any
application therefor by Mortgagee, but nothing herein is to be construed to
deprive Mortgagee of any other right, remedy or privilege Mortgagee may now have
under the law to

                                       66

<PAGE>

have a receiver appointed, provided, however, that, the appointment of such
receiver, trustee or other appointee by virtue of any court order, statute or
regulation shall not impair or in any manner prejudice the rights of Mortgagee
to receive payment of the Rents and Profits pursuant to other terms and
provisions hereof. Any such receiver shall have all of the usual powers and
duties of receivers in similar cases, including, without limitation, the full
power to hold, develop, rent, lease, manage, maintain, operate and otherwise use
or permit the use of the Property upon such terms and conditions as said
receiver may deem to be prudent and reasonable under the circumstances as more
fully set forth in Section 3.3 below. Such receivership shall, at the option of
Mortgagee, continue until full payment of all of the indebtedness secured hereby
or until title to the Property shall have passed by foreclosure sale under this
Mortgage or deed in lieu of foreclosure. This Mortgage is given upon the
conditions stated herein and upon the statutory conditions for any breach of
which Mortgagee shall have statutory power of sale.

            (e) Foreclosure. Immediately commence an action or proceeding to
foreclose this Mortgage or to specifically enforce its provisions with respect
to the indebtedness secured hereby pursuant to the statutes in such case made
and provided and sell the Property or cause the Property to be sold in
accordance with the requirements and procedures provided by said statutes in a
single parcel or in several parcels at the option of Mortgagee.

                  (1) In the event foreclosure proceedings are filed by
      Mortgagee, all expenses incident to such proceeding, including, but not
      limited to, attorneys' fees and costs, shall be paid by Mortgagor and
      secured by this Mortgage and by all of the other Loan Documents securing
      all or any part of the indebtedness evidenced by the Note. The secured
      indebtedness and all other obligations secured by this Mortgage,
      including, without limitation, interest at the Default Interest Rate (as
      defined in the Note), any prepayment charge, fee or premium required to be
      paid under the Note in order to prepay principal (to the extent permitted
      by applicable law), attorneys' fees and any other amounts due and unpaid
      to Mortgagee under the Loan Documents, may be bid by Mortgagee in the
      event of a foreclosure sale hereunder. In the event of a judicial sale
      pursuant to a foreclosure decree, it is understood and agreed that
      Mortgagee or its assigns may become the purchaser of the Property or any
      part thereof.

                  (2) Mortgagee may, by following the procedures and satisfying
      the requirements prescribed by applicable law, foreclose on only a portion
      of the Property and, in such event, said foreclosure shall not affect the
      lien of this Mortgage on the remaining portion of the Property foreclosed.

            (f) Other. Exercise any other right or remedy available hereunder,
under any of the other Loan Documents or at law or in equity.

      Section 3.2 Application of Proceeds. To the fullest extent permitted by
law, the proceeds of any sale under this Mortgage shall be applied to the extent
funds are so available to the following items in such order as Mortgagee in its
discretion may determine:

            (a) To payment of the costs, expenses and fees of taking possession
of the Property, and of holding, operating, maintaining, using, leasing,
repairing, improving, marketing

                                       67

<PAGE>
and selling the same and of otherwise enforcing Mortgagee's rights and remedies
hereunder and under the other Loan Documents, including, hut not limited to,
receivers' fees, court costs, attorneys', accountants', appraisers', managers'
and other professional fees, title charges and transfer taxes.

            (b) To payment of all sums expended by Mortgagee under the terms of
any of the Loan Documents and not yet repaid, together with interest on such
sums at the Default Interest Rate.

            (c) To payment of the secured indebtedness and all other obligations
secured by this Mortgage, including, without limitation, interest at the Default
Interest Rate and, to the extent permitted by applicable law, any prepayment
fee, charge or premium required to be paid under the Note in order to prepay
principal, in any order that Mortgagee chooses in its sole discretion.

            The remainder, if any, of such funds shall be disbursed to Mortgagor
or to the person or persons legally entitled thereto.

      Section 3.3 Right and Authority of Receiver or Mortgagee in the Event of
Default; Power of Attorney. Upon the occurrence of an Event of Default
hereunder, and entry upon the Property pursuant to Section 3.1(b) hereof or
appointment of a receiver pursuant to Section 3.1(d) hereof, and under such
terms and conditions as may be prudent and reasonable under the circumstances in
Mortgagee's or the receiver's sole discretion, all at Mortgagor's expense,
Mortgagee or said receiver, or such other persons or entities as they shall
hire, direct or engage, as the case may be, may do or permit one or more of the
following, successively or concurrently: (a) enter upon and take possession and
control of any and all of the Property; (b) take and maintain possession of all
documents, books, records, papers and accounts relating to the Property; (c)
exclude Mortgagor and its agents, servants and employees wholly from the
Property; (d) manage and operate the Property; (e) preserve and maintain the
Property; (f) make repairs and alterations to the Property; (g) complete any
construction or repair of the Improvements, with such changes, additions or
modifications of the plans and specifications or intended disposition and use of
the Improvements as Mortgagee may in its sole discretion deem appropriate or
desirable to place the Property in such condition as will, in Mortgagee's sole
discretion, make it or any part thereof readily marketable or rentable;
(h) conduct a marketing or leasing program with respect to the Property, or
employ a marketing or leasing agent or agents to do so, and direct the leasing
or sale of the Property under such terms and conditions as Mortgagee may in its
sole discretion deem appropriate or desirable; (i) employ such contractors,
subcontractors, materialmen, architects, engineers, consultants, managers,
brokers, marketing agents, or other employees, agents, independent contractors
or professionals, as Mortgagee may in its sole discretion deem appropriate or
desirable to implement and effectuate the rights and powers herein granted; (j)
execute and deliver, in the name of Mortgagee as attorney-in-fact and agent of
Mortgagor or in its own name as Mortgagee, such documents and instruments as are
necessary or appropriate to consummate authorized transactions; (k) enter into
such Leases, whether of real or personal property, under such terms and
conditions as Mortgagee may in its sole discretion deem appropriate or
desirable; (l) collect and receive the Rents and Profits from

                                       68

<PAGE>
the Property; (m) eject Tenants or repossess personal property, as provided by
law, for breaches of the conditions of their Leases; (n) sue for unpaid Rents
and Profits, payments, income or proceeds in the name of Mortgagor or Mortgagee;
(o) maintain actions in forcible entry and detainer, ejectment for possession
and actions in distress for rent; (p) compromise or give acquittance for Rents
and Profits, payments, income or proceeds that may become due; (q) delegate or
assign any and all rights and powers given to Mortgagee by this Mortgage; and
(r) do any acts which Mortgagee in its sole discretion deems appropriate or
desirable to protect the security hereof and use such measures, legal or
equitable, as Mortgagee may in its sole discretion deem appropriate or desirable
to implement and effectuate the provisions of this Mortgage. This Mortgage shall
constitute a direction to and full authority to any Tenant, lessee, or other
third party who has heretofore dealt or contracted or may hereafter deal or
contract with Mortgagor or Mortgagee, at the request of Mortgagee, to pay all
amounts owing under any Lease, contract or other agreement to Mortgagee without
proof of the Event of Default relied upon. Any such Tenant, lessee or third
party is hereby irrevocably authorized to rely upon and comply with (and shall
be fully protected by Mortgagor in so doing) any request, notice or demand by
Mortgagee for the payment to Mortgagee of any Rents and Profits or other sums
which may be or thereafter become due under its Lease, contract or other
agreement, or for the performance of any undertakings under any such Lease,
contract or other agreement, and shall have no right or duty to inquire whether
any Event of Default under this Mortgage, or any default under any of the other
Loan Documents, has actually occurred or is then existing. Mortgagor hereby
constitutes and appoints Mortgagee, its assignees, successors, transferees and
nominees, as Mortgagor's true and lawful attorney-in-fact and agent, with full
power of substitution in the Property, in Mortgagor's name, place and stead, to
do or permit any one or more of the foregoing described rights, remedies, powers
and authorities, successively or concurrently, and said power of attorney shall
be deemed a power coupled with an interest and irrevocable so long as any
indebtedness secured hereby is outstanding. Any money advanced by Mortgagee in
connection with any action taken under this Section 3.3, together with interest
thereon at the Default Interest Rate from the date of making such advancement by
Mortgagee until actually paid by Mortgagor, shall be a demand obligation owing
by Mortgagor to Mortgagee and shall be secured by this Mortgage and by every
other instrument securing the secured indebtedness.

      Section 3.4 Occupancy After Foreclosure. In the event there is a
foreclosure sale hereunder and at the time of such sale, Mortgagor or
Mortgagor's representatives, successors or assigns, or any other persons
claiming any interest in the Property by, through or under Mortgagor (except
tenants of space in the Improvements subject to Leases entered into prior to the
date hereof), is or are occupying or using the Property, or any part thereof,
then, to the extent not prohibited by applicable law, each and all shall, at the
option of Mortgagee or the purchaser at such sale, as the case may be,
immediately become the tenant of the purchaser at such sale, which tenancy shall
be a tenancy from day-to-day, terminable at the will of either landlord or
tenant, at a reasonable rental per day based upon the value of the Property
occupied or used, such rental to be due daily to the purchaser. Further, to the
extent permitted by applicable law, in the event the tenant fails to surrender
possession of the Property upon the termination of such tenancy, the purchaser
shall be entitled to institute and maintain an action for unlawful detainer of
the Property in the appropriate court of the county in which the Land is
located.

                                       69

<PAGE>

      Section 3.5 Notice to Account Debtors. Mortgagee may, at any time after an
Event of Default hereunder, notify the account debtors and obligors of any
accounts, chattel paper, negotiable instruments or other evidences of
indebtedness, to Mortgagor included in the Property to pay Mortgagee directly.
Mortgagor shall at any time or from, time to time upon the request of Mortgagee
provide to Mortgagee a current list of all such account debtors and obligors and
their addresses.

      Section 3.6 Cumulative Remedies. All remedies contained in this Mortgage
are cumulative and Mortgagee shall also have all other remedies provided at law
and in equity or in any other Loan Documents. Such remedies may be pursued
separately, successively or concurrently at the sole subjective discretion of
Mortgagee and may be exercised in any order and as often as occasion therefor
shall arise. No act of Mortgagee shall be construed as an election to proceed
under any particular provisions of this Mortgage to the exclusion of any other
provision of this Mortgage or as an election of remedies to the exclusion of any
other remedy which may then or thereafter he available to Mortgage. No delay or
failure by Mortgagee to exercise any right or remedy under this Mortgage shall
be construed to be a waiver of that right or remedy or of any Event of Default
hereunder. Mortgagee may exercise any one or more of its rights add remedies at
its option without regard to the adequacy of its security.

      Section 3.7 Payment of Expenses. Mortgagor shall pay on demand all of
Mortgagee's expenses incurred in any efforts to enforce any terms of this
Mortgage whether or not any lawsuit is filed and whether or not foreclosure is
commenced but not completed, including, but not limited to, reasonable legal
fees and disbursements, foreclosure costs and title charges, together with
interest thereon from and after the date incurred by Mortgagee until actually
paid by Mortgagor at the Default Interest Rate, and the same shall be secured by
this Mortgage and by all of the other Loan Documents securing all or any part
of the indebtedness evidenced by the Note.

                                   ARTICLE IV

                             INTENTIONALLY OMITTED

                                   ARTICLE V

                       MISCELLANEOUS TERMS AND CONDITIONS

      Section 5.1 Time of Essence. Time is of the essence with, respect to all
provisions of this Mortgage.

      Section 5.2 Release of Mortgage. If all of the secured indebtedness be
paid, then and in that event only, all rights under this Mortgage shall
terminate except for those provisions hereof which by their terms survive, and
the Property shall become wholly clear of the liens, Security interests,
conveyances and assignment evidenced hereby, which shall be released by
Mortgagee in due form at Mortgagor's cost. No release of this Mortgage or the
lien hereof shall be valid unless executed by Mortgagee.

                                       70

<PAGE>
      Section 5.3 Certain Rights of Mortgagee. Without affecting Mortgagor's
liability for the payment of and of the indebtedness secured hereby, Mortgage
may from time to time and without notice to Mortgagor: (a) release any person
liable for the payment of the indebtedness secured hereby; (b) extend or modify
The terms of payment of the indebtedness secured hereby; (c) accept additional
real or personal property of any kind as security or alter, substitute, or
release any property securing the indebtedness secured hereby; (d) recover any
part of the Property; (e) consent in writing to the making of any subdivision
map or plat thereof; (f) join in granting any easement therein; or (g) join in
any extension agreement of the Mortgage or any agreement subordinating the lien
hereof.

      Section 5.4 Waiver of Certain Defenses. No action for the enforcement of
the lien hereof or of any provision hereof shall be subject to any defense which
would not be good and available to the party interposing the same in an action
at law upon the Note or any of the other Loan Documents.

      Section 5.5 Notices. All notices, demands, requests or other
communications to be sent by one party to the other hereunder or required by law
shall be in writing and shall be deemed to have been validly given or served by
delivery of the same in person to the intended addressee, or by depositing the
same with Federal Express or another reputable private courier service for next
business day delivery, or by depositing the same in the United States mail,
postage prepaid, registered or certified mail, return receipt requested, in any
event addressed to the intended addressee at its address set forth on the first
page of this Mortgage (provided that any notice to Mortgagor hereunder shall
include the following at the end of the address: "Attention: Director, Asset
Management") or at such other address, as may be designated by such party as
herein provided with a copy of any notice to Mortgagor sent to Reed Smith LLP,
One Liberty Place, 1650 Market Street, Philadelphia, PA 19103, Attention: Chair,
Real Estate Group. All notices, demands, and requests shall be effective upon
such personal delivery, or one (1) business day after being deposited with the
private- courier service, or two (2) business days after being deposited in the
United States mail as required above. Rejection or other refusal to accept or
the inability to deliver because of changed address of which no notice was given
as herein required shall be deemed to be receipt of the notice, demand or
request sent. By giving to the other party hereto at least fifteen (15) days'
prior written notice thereof in accordance with the provisions hereof, the
parties hereto shall have the right from time to time to change their respective
addresses and each shall have the right to specify as its address any other
address within the United States of America.

      Section 5.6 Successors and Assigns. The terms, provisions, indemnities,
covenants and conditions hereof shall be binding upon Mortgagor and the
successors and assigns of Mortgagor, including all successors in interest of
Mortgagor in and to all or any part of the Property, and shall inure to the
benefit of Mortgagee, its directors, officers, shareholders, employees and
agents and their respective successors and assigns and shall constitute
covenants running with the land. All references in this Mortgage to Mortgagor or
Mortgagee shall be deemed to include all such parties' successors and assigns,
and the term "Mortgagee" as used herein shall also mean and refer to any lawful
holder or owner, including pledgees and participants, of any of the
indebtedness secured hereby. If Mortgagor consists of more than one

                                       71

<PAGE>

person or entity, each will be jointly and severally liable to perform the
obligations of Mortgagor.

      Section 5.7 Severability. A determination that any provision of this
Mortgage is unenforceable or invalid shall not affect the enforceability or
validity of any other provision, and any determination that the application of
any provision of this Mortgage to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such provision
as it may apply to any other persons or circumstances.

      Section 5.8 Gender. Within this Mortgage, words of any gender shall be
held and construed to include any other gender, and words in the singular shall
be held and construed to include the plural, and vice versa, unless, the context
otherwise requires.

      Section 5.9 Waiver; Discontinuance of Proceedings. Mortgagee may waive any
single Event of Default by Mortgagor hereunder without waiving any other prior
or subsequent Event of Default. Mortgagee may remedy any Event of Default by
Mortgagor hereunder without waiving the Event of Default remedied. Neither the
failure by Mortgagee to exercise, nor the delay by Mortgagee in exercising, any
right, power or remedy upon any Event of Default by Mortgagor hereunder shall be
construed as a waiver of such Event of Default or as a waiver of the right to
exercise any such right, power or remedy at a later date. No single or partial
exercise by Mortgagee of any right, power or remedy hereunder shall exhaust the
same or shall preclude any other or further exercise thereof, and every such
right, power or remedy hereunder may be exercised at any time and from time to
time. No modification or waiver of any provision hereof nor consent to any
departure by Mortgagor therefrom shall in any event be effective unless the same
shall be in writing and signed by Mortgagee, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
given. No notice to nor demand on Mortgagor in any case shall of itself entitle
Mortgagor to any other or further notice or demand in similar or other
circumstances. Acceptance by Mortgagee of any payment in an amount less than the
amount then due on any of the secured indebtedness shall be deemed in acceptance
on account only and shall not in any way affect the existence of a Default or an
Event of Default hereunder. In case Mortgagee shall have proceeded to invoke any
right, remedy or recourse permitted hereunder or under the other Loan Documents
and shall thereafter elect to discontinue or abandon the same for any reason,
Mortgagee shall have the unqualified right to do so and, in such an event.
Mortgagor and Mortgagee shall be restored to their former positions with respect
to the indebtedness secured hereby, the Loan Documents, the Property and
otherwise, and the rights, remedies, recourses and powers of Mortgagee shall
continue as if the same had never been invoked.

      Section 5.10 Section Headings. The headings of the sections and paragraphs
of this Mortgage are for convenience of reference only, are not to be considered
a part hereof and shall not limit or otherwise affect any of the terms hereof.

      Section 5.11 Governing Law. This Mortgage will be governed by and
construed in accordance with the laws of the State of New Hampshire,provided
that to the extent any of such laws may now or hereafter be preempted by Federal
law, in such case such Federal law shall so govern and be controlling.

                                       72

<PAGE>

      Section 5.12 Counting of Days. The term "days" when used herein shall
mean calender days. If any time period ends on a Saturday, Sunday or holiday
officially recognized by the state within which the Land is located, the period
shall be deemed to end on the next succeeding business day. The term "business
day" when used herein shall mean a weekday, Monday through Friday, except a
legal holiday or a day on which banking institutions, in the State in which the
Land is located are authorized by law to be closed.

      Section 5.13 Relationship of the Parties. The relationship between
Mortgagor and Mortgagee is that of a borrower and a lender only and neither of
those parties is, nor shall it hold itself to be, the agent, employee, joint
venturer or partner of the other party.

      Section 5.14 Application of the Proceeds of the Note. To the extent that
proceeds of the Note are used to pay indebtedness secured by any outstanding
lien, security interest, charge or prior encumbrance against the Property, such
proceeds have been advanced by Mortgagee at Mortgagor's request and Mortgagee
shall be subrogated to any and all rights, security interests and liens owned by
any owner or holder of such outstanding liens, security interests, charges or
encumbrances, irrespective of whether said liens, security interests, charges or
encumbrances are released.

      Section 5.15 Unsecured Portion of Indebtedness. If any part of the secured
indebtedness cannot be lawfully secured by this Mortgage or if any part of the
Property cannot be lawfully subject to the lien and security interest hereof to
the full extent of such indebtedness, then all payments made shall be applied on
said indebtedness first in discharge of that portion thereof which is unsecured
by this Mortgage.

      Section 5.16 Cross Default. An Event of Default shall be a default under
each of the other Loan Documents.

      Section 5.17 Interest After Sale. In the event the Property or any part
thereof shall be sold upon foreclosure as provided hereunder, to the extent
permitted by law, the sum for which the same shall have been sold shall, for
purposes of redemption (pursuant to the laws of the state in which the Property
is located), bear interest at the Default Interest Rate.

      Section 5.18 Inconsistency with Other Loan Documents. In the event of any
inconsistency between the provisions hereof and the provisions in any of the
other Loan Documents, it is intended that the provisions selected to control by
Mortgagee in its sole subjective discretion shall be controlling.

      Section 5.19 Construction of this Document. This document may be construed
an a mortgage, security deed, deed of trust, chattel mortgage, conveyance,
assignment, security agreement, pledge, financing statement, hypothecation or
contract, or any one or more of the foregoing, in order to fully effectuate the
liens and security interests created hereby and the purposes and agreements
herein set forth.

      Section 5.20 No Merger. It is the desire and intention of the parties
hereto that this Mortgage and the lien hereof do not merge in fee simple title
to the Property. It is hereby

                                       73

<PAGE>

understood and agreed that should Mortgagee acquire any additional or other
interests in or to the Property or the ownership thereof, then, unless a
contrary intent is manifested by Mortgagee as evidenced by an appropriate
document duly recorded, this Mortgage and the lien hereof shall not merge in
such other or additional interests in or to the Property, toward the end that
this Mortgage may be foreclosed as if owned by a stranger to said other or
additional interests.

      Section 5.21 Rights With Respect to Junior Encumbrances. Any person or
entity purporting to have or to take a junior mortgage or other lien upon the
Property or any interest therein shall be subject to the rights of Mortgagee to
amend, modify, increase, vary, alter or supplement this Mortgage, the Note or
any of the other Loan Documents and to extend the maturity date of the
indebtedness secured hereby and to increase the amount of the indebtedness
secured hereby and to waive or forebear the exercise of any of its rights and
remedies hereunder or under any of the other Loan Documents and to release any
collateral or security for the indebtedness secured hereby, in each and every
case without obtaining the consent of the holder of such junior lien and without
the Lien or security interest of this Mortgage losing its priority over the
rights of any such junior lien.

      Section 5.22 Mortgagee May File Proofs of Claim. In the case of any
receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment,
composition or other proceedings affecting Mortgagor or the principals or
general partners or members in Mortgagor, or their respective creditors or
property, Mortgagee, to the extent permitted by law, shall be entitled to file
such proofs of claim and other documents as may be necessary or advisable in
order to have the claims of Mortgagee allowed in such proceedings for the entire
secured indebtedness at the date of the institution of such proceedings and for
any additional amount which may become due and payable by Mortgagor hereunder
after such date.

      Section 5.23 Fixture Filing. This Mortgage shall be effective from the
date of its recording as a financing statement filed as a filing with respect to
all goods constituting part of the Property which are or are to become fixtures.
This Mortgage shall also be effective as a financing statement covering mineral
or the like (including oil and gas) and is to be filed for record in the Real
Estate Records of the county where the Property is situated. The mailing address
of Mortgagor and the address of Mortgagee from which information concerning the
security interests may be obtained are set forth in Section 1.22 above.

      Section 5.24 After-Acquired Property. All property acquired by Mortgagor
after the date of this Mortgage which by the terms of this Mortgage shall be
subject to the lien and the security interest created hereby, shall immediately
upon the acquisition thereof by Mortgagor and without further mortgage,
conveyance or assignment become subject to the lien and security interest
created by this Mortgage. Nevertheless Mortgagor shall execute, acknowledge,
deliver and record or file, as appropriate, all and every such, further
mortgages, Security agreements, financing statement, assignments and assurances,
as Mortgagee shall require for accomplishing the purposes of this Mortgage.

      Section 5.25 No Representation. By accepting delivery of any item required
to be observed, performed or fulfilled or to be given to Mortgagee pursuant to
the Loan Documents, including, but not limited to, any officer's certificates,
balance sheet, statement of profit and loss

                                       74
<PAGE>

or other financial statement, survey , appraisal or insurance policy, Mortgagee
shall not be deemed to have warranted, consented to, or affirmed the
sufficiency, legality, effectiveness or legal effect of the same, or of any term
provision or condition thereof, and such acceptance of delivery thereof shall
not be or constitute any warranty, consent or affirmation with respect thereto
by Mortgagee.

      Section 5.26 Counterparts. This Mortgage may be executed in any number of
counterparts, each of which shall be effective only upon delivery and thereafter
shall be deemed an original, and all of which shall be taken to be one and the
same instrument, for the same effect as if all parties hereto had signed the
same signature page. Any signature page of this Mortgage may be detached from
any counterpart of this Mortgage without impairing the legal effect of any
signatures thereon and may be attached to another counterpart of this Mortgage
identical in form hereto but having attached to it one or more additional
signature pages.

      Section 5.27 Personal Liability. Notwithstanding anything to the contrary
contained in this Mortgage, the liability of Mortgagor and its officers,
directors, members and general partners for the indebtedness secured hereby and
for the performance of the other agreements, covenants and obligations contained
herein and in the other Loan Documents shall be limited as set forth in Section
1.05 of the Note.

      Section 5.28 Recording and Filing. Mortgagor will cause the Loan Documents
and all amendments and supplements thereto and substitutions therefor to be
recorded, filed, rerecorded and re-filed in such manner and in such places as
Mortgagee shall reasonably request, and will pay on demand all such recording,
filing, re-recording and re-filing taxes, fees and other charges. Mortgagor
shall reimburse Mortgagee, or its servicing agent, for the costs incurred in
obtaining a tax service company to verify the status of payment of taxes and
assessments on the Property.

      Section 5.29 Entire Agreement and Modification. This Mortgage and the
other Loan Documents contain the entire agreements between the parties relating
to the subject matter hereof and thereof and all prior agreements relative
hereto and there which are not contained herein or therein are terminated. This
Mortgage and the other Loan Documents may not be amended, revised, waived,
discharged, released or terminated orally but only by a written instrument or
instruments executed by the party against which enforcement of the amendment,
revision, waiver, discharge, release or termination is asserted. Any alleged
amendment, revision, waiver, discharge, release or termination which is not so
documented shall not be effective as to any party.

      Section 5.30 Maximum Interest. The provisions of this Mortgage and of all
agreements between Mortgagor and Motgagee, whether now existing or hereafter
arising and whether written or oral, are hereby expressly limited so that in no
contingency or event whatsoever, whether by reason of demand or acceleration of
the maturity of the Note or otherwise, shall the amount paid, or agreed to be
paid ("Interest"), to Mortgagee for the use, forbearance or retention of the
money loaned under the Note exceed the maximum amount permissible under
applicable law. If, from any circumstance whatsoever, performance or fulfillment
of any provision hereof or of any agreement between Mortgagor and Mortgagee
shall,

                                       75
<PAGE>

at the time performance or fulfillment of such provision shall be due, exceed
the limit for Interest prescribed by law or otherwise transcend the Limit of
validity prescribed by applicable law, then jpso facto the obligation to be
performed or fulfilled shall be reduced to such limit and if, from any
circumstance whatsoever, Mortgagee shall ever receive anything of value deemed
Interest by applicable law in excess of the maximum lawful amount, an amount
equal to any excessive Interest shall be applied to the reduction of the
principal balance owing under the Note in the inverse order of its maturity
(whether or not then due) or at the option of Mortgagee be paid over to
Mortgagor, and not to the payment of Interest. All Interest (including any
amounts or payments deemed to be Interest) paid or agreed to be paid to
Mortgagee shall, to the extent permitted by applicable Law, be amortized,
prorated, allocated and spread throughout the full period until payment in full
of the principal balance of the Note so that the Interest thereon for such full
period will not exceed the maximum amount permitted by applicable law. This
paragraph will control all agreements between Mortgagor and Mortgagee.

            Section 5.31 Interest Payable by Mortgagee. Mortgagee shall cause
funds in the Replacement Reserve, the Leasing Reserve and any Cash Security
Deposit, as applicable, (the foregoing, the "Interest Bearing Reserves") to be
deposited into an Eligible Account and invested in Permitted Investments(each as
defined in Exhibit D). All interest earned on amounts Contributed to the
Interest Bearing Reserves shall be retained by Mortgagee and accumulated for the
benefit of and added to the balance in the applicable account and shall be
disbursed for payment of the items for which other funds in the applicable
Reserve or the Cash Security Deposit are to be disbursed.

            Section 5.32 Further Stipulations. The additional covenants,
agreements and provisions set forth in Exhibits C and D attached hereto and made
a part hereof, if any, shall be a part of this Mortgage and shall, in the event
of any conflict between such further stipulations and any of the other
provisions of this Mortgage, be deemed to control.

            Section 5.33 Request for Notice. Mortgagor hereby requests a copy of
any notice of default and any notice of sale hereunder be mailed to Mortgagor at
the address set forth in the first paragraph of this Mortgage and to the
attention of the Asset Director or at such other address or addresses that
Mortgagor may designate pursuant to Section 5.5 hereof with a copy to Reed Smith
LLP, One Liberty Place, Philadelphia, Pennsylvania 19103, Attn: Chairman, Real
Estate Department.

            Section 5.34 Modification of Primary Lease for Expansion of the
Improvements.

      (a) The Lafayette Factory Expansion (as defined in the Primary Lease)
and/or the Additional Improvements (as defined in the Primary Lease) may be
constructed, but only if Mortgagor satisfies all of the provisions of this
Section 5.34 with respect thereto.

      (b) As used herein, "Expansion" shall Mean the Lafayette Factory Expansion
and/or any Additional Improvements, as applicable. As used herein, "Expansion
Work" shall mean any Lafayette Factory Expansion Work (as defined below) and/or
any Additional Improvements Expansion Work (as defined below), as applicable.

                                       76

<PAGE>

      (c) Construction of the Lafayette Factory Expansion. The construction of
the Lafayette Factory Expansion may be performed (and same shall not violate the
provisions of Section 1.16 hereof) so long no site preparation, demolition,
construction, alteration, renovation or other work performed in connection with
the Lafayette Factory Expansion ("Lafayette Factory Expansion Work") shall be
performed unless all of the following conditions are satisfied (in each case as
determined by Mortgagee):

   1. No Event of Default has occurred and is continuing as of the commencement
      of the Lafayette Factory Expansion Work;

   2. Mortgagor shall provide Mortgagee with written notice of the proposed
      Lafayette Factory Expansion not less than 45 days prior to the
      commencement of the proposed Lafayette Factory Expansion Work (a
      "Lafayette Expansion Notice");

   3. Mortgagor shall provide evidence to Mortgagee that the contractor
      performing such work maintains, during any construction, builder's risk
      and other insurance coverage in amounts, with carriers and with
      deductibles as required under Section 1.4 of this Mortgage (which such
      insurance policies shall name Mortgagee as an additional insured and shall
      in all events comply with all of the requirements set forth in Section 1.4
      of this Mortgage with respect to insurance coverages);

   4. Mortgagee must approve, in advance, (i) the plans and specifications for
      the Lafayette Factory Expansion Work (collectively, the "Lafayette Factory
      Expansion Plans"), which approval shall not be unreasonably withheld so
      long as Mortgagee determines that the Lafayette Factory Expansion will not
      have an adverse effect on the use, operation or value of the Property
      and/or the existing Improvements and that the Lafayette Factory Expansion
      will be architecturally harmonious in both material and design with the
      existing Improvements and (ii) the general contract for the Expansion
      Work, and such other items as Mortgagee may reasonably request in
      connection with same, which such approval shall not be unreasonably
      withheld; Mortgagor must deliver to Mortgagee the items required pursuant
      to the foregoing clause not less than twenty (20) days prior to the
      commencement of any Lafayette Factory Expansion work;

   5. Mortgagor shall deliver to Mortgagee evidence reasonably satisfactory to
      Mortgagee that Mortgagor (or Primary Tenant, if Primary tenant shall
      perform the Lafayette Factory Expansion Work) has obtained, or caused to
      be obtained, all necessary governmental approvals and permits in
      connection with the performance of the Lafayette Factory Expansion Work
      pursuant to the Lafayette Factory Expansion Plans;


   6. Mortgagor shall demonstrate to the reasonable satisfaction that Mortgagor
      (or Primary Tenant, if Primary Tenant shall perform the Lafayette Factory
      Expansion Work) has available sufficient funds to pay for all of the
      projected costs of the Lafayette Factory Expansion Work plus a reasonable
      contingency therefor not to exceed 10% of such projected costs. In
      furtherance of the foregoing, Mortgagor (or Primary Tenant, if Primary
      Tenant shall perform the Lafayette Factory Expansion Work) shall be
      required to provide to Mortgagee such security for payment of the cost of
      any such Lafayette Factory Expansion Work as may be reasonably required by
      Mortgagee, which may be in

                                       77
<PAGE>
      the form of (A) a cash deposit or (B) a letter of Credit in form and
      issued by a financial institution acceptable to Mortgagee (and, so long as
      no Event of Default has occurred and is continuing, the amount of such
      security shall be reduced periodically upon Mortgagor's request on a
      prorata basis as the related construction work is completed).

7.    The general contractor shall provide a payment and performance bond in an
      amount not less than the general contract price;

8.    Mortgagor shall provide to Mortgagee evidence reasonably satisfactory to
      Mortgagee that the Lafayette Factory Expansion Work shall not impair the
      use of the Improvements by any Tenant and its respective invitees nor
      shall it impair the use of the on-site parking areas at the Property;

9.    All improvements constructed in connection with the Lafayette Factory
      Expansion Work shall be the property of Mortgagor and shall be subject to
      the lien of this Mortgage;

10.   All of the General Conditions (as defined below) shall be satisfied;
      and

11.   If the Initial Condominium Recording (as defined in Exhibit E hereof) has
      occurred prior to the completion of the Lafayette Factory Expansion Work,
      then upon the completion of the Lafayette Factory Expansion Work,
      Mortgagor shall record (or cause to be recorded) in the Rockingham County
      Registry of Deeds an amendment to the Condominium Declaration (as defined
      in Exhibit E hereof) and the Condominium Site Plan (as defined in
      Exhibit E hereof) (together with the Foss Condominium Exterior Unit Plan
      for Unit 2 (as defined in the Condominium Declaration), which such
      amendment shall add the Lafayette Factory Expansion to Unit 2 of the
      Condominium (as defined in Exhibit E hereof).

      (d) Construction of the Additional Improvements. The construction of
Additional Improvements may be performed (and same shall not violate the
provisions of Section 1.16 hereof) so long no site preparation demolition,
construction, alteration, renovation or other work performed in connection with
the Additional Improvements ("Additional Improvements Expansion Work") shall be
performed unless, all of the following conditions (collectively, the "Additional
Improvements Requirements") are satisfied (in each case as determined by
Mortgagee):

1.    No Event of Default has occurred and is continuing as of the commencement
      of the Additional Improvements Expansion Work;

2.    Mortgagor shall provide Mortgagee with written notice of the proposed
      Additional Improvements (an "Additional Improvements Notice") not less
      than 45 days prior to the commencement of the proposed Additional
      Improvements Expansion Work;

3.    Mortgagor shall provide evidence to Mortgagee that the contractor
      performing such work maintains, during any construction, builder's risk
      and other insurance coverage in amounts, with carriers and with
      deductibles as required under Section 1.4 of this Mortgage (which such
      insurance policies shall name Mortgagee as an additional insured and shall
      in all events comply with all of the requirements set forth in Section 1.4
      of this

                                       78
<PAGE>

      Mortgage with respect to insurance coverages);

4.    Mortgagee most approve, in advance, the plans and specifications for the
      Additional Improvements Expansion Work (collectively, the "Additional
      Improvements Plans"), which approval shall not be unreasonably withheld so
      long as Mortgagee reasonably determines that the Additional Improvements
      will not have an adverse effect on the use, operation or value of the
      Property and/or the existing Improvements, Mortgagor must deliver to
      Mortgagee the items required pursuant to the foregoing clause not less
      than twenty (20) days prior to the commencement of any Additional
      Improvements Expansion Work;

5.    Mortgagor shall deliver to Mortgagee evidence reasonably satisfactory to
      Mortgagee that Mortgagor (or Primary Tenant, if Primary Tenant shall
      perform the Additional Improvements Expansion Work) has obtained, or
      caused to be obtained, all necessary governmental approvals and permits in
      connection with the performance of the Additional Improvements Expansion
      Work pursuant to the Additional Improvements Plans;

6.    Mortgagor shall demonstrate to the reasonable satisfaction of
      Mortgagee that the Mortgagor (or Primary Tenant, if Primary Tenant shall
      perform the Additional Improvements Expansion Work) has available
      sufficient funds to pay for all of the projected costs of the Additional
      Improvements Expansion Work plus a reasonable contingency therefor not to
      exceed 10% of such projected costs. In furtherance of the foregoing,
      Mortgagor (or Primary Tenant, if Primary Tenant shall perform the
      Additional Improvements Expansion Work) shall be required to provide to
      Mortgagee such security for payment of the cost of any such Additional
      Improvements Expansion Work as may be reasonably required by Mortgagee,
      which may be in the form of (A) a cash deposit or (B) a letter of credit
      in form and issued by a financial institution acceptable to Mortgagee
      (and, so long as no Event of Default has occurred and is continuing, the
      amount of such security shall be reduced periodically upon Mortgagor's
      request on a prorata basis as the related construction work is completed;

7.    The general contractor shall provide a payment and performance bond in an
      amount not less than the general contract price;

8.    Mortgagor shall provide to Mortgagee evidence reasonably satisfactory to
      Mortgagee that the Additional Improvements Expansion Work shall not
      impair the use of the on-site parking areas at the Property;

9.    Mortgagor shall provide evidence satisfactory to Mortgagee that the
      Additional Improvements can be constructed without the requirement for any
      modification of the Improvements (except for minor relocations of certain
      parking areas and driveways within the Property, provided that same shall
      in no event decrease the number of parking spaces available for use by the
      Tenants at the Property or adversely affect the vehicular access to or
      within the Property);

10.   In no event shall the Basic Rent (as defined in the Primary Lease) under
      the Primary Lease be reduced below $2,769,250 per annum in connection with
      the construction of the Additional Improvements and/or the release of the
      New Unit (as defined below) from the

                                       79
<PAGE>

      Primary Lease.

11.   Prior to the commencement of any Additional Improvements Expansion Work,
      the Mortgagor shall satisfy all of the provisions set forth on Exhibit E
      annexed hereto (collectively, the "Condominium Provisions");

12.   Prior to the commencement of any Additional Improvements Expansion Work,
      Mortgagee shall have received confirmation in writing from each of the
      Rating Agencies that such Additional Improvements Expansion Work (and any
      related actions in connection therewith) will not result in a
      qualification, downgrade or withdrawal of any rating in effect immediately
      prior thereto for any securities issued in connection with a Secondary
      Market Transaction.

13.   All of the General Conditions (as defined below) shall be satisfied;

14.   Upon the completion of the Additional Improvements, Mortgagor shall record
      (or cause to be recorded) in the Rockingham County Registry of Deeds an
      amendment to the Condominium Declaration (as defined in Exhibit E hereof)
      and the Condominium Site Plan (as defined in Exhibit E hereof (together
      with the foss Condominium Exterior Unit Plan fur Units 4 and 5, as the
      case may be,) (collectively, a "New Unit Amendment"), which such amendment
      shall designate the Additional Improvements as a separate and distinct
      unit under the Condominium (as defined in Exhibit E hereof) (the "New
      Unit") which such New Unit shall be located on either the Unit 4
      Convertible Land (as defined in the Primary Lease) or the Unit 5
      Convertible Land (as defined in the Primary Lease). Upon the acceptance of
      the New Unit Amendment by the Rockingham County Registry of Deeds and the
      final designation of the New Unit under the Condominium, the following
      shall occur in the following order: (i) Mortgagee shall release the lien
      of this Mortgage on the New Unit (the "New Unit Mortgage Release"), (ii)
      Mortgagor shall transfer by deed in form customary in New Hampshire and
      reasonably approved by Mortgagee (the "New Unit Deed"), title to the New
      Unit to a third party (the "New Unit Owner") and (iii) the Primary Lease
      shall be amended to terminate solely with respect to the New Unit. In no
      event shall the New Unit Owner be the Mortgagor.

15.   Mortgagor shall provide Mortgagee with an opinion of counsel to Mortgagor
      to the effect that (i) the Condominium Documents (as defined in Exhibit E
      hereof), as modified by the New Unit Amendment, satisfy all applicable
      governmental requirements, including but but limited to those of the
      Condominium Act (as defined in Exhibit E hereof), and that the New Unit
      Amendment was duly prepared and executed and, where necessary, duly filed
      and recorded, (ii) all requirements of every applicable statute, rule or
      ordinance have been duly satisfied so that the New Unit has been validly
      created and (iii) no filing, registration or other requirements of federal
      or state securities or other law or regulation will be required to ensure
      that the enforceability of the lien of the Mortgage is not adversely
      affected (except for the New Unit Mortgage Release); and

16.   The title insurance policy insuring the lien of the Mortgage shall be
      endorsed to provide affirmative insurance to the effect that (A) the
      Mortgage encumbers all of the interests of Mortgagor in the Condominium
      (including, without limitation, all of the Units other than the New Unit),
      (B) the lien of the Mortgage cannot be impaired nor is any superior lien

                                       80
<PAGE>

      on the Property created by the execution or filing of the New Unit
      Amendment, the New Unit Mortgage Release or the New Unit Deed, and (E) all
      of the Units (including the New Unit) are entitled, by law to be assessed
      for real property taxes as separate parcels.

      (c) General Conditions. The following requirements and conditions
(collectively, the "General Conditions") shall apply to both the Lafayette
Factory Expansion Work and any Additional Improvements Expansion work, all of
which shall be satisfied by Mortgagor (as reasonably determined by Mortgagee):

1.    All Expansion Work shall be performed in a workmanlike manner and in
      compliance with all applicable laws, ordinances codes, rules and
      regulations;

2.    The Expansion Work shall not affect, in any respect, the compliance of the
      Property with any applicable law, ordinance, code, rule or regulation, or
      increase the extent of any existing non-conformity therewith;

3.    With respect to the Expansion Work, Mortgagor provides Mortgagee with (i)
      evidence that the Expansion Work will not have an adverse effect on the
      value of the Property and/or the existing improvements, (ii) evidence that
      the Expansion Work will not have a material adverse effect on the use or
      operation of the Property and/or the existing Improvements, (iii) evidence
      that the Expansion Work will not adversely impact the structural integrity
      of the improvements, (iv) evidence that the proposed Expansion Work has
      been approved (and all applicable building permits issued by all
      applicable governmental authorities;

4.    In no event shall Mortgagor incur any indebtedness in connection with the
      Expansion Work and in no event shall all or any portion of the Property be
      encumbered or subjected to any Lien in connection, with the Expansion
      Work.

5.    Mortgagor and Guarantor must indemnify Mortgagee in connection with any
      loss, cost, expense or liability that Mortgagee may incur arising out of
      the Expansion Work, pursuant to a written instrument reasonably
      satisfactory to Mortgagee.

6.    All of the conditions set forth in the Primary Lease with respect to the
      Expansion Work shall have been satisfied;

7.    Upon completion of the Expansion, the Property shall have available to it
      all necessary Utility and other services for its use, occupancy and
      operation, and adequate, free and unimpeded and unencumbered, access for
      pedestrian and vehicular ingress and egress onto adjacent public roads at
      all such locations as are reasonably necessary for the use, occupancy and
      operation of the Property; and

8.    Upon the completion of the Expansion Work, Mortgagor shall provide or
      cause in be provided to Mortgagee an updated as-built survey of the
      Property.

                                       81
<PAGE>

      (f) Whether the proposed Expansion is the Lafayette Factory Expansion or
any Additional Improvements, Mortgagor shall remit to Mortgagee, together with
Mortgagor's notice of the proposed Expansion, a non-refundable processing fee of
$10,000. In addition, to the foregoing, upon demand from time to time. Mortgagor
shall pay or cause to be paid to Mortgagee all costs and expenses incurred by
Mortgagee in connection with this Section 5.34 (including, without limitation,
all reasonable attorneys' fees and costs and any Rating Agency fees).

            Section 5.35 State Specific Provisions. The following provisions
shall govern and control in the event of a conflict with any other provision of
this Mortgage:

                  (a) Mortgage Covenants. This Mortgage is granted with MORTGAGE
COVENANTS.

                  (b) Statutory Conditions. In addition to all provisions stated
above, this Mortgage is subject to the STATUTORY CONDITIONS.

                  (c) Power of Sale. Upon a breach of this Mortgage, the
Mortgagee shall have, in addition to all other remedies set forth above, the
STATUTORY POWER OF SALE.

                  (d) Maximum Stated Amount. The maximum stated amount secured
by this Mortgage shall include all obligations, costs and expenses set forth in
Sections (1),1.26 and 3.1(e)(i) above, and for the purposes of NH RSA 479:3
shall be $17,000,000.00.

                  (e) No Construction. This is not a construction loan and no
portion of the loan proceeds are being disbursed for constructions purposes.

                  (f) Disclosure of Finance Charges. Pursuant to NH RSA 399-B,
Mortgagor makes the Disclosure of Finance Charges dated of even date herewith.

             [No Further Text on this Page; Signature Page Follows]

                                       82
<PAGE>

      IN WITNESS WHEREOF, Mortgagor has executed this Mortgage as of the day
and year first above written.

                                        FOSS (NH) QRS 16-3, INC.,
                                        a Delaware corporation

                                        By: /s/ Anne R. Coolidge
                                            -------------------------
                                            Name: Anne R. Coolidge
                                            Title: Managing Director

<PAGE>

State of New York

County of New York

This instrument was acknowledged before me on June 30, 2004, by Anne R.
Coolidge, as Managing Director of FOSS (NH) QRS 16-3, INC., a Delaware
corporation.

                                    /s/ Ziad A. Hammodi
                                    --------------------------
                                    Notary Public, State of NY

                                                       ZIAD A. HAMMODI
                                               Notary Public, State of New York
                                                       No. 01HA8028402
                                                 Qualified in New York County
                                             Commission Expires February 1, 2006

                                      A-1
<PAGE>

                                   EXHIBIT A

                               LEGAL DESCRIPTION

TRACT 1- FACTORY PARCEL

      A certain lot of land with building thereon situated on the southerly
sideline of Exeter Road, in the Town of Hampton, County of Rockingham, State of
New Hampshire being bounded and described as follows:

      Beginning at a 1/4" iron pin found (flush) along the southerly sideline of
Exeter Road at the northeast corner of land now or formerly of Gertrude Lougee;
said pin being located S 60 degrees 41' 43" E, 63.12 feet from a 2 foot high
vertical rail found with scribed "X"; thence along said road S 33 degrees 13'
28" E, 45.76 feet to a 1/4" iron pin found 0.1 feet underground at land now or
formerly of Boston & Maine Railroad Corporation; thence along said railroad land
S 29 degrees 33' 53" W, 49.60 feet; thence by said land S 60 58' 12" E, 17.02
feet to a 1/4" iron pin found 0.3 feet underground; thence along said railroad
land the following courses S 29 degrees 43' 00" W, 456.00 feet to an iron pin;
thence N 66 degrees 29 degrees 11' W, 25.10 feet to an iron pin; thence S 29
degrees 43' 00" W, 511.41 feet to an iron pin; thence N 63 degrees 40' 38" W,
10.02 feet to an iron pin; thence S 29 degrees 43' 00" W, 567.00 feet to a point
at land now or formerly of Foss Realty, Inc., said point being located S 65
degrees 17' 04" W, 1.38 feet from a 5" square granite bound found 1 foot high;
thence along said Foss Realty land the following coursed; N 85 degrees 20' 52"
W, 178.57 feet; thence N 84 degrees 51' 21" W, 193.48 feet; thence N 86 degrees
13' 31" W, 64.37 feet; thence N 84 degrees 11' 51" W, 445.12 feet; thence 85
degrees 47' 11" W, 265.51 feet to an iron pin; thence N 86 degrees 50' 11" W,
196.56 feet; thence N 85 degrees 14' 01" W, 194,42 feet to a point on the
easterly right of way sideline to New Hampshire Route 51; said point being
located N 24 degrees 43' 43" W, 210.03 feet from a New Hampshire Highway bound
found; thence, along said sideline northwesterly along a curve concave to the
east having a radius of 5,025.00 feet and a length of 473.52 feet with a Delta
of 5 degrees 23' 57 and Chord/Bearing of 473.35 feet/ N 20 degrees 49' 53" W to
a New Hampshire Highway bound found; thence, by said sideline N 71 degrees 54'
13" E, 25.08 feet to a new Hampshire Highway Bound found: thence along said
sideline northwesterly along a curve concave to the East having a radius of
5,000,00 feet and length of 414.17 feet with a delta of 4 degrees 44' 46" and a
chord/bearing of 414.05 feet, N 15 degrees 45' 32" W to land now or formerly of
the Timberland Company; thence along said land the following courses; S 68
degrees 07' 38 E, 392.53 feet to an iron pin; thence N 25 degrees 12' 59" E,
71.04 feet to an iron pin thence S 78 degrees 21' 41" E, 320.08 feet to a 30
inch red oak with wire; thence S 77 degrees 17' 21" E, 112.59 feet; thence S 77
degrees 42' 11" E 356.23 feet; thence S 78 degrees 17' 21" E, 105.46 feet;
thence S 78 degrees 56' 11" E, 238,90 feet to an iron pin; thence S 8 degrees
36' 31" E, 12.19 feet to an iron pin; thence S 79 degrees 51" 51" E, 216.42
feet; thence S 77 degrees 26' 11" E, 132.37 feet to a road nail in pavement at
the southeast corner of said land of Timberland Company; thence N 24 degrees 09'
08" E, 37.23 feet; thence N 21 degrees 42 08" E, 298.32 feet to a 12 inch spike
set in northeast base of 24 inch white pine with wire at corner of fence; thence
N 68 degrees 25' 32" W, 1,106.86 feet to a 2 inch iron pipe found 1 foot high
thence N 22 degrees 38' 03" E, 241.73 feet to land now or formerly of Gertrude
Lougee; thence along land of said Lougee the following courses: S 64 degrees 03'
04" E, 114.66 feet to a 1/4 inch iron pin set 0.5 feet high with cap at base of
fence post; thense S 64 degrees 03' 04" E, 286.13 feet to a nail set in 30 inch
red oak with barbed wire; thence S 61 degrees 57' 55" E, 190.59 feet to a nail
set in 30 inch beech with barbed wire; thence S 65 degrees 21' 26" E, 426.20
feet to a nail set in 24 inch yellow birch with barbed wire; thence S 66 degrees
14' 16" E, 269.91 feet to a 1/4 inch iron pin with Hislop cap set at base of
fence post; thence S 75 degrees 05' 15" E, 106.48 feet to an iron pin at the
southeast corner of said land now or formerly of Gertrude Lougee; thence N 29
degrees 42' 36" E, 290.07 feet to a t-bar found flush; thence N 29 degrees 42'
37" E, 242.43 feet to the point beginning.

                                        2
<PAGE>

      The above described parcel containing 37.62 acres is more particularly
shown on plan entitled "As Built Land Title Survey" of land owned by Foss
Manufacturing company, Inc., by Knight Hill Land Surveying Services, Inc., dated
July, 1998, and recorded at the Rockingham County Registry of Deeds as Plan
#D-26503.

      Meaning and intending to convey and describe the premises acquired by the
Grantor herein by deed recorded in the Rockingham County Registry of Deeds at
Book 3631, Page 2762.

      The above described property includes the rights granted under a certain
casement granted by the Boston and Maine Corporation described in an casement
deed recorded at the Rockingham County Registry of Deeds at Book 2261, Page 1262
which casement allows for passage under the railroad trestle to gain access from
Lafayette Road to the above described premises as shown on plan #D-26503.

      The above described property also includes the rights granted to Foss
Manufacturing Company, LLC under a certain "Declaration of Reciprocal Easements"
recorded in the Rockingham County Registry of Deeds at Book 3631, Page 2715.

TRACT II - CORPORATE OFFICE

      A certain lot of land with the buildings thereon situated on the westerly
sideline of Lafayette Road, in the Town of Hampton, County of Rockingham and
State of New Hampshire being bounded and described as follows:

      Beginning at a point on the easterly right of way sideline of Boston &
Maine Railroad corp. at the northwest corner of land now or formerly of Joseph F
Lorusso, II; said point being located N 72 degrees 11' 47" W,4.98 feet from a 3
inch iron pipe found 3 feet high; thence N 29 degrees 43' 00" E,220.77 feet to a
point along an access right of way at land now or formerly of Foss Realty, Inc.;
said point being located S 63 degrees 25' 02" E,23.46 feet from a 2 inch iron
pipe found 0.2 feet high; thence, along said Foss Realty land along said right
of way the following courses: S 79 degrees 09' 50"E,105,43 feet, thence S 74
degrees 14' 47" E,92.50 feet; thence S 63 degrees 13' 39" E,63.55 feet to a
railroad spike in pavement at the westerly right of way sideline of Lafayette
Road; thence along said road sideling the following courses: S 24 degrees 37'
14" W, 44.52 feet; thence S 22 degrees 48' 44" W, 96.21 feet; along a curve
concave to the southeast having a radius of 730 feet and length of 40.00 feet
with a delta of 3 degrees 08'22" and chord/bearing of 39.99 feet; S 21 degrees
14'33" W; S 19 degrees 40'14" W, 35.88 feet to an iron pin at land now or
formerly of Joseph J.Lorusso. II; thence, along said land S 73 degrees 27'47"
E,288.26 feet to the point of beginning.

      The above described parcel containing 1.39 acres is more particularly
shown on a plan entitled "As Built Land Title Survey" of land owned by Foss
Manufacturing Company, Inc., by Knight Hill Land Surveying Services, Inc. dated
July 1998 and recorded in the Rockingham County Registry of Deeds as Plan
#D-26503.

      The above premises include the rights granted under a Declaration of
Reciprocal Easements recorded in the Rockingham County Registry of Deeds at Book
3631,Page 2715.

TRACT III - KNOWN AS THE "TIMBERLAND TRACT"

      A certain lot or land with the buildings thereon situated along the
southerly terminus of Merrill Industrial Drive in the Town of Hampton, County of
Rockingham and State of New Hampshire, being bounded and described as follows:

                                        3
<PAGE>
      Beginning at a 1 1/2 inch iron pipe at the southwest corner of land now or
formerly of Foss Manufacturing Company, Inc.; thence along land of said Foss N
22 degrees 38' 03" E,241.73 feet to a brook at the northern most corner of the
herein described lot at land now or formerly of Snap on tools Corporation;
thence westerly along land of Snap On Tools, the terminus of Merrill Industrial
Drive and land now or formerly of Continental Microwave and Tool Company all
along said brook 715 feet +/- to Drakes River at land now or formerly of Towle
Farm Road Riverwalk Condominiums; thence southwesterly along land of said
condominiums and land now or formerly of Elanor Woodman all at Long Drakes Drive
925 feet +/- to Route 51 right of way boundary; thence along said Route 51
boundary southeasterly along a curve concave to the East having a radius of
5,000 feet and a length of 71.78 feet +/- with a delta of 00 degrees 49' 21" and
chord bearing of 71.78 feet S 12 degrees 58' 29" E to a point at land now or
formerly of Foss Manufacturing Company, Inc., said point being located S 62
degrees 08' 47" W,1172,75 feet from the said northernmost lot corner at brook;
thence along said land the following courses: S 68 degrees 07' 38" E,392.53 feet
to an iron pin; thence N 25 degrees 12' 59" E, 71.04 feet to an iron pin; thence
S 88 degrees 21' 41" E, 320.08 feet to a 40" red oak with wire; thence S 77
degrees 17' 21" E, 112.59 feet; thence S 77 degrees 42' 11" E, 356.23 feet;
thence S 78 degrees 17' 21" E, 105.46 feet; thence S 78 degrees 56' 11" E,
238.90 feet, thence S 78 degrees 56' 11" E, 238.90 feet to an pin thence S 08
degrees 36' 31" E, feet to an iron pin; thence S 79 degrees 51' 51" E, 216.42
feet, thence S 77 degrees 26' 11" E, 132,27 feet to a road nail; thence N 24
degrees 09' 08" E , 37.23 feet; thence N 21 degrees 42' 08" E, 298.32 feet to
spike in pine at fence corner at land now or formerly of Foss Realty, Inc.;
thence along said land of Foss Realty, Inc. N 68 degrees 25' 32" W, 1,106.86
feet to the point of beginning.

      The above described parcel containing 23.6 acres is more particularly
shown on a plan entitled "As Built Land Title Survey of Land Owned by Foss
Manufacturing Company, Inc.," by Knight Hill Land Surveying Services, Inc.,
dated July 1998 and recorded at the Rockingham County Registry of Deeds as Plan
#D-26503.

      Also included hereunder is the right of the Grantor, its successors,
assigns, licences, invitees, in common with other s to pass and repass over
Industrial Drive as shown on a plan entitled "Consolidation and Subdivision Plan
of Land, Towle Farm Road Realty Trust" dated May 26, 1982 which plan is recorded
in the Rockingham County Registry of Deeds as Plan #D-11609.

      The above described premises include the rights granted under the
Declaration of reciprocal Easements recorded at the Rockingham County Registry
of Deeds at Book 3631, Page 2715.

TRACK IV-13 ACRE PARCEL

      A certain parcel of land situate on the southwesterly side of Excter
Road, so-called, in the Town of Hampton, County of Rockingham and State of
New Hampshire containing 13.1 acres, and being bounded and the described as
follows:

      Beginning at point on the westerly side of the B & M Railroad tracks,
thence N 75 degrees 05' 15" W for a distance of 106.48 feet to a point; thence N
66 degrees 14' 16" W for a distance of 269.91 feet to a point; thence N 65
degrees 21' 26" W for a distance of 286.13 feet to a point; thence N 64 degrees
03' 04" W for a distance of 114.66 feet to point; thence along a brook along a
survey tie line N 67 degrees 14' 07" E for a distance of 545.48 feet to a
point; thence N 25 degrees 01' 43" W for a distance of 177.73 feet to a point;
thence N 86 degrees 11' 52" E for a distance of 114.96 feet to a point; thence N
84 degrees 06' 16" E for a distance of 151.51 feet to a point; thence N 85
degrees 42' 04" E for a distance of 394.59 feet to a point; thence N 85 degrees
42' 04" E for a distance of 31.13 feet to a point; thence S 29 degrees 46' 48" E
for a distance of 19.18 feet to a point; thence S 29 degrees 46' 48" E for a
distance of 185.55 feet to a point; hence S 83 degrees 58' 50" for a distance of

                                        4
<PAGE>
398.84 feet to a point; thence S 16 degrees 14' 16" E for a distance of 119.07
feet to a point; thence S 87 degrees 20'16" W for a distance of 300 feet to a
point; thence S 22 degrees 33'22" E for a distance of 163.10 feet to a point;
thence S 64 degrees 39'37" E for a distance of 6.35 feet; thence S 84 degrees
34'59" E for a distance of 159.77 feet to a point; thence S 80 degrees 08'44" E
for a distance of 448.88 feet to a point; thence S 53 degrees 51'12" E for a
distance of 168.60 feet to a point; thence N 32 degrees 03'03" E for  a distance
of 212.15 feet to a point; thence N 32 degrees 03'03" E For a distance of 33.74
feet to a point; thence S 28 degrees 30'03" E along Exeter Road for a distance
of 23.93 feet to a point; thence S 33 degrees 48'23" E still along said Exeter
Road for a distance of 46.27 feet to a point; thence S 29 degrees 42'37" W for a
distance of 242.43 feet to a point; thence S 29 degrees 42'36" W for a distance
of 29 degrees.07 feet to the point of beginning.

      Meaning and intending to describe a 13.1 +/- acre tract shown on a plan
entitled "Standard Boundary Survey Plan of Land Owned by Foss Manufacturing
Company, Inc." known as Town of Hampton Tax Map 143, Lot 19.

      This conveyance includes the rights granted under a Declaration of
Reciprocal Easements recorded at the Rockingham County Registry of Deeds as Book
3631, Page 2715.

TRACT V - 21 ACRE TRACT

      A certain tract or parcel of land situated in the Town of Hampton, County
of Rockingham and State of New Hampshire and bounded and described as follows:

      Beginning a point at an iron pipe on the westerly side of the B & M
Railroad tract property, thence N 88 degrees 00'42" W for a distance of 231.38
feet to a point; thence N 88 degrees 22' 36" W for a distance of 20.64 feet to a
point; thence N 87 degrees 37'17" W for a distance of 140.46 feet to a point;
thence N 88 degrees 08' 05" W for a distance of 226.66 feet to a point; thence N
20 degrees 00'00" W for a distance of 178.61 feet to a point; thence N 26
degrees 00'00" W for a distance of 643.37 feet to a point; thence along a curve
with a radius of 5025 feet and a length of 210.05 feet with a delta of 02
degrees 23'42" and chord bearing of 210.03 feet N 240 43'42" W to a point;
thence S 85 degrees 14'01" E for a distance of 194.42 feet to a point; thence S
86 degrees 50'11" E for a distance of 196.56 feet to a point; thence S 85
degrees 47'11" E for a distance of 265.51 feet to a point; thence S 84 degrees
11'51" E for a distance of 445.12 feet to a point; thence S 86 degrees 13'31" E
for a distance of 64.37 feet to a point; thence S 84 degrees 51'21" E for a
distance of 193.48 feet to a point; thence S 85 degrees 20'52" E for a distance
of 178.57 feet to a point; thence S 85 degrees 20'52" E for a distance of 5.51
feet to a point; thence S 29 degrees 43'00" W for a distance of 584.12 feet to a
point; thence along a curve with a radius of 10777 feet and a length of 123.98
feet with a delta of 00 degrees 39'33" and a chord bearing of 123.98 feet S 30
degrees 02'46" W to a point; thence S 22 degrees 44'07" W for a distance of
40.36 feet to a point; thence along a curve with a radius of 10782.68 feet and a
length of 200.52 feet with a delta of 01 degrees 03'56" and a chord bearing of
200.52 feet S 31 degrees 12'04" W to the point beginning.

      Meaning and intending to describe a certain "21 acre tract" shown as Tax
Map 175, Lot on a plan for Foss Manufacturing Company, Inc. recorded at the
Rockingham County Registry of Deeds as Plan #D26503, sheet 2 of 3.

Subject to and with the benefit of a Declaration of Reciprocal Easements
recorded at the Rockingam County Registry of Deeds at Book 3631, Page 2715.

                                        5
<PAGE>
                                   EXHIBIT B

                             MORTGAGOR'S CERTIFICATE

The undersigned is the ________ of FOSS (NH) QRS 16-3, INC., a Delaware
corporation (collectively, "Mortgagor") and has made due investigation as to the
matters hereinafter set forth and does hereby certify the following to induce
CIBC Inc. ("Mortgagee") to advance the aggregate sum of $____________ (the
"Disbursement") [from the Replacement Reserve or Leasing Reserve or Repair and
Remediation Reserve] to Mortgagor pursuant to the terms of that certain Mortgage
and Rents, Security Agreement, dated as of___________________ _________, 2004,
from Mortgagor to the trustee thereunder for the benefit of Mortgagee (together
with any amendments, modifications, supplements and replacements thereof or
therefore the 'Mortgage'), pursuant to that certain Disbursement request
dated _____________________ which is being submitted to Mortgagee. (Capitalized
terms used and not otherwise define shall have the respective meanings given to
them in due Mortgage.)

            1. No default beyond any applicable notice and/or grace period
exists under the Mortgage or under any of the other Loan Documents.

            2. The [Repairs, Deferred Maintenance or Leasing Costs] relative do
the Disbursement have been delivered or provided to Mortgagor and are properly,
completely and permanently installed on or about the Property or otherwise
properly completed, as applicable.

            3. All of the statements invoice, receipts and information delivered
in connection with the Disbursement request being submitted to Mortgagee in
connection herewith are true and correct as of the date hereof, and the amount
requested in said Disbursement request accurately reflects the precise amounts
due and payable during the period covered by such Disbursement request. All of
the funds to be received pursuant to such Disbursement request shall be used
solely for the purpose of reimbursing Mortgagor for items previously paid.

            4. Nothing has occurred subsequent to the date of the Mortgage which
has or may result in the creation of any lien, charge or encumbrance upon the
Land or the Improvements or any part thereof, or anything affixed thereto or
used in connection therewith, or which has or may substantially and adversely
impair the ability of Mortgagor to make any payments of principal and interest
on the Note or the ability of Mortgagor to meet its obligations under the
Mortgage.

            5. None of the labor, materials, overhead or other items of expense
specified in the Disbursement request submitted herewith has previously been
the basis of any Disbursement request by Mortgagor or any payment by Mortgagee
and, when added to all sums previously disbursed by Mortgagee on account of the
[Repairs, Deferred Maintenance or Leasing Costs], do not exceed the costs of all
[Repairs, Deferred Maintenance or Leasing Costs] services completed, installed
and/or delivered, as applicable, to the date of that certificate.

            6. The amount remaining in the [Account] allocated to the payment of
items on the [Repairs, Deferred Maintenance or Leasing Costs] will be sufficient
in Mortgagor's

                                       B-1
<PAGE>

reasonable estimation to pay in full the entire remaining cost of [Repairs,
Deferred Maintenance or Leasing Costs] required to be completed in accordance
with the Mortgage.

            7. All work required permits and approvals required to complete the
work which work is now in process or was previously completed have been
obtained.

            8. All conditions to the Disbursement to be made in accordance with
the disbursement request submitted herewith have been met in accordance with the
terms of the Mortgage.

                                              By:_______________________________

                                       B-2
<PAGE>

                                    EXHIBIT C

                             ADDITIONAL STIPULATIONS

            1. Repair and Remediation Reserve. Prior to the execution of this
Mortgage, Mortgagee has caused the Property to be inspected and such inspection
has revealed that the Property is in need of certain maintenance, repairs and/or
remedial or corrective work. Contemporaneously with the execution hereof,
Mortgagor has established with the Mortgagee a reserve (the "REPAIR AND
REMEDIATION RESERVE"). On the date hereof, Mortgagor shall pay to Mortgagee for
deposit in the Repair and Remediation Reserve an amount equal to $15,312.50.
Mortgagor shall cause (or cause Primary Tenant to cause) each of the items
described, in Exhibit C-1 attached hereto and made a part hereof (the "DEFERRED
MAINTENANCE") to be completed, performed, remediated and corrected to the
satisfaction of Mortgagee and as necessary to bring the Property into compliance
with all applicable laws, ordinances, rules and regulations on or before the
number of days specified next to each item described in Exhibit C-2 attached
hereto and made a part hereof, as such time period may be extended by Mortgagee
in its sole discretion. So long as no Event of Default hereunder or under the
other Loan Documents has occurred and is continuing, all sums in the Repair and
Remediation Reserve shall be held by Mortgagee in the Repair and Remediation
Reserve to pay the costs and expenses of completing the Deferred Maintenance. So
long as no Event of Default hereunder, and no default under any of the other
Loan Documents, has occurred and is continuing, Mortgagee shall to the extent
funds are available for such purpose in the Repair and Remediation Reserve,
disburse to Mortgagor the amount paid or incurred by Mortgagor or Primary Tenant
in completing, performing, remediating or correcting the Deferred Maintenance
upon (a) the receipt by Mortgagee of a written request from Mortgagor for
disbursement from the Repair and Remediation Reserve and a certification by
Mortgagor in the form annexed hereto as Exhibit B that the applicable item of
Deferred Maintenance has been completed in accordance with the terms of this
Mortgage, (b) delivery to Mortgagee of invoices, receipts or other evidence
reasonably satisfactory to Mortgagee verifying the costs of the Deferred
Maintenance to be reimbursed, (c) delivery to Mortgagee of a certification from
an inspecting architect, engineer or other consultant reasonably acceptable to
Mortgagee describing the completed work, verifying the completion of the work
and the value of the completed work and, if applicable, certifying that the
Property is, as a result of such work, in compliance with all applicable laws,
ordinances rules and regulations relating to the Deferred Maintenance so
performed, (d) delivery to Mortgagee of evidence reasonably satisfactory to
Mortgagee showing that all materialmen, laborers, subcontractors and any other
parties who might or could claim statutory or common law liens and are
furnishing or have furnished materials or labor to the Property have been paid
all amounts due for such labor and materials furnished to the Property, and (e)
the receipt by Mortgagee of an administrative fee in the amount of $150.00.
Mortgagee shall not be required, to make advances from the Repair and
Remediation Reserve more frequently than once in any thirty (30) day period. In
making any payment from the Repair and Remediation Reserve, Mortgagee shall be
entitled to rely on such request from Mortgagor or without any inquiry into the
accuracy, validity or contestability of any such amount. Mortgagor hereby grants
to Mortgagee, as additional security for payment of the indebtedness secured
hereby, a security interest in the Repair and Remediation Reserve. In no event
may Mortgagor be entitled to reimbursement of any costs, with respect to each
item of

                                       C-1
<PAGE>

Deferred Maintenance in excess of the applicable amount set forth in Exhibit C-1
attached hereto and made part hereof. The Repair and Remediation Reserve shall
not, unless otherwise explicitly required by applicable law, be or be deemed to
escrow or trust funds, but at Mortgagee's option and in Mortgagee's discretion,
may either be held in a separate account or be commingled by Mortgagee with the
general funds of Mortgagee. No interest on the funds contained in the Repair and
Remediation Reserve shall be paid by Mortgagee to Mortgagor. The Repair, and
Remediation Reserve is solely for the protection of Mortgagee and entails no
responsibility on Mortgagee's part beyond the payment of the costs and expenses
described in this paragraph in accordance with the terms hereof and beyond the
allowing of due credit for the sums actually received. In the event that the
amounts on deposit or available in the Repair and Remediation Reserve are
inadequate to pay the costs of the Deferred Maintenance, Mortgagor shall pay the
amount of such deficiency. Upon assignment of this Mortgage by Mortgagee and
assumption by the assignee of the Mortgagee's obligations hereunder, any funds
in the Repair and Remediation Reserve shall be turned over to the assignee and
any responsibility of Mortgagee, as assignor, with respect thereto shall
terminate. Upon an event of Default, Mortgagee may, but shall not be obligated
to, apply at any time the balance then remaining in the Repair and Remediation
Reserve against the indebtedness secured hereby in whatever order Mortgagee
shall subjectively determine. No such application of the Repair and Remediation
Reserve shall be deemed to cure any Default hereunder. Mortgagor hereby grants
to Mortgagee a power-of-attorney, coupled with an interest, to cause the
Deferred Maintenance to be completed, performed, remediated and corrected to the
satisfaction of Mortgagee upon 30 days notice to Mortgagor following Mortgagor's
failure to do so in accordance with the terms and conditions of this Mortgage
(provided that no such notice shall be required during the existence of an Event
of Default or if Mortgagee determines that its security hereunder is
threatened), and to apply the amounts on deposit in the Repair and Remediation
Reserve to the costs associated therewith, all as Mortgagee may determine in its
sole and absolute discretion but without obligation to do so. Upon the earlier
to occur of full payment of the indebtedness secured hereby in accordance with
its terms, the completion of the Deferred Maintenance to the reasonable
satisfaction of the Mortgagee or at such earlier time as Mortgagee may elect,
the balance of the Repair and Remediation reserve then in Mortgagee's possession
shall be paid over to Mortgagor and no other party shall have any right or claim
thereto.

            2. Leasing Reserve. As additional security for the indebtedness
secured hereby, Mortgagor shall establish a reserve (the "Leasing Reserve") with
Mortgagee for payment of leasing commissions and tenant improvement costs and
expenses incurred by Mortgagor in connection with re-leasing the Property
pursuant to Leases approved, or deemed approved, by Mortgagee (collectively, the
"Leasing Costs"). The Leasing Reserve shall be funded, if at all, as set forth
in Section 1.12(h) of this Mortgage. So long as no Event of Default hereunder
has occurred and is continuing, all sums in the Leasing Reserve shall be held by
Mortgagee to pay Leasing Costs. Additionally, so long as no Event of Default
hereunder has occurred and is continuing, Mortgagee shall, to the extent funds
are available for such purpose in the Leasing Reserve, disburse to Mortgagor the
amount paid or incurred by Mortgagor in performing such Leasing Costs within
five (5) business days following: (a) the receipt by Mortgagee of a written
request from Mortgagor for disbursement from the Leasing Reserve and a
certification by Mortgagor that (i) for Leasing Costs consisting of commissions
payable to brokers not affiliated

                                       C-2
<PAGE>

with Mortgagor and at a rate not greater than the then current market rate, such
leasing commission has been paid by Mortgagor, and (ii) for Leasing Costs
consisting of amounts required to be expended pursuant to the relevant Lease
for tenant improvement or related costs, said Leasing Costs have been incurred
and the tenant under such Lease has taken possession of its demised premises and
begun to pay rent under its Lease, (b) the delivery to Mortgagee of invoices,
receipts or other evidence satisfactory to Mortgagee verifying the cost of such
Leasing Costs; (c) for disbursement requests in excess of $10,000.00, the
delivery to Mortgagee of affidavits, lien waivers or other evidence reasonably
satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors
and any other parties who might or could claim statutory or common law liens and
are furnishing or have furnished material or labor to the property have been
paid (or will be paid out of such disbursement all amounts due for labor and
materials furnished to the Property; (d) for disbursement requests in excess of
$10,000.00 other than with respect to leasing commissions), delivery to
Mortgagee of a certification from an inspecting architect or other third party
acceptable to Mortgagee describing the completed tenant improvement or other
work, and verifying the completion and the value thereof; (e) for disbursement
request in excess of $10,000.00 (other than with respect to leasing
commissions), delivery to Mortgagee of a new certificate of occupancy for the
portion of the Improvements covered by such Lease, if said new certificate of
occupancy was required by law, or a certification by Mortgagor that no new
certificate of occupancy was required and (f) the receipt by Mortgagee of an
administrative fee in the amount of $150.00. In making any payment from the
Leasing Reserve, Mortgagee shall be entitled to rely on such request from
Mortgagor without any inquiry into the accuracy, validity or contestability of
any such amount. The Leasing Reserve shall not, unless otherwise explicitly
required by applicable law, be or be deemed to be escrow or trust funds, but, at
Mortgagee's option and in Mortgagee's discretion, may either be held in a
separate account or be commingled by Mortgagee with the general funds of
Mortgagee. The Leasing Reserve is solely for the protection of Mortgagee and
entails no responsibility on Mortgagee's part beyond the payment of the costs
and expenses described in this paragraph in accordance with the terms hereof and
beyond the allowing of due credit for the sums actually received. In the event
that the amounts on deposit or available in the Leasing Reserve are inadequate
to pay Leasing Costs in connection with any Lease, Mortgagor shall pay the
amount of such deficiency. Upon assignment of this Mortgage by Mortgagee, any
funds in the Leasing Reserve shall be turned over to the assignee and any
responsibility of Mortgagee, as assignor, with respect thereto shall terminate.
Upon an Event of Default, Mortgagee may, but shall not be obligated to, apply at
any time the balance then remaining in the Leasing Reserve against the
indebtedness secured hereby in whatever order Mortgagee shall subjectively
determine. No such application of the Leasing Reserve shall be deemed to cure
any Default hereunder. Upon the full payment of the indebtedness secured hereby
in accordance with its terms or at such earlier time as Mortgagee may elect, the
balance of the Leasing Reserve then in Mortgagee's possession shall be paid over
to Mortgagor and no other party shall have any right or claim thereto.

            3. Environmental Reserve. Prior to the execution of this Mortgage,
Mortgagee has caused the Property to be inspected and such inspection has
revealed that the Property is in need of certain environmental remediation.
Contemporaneously with the execution hereof; Mortgagor has established with the
Mortgagee a reserve for such environmental remediation (the "ENVIRONMENTAL
RESERVE") in the amount of $33,600.

                                       C-3
<PAGE>

Mortgagor shall cause (or cause Primary Tenant to cause) each of the items
described in Exhibit C-3 attached hereto and made a part hereof (the
"ENVIRONMENTAL REMEDIATION") to be completed, performed, remediated and
corrected to the satisfaction of Mortgagee and as necessary to bring the
Property into compliance with all applicable laws, ordinances, rules and
regulations. Mortgagor shall diligently undertake and pursue to completion (or
cause Primary Tenant to diligently undertake and pursue to completion) the
Environmental Remediation. Mortgagee shall have the right to inspect the work
from time to time, at Mortgagor's expense, to insure that the work is being
completed in a good and workmanlike manner.

      So long as no Event of Default hereunder or under the other Loan Documents
has occurred and is continuing, all sums in the Environmental Reserve shall be
held by Mortgagee in the Environmental Reserve to pay the costs and expenses of
completing the Environmental Remediation. So long as no default hereunder or
under the other Loan Documents has occurred and is continuing, Mortgagee shall,
to the extent funds are available for such purpose in the Environmental Reserve,
disburse to Mortgagor the amount paid or incurred by Mortgagor in completing,
performing, remediating or correcting the Environmental Remediation upon (a) the
receipt by Mortgagee of a written request from Mortgagor for disbursement from
the Environmental Reserve and a certification by Mortgagor in the form annexed
hereto as Exhibit B that the applicable item of Environmental Remediation has
been completed in accordance with the terms of this Mortgage, (b) delivery to
Mortgagee of invoices, receipts or other evidence reasonably satisfactory to
Mortgagee verifying the costs of the Environmental Remediation to be reimbursed,
(c) delivery to Mortgagee of a certification from an inspecting environmental
engineer or other consultant reasonably acceptable to Mortgagee describing the
completed work, verifying the completion of the work and, if applicable,
certifying that the Property is, as a result of such work, in compliance with
all applicable laws, ordinances rules and regulations relating to the
Environmental Remediation so performed, and (d) delivery to Mortgagee of
evidence reasonably satisfactory to Mortgagee showing that all materialmen,
laborers, subcontractors and any other parties who might or could claim
statutory or common law liens and are furnishing or have furnished materials or
labor to the Property have been paid all amounts due for such labor and
materials furnished to the Property. Mortgagee shall not be required to make
advances from the Environmental Reserve more frequently than once in any thirty
(30) day period. In making any payment from the Environmental Reserve, Mortgagee
shall be entitled to rely on such request from Mortgagor without any inquiry
into the accuracy, validity or contestability of any such amount.

            Mortgagor hereby grants to Mortgagee, as additional security for
payment of the indebtedness secured hereby, a security interest in the
Environmental Reserve. In no event may Mortgagor be entitled to reimbursement of
any costs with respect to each item of Environmental Remediation in excess of
the applicable amount determined by Mortgagee. No interest on the funds
contained in the Environmental Reserve shall be paid by Mortgagee to mortgagor.
Mortgagor hereby grants to Mortgagee a power-of-attorney, coupled with an
interest, to cause the Environmental Remediation to be completed, performed,
remediated and corrected to the satisfaction of Mortgagee upon Mortgagor's
failure to do so in accordance with the terms and conditions of this Mortgage,
and to apply the amounts on deposit in the Environmental Reserve

                                       C-4
<PAGE>

to the costs associated therewith, all as Mortgagee may determine in its sole
and absolute discretion but without obligation to do so.

                                       C-5
<PAGE>

                                   EXHIBIT C-1

                       LIST OF DEFERRED MAINTENANCE ITEMS

<TABLE>
<S>                                                                                         <C>
Install nine (9) ADA compliant parking spaces with two meeting van accessible requirements  $   2,250.00

Remediation of Fire Code violations - (see Exhibit C-2 hereof for itemized descriptions)    $  10,000.00

SUBTOTAL                                                                                    $  12,250.00

Plus 25% Contingency                                                                        $   3,062.50

TOTAL                                                                                       $  15,312.50
</TABLE>

                                       C-1
<PAGE>

                              EXHIBIT C-2

TIME FOR COMPLIANCE WITH PARKING

1. Installation of nine (9) ADA compliant parking spaces with two meeting van
accessible requirements - 30 days.

TIME FOR COMPLIANCE WITH FIRE CODE VIOLATIONS

      1.    Enlist an engineer/company to bring sprinkler systems to code and
            copy Hampton Fire/Rescue Department ("HFD") on plans. Correct
            deficiency in fire sprinkler coverage under the mezzanines in the
            generator room, in the Baler City mezzanine levels, on the Spin City
            1 and 2 mezzanine levels and in the Coating Line tank area. 90 days.

(390 Lafayette)

      2.    Activate in-rack sprinklers in phase 6. 30 days.

(11 Merrill)

      3.    Copy of a report or letter from sprinkler engineer, certifying that
            the change from hoses to stand pipes with caps still meets code. If
            not, make corrections, 30 days.

(390 Lafayette)

      4.    Copy of the phase 6 fire pump test for prior year. 30 days.

(11 Merrill)

      5.    New fire alarm system test report. 30 days.

(All Three buildings)

      6.    Maintain fire extinguisher coverage and upkeep. Correct any signs,
            hangers, etc. 30 days.

(All Three buildings)

      7.    Remove or secure stray propane and other tanks on platform near
            fuel cage. 30 days.

(390 Lafayette)

      8.    Decrease number of pallets out back, to avoid narrowing of road and
            presenting high fire hazard. 30 days.

(Behind 390 Lafayette)

                                       C-2
<PAGE>

      9.    Provide protection for tanks, and restrictions on where used (Not
            comfortable with in-plant use of propane tanks/guns). 30 days.

(Majority 390 Lafayette, some in 11 Merrill)

      10.   Correct sprinkler connection blocked near vehicle shop. 30 days.

(390 Lafayette)

      11. Provide HFD with an updated copy of Emergency Response Plan. 60 days.

(All Three buildings)

      12.   Send a written report of fires that do not involve a response from
            HFD. 30 days. (All Three buildings)

      13.   Make sure they all Exit Doors swing open with one motion to a full
            90 degrees without obstruction, and with minimal effort (15 ft. Ibs
            or lsss). 30 days.

(All Three buildings)

      14.   Correct malfunction in fire alarm panel in phase 6. (There were some
            malfunctions noted on day of inspection. "Trouble" was indicated in
            some office devices. No trouble was indicated for tamper switch on a
            riser with a closed valve). 30 days.

(11 Merrill)

                                       C-3
<PAGE>

                                   EXHIBIT C-3

                    LIST OF ENVIRONMENTAL REMEDIATION ITEMS

<TABLE>
<S>                                                                                <C>
Perform and complete the on-going groundwater remediation at the Property and
obtain a "No Further Action" letter from the New Hampshire Department of
Environmental Services ("NHDES") with respect thereto.                             $ 16,800

SUBTOTAL                                                                           $ 16,800

Plus 100% Contingency                                                              $ 16,800

TOTAL                                                                              $ 33,600
</TABLE>

                                       C-4
<PAGE>

                                    EXHIBIT D

                   ELIGIBLE ACCOUNT AND PERMITTED INVESTMENTS

            "Eligible Account" shall mean either (i) an account or accounts
maintained with an Eligible Bank or (ii) a Trust Account.

            "Eligible Bank" shall mean a bank that (i) satisfies the Rating
Criteria and (ii) insures the deposits hereunder through the Federal Deposit
Insurance Corporation.

            "Person" shall mean any individual, sole proprietorship,
partnership, limited liability partnership, joint venture, trust, unincorporated
organization, association, corporation, limited liability company, institution,
entity, party or government (whether territorial, national, federal, state,
county, city, municipal or otherwise including, without limitation, any
instrumentality, division, agency, body or department thereof).

            "Permitted Investments" shall mean the following:

            (a) direct debt obligations of, and debt obligations fully
guaranteed as to timely payment of principal and interest by, the United States,
or any agency or instrumentality thereof, provided such obligations are backed
by the full faith and credit of the United States;

            (b) direct debt obligations of, and debt obligations fully
guaranteed as to timely payment of principal and interest by
government-sponsored corporations and agencies of the United States, whether or
not backed by the full faith and credit of the United States, limited to debt
obligations of Federal Home Loan Mortgage Corporation, Federal National
Mortgage Association, Student Loan Marketing Association, Financing Corp. (FICO)
and Resolution Funding Corp, (REFCORP) and Consolidated Systemwide Bonds and
Notes of the Farm Credit System and Consolidated Debt Obligations of the Federal
Home Loan Banks;

            (c) commercial paper of a Depository Institution (as defined below)
or other corporation organized under the law of the United States or any state
thereof which commercial paper is then rated at least "A-1 +" (or an equivalent
rating) by the Rating Agencies;

            (d) unsecured certificates of deposit, time deposit, federal funds
or bankers' acceptances issued by any Depository Institution, provided that the
short-term unsecured debt obligations of such Depository Institution (or in the
case of the principal Depository Institution in a holding company system, the
short-term unsecured debt obligations, of such holding company) are rated at
least "A-1+" (or an equivalent rating) by the Rating Agencies;

            (e) demand and time deposits of any Depository Institution which
deposits are fully insured by the Federal Deposit Insurance Corporation;

            (f) repurchase obligations with respect to any security described in
clauses (a) and (b) of this definition and entered into with a Depository
Institution (acting as principal) described in clause (d) above;

                                       D-1
<PAGE>

            (g) debt obligations (other than stripped bonds or stripped coupons)
bearing interest or sold at a discount and issued by any corporation
incorporated under the laws of the United States or any state thereof the
long-term unsecured debt obligations of which are rated at least "AAA" (or an
equivalent rating by the Rating Agencies;

            (h) money market funds rated "AAAm" or "AAAm-G" (or an equivalent
rating) by the Rating Agencies;

            (i) principal-only strips and interest-only strips in respect of
non-callable obligations issued by the United States Treasury;

            (j) Resolution Funding Corp. (REFCORP) securities stripped by the
Federal Reserve Bank of New York; and

            (k) commercial paper, federal funds, unsecured certificates of
deposit, time deposits, banker's acceptances and repurchase agreements with
respect to any security described in clauses (a) and (b) of definition issued
by, or entered into with, any Depository Institution and commercial paper and
repurchase agreements with respect to any security described in clauses (a) and
(b) of this definition of any corporation incorporated under the laws of the
United States or any state thereof, provided that (i) the short-term unsecured
debt obligations of such Depository Institution (or in the case of the principal
Depository Institution in a holding company system, the short-term unsecured
debt obligations of such holding company) or corporation are rated "A-1+" (or an
equivalent rating) by the Rating Agencies, (ii) the term to maturity of such
instruments is thirty (30) days or less and (iii) investments in such
instruments at any time do not exceed twenty percent (20%) or more of the
outstanding principal amount of the Notes.

            Unless otherwise specified herein, (i) any such. Permitted
Investment must be available for withdrawal without penalty and must mature no
later than the Business day immediately preceding the date upon which the funds
are required to be disbursed; (ii) no such instrument shall have a remaining
term to maturity in excess of three hundred sixty-six (366) days, (iii) no such
instrument set forth above (other than the instrument described in clauses (i)
and (j) of this definition shall constitute a Permitted Investment if such
instrument evidences a right to receive only interest payments with respects to
the obligations underlying such instrument; (iv) in the case of any instrument
rated by the Rating Agencies, the "r" highlighter shall not be affixed to such
rating and, in the case of any instrument not rated by the Rating Agencies, if
the instrument were to be rated by the Rating Agencies, the "r" highlighter
would not be affixed by the Rating Agencies to such rating; (v) such instrument
(other than interest-only strips described in clauses (i) and (j) of this
definition) shall provide for a predetermined fixed dollar payment of principal
that cannot vary or change; (vi) if such instrument bears interest , no such
instrument shall provide for either a fixed rate of interest or a variable rate
of interest tied to a single index plus a fixed spread, if any, which variable
rate of interest moves proportionately with such index; (vii) no instrument
constitute a "Mortgage-backed" security and (viii) such Permitted Investment
must be expressly permitted

                                       D-2
<PAGE>
under the pooling and servicing agreement between Mortgagee and the servicer
applicable to this Loan.

            A "Depository Institution" means any depository institution or trust
company incorporated under the laws of the United States or any state thereof
and subject to supervision and examination by federal or state banking
authorities.

            "Rating Criteria" with respect to any Person, shall mean that (i)the
short-term unsecured debt obligations of such Person are rated at least "A-1" by
S&P, P-l by Moody's Investors Service, Inc., and F-1+ by Fitch Investors
Services, L.P., if deposits are held in the account for a period of less than 30
days, or (ii) the long-term unsecured debt obligations of such Person are rated
at least "AA-" by S&P and Fitch and Aa by Moody's and, if deposits are held in
the account for a period of 30 days or more.

            "Trust Account" shall mean a segregated trust account maintained by
a corporate trust department of a federal depository institution or a state
chartered depository institution subject to regulations regarding fiduciary
funds an deposit similar to Title 12 of the Code of Federal Regulations Section
9.10(B) which has corporate trust powers and is acting in its fiduciary
capacity.

                                       D-3
<PAGE>

                                    EXHIBIT E

                          FUTURE CONDOMINIUM PROVISIONS

1.    As used herein, "Condominium" shall mean the commercial condominium REGIME
      created pursuant to the Condominium Declaration.

2.    As used herein, "Condominium Act" shall mean N.H.R.S.A. 356-B and all
      amendments, modification or replacements thereof or regulations with
      respect thereto now or hereafter enacted or promulgated.

3.    As used herein, "Condominium Declaration" shall have the meaning Set forth
      in the Primary Lease.

4.    As used herein, "Bylaws" shall have the meaning set forth in the Primary
      Lease.

5.    As used herein, "Condominium Site Plan" shall have the meaning set forth
      in the Primary Lease.

6.    As used herein, "Condominium Documents" shall mean all documents required
      by the Condominium Act and otherwise, relating in whole or in part to (A)
      the establishment of the Property as a condominium in accordance with the
      Condominium Declaration, the Condominium Site Plan and the Foss
      Condominium Exterior Unit Plan(s) and (B) the regulation, management or
      administration of the Condominium. The Condominium Documents shall include
      (i) the Condominium Declaration, Condominium Site Plan and the Bylaws, all
      of which shall be in the form attached to the Primary Lease with only such
      modifications as are approved by Mortgagee in writing and (ii) such other
      documents related thereto as approved in writing by Mortgagee.

7.    As used herein, "Mortgage Subordination" shall mean the subordination of
      the lien of the Mortgage to the Condominium Declaration.

8.    In no event shall the Condominium declaration, the Condominium Site Plan
      or any other Condominium Document be recorded, and in no event shall
      Mortgagor grant the Mortgage Subordination, unless all of the following
      conditions are satisfied (the "Initial Condominium Requirements"):

      a. No Default or Event of Default shall have occurred and be continuing.

      b. Mortgagor shall have provided to Mortgagee the Lafayette Expansion
notice or the Additional Improvements Notice.

      c. Mortgagee shall have received confirmation in writing from each of the
Rating Agencies that the conversion of the Property to a condominium form of
ownership (and any related actions in connection therewith) will not result in a
qualifications, downgrade or withdrawal of any rating in effect immediately
prior thereto for any securities issued in connection with a Secondary Market
Transaction.

<PAGE>

      d. Mortgagor shall provide Mortgagee all of the following; which shall be
satisfactory in form and substance to Mortgagee in its discretion:

            (i) The Condominium Documents (it being acknowledged that the
Condominium Declaration, the Condominium Site Plan and the Bylaws shall be in
the form attached to the Primary Lease with only such modifications is are
approved by Mortgagee in writing);

            (ii) A conditional assignment of the declarant's rights under the
Declaration;

            (iii) Conditional letters of resignation in favor of Mortgagee from
all the directors and officers of the Association appointed by or elected by or
representing or controlled by Mortgagor or Guarantor or any of their respective
affiliates (the "Conditional Resignation Letters");

            (iv) An opinion of counsel to Mortgagor to the effect that (i) the
Condominium Documents satisfy all applicable governmental requirements,
including but not limited to those of the Condominium Act, and were duly
executed, (ii) no filing, registration or other requirements of federal or state
securities or other law or regulation will be required to ensure that the
enforceability of the lien of the Mortgage is not adversely affected (except for
subordination to the Condominium Declaration), and (iii) the assignment, letters
and agreements referred to in subparagraphs (ii) and (iii) of this Section (d)
have each been duly authorized, executed and delivered by the respective parties
thereto and are enforceable against said parties in accordance with their
respective terms; and

            (v) The title insurance insurer which provided the policy insuring
the lien of the Mortgage (the "Title Insurer") shall have provided Mortgagee
with a commitment to endorse such policy immediately following the Initial
Condominium Recording with an endorsement (the "Condo Endorsement") to provide
affirmative insurance to the effect that (A) the Mortgage encumbers all of the
interests of Mortgagor in the Condominium, (B) the lien of the Mortgage cannot
be impaired nor is any superior lien on the Property created by any of the
Condominium Documents, (C) the Mortgage Subordination will not affect the lien
of the Mortgage, (D) the Property is part of a condominium validity created
under the Condominium Act, and (E) the Units (us defined below) are entitled by
law to be assessed for real property taxes as separate parcels.

            Immediately following the Initial Condominium Recording, Mortgagor
shall cause the Title Insurer to issue the Condo Endorsement to Mortgagee.

9.    Upon the satisfaction of all of the Initial Condominium Requirements and
      prior to the commencement of the construction of any Additional
      Improvements, Mortgagor shall cause the Condominium Declaration and the
      Condominium Site Plan to be recorded in the Rockingham County Registry of
      Deeds (the "Initial Condominium Recording") in compliance with all
      applicable, laws and legal requirements with respect thereto. Mortgagor
      shall be responsible for the recordation of Condominium Declaration and
      the Condominium Site Plan (any and other documents approved by Mortgagee
      and necessary for the lawful creation of the Condominium) and the
      compliance therewith with all

                                       E-4
<PAGE>

      applicable laws and legal requirements, and Mortgagee shall have no
      obligations with respect thereto.

10.   The Mortgage Subordination shall be executed by Mortgagee and delivered to
      Mortgagor contemporaneously with the Initial Condominium Recording.

11    Upon the Initial Condominium Recording, this Mortgage shall constitute a
      first lien on all units (the "Units") of the Condominium together with
      appurtenant parking spaces and undivided percentage interests in and to
      the Common Areas (as defined in the Declaration), and all other rights,
      titles and hereditaments attributable to the Units. Mortgagor shall
      execute any and all documents and take any and all actions reasonably
      required or requested by Mortgagee in furtherance of the foregoing and to
      ensure that this Mortgage constitutes a first lien on all of the Units
      together with appurtenant parking spaces and undivided percentage
      interests in and to the Common Areas, and all other rights, titles and
      hereditaments attributable to the Units.

12.   Prior to the Initial Condominium Recording, Mortgagor shall cause the Unit
      owners, association (the "Association") to provide Mortgagee with an
      estoppel certificate (a "Condominium Estoppel") confirming that Mortgagee
      shall be recognized as a first mortgagee and shall be entitled to all
      rights under the Declaration and the Bylaws of a first mortgagee, together
      with such other information and assurances as Mortgagee shall reasonably
      require. Upon request from time to time by Mortgagee subsequent to the
      Initial Condominium Recordation, Mortgagor shall cause the Association to
      provide additional Condominium Estoppels to Mortgagee within 10 business
      days of Mortgagee's request therefore.

13.   At all times during the existence of the Condominium, Mortgagor shall own
      not less than 51% of the undivided interests in the Common Areas. At all
      times during the existence of the Condominium, officers of Mortgagor shall
      comprise a majority of the Board of Directors of the Condominium and
      Mortgagee shall be entitled to succeed to such director positions pursuant
      to the Conditional Resignation Letters.

14.   From and after the Initial Condominium Recording, the insurance required
      to be maintained pursuant to Section 1.4 of this Mortgage shall either be
      maintained by the Mortgagor or the Primary Tenant as set forth in Section
      1.4 or shall be maintained for the Condominium by the Association. In the
      event that any such insurance is maintained by the Association, the
      following provisions shall apply:

            It shall constitute a default under this Mortgage entitling
            Mortgagee at its option to accelerate the entire unpaid balance of
            the indebtedness secured hereby if the Association or Mortgagor fail
            or refuse to maintain in full force and effect a policy or policies
            of insurance meeting the requirements of Section 1.4(A)(a). Such
            policy of policies maintained by the Association shall be written in
            the name of, and the proceeds thereof shall be payable to, the
            Association, as trustee for each of the owners of the Condominium
            Units, and to the respective mortgagees of the owners of the
            Condominium units, as their interests may appear and apportioned
            based on which owner or unit experienced the insured loss. Said
            policy or policies shall provide for separate protection for each
            Condominium unit

                                       E-4
<PAGE>

            and its attached, built-in, or installed fixtures and equipment to
            the full insurable replacement value thereof, with a separate loss
            payable endorsement in favor of mortgagees of each Condominium Unit.
            Such policy or policies shall permit the waiver of subrogation and
            shall provide that the insurance company or companies will not look
            to the Association, or any owner of the Condominium units for the
            recovery of any loss under said policy or policies. Such policy or
            policies shall not be cancelable except after 30 days written notice
            to Mortgagee and the original or a duplicate of such policy or
            policies shall be deposited with Mortgagee with evidence of the
            payment of premiums and with renewal policies to be deposited with
            Mortgagee not later than 30 days prior to the expiration of existing
            policies. In the event that the policy or policies of insurance
            maintained by the Association insures the Property only on a
            contingent or conditional basis which requires the individual owner
            of the Condominium units to provide its own insurance on its
            Condominium unit, then Mortgagor shall furnish to Mortgagee an
            original policy of insurance meeting the requirements of Section
            1.4(A)(a) for the Units owned by Mortgagor. Anything hereinabove to
            the contrary notwithstanding, in the event the Association,
            Mortgagor or Primary Tenant, fail or refuse to provide insurance
            coverage as above provided, Mortgagee at its election may obtain
            such insurance for its benefit as mortgagee and may add the premium
            therefore to the unpaid balance of the indebtedness secured hereby.

15.   Upon the Initial Condominium Recording, the following Section 1.34 shall
      be deemed added at the end of Article I of this Mortgage:

            "1.34 CONDOMINIUM PROVISIONS.

            (a) Mortgagor shall comply with (and shall cause Primary Tenant to
      comply with) all terms, conditions and covenants of the Declaration and
      the Bylaws and all other rules and regulations promulgated or otherwise
      existing with respect to the Condominium (collectively, the "Rules") as
      those are in force and effect, and Mortgagor shall comply with (and shall
      cause Primary Tenant to comply with) the terms, conditions and covenants
      of all other Condominium Documents.

            (b) Mortgagor shall not, without Mortgagee's prior written consent,
      modify, amend, supplement or in any other manner change the terms,
      conditions and covenants of the Declaration, the Rules or any other
      Condominium Document so as to affect, alter or impair the lien of this
      Mortgage or the security therefor, or in a manner which materially
      increases the obligations or diminishes the rights of Mortgagee, nor,
      without Mortgagee's prior written consent, may Mortgagor waive or consent
      to the waiver of any enforcement of the provisions thereof with respect to
      another unit owner.

            (c) Mortgagor shall promptly deliver to Mortgagee a true and full
      copy of each and every notice of default or notice requiring the
      performance of any act by

                                       E-4
<PAGE>



      Mortgagor received by Mortgagor with respect to any obligation of
      Mortgagor under the provisions of the Declaration, the Rules or any other
      Condominium Documents.

            (d) Mortgagor shall not, except with the prior written consent of
      Mortgagee, (i) institute any action or proceeding for partition of the
      property of which the Property are a part; (ii) vote for or consent to any
      modification of, amendment to or relaxation in the enforcement of any
      provision of the Declaration, the Rules or any other Condominium Document
      which affects, alters or impairs the lien of this Mortgage or the
      security therefor, or which materially increases the obligations or
      diminishes the rights of Mortgagee; (iii) in the event or damage to or
      destruction of the Units or any of them, vote in opposition to a motion to
      repair, restore, or rebuild.

            (e) In each and every case in which, under the provisions of the
      Declaration, the Rules or any other Condominium Document, the consent or
      the vote of the owners of Units is required, Mortgagor shall not vote or
      give such consent so as to impair the lien of this Mortgage or the
      security therefor without, in each and every case, the prior written
      Consent of Mortgagee.

            (f) Mortgagor shall promptly pay or cause to be paid, as the same
      become due and payable, all common charges or other payments for
      maintenance and reserve funds ("Common Charges") and all assessments
      ("Assessments") as required by the Declaration or the Rules or any
      resolutions adopted pursuant thereto, and shall promptly upon demand
      exhibit to Mortgagee receipts for all such payments. In the event that
      Mortgagor fails to make such payments as the same become due and payable,
      Mortgagee may from time to time at its option, but without any obligation
      to do so and without notice to or demand upon Mortgagor, make such
      payments, and the same shall be added to the debt secured hereby, and
      shall bear interest until repaid at the Default Interest rate (as defined
      in the Note); provided, however, that the failure of the Mortgagor to make
      any such payment to the maintenance fund or to exhibit such receipts
      shall, at the election of Mortgagee upon ten (10) days notice to Mortgagor
      constitute a breach of covenant under this Mortgage entitling Mortgagee to
      accelerate the indebtedness secured hereby.

            (g) In the event of the failure of Mortgagor to perform or cause to
      be performed any of its obligations relating to the Land under the
      Declaration, the Rule or any Other Condominium Document within a period of
      ten (10) days with respect to a monetary obligation or thirty (30) days
      with respect to a non-monetary obligation (unless the Association requires
      sooner performance) after notice from the Association or from Mortgagee,
      or in the case of any such default which cannot with due diligence be
      cured or remedied within such period, if Mortgagor fails, to proceed
      promptly after such notice to cure or remedy the same with due diligence,
      then in any such, case, Mortgagee may from time to time at its option, but
      without any obligation to do so, cure or remedy any such default of
      Mortgagor (Mortgagor hereby authorizing Mortgagee to enter upon the Land
      as may be necessary for such purposes), and all sums expended by Mortgagee
      for such purposes, including reasonable counsel fees, shall be added to
      the debt secured hereby, shall become due and payable and shall bear
      interest until repaid at the Default Interest Rate (as defined In the
      Note) and Shall be added to the indebtedness secured hereby; provided,
      however, that the failure of Mortgagor to keep or perform any such

                                       E-4
<PAGE>

      monetary obligation within such ten (10) day period or any non-monetary
      obligation within such thirty (30) day period, or, in the case in which
      such obligation is a non-monetary obligation which cannot be kept or
      performed within such thirty (30) day period, provided Mortgagor has
      commenced to cure such default and is diligently pursuing same to
      completion, such additional time as is needed to so complete, shall, at
      the election of Mortgagee, constitute an Event of Default under this
      Mortgage entitling Mortgagee to accelerate the indebtedness secured
      hereby.

            (h) Upon the occurrence of an Event of Default hereunder, Mortgagee
      may by notice to Mortgagor require the resignation of Mortgagor's
      designees to the Board of Directors, if any, and the appointment in lieu
      thereof of Mortgagee's designees.

            (i) Mortgagor shall, at the option of Mortgagee exercisable at any
      time after the occurrence of an Event of Default hereunder, pay to
      Mortgagee at the time of each payment of an installment of interest or
      principal under the Note, an additional amount sufficient to discharge
      the obligations under clause (f) when they become due. The determination
      of the amount so payable and of the fractional part thereof to be
      deposited with Mortgagee in an Impound Account. Nothing herein contained
      shall be deemed to affect any right or remedy or Mortgagee under any
      provisions of this Mortgage or of any statute or rule of law to pay any
      such amount and to add the amount so paid, together with interest at the
      Default Interest Rate, (as defined in the Note) to the indebtedness hereby
      secured.

            (j) Mortgagor shall comply (and shall cause the Property to comply)
      with all of the provisions of the Condominium Act."

16.   Upon the Initial Condominium Recording, the following Section 2.1(o) shall
      be deemed added at the end of Article II of this Mortgage:

            "(o) If Mortgagor shall fail to perform any of its obligations with
      respect to the Association, Board of Directors, the Declaration, the
      Rules, any other Condominium Document or the Condominium as set forth in
      Section 1.34 (subject to any notice and/or cure period expressly set
      forth in Section 1.34) or if for any reason all or any portion of the
      land subject to the Declaration is withdrawn from condominium ownership
      without Mortgagee's prior written consent; or if by reason of damage or
      destruction of all or any portion of the Improvements the Association or
      the owners of the Condominium units do not duly and promptly resolve to
      proceed with the repair or restoration of any such damage or destruction,
      to the extent Mortgagor is required under Section 1.9 hereof to restore
      such damage or destruction; or if by reason of the failure of Mortgagor to
      perform any act, as for example notification to the Association under the
      Declaration or the Rules, Mortgagee shall not be entitled to the
      protective provisions under the Declaration or the Rules."

17.   If the Lafayette Factory Expansion Work (as defined in section 5.34
      hereof) has been completed prior to the occurrence of the Initial
      Condominium Recording, then in connection with the Initial Condominium
      Recording, the Condominium Declaration and the Condominium Site Plan shall
      be amended prior to the recording thereof in order to include the
      Lafayette Factory Expansion as part of Unit 2 of the Condominium.

                                       E-4
<PAGE>
18.  For purposes of Section 1.9(b), 1.9(e) and 1.9(g) of this Mortgage, from
     and after the Initial Condominium Recording, (i) the term "380 Lafayette
     Property" shall be deemed to refer to Unit #1 (as defined in the
     Condominium Declaration) of the Condominium, (ii) the term "390 Lafayette
     Property" shall be deemed to refer to Unit #2 (as defined in the
     Condominium Declaration) of the Condominium and (iii) the term "11 Merrill
     Property" shall be deemed to refer to Unit #3 (as defined in the
     Condominium Declaration) of the Condominium.

                                   EXHIBIT F

                     INDIVIDUAL PROPERTY RELEASE CONDITIONS

         For purposes of determining whether the Individual Property Release
Conditions (as defined below) are satisfied with respect to an applicable
Individual Property (as defined in Section 1.9(b) hereof), such applicable
Individual Property shall be referred to in this Exhibit F as the "Release
Parcel".

         As used in this Exhibit F, "Individual Property Release Conditions"
shall mean, collectively:

         a. The portion of the Property other than the Release Parcel (the
     "Remaining Property"), and all improvements thereon, shall comply with all
     applicable zoning, land use and similar laws, rules, regulations and
     ordinances of all governmental authorities having or claiming jurisdiction
     thereover, and all other applicable laws, with such determination assuming
     the separate ownership and operation of the Remaining Property and the
     Release Parcel;

         b. Mortgagor provides evidence reasonably acceptable to Mortgagee that
     all zoning and subdivision approvals of governmental authorities having
     jurisdiction as necessary to create legally identifiable tracts of real
     property, and separate zoning and tax lots for all real property taxes,
     have been granted with respect to the Release Parcel and the Remaining
     Property;

         c. Mortgagor provides evidence reasonably satisfactory to Mortgagee
     that, following any such release, the Remaining Property shall have
     available to it all necessary utility and other services for the
     development, use, occupancy and operation of the Remaining Property, and
     adequate, free, unimpeded and unencumbered access for pedestrian and
     vehicular ingress and egress onto all adjacent public roads;

         d. Mortgagor shall procure from the title insurer insuring the lien of
     this Mortgage an endorsement to Mortgagee's title insurance policy which
     shall provide, inter alia, that the lien and priority of this Mortgage on
     the Remaining Property shall be unaffected as a result of the release of
     the Release Parcel, together with such other matters as Mortgagee shall
     reasonably require;

         e. Mortgagor provides Mortgagee with an updated survey of the Remaining
     Property and the Release Parcel, satisfactory to Mortgagee, prepared by a
     registered land surveyor in the State of New Hampshire and certified to the
     Mortgagee, its successors and assigns, and the title insurer in form
     reasonably acceptable to Mortgagee, containing (i) only such encroachments,
     exceptions and state of facts as are (a) set forth in the title policy
     insuring this Mortgage and (b) approved by Mortgagee in writing; and (ii)
     metes and bounds legal descriptions of each of the Release Parcel and the
     Remaining Property;

         f. No Default or Event of Default shall have occurred and be
     continuing;


                                       E-4
<PAGE>
            g. The Remaining Parcel will be in compliance with all provisions of
      any Leases of any portion of the Property that are then in effect
      (including, without limitation, as to required parking spaces,
      restrictions on development, access and similar matters), an easement in
      form and substance reasonably satisfactory to Mortgagee shall be granted
      in favor of the Remaining Property over all parking areas on the Release
      Parcel, and the Release Parcel shall be subject to a restrictive covenant
      prohibiting the use or development thereof in any manner that violates any
      provision of any then-existing Lease of the Remaining Parcel;

            h. Simultaneously with the release of the Release Parcel, the
      Release Parcel shall be transferred and conveyed by Mortgagor to another
      person or entity, such that the ownership of the Release Parcel does not
      cause Mortgagor to violate any of the restrictions set forth in Section
      1.33 hereof; and

            i. Mortgagor pays all of Mortgagee's fees and expenses (including,
      without limitation, reasonable attorneys' fees and expenses) incurred in
      connection with the release of such Release Parcel and confirmation that
      all of the foregoing conditions have been satisfied.

                                       E-4
<PAGE>

                                   SCHEDULE 1

                             ALLOCATED LOAN AMOUNTS
<TABLE>
<S>                              <C>
380 Lafayette Property           $   705,660

390 Lafayette Property           $10,905,660

11 Merrill Property              $ 5,388,680
</TABLE>