<PAGE>
                                                                  Exhibit 10.65


                                                                Loan No. 3212525




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                  MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND
                               SECURITY AGREEMENT



                           Dated as of March 1, 1999



                          BIRCH POND REALTY CORPORATION
             (doing business in the State of New Hampshire as BPRC)
                                   (Mortgagor)


                                       TO


                     JOHN HANCOCK REAL ESTATE FINANCE, INC.
                                   (Mortgagee)


                              LOCATION OF PROPERTY:

                              100 Birch Pond Drive
                      Tilton, Belknap County, New Hampshire




                              RECORD AND RETURN TO:

                                  Hebb & Gitlin
                           A Professional Corporation
                                One State Street
                               Hartford, CT 06103
                       Attention: John B. D'Agostino, Esq.







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                                                               Loan No. 3212525
<TABLE>
<CAPTION>



                                TABLE OF CONTENTS



<S>  <C>                                                                              <C>
1.   PAYMENT OF INDEBTEDNESS AND INCORPORATION OF COVENANTS, CONDITIONS AND AGREEMENTS..4


2.   WARRANTY OF TITLE..................................................................4


3.   INSURANCE; CASUALTY................................................................5


4.   PAYMENT OF TAXES, ET..............................................................10


5.   ESCROW FUND.......................................................................11


6.   CONDEMNATION......................................................................12


7.   LEASES AND RENTS..................................................................13


8.   MAINTENANCE AND USE OF MORTGAGED PROPERTY.........................................15


9.   TRANSFER OR ENCUMBRANCE OF THE MORTGAGED PROPERTY.................................16


10.  ESTOPPEL CERTIFICATES.............................................................19


11.  NO COOPERATIVE OR CONDOMINIUM.....................................................20


12.  CHANGES IN THE LAWS REGARDING TAXATION............................................20


13.  NO CREDITS ON ACCOUNT OF THE INDEBTEDNESS.........................................20


14.  DOCUMENTARY STAMPS................................................................20


15.  RIGHT OF ENTRY....................................................................20


16.  BOOKS AND RECORDS.................................................................21


17.  PERFORMANCE OF OTHER AGREEMENTS...................................................21


18.  REPRESENTATIONS AND COVENANTS CONCERNING LOAN.....................................22


19.  SINGLE PURPOSE ENTITY/SEPARATENESS................................................23
</TABLE>




                                        i

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<TABLE>
<CAPTION>

<S>  <C>                                                                              <C>
20.  EVENTS OF DEFAULT; REMEDIES.......................................................26

21.  ADDITIONAL REMEDIES...............................................................28


22.  RIGHT TO CURE DEFAULTS............................................................31


23.  LATE PAYMENT CHARGE...............................................................31


24.  PREPAYMENT........................................................................31
     

25.  PREPAYMENT AFTER EVENT OF DEFAULT.................................................31
     

26.  APPOINTMENT OF RECEIVER..........................................................32
     

27.  SECURITY AGREEMENT...............................................................32
     

28.  AUTHORITY........................................................................33
     

29.  ACTIONS AND PROCEEDINGS..........................................................33
     

30.  FURTHER ACTS, ETC................................................................33
     

31.  RECORDING OF MORTGAGE, ETC.......................................................34
     

32.  USURY LAWS.......................................................................34
     

33.  SOLE DISCRETION OF MORTGAGEE.....................................................35
     

34.  RECOVERY OF SUMS REQUIRED TO BE PAID.............................................35
     

35.  MARSHALLING AND OTHER MATTERS....................................................35
     

36.  WAIVER OF NOTICE.................................................................35
     

37.  REMEDIES OF MORTGAGOR............................................................35
     

38.  REPORTING REQUIREMENTS...........................................................35
     

39.  HAZARDOUS MATERIALS..............................................................36
     

40.  ASBESTOS.........................................................................38
     

41.  BANKRUPTCY OR INSOLVENCY.........................................................39
</TABLE>
     
                                       ii

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                                                                Loan No. 3212525
<S>  <C>                                                                              <C>
42.  COMPLIANCE WITH ERISA AND STATE STATUTES ON GOVERNMENTAL PLANS...................39
     

43.  ASSIGNMENTS......................................................................41


44.  COOPERATION......................................................................41


45.  INDEMNIFICATION FOR NON-RECOURSE CARVEOUT OBLIGATIONS............................41


46.  EXCULPATION......................................................................42


47.  NOTICES..........................................................................42


48.  NON-WAIVER.......................................................................43


49.  JOINT AND SEVERAL LIABILITY......................................................44


50.  SEVERABILITY.....................................................................44


51.  DUPLICATE ORIGINALS..............................................................44


52.  INDEMNITY AND MORTGAGEE'S COSTS..................................................44


53.  CERTAIN DEFINITIONS..............................................................44


54.  NO ORAL CHANGE...................................................................45


55.  NO FOREIGN PERSON................................................................45


56.  SEPARATE TAX LOT.................................................................45


57.  RIGHT TO RELEASE ANY PORTION OF THE MORTGAGED PROPERTY...........................45


58.  SUBROGATION......................................................................46


59.  ADMINISTRATIVE FEES..............................................................46


60.  DISCLOSURE.......................................................................46


61.  HEADINGS, E......................................................................46


62.  ADDRESS OF REAL PROPERTY.........................................................46


63.  WIRE TRANSFER....................................................................46


64.  PUBLICITY........................................................................46


65.  RELATIONSHIP.....................................................................46


66.  HOMESTEAD........................................................................46
</TABLE>

                                       iii
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                                                               Loan No. 3212525
<TABLE>
<CAPTION>


<S>  <C>                                                                              <C>
67. NO THIRD PARTY BENEFICIARIES......................................................47


68. ENTIRE AGREEMENT..................................................................47


69. SERVICER..........................................................................47


70. GOVERNING LAW; CONSENT TO JURISDICTION............................................47


71. YEAR 2000.........................................................................48


72. PARTIAL RELEASE...................................................................48


73. SPECIAL STATE PROVISIONS..........................................................50
</TABLE>


                                       iv

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                                                               Loan No. 3212525



     THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT (this
"MORTGAGE"), made as of March 1, 1999, by BIRCH POND REALTY CORPORATION, a
Delaware corporation (doing business in the State of New Hampshire as BPRC),
having its principal place of business at 100 Birch Pond Drive, Tilton, New
Hampshire 03289 ("MORTGAGOR"), to and for the benefit of JOHN HANCOCK REAL
ESTATE FINANCE, INC. having its principal place of business at John Hancock
Place, T-53, 200 Clarendon Street, Boston, Massachusetts 02116 ("MORTGAGEE").


                              W I T N E S S E T H:

     To secure the payment of an indebtedness in the principal sum of TWELVE
MILLION AND 0/100 DOLLARS ($12,000,000.00), lawful money of the United States of
America, to be paid with interest and all other sums and fees payable according
to a certain mortgage note dated the date hereof made by Mortgagor to Mortgagee
(the mortgage note, together with all extensions, renewals or modifications
thereof, being hereinafter collectively called the "NOTE"; and the loan
evidenced by the Note being hereinafter referred to as the "LOAN") and all
indebtedness, obligations, liabilities and expenses due hereunder and under any
other Loan Document (as hereinafter defined) (the indebtedness, interest, other
sums, fees, obligations and all other sums due under the Note and/or hereunder
and/or any other Loan Document being collectively called the "INDEBTEDNESS"),
Mortgagor has mortgaged, given, granted, bargained, sold, alienated, enfeoffed,
conveyed, confirmed, pledged, assigned and hypothecated and by these presents
does mortgage, give, grant, bargain, sell, alien, enfeoff, convey, confirm,
pledge, assign and hypothecate unto Mortgagee with MORTGAGE COVENANTS and hereby
grants unto Mortgagee a security interest in the following property and rights,
whether now owned by Mortgagor or held or hereafter acquired by Mortgagor
(collectively, the "MORTGAGED PROPERTY"):

                               GRANTING CLAUSE ONE

     All right, title and interest in and to the real property or properties
described on EXHIBIT A hereto (collectively, the "LAND ").

                               GRANTING CLAUSE TWO

     All additional lands, estates and development rights hereafter acquired by
Mortgagor for use in connection with the Land and the development of the Land
and all additional lands and estates therein which may, from time to time, by
supplemental mortgage or otherwise, be expressly made subject to the lien hereof
(collectively, the "ADDITIONAL LAND").

                              GRANTING CLAUSE THREE

     Any and all buildings, structures, fixtures, additions, enlargements,
extensions, modifications, repairs, replacements and improvements now or
hereafter located on the Land or any part thereof (collectively, the
"IMPROVEMENTS"; the Land, the Additional Land and the Improvements hereinafter
collectively referred to as the "REAL PROPERTY").



<PAGE>


                                                               Loan No. 3212525


                              GRANTING CLAUSE FOUR

     All easements, rights-of-way, strips and gores of land, streets, ways,
alleys, passages, sewer rights, water, water courses, water rights and powers,
oil, gas and mineral rights, air rights and development rights, zoning rights,
tax credits or benefits and all estates, rights, titles, interests, privileges,
liberties, tenements, hereditaments and appurtenances of any nature whatsoever
in any way belonging, relating or pertaining to the Real Property or any part
thereof and the reversion and reversions, remainder and remainders and all land
lying in the bed of any street, road or avenue, opened or proposed, in front of
or adjoining the Land or any part thereof to the center line thereof and all the
estates, rights, titles, interests, dower and rights of dower, curtesy and
rights of curtesy, property, possession, claim and demand whatsoever, both in
law and in equity, of Mortgagor in, of and to the Real Property and every part
and parcel thereof, with the appurtenances thereto.

                              GRANTING CLAUSE FIVE

     All machinery, equipment, fixtures and other property of every kind and
nature whatsoever owned by Mortgagor or in which Mortgagor has or shall have an
interest (to the extent of such interest) now or hereafter located upon the Real
Property or appurtenant thereto and usable in connection with the present or
future operation and occupancy of the Real Property and all building equipment,
materials and supplies of any nature whatsoever owned by Mortgagor or in which
Mortgagor has or shall have an interest (to the extent of such interest) now or
hereafter located upon the Real Property or appurtenant thereto or usable in
connection with the present or future operation and occupancy of the Real
Property, including but not limited to all heating, ventilating, air
conditioning, plumbing, lighting, communications and elevator machinery,
equipment and fixtures (hereinafter collectively called the "EQUIPMENT") and the
right, title and interest of Mortgagor in and to any of the Equipment which may
be subject to any security agreements (as defined in the Uniform Commercial Code
of the State in which the Mortgaged Property is located (the "UNIFORM COMMERCIAL
CODE")) superior, inferior or PARI PASSU in lien to the lien of this Mortgage.
In connection with Equipment which is leased to Mortgagor or which is subject to
a lien or security interest which is superior to the lien of this Mortgage, this
Mortgage shall also cover all right, title and interest of each Mortgagor in and
to all deposits and the benefit of all payments now or hereafter made with
respect to such Equipment. It is expressly agreed that the fixtures and personal
property listed on EXHIBIT B attached hereto are owned by the tenant of Real
Property, are not owned by Mortgagor and shall not be included in the Mortgaged
Property.

                               GRANTING CLAUSE SIX

     All awards or payments, including interest thereon, which may heretofore
and hereafter be made with respect to the Real Property or any part thereof,
whether from the exercise of the right of eminent domain (including but not
limited to any transfer made in lieu of or in anticipation of the exercise of
said right), or for a change of grade or for any other injury to or decrease in
the value of the Real Property.

                                       2

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                                                               Loan No. 3212525


                              GRANTING CLAUSE SEVEN

     All leases and subleases (including, without limitation, all guarantees
thereof) and other agreements affecting the use, enjoyment and/or occupancy of
the Real Property or any part thereof, now or hereafter entered into (including
any use or occupancy arrangements created pursuant to Section 365(h) of Title 11
of the United States Code (the "BANKRUPTCY CODE") or otherwise in connection
with the commencement or continuance of any bankruptcy, reorganization,
arrangement, insolvency, dissolution, receivership or similar proceedings or any
assignment for the benefit of creditors in respect of any tenant or occupant of
any portion of the Real Property), together with any extension or renewal of the
same (the "LEASES") and all income, rents, issues, profits, revenues and
proceeds including, but not limited to, all oil and gas or other mineral
royalties and bonuses from the Real Property (including any payments received
pursuant to Section 502(b) of the Bankruptcy Code or otherwise in connection
with the commencement or continuance of any bankruptcy, reorganization,
arrangement, insolvency, dissolution, receivership or similar proceedings or any
assignment for the benefit of creditors in respect of any tenant or occupant of
any portion of the Real Property and all claims as a creditor in connection with
any of the foregoing) (the "RENTS") and all proceeds from the sale,
cancellation, surrender or other disposition of the Leases and the right to
receive and apply the Rents to the payment of the Indebtedness.

                              GRANTING CLAUSE EIGHT

     All proceeds of and any unearned premiums on any insurance policies
covering the Real Property or any part thereof including, without limitation,
the right to receive and apply the proceeds of any insurance, judgments or
settlements made in lieu thereof, for damage to the Real Property or any part
thereof.

                              GRANTING CLAUSE NINE

     All tax refunds, including interest thereon, tax credits and tax abatements
and the right to receive or benefit from the same, which may be payable or
available with respect to the Real Property.

                               GRANTING CLAUSE TEN

     The right, in the name and on behalf of Mortgagor, to appear in and defend
any action or proceeding brought with respect to the Real Property or any part
thereof and to commence any action or proceeding to protect the interest of
Mortgagee in the Real Property or any part thereof.

                             GRANTING CLAUSE ELEVEN

     All accounts receivable, utility or other deposits, intangibles, contract
rights, interests, estate or other claims, both in law and in equity, which
Mortgagor now has or may hereafter acquire in the Real Property or any part
thereof.

                                        3

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                                                               Loan No. 3212525

                             GRANTING CLAUSE TWELVE


     All rights which Mortgagor now has or may hereafter acquire to be
indemnified and/or held harmless from any liability, loss, damage, cost or
expense (including, without limitation, attorneys' fees and disbursements)
relating to the Real Property or any part thereof.

                            GRANTING CLAUSE THIRTEEN

     All plans and specifications, maps, surveys, studies, reports, contracts,
subcontracts, service contracts, management contracts, and other agreements,
approvals, consents, permits, special permits, licenses and rights, whether
governmental or otherwise, respecting the use, occupation, development,
construction and/or operation of the Real Property or any part thereof or the
activities conducted thereon or therein, or otherwise pertaining to the Real
Property or any part thereof.

                            GRANTING CLAUSE FOURTEEN

     Any and all proceeds and products of any of the foregoing any and all other
security and collateral of any nature whatsoever, now or hereafter given to
secure the repayment of the Indebtedness and/or the performance of Mortgagor's
obligations to Mortgagee, including, without limitation, any escrow or reserve
fund held by Mortgagee.

     TO HAVE AND TO HOLD the above granted and described Mortgaged Property unto
and to the use and benefit of Mortgagee and the successors and assigns of
Mortgagee forever.

     This mortgage is upon the STATUTORY CONDITION and upon the other terms and
conditions of the Note and other Loan Documents, and upon the further condition
that in the event of any breach thereof or upon the occurrence of any Event of
Default (as hereinafter defined), Mortgagee shall have the STATUTORY POWER OF
SALE.

     PROVIDED, HOWEVER, these presents are upon the express condition, if
Mortgagor shall well and truly pay to Mortgagee the Indebtedness at the time and
in the manner provided in the Note and this Mortgage and shall well and truly
abide by and comply with each and every covenant and condition set forth herein,
in the Note and in the other Loan Documents, these presents and the estate
hereby granted shall cease, terminate and be void.

                           PART I - GENERAL PROVISIONS

     AND Mortgagor represents to, covenants with and warrants to Mortgagee that:

     1. PAYMENT OF INDEBTEDNESS AND INCORPORATION OF COVENANTS, CONDITIONS AND
AGREEMENTS. Mortgagor shall pay the Indebtedness at the time and in the manner
provided in the Note, this Mortgage and the other Loan Documents. All the
covenants, conditions and agreements contained in the Note and the other Loan
Documents are hereby made a part of this Mortgage to the same extent and with
the same force as if fully set forth herein.

     2. WARRANTY OF TITLE. Mortgagor has good and marketable title to the
Mortgaged Property; Mortgagor has the right to mortgage, give, grant, bargain,
sell, alienate, enfeoff, convey, confirm, pledge, lease, assign, hypothecate and
grant a security interest in the Mortgaged Property; Mortgagor possesses an
indefeasible fee estate in the Real Property; and Mortgagor owns the Mortgaged
Property free and clear of all liens, encumbrances and charges whatsoever except
those 
                                       4
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                                                               Loan No. 3212525

exceptions shown in the title insurance policy insuring the lien of this
Mortgage (this Mortgage and the liens, encumbrances and charges shown as
exceptions in such title policy, hereinafter collectively referred to as the
"PERMITTED ENCUMBRANCES"). Mortgagor shall forever warrant, defend and preserve
such title and the validity and priority of the lien of this Mortgage and shall
forever warrant and defend the same to Mortgagee against the claims of all
persons whomsoever.

     3. INSURANCE; CASUALTY.

     (a) Mortgagor, at its sole cost and expense, shall keep, or shall cause to
be kept, the Mortgaged Property insured during the term of this Mortgage for the
mutual benefit of Mortgagor and Mortgagee against loss or damage by any peril
covered by a standard "all risk of physical loss" insurance policy including,
without limitation, riot and civil commotion, vandalism, malicious mischief,
burglary and theft in an amount (i) equal to at least one hundred percent (100%)
of the then "full replacement cost" of the Improvements and Equipment, without
deduction for physical depreciation and (ii) such that the insurer would not
deem Mortgagor a coinsurer under such policies. The policies of insurance
carried in accordance with this PARAGRAPH 3 shall be paid annually in advance
and shall contain the "Replacement Cost Endorsement", and shall have a
deductible no greater than $10,000 unless so agreed by Mortgagee.

     (b) Mortgagor, at its sole cost and expense, for the mutual benefit of
Mortgagor and Mortgagee, shall also obtain and maintain during the term of this
Mortgage the following policies of insurance:

          (i) Flood insurance if any part of the Real Property is located in an
     area identified by the Secretary of Housing and Urban Development as an
     area having special flood hazards and in which flood insurance has been
     made available under the National Flood Insurance Act of 1968 (and any
     successor act thereto) in an amount at least equal to the outstanding
     principal amount of the Note or the maximum limit of coverage available
     with respect to the Improvements and Equipment under said Act, whichever is
     less.

          (ii) Comprehensive public liability insurance, including broad form
     property damage, blanket contractual and personal injuries (including death
     resulting therefrom) coverages.

          (iii) Rental loss insurance in an amount equal to at least one hundred
     percent of the aggregate annual amount of all rents and additional rents
     payable by all of the tenants under the Leases (whether or not such Leases
     are terminable in the event of a fire or casualty), such rental loss
     insurance to cover rental losses for a period of at least one (1) year
     after the date of the fire or casualty in question. The amount of such
     rental loss insurance shall be increased from time to time during the term
     of this Mortgage as and when new Leases and renewal Leases are entered into
     in accordance 

                                       5

<PAGE>

                                                               Loan No. 3212525

     with the terms of this Mortgage, to reflect all increased rent and
     increased additional rent payable by all of the tenants under such renewal
     Leases and all rent and additional rent payable by all of the tenants under
     such new Leases.

          (iv) Insurance against loss or damage from explosion of steam boilers,
     air conditioning equipment, high pressure piping, machinery and equipment,
     pressure vessels or similar apparatus now or hereafter installed in the
     Improvements.

          (v) Such other insurance (including, without limitation, earthquake
     insurance) as may from time to time be reasonably required by Mortgagee in
     order to protect its interests or, in the event of a Secondary Market
     Transaction, as required by the Rating Agencies (as such terms are
     hereinafter defined).

     (c) All policies of insurance (the "POLICIES") required pursuant to this
PARAGRAPH 3 (i) shall be issued by an insurer satisfactory to Mortgagee (and, in
the event of a Secondary Market Transaction, to the Rating Agencies), (ii) shall
contain the standard New York Mortgagee non-contribution clause naming Mortgagee
as the person to which all payments made by such insurance company shall be
paid, (iii) shall be maintained throughout the term of this Mortgage without
cost to Mortgagee, (iv) shall be delivered to Mortgagee, (v) shall contain such
provisions as Mortgagee deems reasonably necessary or desirable to protect its
interest including, without limitation, endorsements providing that neither
Mortgagor, Mortgagee nor any other party shall be a co-insurer under such
Policies and that Mortgagee shall receive at least thirty (30) days prior
written notice of any modification or cancellation and (vi) shall be
satisfactory in form and substance to Mortgagee (and, in the event of a
Secondary Market Transaction, to the Rating Agencies) and shall be approved by
Mortgagee (and, in the event of a Secondary Market Transaction, by the Rating
Agencies) as to amounts, form, risk coverage, deductibles, loss payees and
insureds. Not later than thirty (30) days prior to the expiration date of each
of the Policies, Mortgagor will deliver to Mortgagee satisfactory evidence of
the renewal of each of the Policies.

     (d) If the Improvements shall be damaged or destroyed, in whole or in part,
by fire or other casualty, Mortgagor shall give prompt notice thereof to
Mortgagee and prior to the making of any repairs thereto. Following the
occurrence of fire or other casualty, Mortgagor, regardless of whether insurance
proceeds are payable under the Policies or, if paid, are made available to
Mortgagor by Mortgagee, shall promptly proceed with the repair, alteration,
restoration, replacement or rebuilding of the Improvements as near as possible
to their value, utility, condition and character prior to such damage or
destruction. Such repairs, alterations, restoration, replacement and rebuilding
are herein collectively referred to as the "RESTORATION". The Restoration shall
be performed in accordance with the following provisions:

          (i) Mortgagor shall procure, pay for and furnish to Mortgagee true
     copies of all required governmental permits, certificates and approvals
     with respect to the Restoration.

                                     6

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                                                               Loan No. 3212525

          (ii) Mortgagor shall furnish Mortgagee, within thirty (30) days of the
     casualty, evidence reasonably satisfactory to Mortgagee of the cost to
     complete the Restoration.

          (iii) If the Restoration involves structural work or the estimated
     cost to complete the Restoration exceeds $600,000, the Restoration shall be
     conducted under the supervision of an architect (the "ARCHITECT") selected
     by Mortgagor and approved by Mortgagee (which approval shall not be
     unreasonably withheld), and no such Restoration shall be made except in
     accordance with detailed plans and specifications, detailed cost estimates
     and detailed work schedules approved by Mortgagee (which approval shall not
     be unreasonably withheld).

          (iv) If the estimated cost of the Restoration shall exceed $1,200,000
     in the aggregate, at the request of Mortgagee, Mortgagor, before commencing
     any work, shall cause to be furnished to Mortgagee a surety bond or bonds,
     in form and substance reasonably satisfactory to Mortgagee, naming
     Mortgagor and Mortgagee as co-obligees, in an amount that is not less than
     the estimated cost of the Restoration, issued by a surety company or
     companies reasonably satisfactory to Mortgagee.

          (v) The Restoration shall be prosecuted to completion with all due
     diligence and in an expeditious and first class workmanlike manner and in
     compliance with all laws and other governmental requirements, all permits,
     certificates and approvals, all requirements or fire underwriters and all
     insurance policies then in force with respect to the Real Property.

          (vi) At all times when any work is in progress, Mortgagor shall
     maintain all insurance then required by law or customary with respect to
     such work, and, prior to the commencement of any work, shall furnish to
     Mortgagee duplicate originals or certificates of the policies therefor.

          (vii) Upon completion of the Restoration, Mortgagor shall obtain (A)
     any occupancy permit which may be required for the Improvements and (B) all
     other governmental permits, certificates and approvals and all permits,
     certificates and approvals of fire underwriters which are required for or
     with respect to the Restoration, and shall furnish true copies thereof to
     Mortgagee.

          (viii) An Event of Default (as hereinafter defined) shall be deemed to
     have occurred under this Mortgage if Mortgagor, after having commenced
     demolition or construction of any Improvements, shall abandon such
     demolition or the construction work or shall fail to complete such
     demolition and construction within a reasonable time after the commencement
     thereof.

                                       7

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                                                               Loan No. 3212525

     (e) Mortgagor and Mortgagee shall jointly adjust and settle all insurance
claims, PROVIDED, HOWEVER, if an Event of Default shall have occurred and be
continuing, Mortgagee shall have the right to adjust and settle such claims
without the prior consent of Mortgagor. In the event of any insured loss, the
payment for such loss shall be made directly to Mortgagee. Mortgagee shall have
the option in its sole discretion to apply any insurance proceeds payable under
any of the Policies to the payment of the Indebtedness or to allow all or a
portion of such proceeds to be used for the Restoration. Notwithstanding the
foregoing, provided (i) no Event of Default or event that with the passage of
time or giving of notice or both would constitute a default has occurred
hereunder, under the Note or under any of the other Loan Documents and remains
uncured at the time of such application, (ii) the insurer does not deny
liability to any named insured, (iii) each major and/or anchor tenant (as
determined by Mortgagee) whose Lease permits termination thereof as a result of
such insured loss, agrees in writing to continue its Lease, (iv) rental loss
insurance is available and in force and effect to offset in full any abatement
of rent to which any tenant may be entitled as a result of such damage,
destruction or loss, (v) the remaining Improvements continue at all times to
comply with all applicable building, zoning and other land use laws and
regulations, (vi) in Mortgagee's judgment, the Restoration is practicable and
can be completed within one (1) year after the damage, destruction or loss and
at least one (1) year prior to the Maturity Date (as such term is defined in the
Note) and (vii) rebuilding of the Improvements to substantially identical size,
condition and use as existed prior to the casualty is permitted by all
applicable laws and ordinances, then all of such proceeds shall be used for
Restoration. Any application of insurance proceeds to the Indebtedness shall be
to the unpaid installments of principal due under the Note in the inverse order
of their maturity, such that the regular payments under the Note shall not be
reduced or altered in any manner. In the event the above criteria are satisfied
(including that no Event of Default or event that, with the passage of time or
giving of notice or both, would constitute a default has occurred hereunder,
under the Note or other Loan Documents) or Mortgagee otherwise elects to allow
the use of such proceeds for the Restoration, such proceeds shall be disbursed
in accordance with the following provisions:

               (i) Each request for an advance of insurance proceeds shall be
          made on seven (7) days' prior notice to Mortgagee and shall be
          accompanied by a certificate of the Architect, if one be required
          under PARAGRAPH 3(d)(III) above, otherwise by an executive officer or
          managing general partner or managing member of Mortgagor, stating (A)
          that all work completed to date has been performed in compliance with
          the approved plans and specifications and in accordance with all
          provisions of law, (B) the sum requested is properly required to
          reimburse Mortgagor for payments by Mortgagor to, or is properly due
          to, the contractor, subcontractors, materialmen, laborers, engineers,
          architects or other persons rendering services or materials for the
          Restoration (giving a brief description of such services and
          materials), and that when added to all sums, if any, previously
          disbursed by Mortgagee, does not exceed the value of the work done to
          the date of such certificate and (C) that the amount of such proceeds
          remaining in the hands of Mortgagee will be sufficient on completion
          of the 

                                       8

<PAGE>

                                                               Loan No. 3212525

          work to pay the same in full (giving, in such reasonable detail as
          Mortgagee may require, an estimate of the cost of such completion).

               (ii) Each request for an advance of insurance proceeds shall, to
          the extent permitted under applicable law, be accompanied by waivers
          of liens satisfactory to Mortgagee covering that part of the
          Restoration previously paid for, if any, and by a search prepared by a
          title company or by other evidence reasonably satisfactory to
          Mortgagee including without limitation a title endorsement
          satisfactory to Mortgagee if available in the state where the Real
          Property is located, that there has not been filed with respect to the
          Real Property any mechanic's lien or other lien or instrument and that
          there exist no encumbrances on or affecting the Real Property other
          than the Permitted Encumbrances or otherwise approved by Mortgagee. In
          addition to the foregoing, the request for the final advance shall be
          accompanied by (A) any final occupancy permit which may be required
          for the Improvements, (B) all other governmental permits, certificates
          and approvals and all other permits necessary for the occupancy and
          operation of the Real Property, (C) Tenant estoppels from tenants
          whose space was affected and (D) final lien waivers from all
          contractors, subcontractors and materialmen.

               (iii) No advance of insurance proceeds shall be made if there
          exists an Event of Default or event which with the passage of time or
          the giving of notice or both would constitute a default on the part of
          Mortgagor under this Mortgage, the Note or any other Loan Document.

               (iv) If the cost of the Restoration (as reasonably estimated by
          Mortgagee) at any time shall exceed the amount of the insurance
          proceeds available therefor, insurance proceeds shall not be advanced
          until Mortgagor, before commencing the Restoration or continuing the
          Restoration, as the case may be, shall deposit the full amount of the
          deficiency (or other assurances reasonably satisfactory to Mortgagee)
          with Mortgagee and the amount so deposited shall first be applied
          toward the cost of the Restoration before any portion of the insurance
          proceeds is disbursed for such purpose.

     Upon completion of the Restoration and payment in full therefor, or upon
failure on the part of Mortgagor promptly to commence or diligently to continue
the Restoration, or at any time upon request by Mortgagor, Mortgagee may apply
the amount of any such proceeds then or thereafter in the hands of Mortgagee to
the payment of the Indebtedness; PROVIDED, HOWEVER, that nothing herein
contained shall prevent Mortgagee from applying at any time the whole or any
part of such proceeds to the curing of any default that has not been cured
within the applicable cure period under this Mortgage, the Note or any other
Loan Document.

     (f) Insurance proceeds and any additional funds deposited by Mortgagor with
Mortgagee shall constitute additional security for the Indebtedness. Mortgagor
shall execute, 

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                                                               Loan No. 3212525

deliver, file and/or record, at its expense, such documents and
instruments as Mortgagee deems necessary or advisable to grant to Mortgagee a
perfected, first priority security interest in the insurance proceeds and such
additional funds. If the insurance proceeds are applied to Restoration, (i) the
insurance proceeds shall be, at Mortgagee's election, disbursed in installments
by Mortgagee or by a disbursing agent ("DEPOSITORY") selected by Mortgagee and
whose fees and expenses shall be paid by Mortgagor in the manner provided in
PARAGRAPH 3(e) above and (ii) Mortgagee shall be entitled to receive a fee in
the amount of one percent (1%) of the insurance proceeds as compensation for
administering the use of insurance proceeds, such fee to be in addition to fees
paid the Depository.

     4. PAYMENT OF TAXES, ETC.

     (a) Mortgagor shall pay all taxes, assessments, water rates and sewer
rents, now or hereafter levied or assessed or imposed against the Mortgaged
Property or any part thereof (the "TAXES") and all ground rents, maintenance
charges, other governmental impositions, and other charges, including, without
limitation, vault charges and license fees (collectively, "Other Charges") for
the use of vaults, chutes and similar areas adjoining the Real Property, as same
become due and payable. Mortgagor will deliver to Mortgagee, promptly upon
Mortgagee's request, evidence satisfactory to Mortgagee that the Taxes and Other
Charges have been so paid and are not then delinquent. Mortgagor shall not
suffer or permit any lien or charge (including, without limitation, any
mechanic's lien) against all or any part of the Mortgaged Property and Mortgagor
shall promptly cause to be paid and discharged any lien or charge whatsoever
which may be or become a lien or charge against the Mortgaged Property.
Mortgagor shall promptly pay for all utility services provided to the Mortgaged
Property. In addition, Mortgagee may, at its option, retain the services of a
firm to monitor the payment of Taxes, the cost of which shall be borne by
Mortgagor.

     (b)Notwithstanding the provisions of subsection (a) of this PARAGRAPH 4,
Mortgagor shall have the right to contest in good faith the amount or validity
of any such Taxes, liens or Other Charges (including, without limitation, tax
liens and mechanics' liens) referred to in subsection (a) above by appropriate
legal proceedings and in accordance with all applicable law, after notice to,
but without cost or expense to, Mortgagee, provided that (i) no Event of Default
or event that, with the passage of time or giving of notice or both, would
constitute a default hereunder, under the Note or other Loan Documents has
occurred and is continuing, (ii) Mortgagor pays such Taxes, liens or Other
Charges as same become due and payable, unless Mortgagor delivers evidence
satisfactory to Mortgagee that, as a result of Mortgagor's contest, Mortgagor's
obligation to pay such Taxes, liens or Other Charges has been deferred by the
appropriate governmental authority, in which event, Mortgagor may defer such
payment of such Taxes, liens or Other Charges until the date specified by such
governmental authority, (iii) such contest shall be promptly and diligently
prosecuted by and at the expense of Mortgagor, (iv) Mortgagee shall not thereby
suffer any civil penalty, or be subjected to any criminal penalties or
sanctions, (v) such contest shall be discontinued and such Taxes, liens or Other
Charges promptly paid if at any time all or any part of the Mortgaged Property
shall be in 

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                                                               Loan No. 3212525

imminent danger of being foreclosed, sold, forfeited or otherwise
lost or if the liens of this Mortgage or the priority thereof shall be in
imminent danger of being impaired, (vi) Mortgagor shall have set aside adequate
reserves (in Mortgagee's judgment) for the payment of such Taxes, liens or Other
Charges, together with all interest and penalties thereon and (vii) Mortgagor
shall have furnished such security as may be required in the proceeding or as
may be requested by Mortgagee, to insure the payment of any such Taxes, liens or
Other Charges, together with all interest and penalties thereon.

     5. ESCROW FUND.

     (a) TAX AND INSURANCE FUND. Mortgagor shall pay to Mortgagee on the first
day of each calendar month an amount equal to (i) one-twelfth of an amount which
would be sufficient to pay, at least thirty (30) days prior to the date the
Taxes and Other Charges are due without the payment of any penalties or
interest, the Taxes and Other Charges estimated by Mortgagee to be payable,
during the next ensuing twelve (12) months and (ii) one-twelfth of an amount
which would be sufficient to pay, at least thirty (30) days prior to their due
date for the renewal of the coverage afforded by the Policies upon the
expiration thereof, the insurance premiums for the Policies estimated by
Mortgagee to be payable on such due date, (said amounts in (i) and (ii) above
hereafter called the "Tax and Insurance Fund").

     (b) REPLACEMENT ESCROW FUND. Mortgagor shall enter into a Replacement
Reserve Agreement which shall require Mortgagor to pay to Mortgagee on the first
day of each calendar month one twelfth (1/12) of the amount reasonably estimated
by Mortgagee to be due for the replacements and capital repairs required to be
made to the Mortgaged Property during each calendar year (the "REPLACEMENT
ESCROW FUND"). At least thirty (30) days prior to the end of each calendar year,
Mortgagor shall deliver to Mortgagee for Mortgagee's review and approval, a
capital expenditure budget (the "BUDGET") itemizing the replacements and capital
repairs which are anticipated to be made to the Mortgaged Property during the
next immediately succeeding calendar year. Mortgagee may, upon notice to
Mortgagor, adjust the monthly amounts required to be deposited into the
Replacement Escrow Fund to a monthly amount equal to one twelfth (1/12) of the
total amount specified in each approved Budget. Mortgagee shall make
disbursements from the Replacement Escrow Fund for items specified in each
approved Budget or in the Replacement Reserve Agreement as set forth in such
Agreement. Mortgagee may require an inspection of the Mortgaged Property prior
to making a disbursement in order to verify completion of replacements and
repairs. Mortgagee reserves the right to make any disbursement from the
Replacement Escrow Fund directly to the party furnishing materials and/or
services. Provided that (i) the Mortgagor named herein is the owner of the
Mortgaged Property, (ii) there is no default by Mortgagor under the Loan
Documents and (iii) the Mortgaged Property is being properly maintained by
Mortgagor, then the monthly deposits to the Replacement Escrow Fund may be
suspended so long as the balance of the Replacement Escrow Fund is equal to at
least twenty-four times the monthly deposit required (the "CAP AMOUNT"), it
being understood that if any disbursements under the Replacement Reserve
Agreement shall cause said balance to be less than the Cap Amount, or 

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<PAGE>

                                                               Loan No. 3212525

if such balance shall for any other reason be less than the Cap Amount, the
monthly deposits shall resume until the balance of the Replacement Escrow Fund
is again equal to the Cap Amount.

     (c) TENANT IMPROVEMENT AND LEASING COMMISSION ESCROW. Mortgagor shall enter
into a Tenant Improvement and Leasing Commission Agreement which shall require
Mortgagor to pay to Mortgagee on the first day of each calendar month deposits
for additional collateral in the amount of $8,400.00 each for payment of costs
and expenses incurred by Mortgagor in connection with the performance of work to
refit and release space in the Improvements that may be vacated during the term
of the Loan, and for payment of leasing commissions incurred by Mortgagor in
connection with the releasing of space in the Improvements that may be vacated
during the term of the Loan (the "TENANT IMPROVEMENT AND LEASING COMMISSION
ESCROW FUND"), all according to the Tenant Improvement and Leasing Commission
Agreement.

     The amounts in (a), (b) and (c) above shall hereinafter be collectively
called the "ESCROW FUND". Mortgagor hereby pledges to Mortgagee any and all
monies now or hereafter deposited as the Escrow Fund as additional security for
the payment of the Indebtedness. Mortgagee may apply the Escrow Fund to payments
of Taxes, Other Charges, insurance premiums and, as applicable, payments for
replacements and capital repairs, tenant improvements and leasing commissions
and repairs and remediations required to be made by Mortgagor pursuant to the
terms hereof or pursuant to the terms of any other Loan Documents (even though
subsequent owners of the Mortgaged Property may benefit thereby); PROVIDED,
HOWEVER, if there is an Event of Default which is continuing, then Mortgagee may
credit such Escrow Fund against the Indebtedness in such priority and
proportions as Mortgagee in its discretion shall deem proper. If the Escrow Fund
is not sufficient to fully pay for the Taxes, Other Charges and/or the insurance
premiums or, as applicable, amounts for replacements and capital repairs, tenant
improvements and leasing commissions and repairs and remediation when due,
Mortgagor shall promptly pay to Mortgagee, upon demand, an amount which
Mortgagee shall estimate as sufficient to make up the deficiency. The Escrow
Fund shall not constitute a trust fund and may be commingled with other monies
held by Mortgagee. No earnings or interest on the Escrow Fund shall be payable
to Mortgagor, except as otherwise provided in a written agreement between
Mortgagor and Mortgagee.

     6. CONDEMNATION. Mortgagor shall promptly give Mortgagee written notice of
the actual or threatened commencement of any condemnation or eminent domain
proceeding and shall deliver to Mortgagee copies of any and all papers served in
connection with such proceedings. Following the occurrence of a condemnation,
Mortgagor, regardless of whether an award is available, shall promptly proceed
to restore, repair, replace or rebuild the Improvements to the extent
practicable to be of at least equal value and of substantially the same
character as prior to such condemnation, all to be effected in accordance with
applicable law. Notwithstanding any taking by any public or quasi-public
authority through eminent domain or otherwise (including but not limited to any
transfer made in lieu of or in anticipation of the exercise of such taking),
Mortgagor shall continue to pay the Indebtedness at the time and in the manner
provided for its payment in the Note, in this Mortgage and the other 

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<PAGE>

                                                               Loan No. 3212525

Loan Documents and the Indebtedness shall not be reduced until any award or
payment therefor shall have been actually received after expenses of collection
and applied by Mortgagee to the discharge of the Indebtedness. Mortgagor shall
cause the award or payment made in any condemnation or eminent domain
proceeding, which is payable to Mortgagor, to be paid directly to Mortgagee.
Mortgagee may apply any such award or payment (for purposes of this PARAGRAPH 6,
the award or payment that may be made in any condemnation or eminent domain
proceeding shall mean the entire award allocated to Mortgagor in any capacity)
to the discharge of the Indebtedness whether or not then due and payable (such
application to be without prepayment fee or premium, except that if an Event of
Default, or an event with notice and/or the passage of time, or both, would
constitute an Event of Default, has occurred, then such application shall be
subject to a prepayment premium computed in accordance with the Note). If the
Mortgaged Property is sold, through foreclosure or otherwise, prior to the
receipt by Mortgagee of such award or payment, Mortgagee shall have the right,
whether or not a deficiency judgment on the Note shall have been sought,
recovered or denied, to receive said award or payment or a portion thereof
sufficient to pay the Indebtedness.

     7. LEASES AND RENTS.

     (a) Mortgagor does hereby absolutely and unconditionally assign to
Mortgagee its right, title and interest in all current and future Leases and
Rents and all proceeds from the sale, cancellation, surrender or other
disposition of the Leases, it being intended by Mortgagor that this assignment
constitutes a present, absolute assignment and not an assignment for additional
security only. Such assignment to Mortgagee shall not be construed to bind
Mortgagee to the performance of any of the covenants, conditions or provisions
contained in any such Lease or otherwise to impose any obligation upon
Mortgagee. Mortgagor agrees to execute and deliver to Mortgagee such additional
instruments in form and substance satisfactory to Mortgagee, as may hereafter be
requested by Mortgagee to further evidence and confirm such assignment.
Nevertheless, subject to the terms of this PARAGRAPH 7, Mortgagee grants to
Mortgagor a revocable license to operate and manage the Mortgaged Property and
to collect the Rents. Mortgagor shall hold the Rents, or a portion thereof
sufficient to discharge all current sums due on the Indebtedness, in trust for
the benefit of Mortgagee for use in the payment of such sums. The grant of the
foregoing license is subject to the provisions of PARAGRAPH 1 of the separate
Assignment of Leases and Rents of even date herewith granted by the Mortgagor as
"Assignor" to the Mortgagee as "Assignee" with respect to the Mortgaged Property
("ASSIGNMENT OF LEASES AND RENTS"). Upon the occurrence of an Event of Default,
the license granted to Mortgagor herein shall be automatically revoked and
Mortgagee shall immediately be entitled to possession of all Rents, whether or
not Mortgagee enters upon or takes control of the Mortgaged Property. Mortgagee
is hereby granted and assigned by Mortgagor the right, at its option, upon the
revocation of the license granted herein to enter upon the Mortgaged Property in
person, by agent or by court-appointed receiver to collect the Rents. Any Rents
collected after the revocation of the license herein granted may be applied
toward payment of the Indebtedness in such priority and proportion as Mortgagee
in its discretion shall deem proper. It is further the intent of Mortgagor and
Mortgagee that the Rents hereby absolutely assigned are no longer, during the
term of this Mortgage, property of 

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<PAGE>

                                                               Loan No. 3212525

Mortgagor or property of any estate of Mortgagor as defined in Section 541 of
the Bankruptcy Code and shall not constitute collateral, cash or otherwise, of
Mortgagor. The term "Rents" as used herein shall mean the gross rents without
deduction or offsets of any kind.

     (b) All Leases executed after the date of this Mortgage shall provide that
they are subordinate to this Mortgage and that the lessee agrees to attorn to
Mortgagee; PROVIDED, HOWEVER, that nothing herein shall affect Mortgagee's right
to designate from time to time any one or more Leases as being superior to this
Mortgage and Mortgagor shall execute and deliver to Mortgagee and shall cause to
be executed and delivered to Mortgagee from each tenant under such Lease any
instrument or agreement as Mortgagee may deem necessary to make such Lease
superior to this Mortgage. Upon request, Mortgagor shall promptly furnish
Mortgagee with executed copies of all Leases.

     (c) Mortgagor shall not, without the prior consent of Mortgagee, (i) lease
all or any part of the Mortgaged Property, (ii) alter or change the terms of any
Lease or cancel or terminate, abridge or otherwise modify the terms of any
Lease, (iii) consent to any assignment of or subletting under any Lease not in
accordance with its terms, (iv) cancel, terminate, abridge or otherwise modify
any guaranty of any Lease or the terms thereof, (v) collect or

accept prepayments of installments of Rents for a period of more than one (1)
month in advance or (vi) further assign the whole or any part of the Leases or
the Rents.

     (d) With respect to each Lease, Mortgagor shall (i) observe and perform
each and every provision thereof on the lessor's part to be fulfilled or
performed under each Lease and not do or permit to be done anything to impair
the value of the Lease as security for the Loan, including surrender or
voluntary termination of any Lease, (ii) promptly send to Mortgagee copies of
all notices of default which Mortgagor shall send or receive thereunder, (iii)
enforce all of the terms, covenants and conditions contained in such Lease upon
the lessee's part to be performed, short of termination thereof, (iv) execute
and deliver, at the request of Mortgagee, all such further assurances,
confirmations and assignments in connection with the Mortgaged Property as
Mortgagee shall, from time to time, require and (v) upon request, furnish
Mortgagee with executed copies of all Leases. Upon the occurrence of any Event
of Default under this Mortgage, Mortgagor shall pay monthly in advance to
Mortgagee, or any receiver appointed to collect the Rents, the fair and
reasonable rental value for the use and occupation of the Mortgaged Property or
part of the Mortgaged Property as may be occupied by Mortgagor or any one
Mortgagor and upon default in any such payment Mortgagor shall vacate and
surrender possession of the Mortgaged Property to Mortgagee or to such receiver
and, in default thereof, Mortgagor may be evicted by summary proceedings or
otherwise.

     (e) All security deposits of tenants, whether held in cash or any other
form, shall not be commingled with any other funds of Mortgagor and, if cash,
shall be deposited by Mortgagor at such commercial or savings bank or banks as
may be reasonably satisfactory to Mortgagee. Any bond or other instrument which
Mortgagor is permitted to hold in lieu of cash 

                                       14
<PAGE>

                                                              Loan No. 3212525 

security deposits under any applicable legal requirements 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 legal
requirements, name Mortgagee as payee or Mortgagee thereunder (or at Mortgagee's
option, be 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. Following the occurrence and during the continuance of any Event of
Default, Mortgagor shall, upon Mortgagee's request, if permitted by any
applicable legal requirements, turn over to Mortgagee the security deposits (and
any interest theretofore earned thereon) with respect to all or any portion of
the Mortgaged Property, to be held by Mortgagee subject to the terms of the
Leases.

     8. MAINTENANCE AND USE OF MORTGAGED PROPERTY. Mortgagor shall, at its sole
cost and expense, keep and maintain the Mortgaged Property, including, without
limitation, parking lots and recreational and landscaped portions thereof, if
any, in the same condition which exists as of the date hereof, reasonable wear
and tear excepted, but in any event, in good order and condition. The
Improvements and the Equipment shall not be diminished, removed, demolished or
materially altered (except for normal replacement of Equipment) and Mortgagor
shall not erect any new buildings, structures or building additions on the
Mortgaged Property without the prior consent of Mortgagee. So long as no Event
of Default shall have occurred and be continuing, Mortgagor shall have the right
at any time and from time to time after providing Mortgagee with written notice
to make or cause to be made reasonable alterations of and additions to the
Mortgaged Property or any part thereof, PROVIDED that any alteration or addition
(a) shall not change the general character of the Mortgaged Property or reduce
the fair market value thereof below its value immediately before such alteration
or addition, or impair the usefulness of the Mortgaged Property, (b) is effected
with due diligence, in a good and workmanlike manner and in compliance with all
applicable laws and with all provisions of any insurance policy covering or
applicable to the Mortgaged Property and all requirements of the issuers
thereof, (c) is promptly and fully paid for, or caused to be paid for, by
Mortgagor, (d) the estimated cost of such alteration or addition does not exceed
$600,000, and (e) is made under the supervision of a qualified architect or
engineer, (f) shall not violate the terms of any Leases, and (g) upon
completion, Mortgagor shall provide Mortgagee with (i) a satisfactory final
improvement survey if the footprint of the building has been altered, (ii), any
final occupancy permit which may be required for the Improvements, (iii) all
other governmental permits, certificates and approvals and all other permits,
certificates and approvals of fire underwriters which are required with respect
to the alterations and additions and the use and occupancy thereof, and shall
furnish true copies thereof to Mortgagee, and (iv) final lien waivers from all
contractors, subcontractors and materialmen. Mortgagor shall promptly comply
with all laws, orders and ordinances affecting the Mortgaged Property, or the
use thereof, PROVIDED, HOWEVER, that nothing in the foregoing clause shall
require Mortgagor to comply with any such law, order or ordinance so long as
Mortgagor shall in good faith, after notice to, but without cost or expense to,
Mortgagee, contest the validity of such law, order or ordinance by appropriate
legal proceedings and in accordance with all applicable law, which proceedings
must operate to prevent (a) the enforcement thereof, (b) the payment of any
fine, charge 

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<PAGE>

                                                              Loan No. 3212525 

or penalty, (c) the sale or forfeiture of the Mortgaged Property or any part
thereof, (d) the lien of this Mortgage and the priority thereof from being
impaired, (e) the imposition of criminal liability on Mortgagee and (f) the
imposition, unless stayed, of civil liability on Mortgagee; PROVIDED that during
such contest Mortgagor shall, at the option of Mortgagee, provide cash, bonds or
other security satisfactory to Mortgagee, indemnifying and protecting Mortgagee
against any liability, loss or injury by reason of such non-compliance or
contest, and PROVIDED FURTHER, that such contest shall be promptly and
diligently prosecuted by and at the expense of Mortgagor. Mortgagor shall
promptly, at its sole cost and expense, repair, replace or rebuild any part of
the Mortgaged Property which may be destroyed by any casualty, or become
damaged, worn or dilapidated. Mortgagor shall not commit any waste at the
Mortgaged Property. Mortgagor shall not initiate, join in, acquiesce in or
consent to any change in any private restrictive covenant, zoning law or other
public or private restriction, limiting or defining the uses which may be made
of the Mortgaged Property or any part thereof. If under applicable zoning
provisions the use of all or any portion of the Mortgaged Property is or shall
become a nonconforming use, Mortgagor will not cause or permit such
nonconforming use to be discontinued or abandoned without the express consent of
Mortgagee. Mortgagor covenants and agrees that it shall operate, or cause to be
operated, the Mortgaged Property at all times as a first-class office,
warehouse, distribution and industrial building. Without limiting the foregoing,
Mortgagor agrees that if any of the fixtures or personal property listed on
EXHIBIT B are removed from the Improvements, then Mortgagor shall restore (or
cause to be restored) any damage to the Mortgaged Property caused by or
resulting from such removal.

     9. TRANSFER OR ENCUMBRANCE OF THE MORTGAGED PROPERTY.

     (a) Mortgagor acknowledges that Mortgagee has examined and relied on the
creditworthiness and experience of Mortgagor in owning and operating properties
such as the Mortgaged Property in agreeing to make the Loan, and that Mortgagee
will continue to rely on Mortgagor's ownership of the Mortgaged Property as a
means of maintaining the value of the Mortgaged Property as security for
repayment of the Indebtedness. Mortgagor acknowledges that Mortgagee has a valid
interest in maintaining the value of the Mortgaged Property so as to ensure
that, should Mortgagor default in the repayment of the Indebtedness, Mortgagee
can recover the Indebtedness by a sale of the Mortgaged Property. Mortgagor
shall not, without the prior consent of Mortgagee, sell, convey, alienate,
mortgage, encumber, pledge or otherwise transfer the Mortgaged Property or any
part thereof, or permit the Mortgaged Property or any part thereof to be sold,
conveyed, alienated, mortgaged, encumbered, pledged or otherwise transferred.

     (b) A sale, conveyance, alienation, mortgage, encumbrance, pledge or
transfer within the meaning of this PARAGRAPH 9 shall be deemed to include (i)
an installment sales agreement wherein Mortgagor agrees to sell the Mortgaged
Property or any part thereof for a price to be paid in installments, (ii) an
agreement by Mortgagor leasing all or a substantial part of the Mortgaged
Property for other than actual occupancy by a space tenant thereunder or a sale,
assignment or other transfer of, or the grant of a security interest in,
Mortgagor's right, title and interest in and to any Leases or any Rents, (iii)
if Mortgagor, the guarantor of any Non-Recourse Carveout Obligations, or any
general partner or managing member of Mortgagor or such guarantor is a
corporation, the voluntary or involuntary sale, conveyance or transfer of such
corporation's stock (or the stock of any corporation directly or indirectly

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<PAGE>
                                                              Loan No. 3212525 

controlling such corporation by operation of law or otherwise, except the stock
of DM Management Company in the event such stock is traded on a public stock
exchange or NASDAQ) or the creation or issuance of new stock in one or a series
of transactions by which an aggregate of more than 10% of such corporation's
stock (other than the stock of DM Management Company in the event such stock is
traded on a public stock exchange or NASDAQ) shall be vested in a party or
parties who are not now stockholders or any change in the control of such
corporation (other than a change in control with respect to the stock of DM
Management Company in the event such stock is traded on a public stock exchange
or NASDAQ) and (iv) if Mortgagor, any said guarantor or any general partner or
managing member of Mortgagor or any said guarantor is a limited or general
partnership, joint venture or limited liability company, the change, removal,
resignation or addition of a general partner, managing partner, limited partner,
joint venturer or member or the transfer of the partnership interest of any
general partner, managing partner or limited partner or the transfer of the
interest of any joint venturer or member.

     (c) Mortgagee shall not be required to demonstrate any actual impairment of
its security or any increased risk of default hereunder in order to declare the
Indebtedness immediately due and payable upon Mortgagor's sale, conveyance,
alienation, mortgage, encumbrance, pledge or transfer of the Mortgaged Property
without Mortgagee's consent. This provision shall apply to every sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Mortgaged Property regardless of whether voluntary or not, or whether or not
Mortgagee has consented to any previous sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer of the Mortgaged Property.

     (d) Mortgagee's consent to a sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer of the Mortgaged Property shall not be deemed to
be a waiver of Mortgagee's right to require such consent to any future
occurrence of same. Any sale, conveyance, alienation, mortgage, encumbrance,
pledge or transfer of the Mortgaged Property made in contravention of this
PARAGRAPH 9 shall be null and void and of no force and effect.

     (e) Mortgagor agrees to bear and shall pay or reimburse Mortgagee on demand
for all reasonable expenses (including, without limitation, reasonable
attorneys' fees and disbursements, title search costs and title insurance
endorsement premiums) incurred by Mortgagee in connection with the review,
approval and documentation of any such sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer.

     (f) Mortgagee's consent to the sale or transfer of the Mortgaged Property
will not be unreasonably withheld after consideration of all relevant factors,
PROVIDED that:

          (i) no Event of Default shall have occurred and remain uncured;

          (ii) the proposed transferee ("TRANSFEREE"), the guarantors of Non-
     Recourse Carveout Obligations (hereinafter defined) and the indemnitors of

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<PAGE>

                                                              Loan No. 3212525 

     environmental liabilities shall be reputable entities or persons of good
     character, creditworthy, with sufficient financial worth considering the
     obligations assumed and undertaken, as evidenced by financial statements
     and other information reasonably requested by Mortgagee;

          (iii) the Transferee and its property manager shall have sufficient
     experience in the ownership and management of properties similar to the
     Mortgaged Property, and Mortgagee shall be provided with reasonable
     evidence thereof (and Mortgagee reserves the right to approve the
     Transferee without approving the substitution of the property manager);

          (iv) that Mortgagee has received a written request for approval from
     the Mortgagor at least sixty (60) days prior to the proposed transfer
     (including a description of the proposed terms of the transfer), together
     with a diagram showing the legal structure of the Transferee, the proposed
     guarantor of Non-Recourse Carveout Obligations and the proposed indemnitor
     of environmental liabilities and all of the constituent entities of each,
     after the contemplated transfer, and a list of the names, types of
     interests and ownership percentages of all persons to have ownership
     interests in any of the foregoing or any constituent entity thereof,
     financial statements for all such entities and an administrative fee of
     $5,000, which shall be deemed fully earned on the date of receipt and shall
     be retained by Mortgagee regardless of whether or not the transfer occurs
     and whether or not approval is given;

          (v) Mortgagee and its counsel have received (aa) certification from
     Mortgagor and the Transferee that the proposed terms of the transfer
     described in its subparagraph 9(f)(iv) are the actual terms of the
     transfer, (bb) evidence of casualty insurance and other applicable
     insurance, (cc) all corporate, partnership or other entity documents and
     (dd) all other certificates, legal opinions, title materials and other
     documents which Mortgagee may reasonably require, all in form and substance
     reasonably satisfactory to Mortgagee, at least 30 days prior to the
     proposed transfer;

          (vi) Mortgagee shall be provided satisfactory evidence concerning the
     effect of any change in the real estate taxes to result from the sale and
     the effect of such change on the ability of the Security to generate a cash
     flow sufficient to pay the debt service on the Loan and to maintain a debt
     service coverage ratio satisfactory to Mortgagee;

          (vii) to the extent applicable, Mortgagee shall have received in
     writing evidence from the Rating Agencies to the effect that such transfer
     will not result in a re-qualification, reduction or withdrawal of any
     rating initially assigned or to be assigned in a Secondary Market
     Transaction together with such legal opinions as may be requested by the
     Rating Agencies. The term "RATING AGENCIES" as used herein shall mean each
     of Standard & Poor's Ratings Group, Moody's Investors Service, Inc., Duff &
     Phelps 

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                                                              Loan No. 3212525 

     Credit Rating Co., Fitch Investors Service, Inc. or any other
     nationally-recognized statistical rating agency who shall then be rating
     the certificates or securities issued in connection with the Secondary
     Market Transaction;

          (viii) the Transferee and its constituent entities shall comply with
     all of the Single Purpose Entity/Separateness requirements set forth in
     Paragraph 19 hereof;

          (ix) the Transferee shall have executed and delivered to Mortgagee an
     assumption agreement in form and substance acceptable to Mortgagee,
     evidencing such Transferee's agreement to abide and be bound by the terms
     of the Note, this Mortgage and the other Loan Documents, together with an
     executed guaranty of Non- Recourse Carveout Obligations under the Note from
     an approved guarantor and an executed separate environmental indemnity
     agreement from an approved indemnitor, both in form and substance
     acceptable to Mortgagee, and such legal opinions and title insurance
     endorsements as may be reasonably requested by Mortgagee; and

          (x) Mortgagee shall have received an assumption fee equal to one
     percent (1%) of the then unpaid principal balance of the Note (against
     which the administrative fee shall be credited) in addition to the payment
     of all costs and expenses incurred by Mortgagee in connection with such
     assumption (including reasonable attorney's fees and costs).

     In the event all of the foregoing conditions are satisfied and Mortgagee
consents to the sale or transfer, Mortgagee agrees to release (aa) the
transferor Mortgagor and the prior guarantors of Non- Recourse Carveout
Obligations with respect to matters first arising solely after the transfer, and
(bb) the prior indemnitors of environmental liabilities with respect to a
presence and/or release which first occurs solely after acquisition of title to
the Mortgaged Property by Mortgagee upon a foreclosure or acceptance of a deed
in lieu of foreclosure and surrender of possession and occupancy of the
Mortgaged Property by the transferor Mortgagor, the prior guarantors and the
prior indemnitors, their agents, affiliates, employees and independent
contractors. The transferor Mortgagor, the prior guarantors and the prior
indemnitors, respectively, shall have the burden of proving that the conditions
in this PARAGRAPH 9 (including, without limitation, the time as to which matters
described herein arose) were satisfied by clear and convincing evidence and
shall continue to defend with counsel satisfactory to Mortgagee and shall
indemnify and hold Mortgagee harmless for all matters set forth in PARAGRAPH 39
and in the Non-Recourse Carveout Obligations unless and until a court of
competent jurisdiction finds that such transferor Mortgagor, prior guarantors or
prior indemnitors, respectively, met such burden.

     10. ESTOPPEL CERTIFICATES.

          (a) Mortgagor, within ten (10) business days after request by
     Mortgagee, shall furnish Mortgagee from time to time with a statement, duly
     acknowledged and certified, setting forth (i) the amount of the original
     principal amount of the Note, (ii) the unpaid principal 

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                                                              Loan No. 3212525 

     amount of the Note, (iii) the rate of interest in the Note, (iv) the date
     through which all installments of interest, commitment fees and/or
     principal have been paid, (v) any offsets or defenses to the payment of the
     Indebtedness, if any, (vi) that the Note and this Mortgage have not been
     modified or if modified, giving particulars of such modification and (vii)
     such other information as shall be reasonably requested by Mortgagee.

          (b) Mortgagor, after request by Mortgagee, will obtain and furnish
     (within the time periods, if any, provided in the applicable Leases or if
     no time period is so specified, within ten (10) business days after
     request) Mortgagee from time to time with estoppel certificates from any
     tenants under then existing Leases, which certificates shall be in form and
     substance as required by such Leases, or if not required, then in form and
     substance reasonably satisfactory to Mortgagee.

     11. NO COOPERATIVE OR CONDOMINIUM. Mortgagor shall not operate the
Mortgaged Property, or permit the Mortgaged Property to be operated as a
cooperative or condominium building or buildings in which the tenants or
occupants participate in the ownership, control or management of the Mortgaged
Property or any part thereof, as tenant stockholders or otherwise.

     12. CHANGES IN THE LAWS REGARDING TAXATION. If any law is enacted or
adopted or amended after the date of this Mortgage which deducts the
Indebtedness or any portion thereof from the value of the Mortgaged Property for
the purpose of taxation or which imposes a tax, either directly or indirectly,
on the principal amount of the Note or Mortgagee's interest in the Mortgaged
Property, Mortgagor will pay such tax, with interest and penalties thereon, if
any. In the event Mortgagee is advised by counsel chosen by it that the payment
of such tax or interest and penalties by Mortgagor would be unlawful or taxable
to Mortgagee or unenforceable or provide the basis for a defense of usury, then
in any such event, Mortgagee shall have the option, by notice of not less than
sixty (60) days, to declare the Indebtedness immediately due and payable.

     13. NO CREDITS ON ACCOUNT OF THE INDEBTEDNESS. Mortgagor will not claim or
demand or be entitled to any credit or credits on account of the Indebtedness
for any part of the Taxes assessed against the Mortgaged Property or any part
thereof and no deduction shall otherwise be made or claimed from the taxable
value of the Mortgaged Property, or any part thereof, by reason of this Mortgage
or the Indebtedness. In the event such claim, credit or deduction shall be
required by law, Mortgagee shall have the option, by notice of not less than
sixty (60) days, to declare the Indebtedness immediately due and payable without
premium.

     14. DOCUMENTARY STAMPS. If at any time the United States of America, any
State thereof or any subdivision of any such State shall require revenue or
other stamps to be affixed to the Note or this Mortgage, or impose any other tax
or charge on the same, Mortgagor will pay for the same, with interest and
penalties thereon, if any.

     15. RIGHT OF ENTRY. Mortgagee and its agents shall have the right to enter
and inspect the Mortgaged Property at any time during reasonable business hours
upon twenty-four (24) hour notice 

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                                                              Loan No. 3212525 

to Mortgagor, except in the case of an emergency, in which event Mortgagee and
its agents may enter and inspect the Mortgaged Property at any time.

     16. BOOKS AND RECORDS.

         (a) Mortgagor will maintain full, accurate and complete books of 
accounts and other records reflecting the results of the operations of the 
Mortgaged Property as well as its other operations and will furnish, or cause 
to be furnished, to Mortgagee the following:

          (i) (A) within ninety (90) days after the end of each fiscal year, the
     Mortgagor will furnish to Mortgagee, a statement of Mortgagor's financial
     condition, including a balance sheet and profit and loss statement, and a
     statement of annual income and expenses satisfactory in form and substance
     to Mortgagee in connection with the operation of the Mortgaged Property, in
     detail satisfactory to Mortgagee, prepared by Mortgagor, and audited and
     certified by a certified public accountant who is a member of the American
     Institute of Certified Public Accountants; provided, that so long as there
     are no Events of Default in existence, if such statements audited and
     certified by such accountant are not available within such ninety (90) day
     period, then Mortgagor shall furnish such statements prepared and certified
     by Borrower within such ninety (90) day period, provided, further that in
     any event such statements audited and certified by such accountant shall be
     delivered no later than one hundred eighty (180) days after the end of such
     fiscal year, and, (B) in addition, within forty-five (45) days after the
     end of each fiscal quarter of Mortgagor, Mortgagor shall provide the above
     information except that it may be prepared and certified by the financial
     officer of Mortgagor who is responsible for the preparation of such annual
     financial statements.

          (ii) accompanying the submission of the certified statements of annual
     and quarterly income and expenses, shall be a certified current rent roll,
     which shall include among other things tenant names, lease commencement and
     expiration dates, square footage, annual rent, annual operating expense and
     real estate tax contributions and any and all other fees paid by tenants
     and security deposits currently held.

          (iii) accompanying the submission of the certified statements of
     annual and quarterly income and expenses shall be such additional financial
     information as Mortgagee shall reasonably require.

     (b) Mortgagee shall have the right, upon five (5) business days' prior
notice to Mortgagor, to inspect and make copies of Mortgagor's books and records
and income tax returns and notices.

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<PAGE>

                                                              Loan No. 3212525 

         (c) In the event of a Secondary Market Transaction, Mortgagor shall 
     furnish from time to time such information relating to Mortgagor 
     and the Mortgaged Property as shall be requested by the Rating 
     Agencies.

     17. PERFORMANCE OF OTHER AGREEMENTS. Mortgagor shall observe and perform
each and every term to be observed or performed by such Mortgagor pursuant to
the terms of any agreement or recorded instrument affecting or pertaining to the
Mortgaged Property.

     18. REPRESENTATIONS AND COVENANTS CONCERNING LOAN. Mortgagor represents,
warrants and covenants as follows:

         (a) The Note, this Mortgage and the other Loan Documents are not 
     subject to any right of rescission, set-off, counterclaim or defense, 
     including the defense of usury, nor would the operation of any of the 
     terms of the Note, this Mortgage and 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.

         (b) All certifications, permits, licenses and approvals, including, 
     without limitation, certificates of completion and occupancy permits 
     required for the legal use, occupancy of the Mortgaged Property, have 
     been obtained and are in full force and effect. The Mortgaged Property 
     is free of material damage and is in good repair, and there is no 
     proceeding pending for the total or partial condemnation of, or 
     affecting, the Mortgaged Property.

        (c) All of the Improvements which were included in determining the 
     appraised value of the Mortgaged Property lie wholly within the 
     boundaries and building restriction lines of the Mortgaged Property, and 
     no improvements on adjoining properties encroach upon the Mortgaged 
     Property, and no easements or other encumbrances upon the Land encroach 
     upon any of the Improvements, so as to affect the value or marketability 
     of the Mortgaged Property except those which are insured against by 
     title insurance. All of the Improvements comply with all requirements of 
     applicable zoning and subdivision laws and ordinances in all material 
     respects.

       (d) The Mortgaged Property is not subject to any Leases other than the 
     Leases described in the rent roll delivered to Mortgagee in connection 
     with this Mortgage. No person has any possessory interest in the 
     Mortgaged Property or right to occupy the same except under and pursuant 
     to the provisions of the Leases. Except as otherwise disclosed in 
     writing to Mortgagee, the current Leases are in full force and effect 
     and there are no defaults thereunder by either party and there are no 
     conditions that, with the passage of time or the giving of notice, or 
     both, would constitute defaults thereunder. Except as otherwise 
     disclosed in writing to Mortgagee, all presently existing Leases are 
     subordinate to the Mortgage.

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<PAGE>

                                                              Loan No. 3212525 

       (e) The Mortgaged Property and the Lease are in compliance with all 
     statutes, ordinances, regulations and other governmental or 
     quasi-governmental requirements and private covenants now or hereafter 
     relating to the ownership, construction, use or operation of the 
     Mortgaged Property.

       (f) There has not been and shall never be committed by Mortgagor or 
     any other person in occupancy of or involved with the operation or use 
     of the Mortgaged Property any act or omission affording the federal 
     government or any state or local government the right of forfeiture as 
     against the Mortgaged Property or any part thereof or any monies paid in 
     performance of Mortgagor's obligations under any of the Loan Documents. 
     Mortgagor hereby covenants and agrees not to commit, permit or suffer to 
     exist any act or omission affording such right of forfeiture.

       (g) Mortgagor operates the Mortgaged Property and has not entered into 
     any agreement (oral, written or otherwise) with any third party relating 
     to the operation and management of the Mortgaged Property, and no third 
     party is entitled to any management fee or has any interest in or right 
     to receive any portion of the income derived from owning, operating or 
     managing the Mortgaged Property. In the event Mortgagor desires to have 
     a third party operate the Mortgaged Property it shall enter into a 
     management agreement (the "MANAGEMENT AGREEMENT") with such party, 
     provided that Mortgagee approves such party (the "MANAGER"), and Manager 
     and Mortgagor shall execute an assignment and subordination of such 
     Management Agreement in form satisfactory to Mortgagee, in its sole 
     discretion, assigning and subordinating the Manager's interest in the 
     Mortgaged Property and all fees and other right of the Manager pursuant 
     to such Management Agreement to the rights of the Mortgagee. Such 
     Management Agreement, if any, shall remain in full force and effect and 
     there shall be no default, breach or violation existing thereunder by 
     any party thereto and no event shall occur (other than payments due but 
     not yet delinquent) that, with the passage of time or the giving of 
     notice, or both, would constitute a default, breach or violation by any 
     party thereunder. Mortgagor shall not terminate, cancel, modify, renew 
     or extend the Management Agreement, or enter into any agreement relating 
     to the management or operation of the Mortgaged Property with Manager or 
     any other party without the express written consent of Mortgagee, which 
     consent shall not be unreasonably withheld. If at any time Mortgagee 
     consents to the appointment of a new manager, such new manager and 
     Mortgagor shall, as a condition of Mortgagee's consent, execute a 
     Manager's Consent and Subordination of Management Agreement in the form 
     then used by Mortgagee.

     19. SINGLE PURPOSE ENTITY/SEPARATENESS. Mortgagor represents, warrants and
covenants as follows:

       (a) The purpose for which the Mortgagor is organized shall be limited 
     solely to (A) owning, holding, selling, leasing, transferring, 
     exchanging, operating and managing the Mortgaged Property, (B) entering 
     into the Loan with the Mortgagee, (C) refinancing the Mortgaged Property 
     in connection with a permitted repayment of the Loan, and (D) 

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<PAGE>

                                                              Loan No. 3212525 

transacting any and all lawful business for which a corporation may be organized
under Delaware law that is incident, necessary and appropriate to accomplish the
foregoing.

     (b) Mortgagor does not own and will not own any asset or property other
than (i) the Mortgaged Property, and (ii) incidental personal property necessary
for and used in connection with the ownership, operation or managing of the
Mortgaged Property.

     (c) Mortgagor will not engage in any business other than the ownership,
management and operation of the Mortgaged Property.

     (d) Except as otherwise disclosed on Exhibit C to the Borrower's
Certificate delivered by Mortgagor to Mortgagee in connection herewith,
Mortgagor will not enter into any contract or agreement with any affiliate of
Mortgagor, any constituent party of Mortgagor, any owner of the Mortgagor, the
Guarantors or any affiliate of any constituent party or Guarantor, except upon
terms and conditions that are intrinsically fair, commercially reasonable and
substantially similar to those that would be available on an arms-length basis
with third parties not affiliated with the Mortgagor or its owner(s) or
constituent part(ies).

     (e) Mortgagor has not incurred and will not incur any indebtedness, other
than (i) the Loan, (ii) trade and operational debt incurred in the ordinary
course of business with trade creditors and in amounts as are normal and
reasonable under the circumstances provided such debt is not evidenced by a note
and is paid when due, and (iii) indebtedness incurred in the financing of
equipment and other personal property used on the Mortgaged Property. No
indebtedness other than the Loan may be secured (subordinate or PARI PASSU) by
the Mortgaged Property.

     (f) Mortgagor has not made and will not make any loans or advances to any
entity or person (including any affiliate or constituent party or owner of
Mortgagor, any Guarantor or any affiliate of any constituent party or
Guarantor), and shall not acquire obligations or securities of its affiliates or
any constituent party .

     (g) Mortgagor is and will remain solvent and Mortgagor will pay its debts
and liabilities (including, as applicable, shared personnel and overhead
expenses) from its assets as the same shall become due.

     (h) Mortgagor has done or caused to be done and will do all things
necessary to observe organizational formalities and preserve its existence, and
Mortgagor will not, nor will Mortgagor permit any constituent party or owner of
Mortgagor or any Guarantor to amend, modify or otherwise change the partnership
certificate, partnership agreement, articles of incorporation and bylaws,
operating agreement, trust or other organizational documents of Mortgagor or
such constituent party or Guarantor without the written consent of Mortgagee
(other than DM Management Company in the event its stock is traded on a public
stock exchange or NASDAQ).

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<PAGE>


                                                              Loan No. 3212525 

     (i) Mortgagor will maintain all of its books, records, financial statements
and bank accounts separate from those of its affiliates and any constituent
party. Mortgagor's assets will not be listed as assets on the financial
statement of any other entity. Mortgagor shall have its own separate financial
statement, provided, however, that Mortgagor's assets may be included in a
consolidated financial statement of its parent if such inclusion on the
financial statements of its parent complies with the requirements of generally
accepted accounting principles ("GAAP"), provided that such consolidated
financial statement shall contain a footnote to the effect that Mortgagor's
assets are owned by Mortgagor, and further provided that such assets shall be
listed on Mortgagor's own separate balance sheet. Mortgagor will file separate
tax returns, or if part of a consolidated, unitary or combined group, then it
will be shown as a separate member of such group. Mortgagor shall maintain its
books, records, resolutions and agreements as official records.

     (j) Mortgagor 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 of Mortgagor, any constituent party of Mortgagor, any Guarantor or any
affiliate of any constituent party or Guarantor), shall correct any known
misunderstanding regarding its status as a separate entity, shall conduct
business in its own name, shall not identify itself or any of its affiliates as
a division or part of the other and shall maintain and utilize separate
telephone numbers, stationery, invoices and checks.

     (k) Mortgagor 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.

     (l) Neither Mortgagor nor any constituent party will seek the dissolution,
winding up, liquidation, consolidation or merger in whole or in part, or the
sale of material assets of Mortgagor.

     (m) Mortgagor will not commingle the funds and other assets of Mortgagor
with those of any affiliate, any constituent party or owner of Mortgagor, any
Guarantor, or any affiliate of any constituent party or Guarantor, or any other
person, and will not participate in a cash management system with any such
party.

     (n) Mortgagor will not commingle its assets with those of any other person
or entity and will hold all of its assets in its own name.

     (o) Mortgagor will not guarantee or become obligated for the debts of any
other entity or person and does not and will not hold itself out as being
responsible for the debts or obligations of any other person.

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<PAGE>

                                                              Loan No. 3212525 

     (p) If Mortgagor is a limited partnership or a limited liability company,
at least one general partner or member (an "SPC PARTY") shall be a corporation
whose sole asset is its interest in Mortgagor, and each such SPC Party will at
all times comply, and shall cause Mortgagor to comply, with each of the
representations, warranties and covenants contained in this PARAGRAPH 19 as if
such representation, warranty or covenant was made directly by such SPC Party.

     (q) Mortgagor shall allocate fairly and reasonably any overhead expenses
that are shared with an affiliate, including paying for office space and
services performed by any employee of an affiliate.

     (r) The stationery, invoices and checks utilized by Mortgagor or utilized
to collect its funds or pay its expenses shall bear its own name and shall not
bear the name of any other entity unless such entity is clearly designated as
being Mortgagor's agent.

     (s) Mortgagor shall not pledge its assets for the benefit of any other
person or entity, and other than with respect to the Loan.

     (t) Mortgagor shall correct any known misunderstanding regarding its
separate identity.

     (u) Mortgagor shall not identify itself as a division of any other person
or entity.

     (v) Mortgagor shall at all times cause there to be at least one duly
appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of
Mortgagor, in the case of a corporation, and each SPC Party in Mortgagor in the
case of a limited partnership or limited liability company, in each case
reasonably satisfactory to Mortgagee who is not at the time of initial
appointment, and has not been at any time during the preceding five (5) years:
(a) stockholder, director, officer, employee, partner, attorney or counsel of
the SPC Party, the Mortgagor or any affiliate of either of them; (b) a customer,
supplier or other person who derives more than 10% of its purchases or revenues
from its activities with the SPC Party, the Mortgagor or any affiliate of either
of them; (c) a person or other entity controlling or under common control with
any such stockholder, partner, customer, supplier or other person; or (d) a
member of the immediate family of any such stockholder, director, officer,
employee, partner, customer, supplier or other person. As used herein, the term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of management, policies or activities of a person or
entity, whether through ownership of voting securities, by contract or
otherwise.

     (w) Mortgagor shall not cause or permit the board of directors of each SPC
Party in Mortgagor to take any action which, under the terms of any certificate
of incorporation, by-laws or any voting trust agreement with respect to any
common stock, requires the vote of each 

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<PAGE>

                                                              Loan No. 3212525 

     SPC Party in Mortgagor unless at the time of such action there shall be at
     least one member who is an Independent Director.

     Subject to the other terms and conditions of this Mortgage and the other
Loan Documents, Mortgagor shall have the right to pay dividends and make
payments in return of capital to Mortgagor's shareholders.


     20. EVENTS OF DEFAULT; REMEDIES. Each of the following events shall
constitute an "EVENT OF DEFAULT" hereunder:

          (a) if (i) any installment of interest or principal is not paid within
     five (5) days after the same is due, (ii) the entire Indebtedness is not
     paid on or before the Maturity Date (or if the Maturity Date has been
     accelerated, upon such acceleration), or (iii) any other payment or charge
     due under the Note, this Mortgage or any other Loan Documents is not paid
     when due;

          (b) if any Taxes payable directly to the billing authority by
     Mortgagor are not paid before interest becomes payable on the amount due or
     a penalty is assessed (provided that the foregoing provisions of this
     clause (b) shall be subject to the right to contest Taxes granted to
     Mortgagor in PARAGRAPH 4(b) of this Mortgage, but only for so long as the
     conditions in PARAGRAPH 4(b) of this Mortgage remain satisfied);

          (c) if the Policies are not kept in full force and effect and are not
     delivered to Mortgagee when required hereunder, or if the Policies are not
     delivered to Mortgagee within ten (10) days after request by Mortgagee;

          (d) if any of the provisions of PARAGRAPHS 7, 8(b), 9, 19 or 39 herein
     are violated or not complied with;

          (e) if any of the events described in PARAGRAPH 41 shall occur;

          (f) if at any time any representation or warranty of Mortgagor or any
     Guarantor made herein or in any guaranty, agreement, certificate, report,
     affidavit, owner's affidavit, financial statement or other instrument
     furnished to Mortgagee shall be false or misleading in any material
     respect;

          (g) if any mortgagee under a mortgage on the Mortgaged Property,
     whether superior or subordinate to this Mortgage (i) demands payment in
     full or otherwise accelerates any indebtedness of Mortgagor or (ii)
     otherwise commences the exercise of any remedy available to such party
     under any Loan Document;


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<PAGE>


                                                             Loan No. 3212525


          (h) if Mortgagor fails to cure promptly any violation of any law or
     ordinance affecting the Mortgaged Property (provided that the foregoing
     provisions of this clause (h) shall be subject to any right to contest such
     violation specifically granted to Mortgagor in PARAGRAPH 8 of this
     Mortgage);

          (i) if any Guaranty (as hereinafter defined) is terminated or any
     event or condition occurs which, in the reasonable judgment of Mortgagee,
     may materially impair the ability of any Guarantor to perform its
     obligations under any Guaranty or any Guarantor attempts to withdraw,
     cancel or disclaim any Guaranty;

          (j) if a default by Mortgagor under any of the other terms, covenants
     or conditions of the Note, this Mortgage or any other Loan Document shall
     occur and such default shall not have been cured within thirty (30) days
     after notice from Mortgagee, provided that if such default is not
     susceptible of being cured within such thirty (30) day period and Mortgagor
     shall have commenced the cure of such default within such thirty (30) day
     period and thereafter diligently pursues such cure to completion, then such
     thirty (30) day period shall be extended for a period of ninety (90) days
     from the occurrence of the default, provided, further, that the notice and
     grace period set forth in this subparagraph (j) shall not apply to any
     other Event of Default expressly set forth in this PARAGRAPH 20 or to any
     other Event of Default defined as such in any other Loan Document or to any
     other covenant or condition with respect to which a grace period is
     expressly provided elsewhere; or

          (k) if any of the provisions of PARAGRAPHS 42(d) and/or PARAGRAPH
     42(f) are violated or not complied with, and/or if any representation or
     warranty in PARAGRAPH 42(b) and/or 42(c) shall prove false or misleading in
     any material respect and/or if any of the events described in PARAGRAPH
     42(e) shall occur.

     Upon the occurrence of any Event of Default, the Indebtedness shall
immediately become due at the option of Mortgagee.

     Upon the occurrence of any Event of Default, Mortgagor shall pay interest
on the entire unpaid principal balance of the Note, as defined in and provided
for in the Note.

     Upon the occurrence of any Event of Default, Mortgagee may, to the extent
permitted under applicable law, elect to treat the fixtures included in the
Mortgaged Property either as real property or as personal property, or both, and
proceed to exercise such rights as apply thereto. With respect to any sale of
real property included in the Mortgaged Property made under the powers of sale
herein granted and conferred, Mortgagee may, to the extent permitted by
applicable law, include in such sale any fixtures included in the Mortgaged
Property and relating to such real property.

     21. ADDITIONAL REMEDIES.

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                                                              Loan No. 3212525 

          (a) Upon the occurrence of any Event of Default, Mortgagee may take
     such action, without notice or demand, as it shall deem advisable to
     protect and enforce its rights against Mortgagor and in and to the
     Mortgaged Property or any part thereof or interest therein, including, but
     not limited to, the following actions, each of which may be pursued
     concurrently or otherwise, at such time and in such order as Mortgagee may
     determine, in its sole discretion, without impairing or otherwise affecting
     the other rights and remedies of Mortgagee (i) enter into or upon the Real
     Property, either personally or by its agents, nominees or attorneys and
     dispossess Mortgagor and its agents and servants therefrom, and thereupon
     Mortgagee may (A) use, operate, manage, control, insure, maintain, repair,
     restore and otherwise deal with all and every part of the Mortgaged
     Property and conduct the business thereat, (B) complete any construction on
     the Mortgaged Property in such manner and form as Mortgagee deems
     advisable, (C) make alterations, additions, renewals, replacements and
     improvements to or on the Mortgaged Property, (D) exercise all rights and
     powers of Mortgagor with respect to the Mortgaged Property, whether in the
     name of Mortgagor or otherwise, including, without limitation, the right to
     make, cancel, enforce or modify leases, obtain and evict tenants and
     demand, sue for, collect and receive all earnings, revenues, rents, issues,
     profits and other income of the Mortgaged Property and every part thereof
     and (E) apply the receipts from the Mortgaged Property to the payment of
     the Indebtedness, after deducting therefrom all expenses (including
     reasonable attorneys' fees and expenses) incurred in connection with the
     aforesaid operations and all amounts necessary to pay the taxes,
     assessments, insurance and other charges in connection with the Mortgaged
     Property, as well as just and reasonable compensation for the services of
     Mortgagee and its counsel, agents and employees, or (ii) institute
     proceedings for the complete foreclosure of this Mortgage in which case the
     Mortgaged Property may be sold for cash or upon credit in one or more
     parcels, or (iii) with or without entry, to the extent permitted and
     pursuant to the procedures provided by applicable law, institute
     proceedings for the partial foreclosure of this Mortgage for the portion of
     the Indebtedness then due and payable, subject to the continuing lien of
     this Mortgage for the balance of the Indebtedness not then due, or (iv)
     sell for cash or upon credit the Mortgaged Property or any part thereof and
     all or any part of any estate, claim, demand, right, title and interest of
     Mortgagor therein and rights of redemption thereof, pursuant to power of
     sale or otherwise, at one or more sales, as an entity or in parcels, at
     such time and place, upon such terms and after such notice thereof as may
     be required or permitted by law, and in the event of a sale, by foreclosure
     or otherwise, of less than all of the Mortgaged Property, this Mortgage
     shall continue as a lien on the remaining portion of or estate in the
     Mortgaged Property, or (v) institute an action, suit or proceeding in
     equity for the specific performance of any covenant, condition or agreement
     contained herein or in the Note or any other Loan Document, or (vi) recover
     judgment on the Note or any Guaranty either before, during or after any
     proceedings for the enforcement of this Mortgage or (vii) pursue such other
     remedies as Mortgagee may have under applicable law.

          (b) The purchase money proceeds or avails of any sale made under or by
     virtue of this PARAGRAPH 21, together with any other sums which then may be
     held by Mortgagee under 

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                                                              Loan No. 3212525 

     this Mortgage, whether under the provisions of this PARAGRAPH 21 or
     otherwise, shall be applied as follows:

          FIRST: To the payment of the costs and expenses of any such sale,
     including reasonable compensation to Mortgagee, its agents and counsel, and
     of any judicial proceedings wherein the same may be made, and of all
     expenses, liabilities and advances made or incurred by Mortgagee under this
     Mortgage, together with interest as provided herein on all advances made by
     Mortgagee and all taxes or assessments, except any taxes, assessments or
     other charges subject to which the Mortgaged Property shall have been sold.

          SECOND: To the payment of the whole amount then due, owing or unpaid
     upon the Note for principal, together with any and all applicable interest,
     fees and late charges.

          THIRD: To the payment of any other sums required to be paid by
     Mortgagor pursuant to any provision of this Mortgage or of the Note or of
     the Guaranty.

          FOURTH: To the payment of the surplus, if any, to whomsoever may be
     lawfully entitled to receive the same.

          Mortgagee and any receiver of the Mortgaged Property, or any part
     thereof, shall be liable to account for only those rents, issues and
     profits actually received by it.

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

          (d) Upon the completion of any sale or sales made by Mortgagee under
     or by virtue of this PARAGRAPH 21, Mortgagee, or an officer of any court
     empowered to do so, shall execute and deliver to the accepted purchaser or
     purchasers a good and sufficient instrument, or good and sufficient
     instruments, conveying, assigning and transferring all estate, right, title
     and interest in and to the property and rights sold. Mortgagee is hereby
     irrevocably appointed the true and lawful attorney of Mortgagor, in its
     name and stead, to make all necessary conveyances, assignments, transfers
     and deliveries of the Mortgaged Property and rights so sold and for that
     purpose Mortgagee may execute all necessary instruments of conveyance,
     assignment and transfer, and may substitute one or more persons with like
     power, Mortgagor hereby ratifying and confirming all that its said attorney
     or such substitute or substitutes shall lawfully do by virtue hereof. Any
     such sale or sales made under or by virtue of this PARAGRAPH 21, whether
     made under the power of sale herein granted or under or by virtue of
     judicial proceedings or of a judgment or decree of foreclosure and sale,
     shall operate to divest all the estate, right, title, interest, claim and
     demand whatsoever, whether at law or in equity, of Mortgagor in and to the
     properties and rights so sold, and shall be a perpetual bar both at law 

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                                                              Loan No. 3212525 

     and in equity against Mortgagor and against any and all persons claiming or
     who may claim the same, or any part thereof from, through or under
     Mortgagor.

          (e) In the event of any sale made under or by virtue of this PARAGRAPH
     21 (whether made under the power of sale herein granted or under or by
     virtue of judicial proceedings or of a judgment or decree of foreclosure
     and sale) the entire Indebtedness, if not previously due and payable,
     immediately thereupon shall, anything in the Note, this Mortgage, any
     Guaranty or any other Loan Document to the contrary notwithstanding, become
     due and payable.

          (f) Upon any sale made under or by virtue of this PARAGRAPH 21
     (whether made under the power of sale herein granted or under or by virtue
     of judicial proceedings or of a judgment or decree of foreclosure and
     sale), Mortgagee may bid for and acquire the Mortgaged Property or any part
     thereof and in lieu of paying cash therefor may make settlement for the
     purchase price by crediting upon the Indebtedness the net sales price after
     deducting therefrom the expenses of the sale and the costs of the action
     and any other sums which Mortgagee is authorized to deduct under this
     Mortgage.

          (g) No recovery of any judgment by Mortgagee and no levy of an
     execution under any judgment upon the Mortgaged Property or upon any other
     property of Mortgagor shall affect in any manner or to any extent, the lien
     of this Mortgage upon the Mortgaged Property or any part thereof, or any
     liens, rights, powers or remedies of Mortgagee hereunder, but such liens,
     rights, powers and remedies of Mortgagee shall continue unimpaired as
     before.

     22. RIGHT TO CURE DEFAULTS. Upon the occurrence of any Event of Default or
if Mortgagor fails to make any payment or to do any act as herein provided,
Mortgagee may, but without any obligation to do so and without notice to or
demand on Mortgagor and without releasing Mortgagor from any obligation
hereunder, make or do the same in such manner and to such extent as Mortgagee
may deem necessary to protect the security hereof. Without limiting the
foregoing, Mortgagee may enter upon the Mortgaged Property for such purposes or
appear in, defend, or bring any action or proceeding to protect its interest in
the Mortgaged Property, and the cost and expense thereof (including, without
limitation, attorneys' fees and disbursements to the extent permitted by law),
with interest as provided in this PARAGRAPH 22, shall be immediately due and
payable to Mortgagee upon demand by Mortgagee therefor. All such costs and
expenses incurred by Mortgagee in remedying such Event of Default or in
appearing in, defending, or bringing any such action or proceeding shall bear
interest at the Default Rate, for the period from the date that such cost or
expense was incurred to the date of payment to Mortgagee. All such costs and
expenses, together with interest thereon at the Default Rate, shall be added to
the Indebtedness and shall be secured by this Mortgage. If the principal sum of
the Note or any other amount required to be paid on the Maturity Date under the
Note shall not be paid on the Maturity Date, interest shall thereafter be
computed and paid at the Default Rate.

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                                                              Loan No. 3212525 

     23. LATE PAYMENT CHARGE. If any monthly principal and interest payment is
not paid in accordance with the Note, a late charge (the "LATE CHARGE") shall be
due as provided for in the Note.

     24. PREPAYMENT. The Indebtedness may be prepaid only in accordance with the
terms of the Note.

     25. PREPAYMENT AFTER EVENT OF DEFAULT. A tender of the amount necessary to
satisfy the entire indebtedness, paid at any time following an Event of Default
or acceleration (which acceleration shall be at Mortgagee's sole option),
including at a foreclosure sale or during any subsequent redemption period, if
any, shall be deemed a voluntary prepayment, which payment shall include a
premium equal to the Default Consideration, as determined in accordance with the
terms of the Note.

     26. APPOINTMENT OF RECEIVER. Mortgagee, upon the occurrence of an Event of
Default or in any action to foreclose this Mortgage or upon the actual or
threatened waste to any part of the Mortgaged Property, shall be entitled to the
appointment of a receiver without notice and without regard to the value or
condition of the Mortgaged Property as security for the Indebtedness or the
solvency or insolvency of any person liable for the payment of the Indebtedness.

     27. SECURITY AGREEMENT.

          (a) This Mortgage is both a real property Mortgage and a "security
     agreement" within the meaning of the Uniform Commercial Code. The Mortgaged
     Property includes both real and personal property and all other rights and
     interests, whether tangible or intangible in nature, of Mortgagor in the
     Mortgaged Property. Mortgagor, by executing and delivering this Mortgage
     grants to Mortgagee, as security for the Indebtedness, a security interest
     in the Mortgaged Property to the full extent that the Mortgaged Property
     may be subject to the Uniform Commercial Code (such portion of the
     Mortgaged Property so subject to the Uniform Commercial Code being called
     in this PARAGRAPH 27 the "COLLATERAL"). Mortgagor shall execute and deliver
     to Mortgagee, in form and substance satisfactory to Mortgagee, such
     financing statements and further assurances as Mortgagee may, from time to
     time, reasonably request in order to create, perfect, and preserve the
     security interest(s) herein granted. This Mortgage shall also constitute a
     "fixture filing" for the purposes of the Uniform Commercial Code and shall
     cover all items of the Collateral that are or are to become fixtures.
     Information concerning the security interest(s) herein granted may be
     obtained from Mortgagee upon request.

          If an Event of Default shall occur, Mortgagee, in addition to any
     other rights and remedies which it may have, shall have and may exercise
     immediately and without demand, any and all rights and remedies granted to
     a secured party upon default under the Uniform Commercial Code, including,
     without limiting the generality of the foregoing, the right to take
     possession of the Collateral or any part thereof, and to take such other
     measures as Mortgagee may deem necessary for the care, protection and
     preservation of the Collateral. Upon request 

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                                                              Loan No. 3212525 

     or demand of Mortgagee, Mortgagor shall at its expense assemble the
     Collateral and make it available to Mortgagee at a convenient place
     acceptable to Mortgagee. Mortgagor shall pay to Mortgagee on demand any and
     all expenses, including legal expenses and attorneys' fees and
     disbursements, incurred or paid by Mortgagee in protecting its interest in
     the Collateral and in enforcing its rights hereunder with respect to the
     Collateral. Any notice of sale, disposition or other intended action by
     Mortgagee with respect to the Collateral sent to Mortgagor in accordance
     with the provisions hereof at least five (5) days prior to such shall
     constitute reasonable notice to Mortgagor. The proceeds of any disposition
     of the Collateral, or any part thereof, may be applied by Mortgagee to the
     payment of the Indebtedness in such priority and proportions as Mortgagee
     in its discretion shall deem proper.

          Mortgagor shall notify Mortgagee of any change in name, identity or
     structure of Mortgagor and shall promptly execute, file and record, at its
     sole cost and expense, such Uniform Commercial Code forms as are necessary
     to maintain the priority of the lien of Mortgagee upon and security
     interest in the Collateral. In addition, Mortgagor shall promptly execute,
     file and record such additional Uniform Commercial Code forms or
     continuation statements as Mortgagee shall deem necessary and shall pay all
     expenses and fees in connection with the filing and recording thereof,
     provided that no such additional documents shall increase the obligations
     of Mortgagor under the Note, this Mortgage or the other Loan Documents.
     Mortgagor hereby grants to Mortgagee an irrevocable power of attorney,
     coupled with an interest, to file with the appropriate public office on its
     behalf any financing or other statements signed only by Mortgagee, as
     secured party, in connection with the Collateral covered by this Mortgage.

          (b) That portion of the Mortgaged Property consisting of personal
     property and equipment, shall be owned by Mortgagor and shall not be the
     subject matter of any lease or other transaction whereby the ownership or
     any beneficial interest in any of such property is held by any person or
     entity other than Mortgagor nor shall Mortgagor create or suffer to be
     created any security interest covering any such property as it may from
     time to time be replaced, other than the security interest created herein.

     28. AUTHORITY.

          (a) Mortgagor has full power, authority and legal right to execute
     this Mortgage, and to mortgage, give, grant, bargain, sell, alien, enfeoff,
     convey, confirm, pledge, hypothecate and assign and grant a security
     interest in the Mortgaged Property pursuant to the terms hereof and to keep
     and observe all of the terms of this Mortgage on Mortgagor's part to be
     performed.

          (b) Mortgagor represents and warrants to Mortgagee that Mortgagor is
     not a "foreign person" and covenants with Mortgagee that Mortgagor will
     not, throughout the term of the Note, become a "foreign person" within the
     meaning of Section 1445 and Section 7701 of the Internal Revenue Code of 
     1986, (26 USC Sections 1445, 7701) and the related Treasury Department 
     regulations, including, without limitation, temporary regulations
     (hereinafter collectively the 

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                                                              Loan No. 3212525 

     "CODE"); that is, such Mortgagor is not a non-resident alien, foreign
     corporation, foreign partnership, foreign trust or foreign estate as those
     terms are defined in the Code.

     29. ACTIONS AND PROCEEDINGS. Mortgagee shall have the right to appear in
and defend any action or proceeding brought with respect to the Mortgaged
Property and to bring any action or proceeding, in the name and on behalf of
Mortgagor, which Mortgagee, in its discretion, shall decide should be brought to
protect its interest(s) in the Mortgaged Property.

     30. FURTHER ACTS, ETC. Mortgagor will, at the sole cost of Mortgagor, and
without expense to Mortgagee, do, execute, acknowledge and deliver all and every
such further acts, deeds, conveyances, Mortgages, assignments, notices of
assignments, transfers and assurances as Mortgagee shall, from time to time,
reasonably require, for the better assuring, conveying, assigning, transferring
and confirming unto Mortgagee the property and rights hereby mortgaged, given,
granted, bargained, sold, aliened, enfeoffed, conveyed, confirmed, pledged,
assigned and hypothecated or intended now or hereafter so to be, or which
Mortgagor may be or may hereafter become bound to convey or assign to Mortgagee,
or for carrying out the intention or facilitating the performance of the terms
of this Mortgage or for filing, registering or recording this Mortgage and, on
demand, will execute and deliver within five (5) business days after request of
Mortgagee, and if Mortgagor fails to so deliver, hereby authorizes Mortgagee
thereafter to execute in the name of Mortgagor without the signature of
Mortgagor to the extent Mortgagee may lawfully do so, one or more financing
statements, chattel Mortgages or comparable security instruments, to evidence
more effectively the lien hereof upon the Mortgaged Property. Mortgagor grants
to Mortgagee an irrevocable power of attorney coupled with an interest for the
purpose of exercising and perfecting any and all rights and remedies available
to Mortgagee at law and in equity, including without limitation such rights and
remedies available to Mortgagee pursuant to this PARAGRAPH 30.

     31. RECORDING OF MORTGAGE, ETC. Mortgagor forthwith upon the execution and
delivery of this Mortgage, will cause this Mortgage, and any security instrument
creating a lien or security interest or evidencing the lien hereof upon the
Mortgaged Property, to be filed, registered or recorded and, thereafter, from
time to time, each such other instrument of further assurance to be filed,
registered or recorded, all in such manner and in such places as may be required
by any present or future law in order to publish notice of and fully to protect
the lien or security interest hereof upon, and the interest(s) of Mortgagee in,
the Mortgaged Property. Mortgagor will pay all filing, registration or recording
fees, and all expenses incident to the preparation, execution and acknowledgment
of this Mortgage, any Mortgage supplemental hereto, any security instrument with
respect to the Mortgaged Property and any instrument of further assurance, and
all federal, state, county and municipal, taxes, duties, imposts, assessments
and charges arising out of or in connection with the making, execution, delivery
and/or recording of this Mortgage, any Mortgage supplemental hereto, 
any security instrument with respect to the Mortgaged Property or any instrument
of further assurance, except where prohibited by law so to do. Mortgagor shall
hold harmless and indemnify Mortgagee, its successors and assigns, against any
liability incurred by reason of the imposition of any tax on the making,
execution, delivery and/or recording of this Mortgage, any Mortgage supplemental
hereto,

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<PAGE>

                                                              Loan No. 3212525 

any security instrument with respect to the Mortgaged Property or any
instrument of further assurance.

     32. USURY LAWS. This Mortgage and the Note are subject to the express
condition that at no time shall Mortgagor be obligated or required to pay
interest on the principal balance due under the Note at a rate which could
subject the holder of the Note to either civil or criminal liability as a result
of being in excess of the maximum interest rate which Mortgagor is permitted by
law to contract or agree to pay. If by the terms of this Mortgage or the Note,
Mortgagor is at any time required or obligated to pay interest on the principal
balance due under the Note at a rate in excess of such maximum rate, the rate of
interest under the Note shall be deemed to be immediately reduced to such
maximum rate and the interest payable shall be computed at such maximum rate and
all prior interest payments in excess of such maximum rate shall be applied and
shall be deemed to have been payments in reduction of the principal balance of
the Note and the principal balance of the Note shall be reduced by such amount
in the inverse order of maturity.

     33. SOLE DISCRETION OF MORTGAGEE. Wherever pursuant to this Mortgage,
Mortgagee exercises any right given to it to approve or disapprove, or any
arrangement or term is to be satisfactory to Mortgagee, the decision of
Mortgagee to approve or disapprove or to decide that arrangements or terms are
satisfactory or not satisfactory shall be in the sole discretion of Mortgagee
and shall be final and conclusive, except as may be otherwise specifically
provided herein.

     34. RECOVERY OF SUMS REQUIRED TO BE PAID. Mortgagee shall have the right
from time to time to take action to recover any sum or sums which constitute a
part of the Indebtedness as the same become due, without regard to whether or
not the balance of the Indebtedness shall be due, and without prejudice to the
right of Mortgagee thereafter to bring an action of foreclosure, or any other
action, for a default or defaults by Mortgagor existing at the time such earlier
action was commenced.

     35. MARSHALLING AND OTHER MATTERS. Mortgagor waives, to the extent
permitted by law, the benefit of all appraisement, valuation, stay, extension,
reinstatement and redemption laws now or hereafter in force and all rights of
marshalling in the event of any sale hereunder of the Mortgaged Property or any
part thereof or any interest therein. Further, Mortgagor expressly waives any
and all rights of redemption from sale under any order or decree of foreclosure
of this Mortgage on behalf of Mortgagor, and on behalf of each and every person
acquiring any interest in or title to the Mortgaged Property subsequent to the
date of this Mortgage and on behalf of all persons to the extent permitted by
applicable law.

     36. WAIVER OF NOTICE. Mortgagor shall not be entitled to any notices of any
nature whatsoever from Mortgagee except with respect to matters for which this
Mortgage specifically and expressly provides for the giving of notice by
Mortgagee to Mortgagor and except with respect to matters for which Mortgagee is
required by applicable law to give notice, and Mortgagor hereby expressly waives
the right to receive any notice from Mortgagee with respect to any matter for
which this Mortgage does not specifically and expressly provide for the giving
of notice by Mortgagee to Mortgagor.

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<PAGE>

                                                              Loan No. 3212525 

     37. REMEDIES OF MORTGAGOR. In the event that a claim or adjudication is
made that Mortgagee has acted unreasonably or unreasonably delayed acting in any
case where by law or under the Note, this Mortgage or the other Loan Documents,
it has an obligation to act reasonably or promptly, Mortgagee shall not be
liable for any monetary damages, and Mortgagor's remedies shall be limited to
injunctive relief or declaratory judgment.

     38. REPORTING REQUIREMENTS. At the request of Mortgagee, Mortgagor shall
supply or cause to be supplied to Mortgagee either (a) a copy of a completed
Form 1099-B, Statement for Recipients of Proceeds from Real Estate, Broker and
Barter Exchange Proceeds prepared by Mortgagor's attorney or other person
responsible for the preparation of such form, together with a certificate from
the person who prepared such form to the effect that such form has, to the best
of such person's knowledge, been accurately prepared and that such person will
timely file such form or (b) a certification from Mortgagor that the Loan is a
refinancing of the Mortgaged Property or is otherwise not required to be
reported to the Internal Revenue Service pursuant to Section 6045(e) of the
Code. Mortgagor hereby indemnifies, defends and holds Mortgagee harmless from
and against all loss, cost, damage and expense (including without limitation,
attorneys' fees and disbursements and costs incurred in the investigation,
defense and settlement of claims) that Mortgagee may incur, directly or
indirectly, as a result of or in connection with the assertion against Mortgagee
of any claim relating to the failure of Mortgagee to comply with this PARAGRAPH
38.

     39. HAZARDOUS MATERIALS.

          (a) Mortgagor represents and warrants that (i) the Mortgaged Property
     is now and at all times during Mortgagor's ownership thereof has been free
     of contamination from any petroleum product and all hazardous or toxic
     substances, wastes or substances, any substances which because of their
     quantitative concentration, chemical, radioactive, flammable, explosive,
     infectious or other characteristics, constitute or may reasonably be
     expected to constitute or contribute to a danger or hazard to public
     health, safety or welfare or to the environment, including, without
     limitation, any asbestos (whether or not friable) and any
     asbestos-containing materials, waste oils, solvents and chlorinated oils,
     polychlorinated biphenyls (PCBs), toxic metals, etchants, pickling and
     plating wastes, explosives, reactive metals and compounds, pesticides,
     herbicides, radon gas, urea formaldehyde foam insulation and chemical,
     biological and radioactive wastes, or any other similar materials or any
     hazardous or toxic wastes or substances which are included under or
     regulated by any federal, state or local law, rule or regulation (whether
     now existing or hereafter enacted or promulgated, as they may be amended
     from time to time) pertaining to environmental regulations, contamination,
     clean-up or disclosures, and any judicial or administrative interpretation
     thereof, including any judicial or administrative orders or judgments
     ("HAZARDOUS MATERIALS"), including, without limitation, the Comprehensive
     Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
     section 9601 ET SEQ. ("CERCLA"); The Federal Resource Conservation and
     Recovery Act, 42 U.S.C. section 6901 ET SEQ. ("RCRA"); Superfund Amendments
     and Reauthorization Act of 1986, Public Law No. 99-499 ("SARA"); Toxic
     Substances Control Act, 15 U.S.C. section 2601 ET SEQ. ("TSCA"); the
     Hazardous Materials Transportation Act, 49 U.S.C. section 1801 ET SEQ.; 

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<PAGE>

                                                              Loan No. 3212525 

     and any other state superlien or environmental clean-up or disclosure
     statutes (all such laws, rules and regulations being referred to
     collectively as "ENVIRONMENTAL LAWS"), (ii) Mortgagor has not caused or
     suffered to occur any discharge, spill, uncontrolled loss or seepage of any
     Hazardous Materials onto any property adjoining the Mortgaged Property and
     (iii) neither the Mortgagor nor any tenant or occupant of all or part of
     the Mortgaged Property is now or has been involved in operations at the
     Mortgaged Property which could lead to liability for Mortgagor or any other
     owner of the Mortgaged Property or the imposition of a lien on the
     Mortgaged Property under any Environmental Law.

          (b) At its sole cost and expense, Mortgagor shall comply with and
     shall cause all tenants and other occupants of the Mortgaged Property to
     comply with all Environmental Laws now in effect or hereafter enacted with
     respect to the discharge, generation, removal, transportation, storage and
     handling of Hazardous Materials. Mortgagor shall promptly notify Mortgagee
     if Mortgagor shall become aware of any Hazardous Materials (other than
     "Complying Hazardous Materials," as defined below) on or near the Mortgaged
     Property and/or if Mortgagor shall become aware that the Mortgaged Property
     is in direct or indirect violation of any Environmental Laws and/or if
     Mortgagor shall become aware of any condition on or near the Mortgaged
     Property which shall pose a threat to the health, safety or welfare of
     humans. Mortgagor shall promptly remove all contained Hazardous Materials
     (other than Complying Hazardous Materials) from the Mortgaged Property, and
     shall remediate all other Hazardous Materials present on the Mortgaged
     Property, such removal or remediation, as the case may be, to be performed
     in accordance with all applicable federal, state and local laws, statutes,
     rules and regulations. Mortgagor shall pay immediately when due the cost of
     any removal or remediation of any Hazardous Materials and shall keep the
     Mortgaged Property free of any lien imposed pursuant to any Environmental
     Laws now in effect or hereinafter enacted. The term "COMPLYING HAZARDOUS
     MATERIALS" shall mean substances generally available and (a) used in the
     ordinary course of managing and operating the Mortgaged Property for their
     intended purpose to clean and maintain the Mortgaged Property, or (b) used
     by tenants at the Mortgaged Property in their ordinary course of business;
     provided that, in each case, the use, storage and disposal of all such
     substances shall be conducted in strict compliance with all applicable
     laws.

          (c) Mortgagor grants Mortgagee and its employees and agents an
     irrevocable and non-exclusive license, subject to the rights of tenants, to
     enter the Mortgaged Property to conduct testing and to remove or remediate,
     as the case may be, any Hazardous Materials, and the costs of such testing
     and removal or remediation shall immediately become due to Mortgagee and
     shall be secured by this Mortgage. Promptly upon the request of Mortgagee,
     which may be made at any time during which an Event of Default is
     continuing, at any time Mortgagee has a reasonable basis to believe that
     Hazardous Materials may be present on the Mortgaged Property, or once every
     three (3) years, Mortgagor, at Mortgagor's expense, shall provide Mortgagee
     with an environmental site assessment or environmental audit report, or an
     update of such an assessment or report, all in scope, form and content
     satisfactory to Mortgagee. In addition, Mortgagee, at Mortgagee's expense,
     shall have the right of access to 

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<PAGE>

                                                              Loan No. 3212525 

     the Mortgaged Property at any time to obtain an environmental site
     assessment or audit report, including intensive testing. Mortgagor shall
     maintain the integrity of all storage tanks and drums on or under the
     Mortgaged Property during the term of the Loan in compliance with all
     Environmental Laws now in effect or hereinafter enacted. Mortgagor shall
     follow an operation and maintenance program with respect to all storage
     tanks and drums on or under the Mortgaged Property, which program has been
     approved in writing by Mortgagee.

          (d) Mortgagor shall indemnify Mortgagee and hold Mortgagee harmless
     from and against all liability, loss, cost, damage and expense (including,
     without limitation, reasonable attorneys' fees and costs incurred in the
     investigation, defense and settlement of claims) that Mortgagee may incur
     as a result of or in connection with the assertion against Mortgagee
     (whether as past or present holder of this Mortgage, as mortgagee in
     possession or as past or present owner of the Mortgaged Property by virtue
     of a foreclosure or acceptance of a deed in lieu of foreclosure) of any
     claim relating to the presence and/or release, threatened release, storage,
     disposal, generating or removal of any Hazardous Materials or compliance
     with any Environmental Laws now in effect or hereinafter enacted. The
     obligations and liabilities of Mortgagor under this PARAGRAPH 39 shall
     survive full payment of the Loan, entry of a judgment of foreclosure or
     acceptance of a deed in lieu of foreclosure or any subsequent transfer to a
     third party. It is understood that the presence and/or release of
     substances referred to in this section hereof does not pertain to a
     presence and/or release which first occurs solely after (A) repayment of
     the Loan in full in accordance with the Loan Documents or (B) acquisition
     of title to the Property by Mortgagee upon a foreclosure or acceptance of a
     deed in lieu of foreclosure and surrender of possession and occupancy of
     the Property by Mortgagor, its agents, affiliates, employees and
     independent contractors. Mortgagor shall have the burden of proving that
     the conditions in subsection (d) were satisfied by clear and convincing
     evidence and shall continue to defend with counsel satisfactory to
     Mortgagee and shall indemnify and hold Mortgagee harmless for all matters
     set forth in this Paragraph 39, unless and until a court of competent
     jurisdiction finds that Mortgagor has met such burden.

          (e) Nothing contained herein shall constitute or be construed as a
     waiver of any statutory or judicial federal, state or local law which may
     provide rights or remedies to Mortgagee against Mortgagor or others in
     connection with any claim relating to the Mortgaged Property and pertaining
     to the presence and/or release, threatened release, storage, disposal,
     generating or removal of any Hazardous Materials or to the failure to
     comply with any Environmental Laws now or hereafter enacted.

          (f) Mortgagor, at its sole cost and expense, shall maintain a policy
     of environmental insurance with respect to the Mortgaged Property which
     shall be in form and substance, and with a carrier, satisfactory to
     Mortgagee, and which shall name Mortgagee as an additional insured.

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                                                              Loan No. 3212525 

          (g) Notwithstanding anything to the contrary provided herein,
     Mortgagor shall be entitled to allow the storage and use of Complying
     Hazardous Materials at the Mortgaged Property.

     40. ASBESTOS. Mortgagor shall not install or permit to be installed in the
Mortgaged Property, friable asbestos or any substance containing asbestos. With
respect to any such material currently present in the Mortgaged Property,
Mortgagor, at Mortgagor's expense, shall promptly comply with and shall cause
all occupants of the Mortgaged Property to comply with all present and future
applicable federal, state or local laws, rules, regulations or orders relating
to asbestos, friable asbestos and asbestos containing materials. In the event
any asbestos, friable asbestos or asbestos containing material is discovered at
the Mortgaged Property, Mortgagor shall obtain a comprehensive asbestos report
prepared by a licensed engineer or asbestos consultant acceptable to Mortgagee
describing the form, extent, location and condition of such asbestos and
recommending methods of removal or abatement. Mortgagor shall promptly comply at
its sole cost and expense with the recommendations contained in such report,
such compliance to be performed in accordance with all applicable federal, state
and local laws, statutes, rules and regulations. Mortgagor shall indemnify
Mortgagee and hold Mortgagee harmless from and against all loss, cost, damage
and expense (including, without limitation, attorneys' fees and costs incurred
in the investigation, defense and settlement of claims) that Mortgagee may incur
as a result of or in connection with the assertion against Mortgagee (whether as
past or present holder of the Mortgage, as mortgagee in possession, or as past
or present owner of the Mortgaged Property by virtue of a foreclosure or
acceptance of a deed in lieu of foreclosure) of any claim relating to the
presence or removal of any asbestos substance referred to in this PARAGRAPH 40,
or compliance with any federal, state or local laws, rules, regulations or
orders relating thereto. The obligations and liabilities of Mortgagor under this
PARAGRAPH 40 shall survive full payment of the Loan, entry of a judgment of
foreclosure or a deed in lieu of foreclosure.

     41. BANKRUPTCY OR INSOLVENCY. In the event that Mortgagor or any Guarantor
or, if Mortgagor or any Guarantor is a general or limited partnership, any
general partner of any such entity (a) admits in writing its inability to pay
its debts generally as they become due, or does not pay its debts generally as
they become due, (b) commences as debtor any case or proceeding under any
bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law,
or seeks or consents to the appointment of a receiver, conservator, trustee,
custodian, manager, liquidator or similar official for it or the whole or any
substantial part of its property, (c) has a receiver, conservator, trustee,
custodian, manager, liquidator, or similar official appointed for it or the
whole or any substantial part of its property, by any governmental authority
with jurisdiction to do so, (d) makes a proposal or any assignment for the
benefit of its creditors, or enters into an arrangement or composition or
similar plan or scheme with or for the benefit of creditors generally occurring
in circumstances in which such entity is unable to meet its obligations as they
become due or (e) has filed against it any case or proceeding under any
bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law
which (i) is consented to or not timely contested by such entity, (ii) results
in the entry of an order for relief, appointment of a receiver, conservator,
trustee, custodian, manager, liquidator or similar official for such entity or
the whole or any substantial part of its property or (iii) is not dismissed
within sixty (60) days, an Event of Default shall have occurred and as a result,
the entire principal balance of the 

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                                                              Loan No. 3212525 

Note and all obligations under any Guaranty shall become immediately due and
payable at the option of Mortgagee without notice to Mortgagor or any Guarantor
and Mortgagee may exercise any remedies available to it hereunder, under any
other Loan Document, at law or in equity.

     42. COMPLIANCE WITH ERISA AND STATE STATUTES ON GOVERNMENTAL PLANS.

          (a) Mortgagee represents and warrants to Mortgagor that, as of the
     date of this Mortgage and throughout the term of this Mortgage, the source
     of funds from which Mortgagee extends this Mortgage is its general account,
     which is subject to the claims of its general creditors under state law.

          (b) Mortgagor represents and warrants that, as of the date of this
     Mortgage and throughout the term of this Mortgage, (i) Mortgagor is not an
     "employee benefit plan" as defined in Section 3(3) of the Employee
     Retirement Income Security Act of 1974, as amended ("ERISA"), which is
     subject to Title I of ERISA and (ii) the assets of such Mortgagor do not
     constitute "plan assets" of one or more such plans within the meaning of 29
     C.F.R. Section 2510.3- 101.

          (c) Mortgagor represents and warrants to Mortgagee that, as of the
     date of this Mortgage and throughout the term of this Mortgage (i)
     Mortgagor is not a "governmental plan" within the meaning of Section 3(32)
     of ERISA and (ii) transactions by or with Mortgagor or any Mortgagor are
     not subject to state statues regulating investments of and fiduciary
     obligations with respect to governmental plans.

          (d) Mortgagor covenants and agrees to deliver to Mortgagee such
     certifications or other evidence from time to time throughout the term of
     this Mortgage, as requested by Mortgagee in its sole discretion, that (i)
     Mortgagor is not an "employee benefit plan" or a "governmental plan", (ii)
     Mortgagor is not subject to state statutes regulating investments and
     fiduciary obligations with respect to governmental plans, and (iii) one or
     more of the following circumstances is true:

               (A)Equity interests in Mortgagor are publicly offered securities,
          within the meaning of 29 C.F.R. Section 2510.3-101(b)(2);

                                                                          
               (B)Less than 25 percent of all equity interests in such Mortgagor
          are held by "benefit plan investors" within the meaning of 29 C.F.R.
          Section 2510.3-101(f)(2); or

                                                                          
               (C)Mortgagor qualifies as an "operating company" or a "real
          estate operating company" within the meaning of 29 C.F.R. 
          Section 2510.3-101(c) or (e).

          (e) Any of the following shall constitute an Event of Default under
     this Mortgage, entitling Mortgagee to exercise any and all remedies to
     which it may be entitled under this Mortgage, and any other Loan Documents
     (i) the failure of any representation or

                                       40

<PAGE>

                                                              Loan No. 3212525 

     warranty made by any Mortgagor under this PARAGRAPH 42 to be true and
     correct in all respects, (ii) the failure of any Mortgagor to provide
     Mortgagee with the written certifications and evidence referred to in this
     PARAGRAPH 42 or (iii) the consummation by Mortgagor or any one Mortgagor of
     a transaction which would cause this Mortgage or any exercise of
     Mortgagee's rights under this Mortgage, or the other Loan Documents to
     constitute a non-exempt prohibited transaction under ERISA or a violation
     of a state statute regulating governmental plans, or otherwise subjecting
     Mortgagee to liability for violation of ERISA or such state statute.

          (f) Mortgagor shall indemnify Mortgagee and defend and hold Mortgagee
     harmless from and against all civil penalties, excise taxes, or other loss,
     cost, damage and expense (including, without limitation, attorneys' fees
     and disbursements and costs incurred in the investigation, defense and
     settlement of claims and losses incurred in correcting any prohibited
     transaction or in the sale of a prohibited loan, and in obtaining any
     individual prohibited transaction exemption under ERISA that may be
     required, in Mortgagee's sole discretion) that Mortgagee may incur,
     directly or indirectly, as a result of a default under this PARAGRAPH 42.
     This indemnity shall survive any termination, satisfaction or foreclosure
     of this Mortgage.

     43. ASSIGNMENTS. Mortgagee shall have the right to assign or transfer its
rights under this Mortgage without limitation. Any assignee or transferee shall
be entitled to all the benefits afforded Mortgagee under this Mortgage.

     44. COOPERATION. Mortgagor acknowledges that Mortgagee and its successors
and assigns may (a) sell this Mortgage, the Note and other Loan Documents to one
or more investors as a whole loan, (b) participate the Loan to one or more
investors, (c) deposit this Mortgage, the Note and other Loan Documents with a
trust, which trust may sell certificates to investors evidencing an ownership
interest in the trust assets or (d) otherwise sell the Loan or interest therein
to investors (the transactions referred to in clauses (a) through (d) are
hereinafter referred to as "SECONDARY MARKET TRANSACTIONS"). 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 the Rating Agency involved in any Secondary Market Transaction
including, without limitation, all structural or other changes to the Loan,
modifications to any documents evidencing or securing the Loan, delivery of
opinions of counsel acceptable to the Rating Agency and addressing such matters
as the Rating Agency may require; PROVIDED, HOWEVER, that Mortgagor shall not be
required to modify any documents evidencing or securing the Loan which would
modify (i) the interest rate payable under the Note, (ii) the stated maturity of
the Note, (iii) the amortization of principal of the Note or (iv) any other
material economic term of the Loan. Mortgagor shall provide such information and
documents relating to Mortgagor, Guarantor, if any, the Mortgaged Property, the
Lease and the Lessee as Mortgagee may reasonably request in connection with a
Secondary Market Transaction. Mortgagee shall have the right to provide to
prospective investors any information in its possession, including, without
limitation, financial statements relating to Mortgagor, the Guarantor, if any,
the Mortgaged Property and the Lessee. Mortgagor acknowledges that certain
information 

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<PAGE>

                                                              Loan No. 3212525 

regarding the Loan and the parties thereto and the Mortgaged Property may be
included in a private placement memorandum, prospectus or other disclosure
documents.

     45. INDEMNIFICATION FOR NON-RECOURSE CARVEOUT OBLIGATIONS. Mortgagor hereby
covenants and agrees unconditionally and absolutely to indemnify and save
harmless Mortgagee, its officers, directors, shareholders, employees, agents and
attorneys against all damages, losses, liabilities, obligation, claims,
litigation, demands or defenses, judgments, suits, proceedings, fines,
penalties, costs, disbursements and expenses of any kind or nature whatsoever
(including without limitation attorneys' fees reasonably incurred), which may at
any time be imposed upon, incurred by or asserted or awarded against Mortgagee
and arising from the Non-Recourse Carveout Obligations.

     This indemnity shall survive any foreclosure of this Mortgage, the taking
of a deed in lieu thereof, or any other discharge of the obligations of the
Mortgagor hereunder or a transfer of the Mortgaged Property, even if the
indebtedness secured hereby is satisfied in full. Mortgagor agrees that the
indemnification granted herein may be enforced by Mortgagee without resorting to
or exhausting any other security or collateral or without first having recourse
to the Note or the Mortgaged Property covered by this Mortgage through
foreclosure proceedings or otherwise; provided, however, that, subject to
PARAGRAPH 46 of this Mortgage, nothing herein contained shall prevent Mortgagee
from suing on the Note or foreclosing this Mortgage or from exercising any other
rights under the Loan Documents.

     46. EXCULPATION. Notwithstanding anything to the contrary contained herein,
but subject to PARAGRAPH 45 hereof, any claim based on or in respect of any
liability of Mortgagor under the Note or under this Mortgage or any other Loan
Document shall be enforced only against the Mortgaged Property and any other
collateral now or hereafter given to secure the Loan and not against any other
assets, properties or funds of Mortgagor; PROVIDED, HOWEVER, that the liability
of Mortgagor for loss, costs or damage arising out of the matters described in
subparagraphs (i) through (vi) below (collectively, "Non-Recourse Carveout
Obligations") shall not be limited solely to the Mortgaged Property and other
collateral now or hereafter given to secure the Loan but shall include all of
the assets, properties and funds of Mortgagor: (i) fraud, misrepresentation and
waste, (ii) any rents, issues or profits collected more than one (1) month in
advance of their due dates, (iii) any misapplication of loan proceeds, rents,
issues or profits, security deposits and any other payments from tenants or
occupants (including, without limitation, lease termination fees) insurance
proceeds, condemnation awards, or other sums of a similar nature, (iv) liability
under environmental covenants, conditions and indemnities contained in the
Mortgage and in any separate environmental indemnity agreements, (v) the
unauthorized sale, conveyance or transfer of title to the Mortgaged Property or
encumbrance of the Mortgaged Property and (vi) the failure of Mortgagor to
maintain its status as a single purpose, bankruptcy-remote entity pursuant to
its organizational documents and the Loan Documents. Nothing herein shall be
deemed (w) to be a waiver of any right which Mortgagee may have under any
bankruptcy law of the United States or the State of New Hampshire, including,
but not limited to, Section 506(a), 506(b), 1111(b) or any other provisions of
the U.S. Bankruptcy Code, to file a claim for the full amount of the
indebtedness secured by this Mortgage or to require that all of the collateral
securing the indebtedness secured hereby shall continue to secure all of the
indebtedness owing to 

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<PAGE>

                                                              Loan No. 3212525 

Mortgagee under the Note, this Mortgage and the other Loan Documents; (x) to
impair the validity of the indebtedness secured by this Mortgage; (y) to impair
the right of Mortgagee as Mortgagee or secured party to commence an action to
foreclose any lien or security interest; or (z) to modify, diminish or discharge
the liability of any guarantor under any guaranty.

     47. NOTICES. Any notice, demand, statement, request or consent made
hereunder shall be effective and valid only if in writing, referring to this
Mortgage, signed by the party giving such notice, and delivered either
personally to such other party, or sent by nationally recognized overnight
courier delivery service or by certified mail of the United States Postal
Service, postage prepaid, return receipt requested, addressed to the other party
as follows (or to such other address or person as either party or person
entitled to notice may by notice to the other party specify):

                TO MORTGAGEE:

                John Hancock Real Estate Finance, Inc.
                John Hancock Place, T-53
                200 Clarendon Street
                Boston, MA 02116
                Re: Loan No.  3212525

                and with a copy concurrently to:

                Hebb & Gitlin
                A Professional Corporation
                One State Street
                Hartford, CT  06103
                Attention: John B. D'Agostino, Esq.

                TO MORTGAGOR:

                Birch Pond Realty Corporation
                100 Birch Pond Drive
                Tilton, New Hampshire 03289

                and with a copy concurrently to:

                Foley, Hoag & Eliot, Esq.
                One Post Office Square
                Boston, Massachusetts 02109
                Attention: Deborah Breznay, Esq.

                                       43

<PAGE>

                                                              Loan No. 3212525 

     Unless otherwise specified, notices shall be deemed given as follows: (i)
if delivered personally, when delivered, (ii) if delivered by nationally
recognized overnight courier delivery service, on the day following the day such
material is sent, or (iii) if delivered by certified mail, on the third day
after the same is deposited with the United States Postal Service as provided
above.

     48. NON-WAIVER. The failure of Mortgagee to insist upon strict performance
of any term hereof shall not be deemed to be a waiver of any term of this
Mortgage. Mortgagor shall not be relieved of Mortgagor's obligations hereunder
by reason of (a) failure of Mortgagee to comply with any request of Mortgagor or
any Guarantor to take any action to foreclose this Mortgage or otherwise enforce
any of the provisions hereof or of the Note, any Guaranty or the other Loan
Documents, (b) the release, regardless of consideration, of the whole or any
part of the Mortgaged Property, or of any person liable for the Indebtedness or
portion thereof or (c) any agreement or stipulation by Mortgagee extending the
time of payment or otherwise modifying or supplementing the terms of the Note,
any Guaranty, this Mortgage or the other Loan Documents. Mortgagee may resort
for the payment of the Indebtedness to any other security held by Mortgagee in
such order and manner as Mortgagee, in its discretion, may elect. Mortgagee may
take action to recover the Indebtedness, or any portion thereof, or to enforce
any covenant hereof without prejudice to the right of Mortgagee thereafter to
foreclose this Mortgage. The rights of Mortgagee under this Mortgage shall be
separate, distinct and cumulative and none shall be given effect to the
exclusion of the others. No act of Mortgagee shall be construed as an election
to proceed under any one provision herein to the exclusion of any other
provision. Mortgagee shall not be limited exclusively to the rights and remedies
herein stated but shall be entitled to every right and remedy now or hereafter
afforded by law.

     49. JOINT AND SEVERAL LIABILITY. If there is more than one party comprising
Mortgagor, then the obligations and liabilities of each party under this
Mortgage shall be joint and several.

     50. SEVERABILITY. If any term, covenant or condition of the Note, any
Guaranty or this Mortgage is held to be invalid, illegal or unenforceable in any
respect, the Note, any Guaranty and this Mortgage shall be construed without
such provision.

     51. DUPLICATE ORIGINALS. This Mortgage may be executed in any number of
duplicate originals and each such duplicate original shall be deemed to
constitute but one and the same instrument.

     52. INDEMNITY AND MORTGAGEE'S COSTS. Mortgagor agrees to pay all costs,
including, without limitation, attorneys' fees and expenses, incurred by
Mortgagee in enforcing the terms hereof and/or the terms of any of the other
Loan Documents or the Note or any Guaranty, whether or not suit is filed and
waives to the full extent permitted by law all right to plead any statute of
limitations as a defense to any action hereunder. Mortgagor agrees to indemnify
and hold Mortgagee harmless from any and all liability, loss, damage or expense
(including, without limitation, attorneys' fees and disbursements) that
Mortgagee may or might incur hereunder or in connection with the enforcement of
any of its rights or remedies hereunder, any action taken by Mortgagee
hereunder, or by reason or in defense of any and all claims and demands
whatsoever that may be asserted against Mortgagee 

                                       44

<PAGE>

                                                              Loan No. 3212525 

arising out of the Mortgaged Property; and should Mortgagee incur any such
liability, loss, damage or expense, the amount thereof with interest thereon at
the Default Rate shall be payable by Mortgagor immediately without demand, shall
be secured by this Mortgage, and shall be a part of the Indebtedness.

     53. CERTAIN DEFINITIONS. Unless the context clearly indicates a contrary
intent or unless otherwise specifically provided herein, words used in this
Mortgage shall be used interchangeably in singular or plural form. The word
"MORTGAGOR" shall mean Mortgagor and/or any subsequent owner or owners of the
Mortgaged Property or any part thereof or interest therein. The word "MORTGAGEE"
shall mean Mortgagee or any subsequent holder of the Note. The word "GUARANTY"
shall mean any Guaranty of Payment, Guaranty of Completion, Guaranty of
Collection, Environmental Indemnity or any other Guaranty or Indemnity given at
any time to or for the benefit of Mortgagee in connection with the Loan. The
word "GUARANTOR" shall mean any person giving or making any Guaranty. The word
"NOTE" shall mean the Note or any other evidence of indebtedness secured by this
Mortgage. The words "LOAN DOCUMENTS" shall mean the Note, this Mortgage, the
loan agreement, if any, between Mortgagor and Mortgagee, the security agreement,
if any, between Mortgagor and Mortgagee, the assignment of leases and rents, if
any, made by Mortgagor to Mortgagee, any escrow agreements between Mortgagor and
Mortgagee, the assignment of contracts, if any, made by Mortgagor to Mortgagee,
all Guaranties, if any, made to Mortgagee, any other Mortgage or deed of trust
securing the Note and any other agreement, instrument, affidavit or document
executed by Mortgagor, any Guarantor or any indemnitor and delivered to
Mortgagee in connection with the Loan. The word "PERSON" shall include an
individual, corporation, partnership, trust, unincorporated association,
government, governmental authority or other entity. The words "MORTGAGED
PROPERTY" shall include any portion of the Mortgaged Property or interest
therein. Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns and pronouns shall include the plural and vice versa.

     54. NO ORAL CHANGE. This Mortgage, and any provisions hereof, may not be
modified, amended, waived, extended, changed, discharged or terminated orally or
by any act or failure to act on the part of Mortgagor or any one Mortgagor or
Mortgagee, but only by an agreement in writing signed by the party against whom
enforcement of any modification, amendment, waiver, extension, change, discharge
or termination is sought.

     55. NO FOREIGN PERSON. Mortgagor is not a "foreign person" within the
meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended
and the related Treasury Department Regulations, including temporary
regulations.

     56. SEPARATE TAX LOT. Except as set forth in the Borrower's Certificate
delivered to Mortgagee by Mortgagor herewith, the Mortgaged Property is assessed
for real estate tax purposes as one or more wholly independent tax lot or lots,
separate from any adjoining land or improvements not constituting a part of such
lot or lots, and no other land or improvements is assessed and taxed together
with the Mortgaged Property or any portion thereof. Mortgagor hereby covenants
and agrees to use its best efforts to cause the Mortgaged Property to be a
separate tax lot. In any event, 

                                       45

<PAGE>

                                                              Loan No. 3212525 

Mortgagor agrees to pay before delinquency any and all taxes assessed against
any portion of the Mortgaged Property, including any taxes assessed against
other property in the event such assessment includes any portion of the
Mortgaged Property.

     57. RIGHT TO RELEASE ANY PORTION OF THE MORTGAGED PROPERTY. Mortgagee may
release any portion of the Mortgaged Property for such consideration as
Mortgagee may require without, as to the remainder of the Mortgaged Property, in
any way impairing or affecting the lien or priority of this Mortgage, or
improving the position of any subordinate lienholder with respect thereto,
except to the extent that the obligations hereunder shall have been reduced by
the actual monetary consideration, if any, received by Mortgagee for such
release, and may accept by assignment, pledge or otherwise any other property in
place thereof as Mortgagee may require without being accountable for so doing to
any other lienholder. This Mortgage shall continue as a lien and security
interest in the remaining portion of the Mortgaged Property.

     58. SUBROGATION. The Mortgagee shall be subrogated for further security to
the lien, although released of record, of any and all encumbrances paid out of
the proceeds of the Loan secured by this Mortgage.

     59. ADMINISTRATIVE FEES. Mortgagee may charge reasonable administrative
fees and be reimbursed for all costs and expenses, including reasonable
attorneys' fees and disbursements, associated with reviewing and processing
post-closing requests of Mortgagor.

     60. DISCLOSURE. Mortgagor represents and warrants that it has fully
disclosed to Mortgagee all facts material to the Mortgaged Property, the
Mortgagor, the Mortgagor's business
operations to the extent material to this loan transaction, any guarantor of
Non-Recourse Carveout Obligations and any indemnitor of environmental
liabilities.

     61. HEADINGS, ETC.. The headings and captions of various paragraphs of this
Mortgage are for convenience of reference only and are not to be construed as
defining or limiting, in any way, the scope or intent of the provisions hereof.

     62. ADDRESS OF REAL PROPERTY. The street address of the Real Property is as
follows: 100 Birch Pond Drive, Tilton, Belknap County, New Hampshire.

     63. WIRE TRANSFER. All payments of principal and interest and other amounts
due under this Mortgage shall be paid to Mortgagee by wire transfer of
immediately available funds to such bank or place, or in such manner, as
Mortgagee may from time to time designate.

     64. PUBLICITY. Mortgagor agrees that Mortgagee, at its expense, may
publicize the financing of the Mortgaged Property in trade and similar
publications.

     65. RELATIONSHIP. The relationship of Mortgagee to Mortgagor under this
Mortgage is strictly and solely that of lender and borrower and nothing
contained in this Mortgage or any other 

                                       46

<PAGE>

                                                              Loan No. 3212525 

Loan Document is intended to create, or shall in any event or under any
circumstance be construed to create, a partnership, joint venture,
tenancy-in-common, joint tenancy or other relationship of any nature whatsoever
between Mortgagee and Mortgagor other than that of lender and borrower.

     66. HOMESTEAD. The Mortgaged Property is not homestead property. Mortgagor
hereby waives and renounces all homestead and exemption rights provided by the
constitution and the laws of the United States and of any state, in and to the
Land as against the collection of the Indebtedness, or any part hereof.

     67. NO THIRD PARTY BENEFICIARIES. Nothing contained herein is intended or
shall be deemed to create or confer any rights upon any third person not a party
hereto, whether as a third-party beneficiary or otherwise, except as expressly
provided herein.

     68. ENTIRE AGREEMENT. This Mortgage, the Note and the other Loan Documents
constitute the entire agreement among Mortgagor and Mortgagee with respect to
the subject matter hereof and all understandings, oral representations and
agreements heretofore or simultaneously had among the parties are merged in, and
are contained in, such documents and instruments.

     69. SERVICER. Mortgagee may from time to time appoint a servicer (the
"SERVICER") to administer the Loan, which Servicer shall have the power and
authority to exercise all of the rights and remedies of Mortgagee and to act as
agent of Mortgagee hereunder.

     70. GOVERNING LAW; CONSENT TO JURISDICTION. THIS MORTGAGE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE IN WHICH THE MORTGAGED
PROPERTY IS LOCATED WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF. EACH
MORTGAGOR, ENDORSER AND GUARANTOR HEREBY SUBMITS TO PERSONAL JURISDICTION IN
SAID STATE AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN
SAID STATE (AND ANY APPELLATE COURTS TAKING APPEALS THEREFROM) FOR THE
ENFORCEMENT OF SUCH MORTGAGOR'S, ENDORSER'S OR GUARANTOR'S OBLIGATIONS
HEREUNDER, UNDER THE NOTE, THE GUARANTY AND THE OTHER LOAN DOCUMENTS, AND WAIVES
ANY AND ALL PERSONAL RIGHTS UNDER THE LAW OF ANY OTHER STATE TO OBJECT TO
JURISDICTION WITHIN SUCH STATE FOR THE PURPOSES OF SUCH ACTION, SUIT, PROCEEDING
OR LITIGATION TO ENFORCE SUCH OBLIGATIONS OF SUCH MORTGAGOR, ENDORSER OR
GUARANTOR. EACH MORTGAGOR, ENDORSER AND GUARANTOR HEREBY WAIVES AND AGREES NOT
TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS MORTGAGE, THE NOTE, ANY GUARANTY OR ANY OTHER LOAN DOCUMENT,
(A) THAT IT IS NOT SUBJECT TO SUCH JURISDICTION OR THAT SUCH ACTION, SUIT OR
PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN THOSE COURTS OR THAT
THIS MORTGAGE, THE NOTE, THE GUARANTY AND/OR ANY OF THE OTHER LOAN DOCUMENTS MAY
NOT BE ENFORCED IN OR BY THOSE COURTS OR THAT IT IS EXEMPT OR IMMUNE FROM
EXECUTION, (B) THAT THE ACTION, SUIT OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM OR (C) THAT THE VENUE OF THE ACTION, SUIT 

                                       47

<PAGE>

                                                              Loan No. 3212525 

OR PROCEEDING IS IMPROPER. IN THE EVENT ANY SUCH ACTION, SUIT, PROCEEDING OR
LITIGATION IS COMMENCED, MORTGAGOR, ENDORSER AND GUARANTOR AGREE THAT SERVICE OF
PROCESS MAY BE MADE, AND PERSONAL JURISDICTION OVER SUCH MORTGAGOR, ENDORSER OR
GUARANTOR OBTAINED, BY SERVICE OF A COPY OF THE SUMMONS, COMPLAINT AND OTHER
PLEADINGS REQUIRED TO COMMENCE SUCH LITIGATION UPON SUCH MORTGAGOR, ENDORSER OR
GUARANTOR AT 100 BIRCH POND DRIVE, TILTON, NEW HAMPSHIRE 03289.

     71. YEAR 2000. Mortgagor shall take all action necessary to ensure that all
software, hardware, equipment, goods, and systems used by or material to the
physical operations, business operations, or financial reporting of Mortgagor or
of the equipment, the improvements, and all other components of the Mortgaged
Property will not malfunction or cease to function or provide invalid or
incorrect results and will continue to operate and perform date-sensitive
functions before, during, and after the Year 2000, including with regard to the
Year 2000 leap year.

     72. PARTIAL RELEASE. Subsequent to the Closing, Mortgagor may request that
Mortgagee release from the lien of this Mortgage and the other Loan Documents
the land shown as Lots 1 and 3 on a certain plan (the "SUBDIVISION PLAN")
entitled "Subdivision, Plan of Land Prepared for DM Management Company, Route
132 (Sanborn Road) Tilton, NH, 2 Sheets" dated January 20, 1999, by Yerkes
Surveying Consultants, Laconia NH, together with the improvements thereon (the
"Release Parcel"). Mortgagee will release the Release Parcel, provided that:

          (a) no default has occurred under this Mortgage or the Loan Documents

          (b) the loan to value ratio with respect to the Mortgaged Property
     remaining after the release ("Remaining Security") is not greater than 75%
     and the debt service coverage ratio is not less than 1.40x, all as
     determined by Mortgagee in its sole discretion. ;

          (c) all documentation pertaining to the Remaining Security, including
     without limitation, the existing zoning, are satisfactory to Mortgagee;

          (d) the Release Parcel and the Remaining Security shall have been
     legally and validly subdivided in accordance with, and the Remaining
     Security shall be in compliance with, all applicable federal, state and
     local laws and regulations, including, without limitation, all laws and
     regulations pertaining to environmental, land use, zoning, minimum lot
     size, parking requirements, setback, frontage, site plan approval and
     access to a public way, and both parcels function legally and operationally
     independently in the reasonable judgment of Mortgagee, except as
     specifically approved by Mortgagee;

          (e) the Remaining Security and the Release Parcel shall each
     constitute separate tax and zoning lots and Mortgagor shall deliver to
     Mortgagee evidence in form and substance satisfactory to Mortgagee and its
     special counsel, including without limitation, an opinion of 

                                       48

<PAGE>

                                                              Loan No. 3212525 

     Mortgagor's counsel, that the Remaining Security constitutes a lawful
     parcel and has been separately assessed for real property tax purposes;

          (f) Mortgagor delivers to Mortgagee surveys of the Release Parcel and
     the Remaining Security, together with surveyors' certificates addressed to
     Mortgagee and the title insurance company insuring title to the Mortgaged
     Property, which surveys shall comply with all of Mortgagee's survey
     requirements, including without limitation showing the acreage, the metes
     and bounds, easements, setback lines, and proper legal description of both
     the Release Parcel and the Remaining Security, the dimensions and locations
     of the improvements, and show that the Remaining Security has all necessary
     utility lines, parking areas, sewer and septic lines and tanks, drain
     fields, access to a public way, and such other items as Mortgagee and its
     counsel shall request;

          (g) Mortgagor delivers to Mortgagee an endorsement to the title
     insurance policy covering the Mortgaged Property (1) updating such policy
     to the date of the recording of such release, (2) reflecting the new legal
     description of the Remaining Security, (3) certifying and insuring that
     this Mortgage remains and constitutes an enforceable first lien on the
     Remaining Security, subject to no other exceptions to title except the
     title exceptions contained in the title policy issued to Mortgagee at the
     time this Mortgage was first recorded, and (4) insuring that the Remaining
     Security continues to be in compliance with all state and local zoning,
     subdivision and parking laws and regulations;

          (h) Mortgagor delivers to Mortgagee a valid, binding and enforceable
     agreement signed by the Mortgagor with respect to the utility easement over
     Lot 3 appurtenant to the Remaining Security and the pipe drainage easement
     over the Remaining Security appurtenant to Lot 3, which are in form and
     substance satisfactory to Mortgagee, and in the event that the Release
     Parcel is the subject of an application for a zoning variance or other
     governmental permit of which Mortgagor receives notice and to which
     Mortgagor has standing to object, then Mortgagor will promptly notify
     Mortgagee of any such application and cooperate with Mortgagee in the event
     Mortgagee desires to oppose the granting of any such variance or other
     permit;

          (i) the release of the Release Parcel will not violate the terms of,
     or entitle an tenant to reduce the rent payable under, any lease on the
     Remaining Security;

          (j) Mortgagor shall have the Certificate of Occupancy (to the extent
     available under applicable laws, regulations and codes) for the Remaining
     Security duly amended to reflect the subdivision of the Release Parcel from
     the Remaining Security;

          (k) Mortgagor delivers notice to, and obtains consent of, any party
     requiring notice or consent to the release of the Release Parcel
     (including, without limitation, any tenant under any lease);

          (l) Mortgagor provides Mortgagee with (1) evidence satisfactory to
     Mortgagee and its special counsel that the release will not interfere with
     vehicular, pedestrian or rail access, utilities to or other items affecting
     the Remaining Parcel, (2) any easements for access, utilities 

                                       49

<PAGE>

                                                              Loan No. 3212525 

     or other items affecting the Release Parcel required by Mortgagee and its
     special counsel and satisfactory to them in form and substance, and (3) any
     joint use agreement deemed appropriate by Mortgagee and its special
     counsel, satisfactory in form and substance to them; it is understood that
     the agreement by Mortgagee to consent to or to subordinate its lien to any
     easements or use agreements with respect to the Remaining Security is
     predicated on receiving this information;

          (m) Mortgagee and its special counsel are satisfied with the size,
     boundaries and location of the Release Parcel, provided that all other
     conditions hereunder are met;

          (n) the Release Parcel has legal access satisfactory to Mortgagee and
     its special counsel;

          (o) no construction shall occur on the Release Parcel prior to the
     release thereof in accordance with the conditions set forth herein; and

          (p) Mortgagor shall pay all legal, administrative, title, recording an
     any other costs and expenses incurred in connection with the release of the
     Release Parcel including, without limitation, any such costs and expenses
     incurred by Mortgagee.

     73. SPECIAL STATE PROVISIONS.

          (a) INCONSISTENCY. In the event of any inconsistency between this
     Paragraph 73 and the other Paragraphs of this Mortgage, the terms and
     conditions of this Paragraph 73 shall control and be binding.

          (b) MORTGAGE COVENANTS. In addition, to and in no way abrogating or
     amending the granting language or any other term contained in this
     Mortgage, for consideration paid, and to timely secure the payment and
     performance of the Indebtedness, the Mortgagee hereby grants the Mortgaged
     Property to Mortgagee with Mortgage Covenants.

          (c) POWER OF SALE. In addition to any other rights and remedies of the
     Mortgagee set forth in this Mortgage, including, but not limited to, those
     set forth in Paragraph 21, this Mortgage is granted with, contains and is
     subject to the STATUTORY POWER OF SALE and Mortgagee shall have the ability
     and option to exercise the STATUTORY POWER OF SALE and, upon compliance
     with the requirements of the New Hampshire laws respecting a Power of Sale
     mortgage foreclosure of real estate, may sell the Mortgaged Property, or
     any part thereof at public auction at some place in the city or town where
     the Mortgaged Property is situated or at the principal office of the
     Mortgagee or any other location at Mortgagee's election, in one or more
     lots, at one or several sales, to the highest bidder, and Mortgagor hereby
     appoints Mortgagee, as Mortgagor's agent, and attorney-in-fact to sell and
     convey the Mortgaged Property so sold to the purchaser by indefeasible
     title, discharged of all rights of redemption by Mortgagor or its
     successors and assigns, or any other person claiming under them. It is
     agreed that Mortgagee, its successors and assigns, or any person on their
     behalf, may purchase at any sale or sales made as aforesaid.

                                       50


<PAGE>


                                                              Loan No. 3212525 

          (d) STATUTORY CONDITIONS. This Mortgage is given upon and contains the
     Statutory Conditions and for any breach of said Statutory Conditions,
     Mortgagee shall have any and all remedies available to it pursuant to this
     Mortgage, including, but not limited to the STATUTORY POWER OF SALE.

          (e) ENTRY NOT A TRESPASS OR BREACH OF PEACE. If the Mortgagee shall
     enter upon the Mortgaged Premises pursuant to the exercise of any of its
     rights or remedies pursuant to this Mortgage or the Loan Documents,
     Mortgagee shall not be deemed to have committed a trespass or a breach of
     the peace.

          (f) ADDITIONAL ENVIRONMENTAL LAWS. The definition of Environmental
     Laws shall include New Hampshire RSA 125-A, 125-C, 125-I, 146-A, 146-C,
     147-A, 147-B, 149-I and 149-M, as they may be amended.

          (g) ADDITIONAL WAIVER PROVISIONS. MORTGAGOR AND MORTGAGEE EACH, TO THE
     EXTENT PERMITTED BY LAW, WAIVE ANY RIGHT TO A JURY TRIAL OR TO HAVE A JURY
     PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
     OR OTHERWISE BETWEEN MORTGAGEE AND MORTGAGOR ARISING OUT OF, IN CONNECTION
     WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN
     MORTGAGOR AND MORTGAGEE IN CONNECTION WITH THE LOAN, THE NOTE, THE MORTGAGE
     OR THE LOAN DOCUMENTS OR ANY OTHER AGREEMENT, INSTRUMENT OR DOCUMENT
     EXECUTED OR DELIVERED IN CONNECTION THEREWITH OR THE TRANSACTIONS RELATED
     THERETO. THIS WAIVER SHALL NOT IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR
     MODIFY MORTGAGEE'S ABILITY TO PURSUE REMEDIES PURSUANT TO ANY CONFESSION OF
     JUDGMENT OR COGNOVIT PROVISION CONTAINED IN THIS NOTE, OR ANY OTHER
     AGREEMENT, INSTRUMENT OR DOCUMENT RELATED THERETO.



    [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE(S) FOLLOW(S)]


                                       51

<PAGE>


                                                              Loan No. 3212525 

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

                                   BIRCH POND REALTY CORPORATION
Witnessed By:                      (doing business in the State of New Hampshire
                                    as BPRC)



                                                  By: /s/ Olga L. Conley
                                                    ---------------------------
Name:  /s/ Deborah B. Breznay                           Name: Olga L. Conley
    ---------------------------                   Its:  Treasurer



Name:  /s/ Deborah B. Breznay
    ---------------------------






COMMNWEALTH OF MASSACHUSETTS   )
                               )
COUNTY OF SUFFOLK              )

     The foregoing instrument was acknowledged before me this day of March,
1999, by , of Birch Pond Realty Corporation, a Delaware corporation (doing
business in the State of New Hampshire as BPRC), on behalf of said corporation.

                                          /s/ Katherine Culkin
                                          -------------------------------------
                                          Notary Public:   Katherine Culkin
                                          My Commission Expires: 05/27/05

                                          [SEAL]



                                       52



<PAGE>


                                        EXHIBIT A

     That certain lot or tract of land, with the buildings and improvements 
thereon, located in Tilton, Belknap County, New Hampshire, and being bounded 
and described as follows:

     Beginning at the northeast corner of the described premises at land now or 
formerly of the State of New Hampshire and at a re-bar on the westerly 
sideline of Route 132, Sanborn Road:

     1. S 19 DEG. 20'44" E 45.87' by said Route 132 to a point; then

     2. By a curve to the right having a Delta of 17 DEG. 00'15", a radius of 
        930.00 feet, an arc distance of 276.00 feet, and a chord bearing of S 
        10 DEG. 50'37" E and a chord distance of 274.99 feet by said Route to 
        a re-bar; then

     3. S 02 DEG. 20'29" E 155.23' by said Route to a re-bar; then

     4. S 03 DEG. 47'32" W 86.83' by said Route to a rebar; then

     5. S 03 DEG. 05'40" W 523.55' by said Route to a rebar; then

     6. By a curve to the left having a Delta of 01 DEG. 40'53" and a radius of 
        11,489.16 feet, an arc distance of 337.18 feet, and a chord bearing of 
        S 02 DEG. 15'13" W and a chord distance of 337.17 feet by said Route to 
        a re-bar; then

     7. By a curve to the left having a Delta of 02 DEG. 59'59" and a radius of 
        11,492.87 feet, an arc distance of 601.71 feet, and a chord bearing of 
        S 01 DEG. 03'20" W and a chord distance of 601.64 feet by said Route to 
        a re-bar; then

     8. By a curve to the left having a Delta of 01 DEG. 52'45" and a radius of 
        11,501.15 feet, an arc distance of 377.22 feet, and a chord bearing of 
        S 02 DEG. 31'31" W and a chord distance of 377.20 feet by said Route 
        to a re-bar; then

     9. S 03 DEG. 27'54" E 248.12' by said Route to a point at now or formerly 
        of Oliver; then

     10. S 89 DEG. 39'25" W 287.08' by said land of Oliver to a rebar; then

     11. S 08 DEG. 48'25" W 225.00' by said land of Oliver to a rebar; then

     12. S 08 DEG. 48'25" W, a distance of 20.00' to a point at land now or 
         formerly of

                                     Page 1 of 3


<PAGE>


     the State of New Hampshire; then

13.  N70 DEG. 50'37"W 54.78' by land of the State; then

14.  N 81 DEG. 42'19"W 58.01' by land of the State; then

15.  S 82 DEG. 53'59"W142.27' by land of the State; then

16.  S76 DEG. 57'22"W 157.00' by land of the State; then

17.  S 89 DEG. 46'48"W 67.18' by land of the State; then

18.  N65 DEG. 59'17"W 79.43' by land of the State; then

19.  N47 DEG. 43'27"W 87.84' by land of the State; then

20.  N27 DEG.29'46"W 83.28' by land of the State; then

21.  S73 DEG. 59'49"W 53.30' by land of the State; then

22.  N45 DEG. 19'18"W 43.24' by land of the State; then

23.  N26 DEG. 13'08" W16.85' by land of the State; then

24.  S83 DEG. 49'28"W 29.65' by land of the State; then

25.  N60 DEG. 40'11"W 56.97' by land of the State; then

26.  N38 DEG. 05'58"W 37.81' by land of the State; then

27.  N60 DEG. 17'32"W 38.15' by land of the State; then

28.  N31 DEG. 50'23"W 27.09' by land of the State; then

29.  N74 DEG. 42'14"W 22.80' by land of the State; then

30.  S74 DEG. 47'09" W 91.21' by land of the State; then

31.  N87 DEG. 39'11"W 149.12' by land of the State; then

32.  S72 DEG. 41'13"W 67.05' by land of the State; then

33.  N72 DEG. 57'33" W 454.56' by land of the State; then

34.  N29 DEG. 36'39"W 498.10' by land of the State: then




                              Page 2 of 3

<PAGE>

     35.  N29 DEG. 36'39"W 56.30' by land of the State; then

     36.  N16 DEG. 46'49"W 348.61' by land of the State to a concrete bound; 
          then

     37.  N14 DEG. 31'44"E 885.88' by land of the State to a concrete bound; 
          then

     38.  N58 DEG. 29'32"E 430.73' by land of the State to a re-bar; then

     39.  N05 DEG. 11'37"W 335.93' by land of the State to a re-bar; then

     40.  S76 DEG. 46'28"W 55.90' by land of the State to a concrete bound; 
          then

     41.  N85 DEG. 46'21"W 3.96' by land of the State to a point at land now
          or formerly of DM Management Company ("DM"); then

     42.  N66 DEG. 32'51"E 1044.50 feet by land of said DM, then

     43.  N85 DEG. 07'38"E 305.57' by land of said DM to a stone wall; then

     44.  S25 DEG. 23'01"E 51.24' by land now or formerly of Miller and said
          wall to a re-bar at land of the State; then

     45.  S66 DEG. 06'34"W 50.17' by land of the State and a stone wall to a
          drill hole in the wall; then

     46.  S21 DEG. 06'31"E 95.43' by land of the State; then

     47.  S18 DEG. 16'00"E 175.19' by land of the State to a re-bar; then

     48.  N69 DEG. 11'55"E 499.88' by land of the State to the point of 
          beginning.

     Meaning and intending to describe the land shown on a Plan entitled, 
"ALTA/ACSM LAND TITLE SURVEY, Plan of Land Prepared for DM Management 
Company, Route 132 (Sanborn Road), Tilton, NH," dated November 19, 1998, by 
Yerkes Surveying Consultants and recorded in the Belknap County Registry of 
Deeds on February 16, 1999, in Drawer L-31 #'s 61 and 62.

                                  Page 3 of 3


<PAGE>

                                  EXHIBIT B

                       PERSONAL PROPERTY OWNED BY TENANT

<TABLE>
<CAPTION>

Qty    Manufacturer, Description Model No./Serial No.            Location
---    ----------------------------------------------            --------
<S>    <C>                                                       <C>
                                                                 12 Sandborn St
                                                                 Tilton, NH 03276
(1)     American Bater Model 6042HAT-930R
(36)    Coils of 10 gauge Baling Wire

        Above equipment distributed by: Aquest Corporation

(1)     M8010 Sweeper/Scrubber, Rider Model 8010 S/N: 8010-218)
        Machine as equipped:
        6010 Battery Sweeper Scrubber
        36388 Batt/Chg Pkg. Ext.Run. 1PH. 60HZ
        87419 Brush, Side Polypropylene
        363868 Brush, Main, Polypropylene
        363012 Maxpro 1200 Scrub Head
        30241 Brush, Non-scuff Poly f/MP1200
        30241 Brush, Non-scuff Poly f/MP1200
        08682-15 Det654 Heavy Duty, 15 Gal
        363019 Es-Extended Scrubbing
        48600 Wand. off Aisle Power
        363455 Light Pkg. Revolving, OHG
(1)     M5700 Scrubber, Walk Behind Model 5700 S/N:5700-11109
        Machine as equipped:
        5700 Scrubber, Walk Behind
        222342 Scrubhead, 7000, 28" Disk
        222803 Squeegee Assy. 700D/700C
        222358 Battery, 235AH Wet
        374014 Charger, 115V, 20A, 1PH, 60HZ
        222320 Brush, Polypropylene 700D
        222611 Power Wand, off-Aisle

        Above equipment distributed by: Tennant

(1)     CubiScan 100L S/N: QIL971879
(1)     Mobile Cart-A
(1)     Computer Shuttle Arm-S
(1)     PW800 Inverter/TC20 Charger/Cables
(1)     Portable Power System (PW800-TC20)

        Above equipment distributed by: Quantronix

(2)     Composee Turbo 2 Keyboard Wedge
(2)     Serial Input Cable
(2)     BM 3287 Terminal Cable Set
(2)     External Power Supply
(2)     SC QuickScan 600 Scanner w/cabling
(1)     Custom QBIT Interface

        Above equipment distributed by: Quantronix

</TABLE>


<PAGE>

<TABLE>
<CAPTION>

Qty.     Manufacturer, Description, Model No./Serial No.                Location
----     -----------------------------------------------                --------
<S>                             <C>                                     <C>
                                                                        12 Sandborn St.
                                                                        Tilton, NH 03276

(1)  1020-1021 01-00001 Boom Lift 30-45 ELEC N40 ELC S/N: 0300039334

(2)  1020-1001 01-00002 Personnel Lifts PERS LFT 25AMDC S/N: 0900012248

     Above equipment distributed by Action Equipment

(6)  Crown PTH50-27-48 Hand Pallet Jacks    S/N:  7-142882
                                                  7-142883
                                                  7-142884
                                                  7-142885
                                                  7-142886
                                                  7-142887

Above equipment distributed by Crown Trucks

(1)  T20497 EASI-Orderpicker Model OPC30TT S/N: EASI-98-AT20497
(1)  T20498 EASI-Orderpicker Model OPC30TT S/N: EASI-98-AT20498
(1)  T20499 EASI-Orderpicker Model OPC30TT S/N: EASI-98-AT20499
(1)  T20500 EASI-Orderpicker Model OPC30TT S/N: EASI-98-AT20500
(1)  T20501 EASI-Orderpicker Model OPC30TT S/N: EASI-98-AT20501
(1)  T20502 EASI-Orderpicker Model OPC30TT S/N: EASI-98-AT20502
(1)  T20503 EASI-Orderpicker Model OPC30TT S/N: EASI-98-AT20503
(1)  T20504 EASI-Orderpicker Model OPC30TT S/N: EASI-98-AT20504
(1)  T20505 EASI-Orderpicker Model OPC30TT S/N: EASI-98-AT20505
(1)  T20506 EASI-Orderpicker Model OPC30TT S/N: EASI-98-AT20506
(1)  BN8691 Battery Model 18-E155W-11 S/N: AWG108691
(1)  BN8692 Battery Model 18-E155W-11 S/N: AWG108692
(1)  BN8693 Battery Model 18-E155W-11 S/N: AWG108693
(1)  BN8694 Battery Model 18-E155W-11 S/N: AWG108694
(1)  BN8695 Battery Model 18-E155W-11 S/N: AWG108695
(1)  BN8696 Battery Model 18-E155W-11 S/N: AWG108696
(1)  BN8697 Battery Model 18-E155W-11 S/N: AWG108697
(1)  BN8698 Battery Model 18-E155W-11 S/N: AWG108698
(1)  BN8699 Battery Model 18-E155W-11 S/N: AWG108699

</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                                Manufacturer, Description
           Qty.                    Model No./Serial No.                     Location
           ----                 -------------------------                   --------
<S>                             <C>                                     <C>
                                                                        12 Sandborn St.
                                                                        Tilton, NH 03276

(1)  BN8700 Battery Model 18-EI55W-11 S/N: AWG108700
(1)  BN8701 Battery Model 18-EI55W-11 S/N: AWG108701
(1)  BN8702 Battery Model 18-EI55W-11 S/N: AWG108702
(1)  BN8703 Battery Model 18-EI55W-11 S/N: AWG108703
(1)  BN8704 Battery Model 18-EI55W-11 S/N: AWG108704
(1)  BN8705 Battery Model 18-EI55W-11 S/N: AWG108705
(1)  BN8706 Battery Model 18-EI55W-11 S/N: AWG108706
(1)  BN8707 Battery Model 18-EI55W-11 S/N: AWG108707
(1)  BN8708 Battery Model 18-EI55W-11 S/N: AWG108708
(1)  BN8709 Battery Model 18-EI55W-11 S/N: AWG108709
(1)  BN8710 Battery Model 18-EI55W-11 S/N: AWG108710
(1)  CN1941 Charger Model D3E-18-850B S/N: WF91941
(1)  CN2620 Charger Model D3E-18-850B S/N: WF92620
(1)  CN2621 Charger Model D3E-18-850B S/N: WF92621
(1)  CN2622 Charger Model D3E-18-850B S/N: WF92622
(1)  CN2623 Charger Model D3E-18-850B S/N: WF92623
(1)  CN2624 Charger Model D3E-18-850B S/N: WF92624
(1)  CN2625 Charger Model D3E-18-850B S/N: WF92625
(1)  CN2629 Charger Model D3E-18-850B S/N: WF92629
(1)  CN2633 Charger Model D3E-18-850B S/N: WF92633
(1)  CN2682 Charger Model D3E-18-850B S/N: WF92682
(1)  BN8687 Battery Model 18-EI40-17 S/N: AWG108687
(1)  BN8688 Battery Model 18-EI40-17 S/N: AWG108688
(1)  BN8689 Battery Model 18-EI40-17 S/N: AWG108689
(1)  BN8690 Battery Model 18-EI40-17 S/N: AWG108690
(1)  CN2771 Charger Model D3E-18-1200B S/N: WF92771
(1)  CN2772 Charger Model D3E-18-1200B S/N: WF92772
(1)  Stnlss Steel Drip Pa
(1)  UPC Charge, Batt Sys
(1)  HP Watering System
(1)  Wire Guide System
(1)  T10530 EASI Reach Forktruck Model EASIR45TT S/N: EZ-B-98-10530
(1)  T10536 EASI Reach Forktruck Model EASIR45TT S/N: EZ-B-98-10536

</TABLE>


ABOVE EQUIPMENT DISTRIBUTED BY ROBERT ABEL & CO., INC.

<PAGE>

<TABLE>
<CAPTION>
                                   Manufacturer Description
                 Qty.              Model No./Serial No.                        Location
                 ----              ------------------------                    --------
<S>                               <C>                                 <C>
                                                                       12 Sandborn St.
                                                                       Tilton, NH 03276
</TABLE>

(1) 000063 Wildeck Mezzanine System
    (Phase I
(1) 000068 Wildeck Mezzanine System
    Phase II
(1) 000070 Wildeck Mezzanine System
    Phase III
(1) 000294 Vertical Reciprocating Convoy

ABOVE EQUIPMENT DISTRIBUTED BY WILDECK, INC.

PALLET/CASE/RAI/RACK
PHASE I
    Layout: 41 Bays 96"w x 48"d x 84"h with 4 beam levels
    Steel King Tulukar
    55 RTFAP048084 Uprights - 3" x 1 5/8" x 48"d x 84"h
    Capacity: 16,720# on 48" vertical centers
    328 SBRXL300096 Step Beams - 3"h x 96"l x 1,448#capacity
    328 WIRE DECKS 46"w x 48"d x 2" x 4" x 4Ga. x 300#

PHASE II
    SELECTIVE PALLET RACK
Layout: 75 Bays 144"w x 42"d x 345"/407"h with 6 levels (floor +5 beam levels)
    8   RTFBW042407 End Uprights - 3" x 3" x 42"d x 407"h
        BASEPLATES 5' x 7' x 3/8" FOR Zone ZA
        Capacity: 30,560# per new 1998 RMI
    71  RTFBW042345 inL Uprights - 3" x 3' x 42"d, x 345"h
        BASEPLATES 5" x 7" x 3/8" for Zone 2A
        Capacity: 30,560# per new 1997 RMI
    750 SBRXP600144 Stop Beams - 6" x 144'1 x 6,780# Capacity
    375 BTWSG042 42" Beam Ties (required on all beams 120"+)
    316 ANCHORS 1/2" x 3 1/4"
    6   AISLE MARKERS 12" x 12" at all row ends
    48  RSR3G018 Row Spacers - 18"
    2   STEEL GUARD 102"lx18"h
        2#GR09 2 1/2" deep x 14"h x 11 Ga. x 102"L#C52
        4FPS3K024 Free Standing Column Protector at S. Rows

    RESERVE CARTON RACK
Layout: 225 Bays - 144 w x 60"d x 364"h with 11 beam levels
    30 RTFAP060417 End Uprights - 3" x 1 5/8" x 60"d x 417"h
    BASEPLATES 5" x 7" x 3/8" for Zone 2A
    Capacity: 16,730# per new 1998 RMI
    210RTFAP060384 Int. Uprights - 3" x 1 5/8" x 60"d x 384"h
    BASEPLATES x3/8 for Zone 2A
    Capacity: 16,730#per new 1996 RMI

<PAGE>
<TABLE>
<CAPTION>
                                 Manufacturer, Description,              
            Qty.                    Model No./Serial No.                 Location
            ----                 --------------------------              --------
<S>                             <C>                                     <C>
                                                                        12 Sandborn St.
                                                                        Tilton, NH 03276
</TABLE>


     4950 SBRXP400144 Step Beams-4" x 144"l x 1,870# capacity
     960 ANCHORS 1/2" x 3 3/4"
     4,950 WIRE DECKS 70"w x 60"d x 2" x 4" & GA x 1,200# ea.
     30 AISLE MARKERS 12" x 12" at all row ends
     30 STEEL GUARO 60"Lx18"H
     60#SCL 4" x 4" x 3/4" Tube with 10" sq. x 5/8 Base
     30# GRO5 2 1/2" Deep x 14"h x 11 Ga. x 60"L

ACTIVE CARTON RACK (Convertible G.O.H. Rack)
--------------------------------------------
Layout 1079 Bays -- 96" W x 48"d x 84"h with 4 beam levels 
     1,225 RTFAP048084 Uprights  -- 3" x 1 5/8" x 48"d x 84"h
     Capacity: 16,730# on 48" vertical centers
     8,632 SBRXL300096 Step Beams -- 3"h x 96l x 1,448# capacity
     2,450 ANCHORS 1/2" x 3 3/4"
     160 AISLE MARKERS 12" x 12" at all row ends
     4,904 WIRE DECKS 46"W X 48"d x 2" x 4" x 4Ga x 300#

ACTIVE CARTON FLOW RACK
---------------------------------------------
lAYOUT: 56 Bays -- 96" w x 120"d x 96"h with 4 shelf levels (6 runways/12 
tracks + 5 guides per shelf)

     64 Frames verticle Frames -- 96"d x 96"h
     128 ANCHORS 1/2" x 3 3/4"
     168 SWAY BRACES 96"
     224 shelf frames 96" Wx120"d x 1,200# capacity 
     1,344 RUNWAYS 2 pcs x 120" long
     1,120 GUIDES 120"L
     16 AISLE MARKERS 12" x  12" at all row ends

GARMENT ON HANGER RACKS (Convertible to Active Carton Rack)
Layout: 232 Runs -- 56"L x 4"D with 50% two high & 50% one high  
     1,856 RTFAP048084 Uprights -- 3" x 1 5/8" x 48"d x 84"h
     Capacity: 16,730# on 48" vertical centers
     3,248 SRRXL300096 Step Beam  3"hx96"l x 1,448# capacity
     3,712 ANCHORS 1/2" x 3 3/4"
     60 PIPE HOLDERS Adjustable Brackets -- 48"d
     40,194 LN.FT.Rails 1,315 x 14 ga. Zinc plated round tubing 
     Note 50% of runs include 2 levels high


<PAGE>

<TABLE>
<CAPTION>
                                Manufacturer, Description
           Qty.                    Model No./Serial No.                     Location
           ----                 -------------------------                   --------
<S>                             <C>                                     <C>
                                                                        12 Sandborn St.
                                                                        Tilton, NH 03276

     24,000 TEK SCREWS 1"
     3,016 INSERTS 20" splices
     1,392 CAPS Rubber End Caps
     5,600 CLIPS For attachments of rail to rack
     0 WIRE DECKS 3584 Supplied from Laconia Location
     464 AISLE MARKERS 12" x 12" at all row ends

</TABLE>

ABOVE EQUIPMENT DISTIBUTED BY THE STEEL KING INDUSTRIES, INC.

(2 9491 SRIENPACKER TYPE S3960 S/N:
                                    --------------------

ABOVE EQUIPMENT DISTRIBUTED  BY SET POINT



<PAGE>




<TABLE>
<CAPTION>

QTY   MANUFACTURER, DESCRIPTION MODEL NO./SERIAL NO.                           LOCATION
---   ---------------------------------------------                            --------
      Seq.                     Conveyor    Type of                             12 Sandborn St.
       #      Series   Panel   Number      Conveyor                            Tilton, NH 03276
      ---     ------   -----   --------    --------
<S>   <C>     <C>      <C>     <C>         <C>

1     1       100      100-1   BPE100A     PBE-Powered Belt Extendable
------------------------------------------------------------------------------
1     2       100      100-1   BPE100B     PBE-Powered Belt Extendable
------------------------------------------------------------------------------
1     3       100      n/a     T100        Track for Powered Belt Extendables
------------------------------------------------------------------------------
1     4       100      n/a     GRC102A     RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     5       100      n/a     GRC102B     RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     6       100      n/a     GRC102C     RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     7       100      n/a     GRC102D     RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     8       100      n/a     GRC102E     RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     9       100      n/a     GRC102F     RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1    10       100      n/a     GRC104A     RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1    11       100      n/a     GRC104B     RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1    12       100      n/a     GRC104C     RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1    13       100      n/a     GRC104D     RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1    14       100      n/a     GRC104E     RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1    15       100      n/a     GRC104F     RGC160-Roller Gravity Curve
------------------------------------------------------------------------------

1    16       100      n/a     GR106A     RG1916-Roller Gravity
------------------------------------------------------------------------------
1    17       100      n/a     GR106B     RG1916-Roller Gravity
------------------------------------------------------------------------------

1    18       100      n/a     GR106C     RG1916-Roller Gravity
------------------------------------------------------------------------------

1    19       100      n/a     GR106D     RG1916-Roller Gravity
------------------------------------------------------------------------------

1    20       100      n/a     GR106E     RG1916-Roller Gravity
------------------------------------------------------------------------------

1    21       100      n/a     GR106F     RG1916-Roller Gravity
------------------------------------------------------------------------------

1    22       100      n/a     GR106G     RG1916-Roller Gravity
------------------------------------------------------------------------------

</TABLE>

                                 Page 1 of 17


<PAGE>

<TABLE>
<CAPTION>

QTY        MANUFACTURER, DESCRIPTION MODEL NO./SERIAL NO.                        LOCATION
           ---------------------------------------------                         --------
      Seq.    Series   Panel   Conveyor    Type of                               12 Sandborn St.
       #                       Number      Conveyor                              Tilton, NH 03276
      ---     ------   -----   --------    --------

<S>   <C>     <C>      <C>     <C>         <C>

1     23      100      100     LR124A      LRTC-Live Roller Transportation
------------------------------------------------------------------------------
1     24      100      100     LR124B      LRTC-Live Roller Transportation
------------------------------------------------------------------------------
1     25      100      100     LR124C      LRTC-Live Roller Transportation
------------------------------------------------------------------------------
1     26      100      100     LR124D      LRTC-Live Roller Transportation
------------------------------------------------------------------------------
1     27      100      100     LR124E      LRTC-Live Roller Transportation
------------------------------------------------------------------------------
1     28      100      100     IB126A      BSE-Indexing Belt
------------------------------------------------------------------------------
1     29      100      100     IB126B      BSE-Indexing Belt
------------------------------------------------------------------------------
1     30      100      100     IB126C      BSE-Indexing Belt
------------------------------------------------------------------------------
1     31      100      100     IB126D      BSE-Indexing Belt
------------------------------------------------------------------------------
1     32      100      100     IB126E      BSE-Indexing Belt
------------------------------------------------------------------------------
1     33      100      100     LRM128A     LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     34      100      100     LRM128B     LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     35      100      100     LRM128C     LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     36      100      100     LRM128D     LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     37      100      100     LRM128E     LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     38      100      100     PB132       BRC-Powered Belt
------------------------------------------------------------------------------
1     39      100      100     LRC134      LRC-Live Roller Curve
------------------------------------------------------------------------------
1     40      100      100     PB1136      BIC-15 Degree Bell Incline
------------------------------------------------------------------------------
1     41      100      100     LRC138      LRC-Live Roller Curve
------------------------------------------------------------------------------
1     42      100      100     LRA140      LRZC-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     43      100      100     LRC142      LRC-Live Roller Curve
------------------------------------------------------------------------------
1     44      100      100     LRA144      LRZC-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     45      100      n/a     LRM146      LREWS-Live Roller Merge
------------------------------------------------------------------------------
1     46      100      100     LRA148      LRZC-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     47      100      n/a     LRC150      LRC-Live Roller Curve
------------------------------------------------------------------------------
1     48      100      100     LRC152      LRZC-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     49      100      n/a     LRC154      LRC-Live Roller Curve
------------------------------------------------------------------------------
1     50      100      100     LRA156      LRZC-Zero Pressure Accumulation
------------------------------------------------------------------------------


</TABLE>


                                 Page 2 of 17


<PAGE>

<TABLE>
<CAPTION>

QTY        MANUFACTURER, DESCRIPTION MODEL NO./SERIAL NO.                       LOCATION
           ---------------------------------------------                        --------
      Seq.    Series   Panel   Conveyor    Type of                              12 Sandborn St.
       #                       Number      Conveyor                             Tilton, NH 03276
      ---     ------   -----   --------    --------

<S>   <C>     <C>      <C>     <C>         <C>

1     51      100      100     LR160       LRTC-Live Roller Transportation
----------------------------------------------------------------------------------
1     52      100      100     PB1162      BIC-15 Degree Belt Incline
----------------------------------------------------------------------------------
1     53      100      n/a     LRC164      LRC-Live Roller Curve
----------------------------------------------------------------------------------
1     54      100      100     LRA166      LRZC-Zero Pressure Accumulation
----------------------------------------------------------------------------------
48    55      100      n/a     GA100       1.5" Angle Guard Rail (bulk)
----------------------------------------------------------------------------------
43    56      100      n/a     GCL100      5.75" Lapped Channel Guard Rail (bulk)
----------------------------------------------------------------------------------
1     57      200      200     BSB200A     BMSE-Brake/Meter Belt
----------------------------------------------------------------------------------
1     58      200      200     BSB200B     BMSE-Brake/Meter Belt
----------------------------------------------------------------------------------
1     59      200      200     BSB200C     BMSE-Brake/Meter Belt
----------------------------------------------------------------------------------
1     60      200      200     BSB200D     BMSE-Brake/Meter Belt
----------------------------------------------------------------------------------
1     61      200      200     LRS201A     LRS-Live Roller Spur
----------------------------------------------------------------------------------
1     62      200      200     LRS201B     LRS-Live Roller Spur
----------------------------------------------------------------------------------
1     63      200      200     LRS201C     LRS-Live Roller Spur
----------------------------------------------------------------------------------
1     64      200      200     LRS201D     LRS-Live Roller Spur
----------------------------------------------------------------------------------
1     65      200      200     LR202       LRTC-Live Roller Transportation
----------------------------------------------------------------------------------
1     66      200      n/a     LRC204      LRC-Live Roller Curve
----------------------------------------------------------------------------------
1     67      200      200     LR206       SP-Skewed Roller Section
----------------------------------------------------------------------------------
1     68      200      200     LRA208      LRS-Live Roller Spur
----------------------------------------------------------------------------------
1     69      200      200     BSB210      BMSE-Brake/Meter Belt
----------------------------------------------------------------------------------
1     70      200      200     SOR212      BRE-Sort Belt
----------------------------------------------------------------------------------
1     71      200      200     SOR214      BRE-Sort Belt
----------------------------------------------------------------------------------
1     72      200      n/a     DIV220      LFS-Line Flow Spur
----------------------------------------------------------------------------------
1     73      200      n/a     DIV230      LFS-Line Flow Spur
----------------------------------------------------------------------------------
1     74      200      200     DIV260      LRSC-Live Roller Spur Curve
----------------------------------------------------------------------------------
1     75      200      200     PBD262      BDC-15 Degree Belt Decline
----------------------------------------------------------------------------------
1     76      200      n/a     GR264       RG1916-Roller Gravity
----------------------------------------------------------------------------------
1     77      200      n/a     DIV280      LFS-Line Flow Spur
----------------------------------------------------------------------------------
18    78      200      n/a     GCL200      5.75"-Lapped Channel Guard Rail (bulk)
------------------------------------------------------------------------------
1     79      300      n/a     DIV310      LFS-Line Flow Spur

</TABLE>


                                 Page 3 of 17


<PAGE>

<TABLE>
<CAPTION>

QTY        MANUFACTURER, DESCRIPTION MODEL NO./SERIAL NO.                           LOCATION
---        ---------------------------------------------                            --------
      Seq.    Series   Panel   Conveyor    Type of                               12 Sandborn St.
       #                       Number      Conveyor                              Tilton, NH 03276
      ---     ------   -----   --------    --------
<S>   <C>     <C>      <C>     <C>         <C>

1     95      300      300-1   LRC332      LRC-Live Roller Curve
----------------------------------------------------------------------------
1     96      300      300-1   PBD333      BDC-15 Degree Belt Decline
----------------------------------------------------------------------------
1     97      300       n/a    LRC334A     LRC-Live Roller Curve
----------------------------------------------------------------------------
1     98      300      300-1   LR334B      LRTE-Live Roller Transportation
----------------------------------------------------------------------------
1     99      300       n/a    LRC334C     LRC-Live Roller Curve
----------------------------------------------------------------------------
1     100     300      300-1   LRA336      LRZC-Zero Pressure Accumulation
----------------------------------------------------------------------------
1     101     300      300-1   BSB338      BMSE-Brake/Motor Belt
----------------------------------------------------------------------------
1     102     300      300-1   SOR340      BRE-Sort Belt
----------------------------------------------------------------------------
1     103     300      300-1   LRA342      LRZC-Zero Pressure Accumulation
----------------------------------------------------------------------------
1     104     300      300-1   BSB344      BMSE-Brake/Motor Belt
----------------------------------------------------------------------------
1     105     300      300-1   BC346       PBC-Powered Belt Curve
----------------------------------------------------------------------------
1     106     300      300-2   SOR347      BRC-Sort Belt
----------------------------------------------------------------------------
1     107     300      300-2   SOR348      BRC-Sort Belt
----------------------------------------------------------------------------
1     108     300      300-2   LRA349      LRZC-Zero Pressure Accumulation
----------------------------------------------------------------------------
1     109     300       n/a    DIV350A     LFS-Line Flow Spur
----------------------------------------------------------------------------
1     110     300       n/a    DIV350B     LFS-Line Flow Spur
----------------------------------------------------------------------------
1     111     300       n/a    DIV350C     LFS-Line Flow Spur
----------------------------------------------------------------------------
1     112     300       n/a    GRC351A     RGC160-Roller Gravity Curve
----------------------------------------------------------------------------
1     113     300       n/a    GRC351B     RGC160-Roller Gravity Curve
----------------------------------------------------------------------------
1     114     300       n/a    GRC351C     RGC160-Roller Gravity Curve
----------------------------------------------------------------------------
1     115     300       n/a    CH352A      CHT-Chute
----------------------------------------------------------------------------
1     116     300       n/a    CH352B      CHT-Chute
----------------------------------------------------------------------------
1     117     300       n/a    CH352C      CHT-Chute
----------------------------------------------------------------------------
1     118     300       n/a    CH352D      CHT-Chute
----------------------------------------------------------------------------
1     119     300       n/a    GR353A      RG1916-Roller Gravity
----------------------------------------------------------------------------
1     120     300       n/a    GR353B      RG1916-Roller Gravity
----------------------------------------------------------------------------
1     121     300       n/a    GR353C      RG1916-Roller Gravity
----------------------------------------------------------------------------
1     122     300       n/a    GR353D      RG1916-Roller Gravity
------------------------------------------------------------------------------

</TABLE>

                                 Page 4 of 17

<PAGE>

<TABLE>
<CAPTION>

QTY        MANUFACTURER, DESCRIPTION MODEL NO./SERIAL NO.                    LOCATION
---        ---------------------------------------------                     --------
      Seq.    Series   Panel   Conveyor    Type of                           12 Sandborn St.
       #                       Number      Conveyor                          Tilton, NH 03276
      ---     ------   -----   --------    --------
<S>   <C>     <C>      <C>     <C>         <C>

1     123     300      n/a     DIV355A     LFS-Line Flow Spur
-------------------------------------------------------------------------------
1     124     300      n/a     DIV355B     LFS-Line Flow Spur
-------------------------------------------------------------------------------
1     125     300      n/a     DIV355C     LFS-Line Flow Spur
-------------------------------------------------------------------------------
1     126     300      n/a     GRC356A     RGC160-Roller Gravity Curve
-------------------------------------------------------------------------------
1     127     300      n/a     GRC356B     RGC160-Roller Gravity Curve
-------------------------------------------------------------------------------
1     128     300      n/a     GRC356C     RGC160-Roller Gravity Curve
-------------------------------------------------------------------------------
1     129     300      n/a     CH357A      CHT-Chute
-------------------------------------------------------------------------------
1     130     300      n/a     CH357B      CHT-Chute
-------------------------------------------------------------------------------
1     131     300      n/a     CH357C      CHT-Chute
-------------------------------------------------------------------------------
1     132     300      n/a     CH357D      CHT-Chute
-------------------------------------------------------------------------------
1     133     300      n/a     GR358A      RG1916-Roller Gravity
-------------------------------------------------------------------------------
1     134     300      n/a     GR358B      RG1916-Roller Gravity
-------------------------------------------------------------------------------
1     135     300      n/a     GR358C      RG1916-Roller Gravity
-------------------------------------------------------------------------------
1     136     300      n/a     GR358D      RG1916-Roller Gravity
-------------------------------------------------------------------------------
1     137     300      n/a     DIV360A     LFS-Lina Flow Spur
-------------------------------------------------------------------------------
1     138     300      n/a     DIV360B     LFS-Lina Flow Spur
-------------------------------------------------------------------------------
1     139     300      n/a     DIV360C     LFS-Lina Flow Spur
-------------------------------------------------------------------------------
1     140     300      n/a     GRC361A     RGC160-Roller Gravity Curve
-------------------------------------------------------------------------------
1     141     300      n/a     GRC361B     RGC160-Roller Gravity Curve
-------------------------------------------------------------------------------
1     142     300      n/a     GRC361C     RGC160-Roller Gravity Curve
-------------------------------------------------------------------------------
1     143     300      n/a     CH362A      CHT-Chute
-------------------------------------------------------------------------------
1     144     300      n/a     CH362B      CHT-Chute
-------------------------------------------------------------------------------
1     145     300      n/a     CH362C      CHT-Chute
-------------------------------------------------------------------------------
1     146     300      n/a     CH362D      CHT-Chute
-------------------------------------------------------------------------------
1     147     300      n/a     GR363A      RG1916-Roller Gravity
-------------------------------------------------------------------------------
1     148     300      n/a     GR363B      RG1916-Roller Gravity
-------------------------------------------------------------------------------
1     149     300      n/a     GB363C      RG1916-Roller Gravity
-------------------------------------------------------------------------------


</TABLE>


                             Page 5 of 17


<PAGE>

<TABLE>
<CAPTION>

QTY   MANUFACTURER, DESCRIPTION MODEL NO./SERIAL NO.                           LOCATION
      ---------------------------------------------                            --------
      Seq.    Series   Panel   Conveyor    Type of                             12 Sandborn St.
       #                       Number      Conveyor                            Tilton, NH 03276
<S>   <C>     <C>      <C>     <C>         <C>

1     150     300      n/a     GR363D      RG1916-Roller Gravity
------------------------------------------------------------------------------
1     151     300      n/a     DIV365A     LFS-Line Flow Spur
------------------------------------------------------------------------------
1     152     300      n/a     DIV365B     LFS-Line Flow Spur
------------------------------------------------------------------------------
1     153     300      n/a     DIV365C     LFS-Line Flow Spur
------------------------------------------------------------------------------
1     154     300      n/a     GRC366A     RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     155     300      n/a     GRC366B     RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     156     300      n/a     GRC366C     RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     157     300      n/a     CH367A      CHT-Chule
------------------------------------------------------------------------------
1     158     300      n/a     CH367B      CHT-Chule
------------------------------------------------------------------------------
1     159     300      n/a     CH367C      CHT-Chule
------------------------------------------------------------------------------
1     160     300      n/a     CH367D      CHT-Chule
------------------------------------------------------------------------------
1     161     300      n/a     GR368A      RG1916-Roller Gravity
------------------------------------------------------------------------------
1     162     300      n/a     GR368B      RG1916-Roller Gravity
------------------------------------------------------------------------------
1     163     300      n/a     GR368C      RG1916-Roller Gravity
------------------------------------------------------------------------------
1     164     300      n/a     GR368D      RC1916-Roller Gravity
------------------------------------------------------------------------------
1     165     300      300-1   BC370       PBC-Powered Belt Curve
------------------------------------------------------------------------------
1     166     300      300-1   SOR377      BRC-Sort Belt
------------------------------------------------------------------------------
1     167     300      300-1   SOR378      BRC-Sort Belt
------------------------------------------------------------------------------
1     168     300      300-1   LRA379      LRZC-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     169     300      300-1   LRC382      LRC-Live Roller Curve
------------------------------------------------------------------------------
1     170     300      300-1   LR383       LRC-Live Roller Transportation
------------------------------------------------------------------------------
1     171     300      n/a     LRC384      LRC-Live Roller Curve
------------------------------------------------------------------------------
1     172     300      300-1   LRA386      LRZC-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     173     300      300-1   BSB388      BMSE-Brake/Meter Belt
------------------------------------------------------------------------------
1     174     300      300-1   SOR390      BRE-Sort Belt
------------------------------------------------------------------------------
1     175     300      300-1   LRA392      LRZC-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     176     300      300-1   BSB394      BMSE-Brake/Meter Belt
------------------------------------------------------------------------------
1     177     300      300-1   BC396       PBC-Powered Belt Curve
------------------------------------------------------------------------------
1     178     300      300-2   SOR397      BRC-Sort Belt
------------------------------------------------------------------------------
1     179     300      300-2   SOR398      BRC-Sort Belt
------------------------------------------------------------------------------


</TABLE>


                             Page 6 of 17


<PAGE>

<TABLE>
<CAPTION>

QTY   MANUFACTURER, DESCRIPTION MODEL NO./SERIAL NO.                       LOCATION
---   ---------------------------------------------                        --------
      Seq.    Series   Panel   Conveyor    Type of                         12 Sandborn St.
       #                       Number      Conveyor                        Tilton, NH 03276
      ---     ------   -----   --------    --------

<S>   <C>     <C>      <C>     <C>         <C>
1     180     300      300-2   LRA399      LRZC-Zero Pressure Accumulation
----------------------------------------------------------------------------------
90    181     300      n/a     GCL300      5.75" Lapped Channel Guard Rail (bulk)
----------------------------------------------------------------------------------
1     182     400      n/a     GR400       RG1916-Roller Gravity
----------------------------------------------------------------------------------
1     183     400      400     PB1401      BRE-12 Degree Booster Belt
--------------------------------------------------------------------------------
1     184     400      400     LRA402      LRZC-Zero Pressure Accumulation
----------------------------------------------------------------------------------
1     185     400      n/a     GR403       RG1916-Roller Gravity
----------------------------------------------------------------------------------
1     186     400      400     PB1401      BRE-12 Degree Booster Belt
----------------------------------------------------------------------------------
1     187     400      n/a     LRM405      LREWS-Live Roller Merge
----------------------------------------------------------------------------------
1     188     400      400     LRA406      LRZC-Zero Pressure Accumulation
----------------------------------------------------------------------------------
1     189     400      n/a     GR407       RG1916-Roller Gravity
----------------------------------------------------------------------------------
1     190     400      400     PB1408      BRE-12 Degree Booster Belt
----------------------------------------------------------------------------------
1     191     400      n/a     LRM409      LREWS-Live Roller Merge
----------------------------------------------------------------------------------
1     192     400      n/a     GR410       RG1916-Roller Gravity
----------------------------------------------------------------------------------
1     193     400      400     PB1411      BRE-12 Degree Booster Belt
----------------------------------------------------------------------------------
1     194     400      n/a     LRM412      LREWS-Live Roller Merge
----------------------------------------------------------------------------------
1     195     400      400     LRA413      LRZC-Zero Pressure Accumulation
----------------------------------------------------------------------------------
1     196     400      n/a     GR414       RG1916-Roller Gravity
----------------------------------------------------------------------------------
1     197     400      400     PB1415      BRE-12 Degree Booster Belt
----------------------------------------------------------------------------------
1     198     400      n/a     LRM416      LREWS-Live Roller Merge
----------------------------------------------------------------------------------
1     199     400      n/a     GR417       RG1916-Roller Gravity
----------------------------------------------------------------------------------
1     200     400      400     PB1418      BRE-12 Degree Booster Belt
----------------------------------------------------------------------------------
1     201     400      n/a     LRM419      LREWS-Live Roller Merge
----------------------------------------------------------------------------------
1     202     400      400     PB1420      BRE-12 Degree Booster Belt
----------------------------------------------------------------------------------
1     203     400      400     LRC421      LRC-Live Roller Curve
----------------------------------------------------------------------------------
1     204     400      400     PB1422      BRE-12 Degree Booster Belt
----------------------------------------------------------------------------------
1     205     400      400     LRA423      LRZC-Zero Pressure Accumulation
----------------------------------------------------------------------------------
1     206     400      n/a     LRC424      LRC-Live Roller Curve
----------------------------------------------------------------------------------
1     207     400      400     LRA425      LRZC-Zero Pressure Accumulation
----------------------------------------------------------------------------------
1     208     400      n/a     GR450       RG1916-Roller Gravity
----------------------------------------------------------------------------------
1     209     400      400     PB1451      BRE-12 Degree Booster Belt
----------------------------------------------------------------------------------

</TABLE>


                             Page 7 of 17


<PAGE>

<TABLE>
<CAPTION>

QTY   MANUFACTURER, DESCRIPTION MODEL NO./SERIAL NO.                      LOCATION
      ---------------------------------------------                       --------
      Seq.    Series   Panel   Conveyor    Type of                        12 Sandborn St.
       #                       Number      Conveyor                       Tilton, NH 03276
<S>   <C>     <C>      <C>     <C>         <C>

1     210      400      400     LRA452      LRZC-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     211      400      n/a     GR453       RG-1916-Roller Gravity
------------------------------------------------------------------------------
1     212      400      400     PB1454      BRE-12 Degree Booster Belt
------------------------------------------------------------------------------
1     213      400      n/a     LRM455      LREWS-Live Roller Merge
------------------------------------------------------------------------------
1     214      400      400     LRA456      LRZC-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     215      400      n/a     GR457       RG1916-Roller Gravity 
------------------------------------------------------------------------------
1     216      400      400     PB1458      BRE-12 Degree Booster Belt
------------------------------------------------------------------------------
1     217      400      n/a     LRM459      LREWS-Live Roller Marge
------------------------------------------------------------------------------
1     218      400      n/a     GR460       RG1916-Roller Gravity
------------------------------------------------------------------------------
1     219      400      400     PB1461      BRE-12 Degree Booster Belt
------------------------------------------------------------------------------
1     220      400      n/a     LRM462      LREWS-Live Roller Merge
------------------------------------------------------------------------------
1     221      400      400     LRM463      LRZC-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     222      400      n/a     GR464       RG1916-Roller Gravity 
------------------------------------------------------------------------------
1     223      400      400     PB1465      BRE-12 Degree Booster Belt
------------------------------------------------------------------------------
1     224      400      n/a     LRM466      LREWS-Live Roller Merge 
------------------------------------------------------------------------------
1     225      400      n/a     GR467       RG1916-Roller Gravity
------------------------------------------------------------------------------
1     226      400      400     PB1468      BRE-12 Degree Booster Belt
------------------------------------------------------------------------------
1     227      400      n/a     LRM469      LREWS-LIve Roller Merge
------------------------------------------------------------------------------
1     228      400      400     LRC471      LRC-Live Roller Curve
------------------------------------------------------------------------------
1     229      400      400     LRA473      LRZC-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     230      400      n/a     LRC474      LRC-Live Roller Curve
------------------------------------------------------------------------------
1     231      400      400     LRA475      LRZC-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     232      400      n/a     GCL400      5.75"Lapped Channel Guard Rail (bulk)
------------------------------------------------------------------------------
1     233      500      200     DIV500      LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     234      500      200     PB1502      BIC-15 Degree Belt Incline
------------------------------------------------------------------------------
1     235      500      n/a     LRC504      LRC-Live Roller Curve
------------------------------------------------------------------------------
1     236      500      200     LRA506      LRZC-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     237      500      200     LRA508      LRZC-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     238      500      n/a     LRC510      LRC-Live Roller Curve
------------------------------------------------------------------------------
1     239      500      500     PBD512      BDC-15 Degree Belt Decline

</TABLE>


                                 Page 8 of 17


<PAGE>

<TABLE>
<CAPTION>

QTY   MANUFACTURER, DESCRIPTION MODEL NO./SERIAL NO.                      LOCATION
---   ---------------------------------------------                       --------
      Seq.    Series   Panel   Conveyor    Type of                        12 Sandborn St.
       #                       Number      Conveyor                       Tilton, NH 03276
      ---     ------   -----   --------    --------

<S>   <C>     <C>      <C>     <C>         <C>

1     240     500      500     LRA514      LRZE-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     241     500      n/a     LRM516      LREWS-Live Roller Merge
------------------------------------------------------------------------------
1     242     500      n/a     LRC518      LRC-Live Roller Curve
------------------------------------------------------------------------------
1     243     500      500     LRC520      LRC-Live Roller Curve
------------------------------------------------------------------------------
1     244     500      500     LRA522      LRZE-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     245     500      500     BSB524      BMSE-Brake/Meter Belt
------------------------------------------------------------------------------
1     246     500      500     SOR526      BRC-Sort Belt
------------------------------------------------------------------------------
1     247     500      500     SOR528      BRC-Sort Belt
------------------------------------------------------------------------------
1     248     500      500     SOR530      BRC-Sort Belt
------------------------------------------------------------------------------
1     249     500      500     BC532       PBC-Powered Belt Curve
------------------------------------------------------------------------------
1     250     500      500     SOR534      BRC-Sort Belt
------------------------------------------------------------------------------
1     251     500      500     SOR536      BRC-Sort Belt
------------------------------------------------------------------------------
1     252     500      500     SOR538      BRC-Sort Belt
------------------------------------------------------------------------------
1     253     500      500     LRA540      LRZC-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     254     500      500     DIV545      LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     255     500      500     GRC546      RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     256     500      n/a     GR547       RG1916-Roller Gravity
------------------------------------------------------------------------------
1     257     500      n/a     DIV550A     LFS-Line Flow Spur
------------------------------------------------------------------------------
1     258     500      n/a     DIV550B     LFS-Line Flow Spur
------------------------------------------------------------------------------
1     259     500      n/a     DIV550C     LFS-Line Flow Spur
------------------------------------------------------------------------------
1     260     500      n/a     DIV550D     LFS-Line Flow Spur
------------------------------------------------------------------------------
1     261     500      n/a     DIV550E     LFS-Line Flow Spur
------------------------------------------------------------------------------
1     262     500      n/a     DIV550F     LFS-Line Flow Spur
------------------------------------------------------------------------------
1     263     500      n/a     DIV550G     LFS-Line Flow Spur
------------------------------------------------------------------------------
1     264     500      n/a     DIV550H     LFS-Line Flow Spur
------------------------------------------------------------------------------
1     265     500      n/a     DIV550J     LFS-Line Flow Spur
------------------------------------------------------------------------------
1     266     500      n/a     DIV550K     LFS-Line Flow Spur
------------------------------------------------------------------------------
1     267     500      n/a     DIV550L     LFS-Line Flow Spur
------------------------------------------------------------------------------
1     268     500      n/a     DIV550M     LFS-Line Flow Spur
------------------------------------------------------------------------------
1     269     500      n/a     DIV550N     LFS-Line Flow Spur
------------------------------------------------------------------------------
1     270     500      n/a     DIV550P     LFS-Line Flow Spur
------------------------------------------------------------------------------
1     271     500      n/a     DIV550Q     LFS-Line Flow Spur
------------------------------------------------------------------------------


</TABLE>


                                 Page 9 of 17


<PAGE>

<TABLE>
<CAPTION>

QTY   MANUFACTURER, DESCRIPTION MODEL NO./SERIAL NO.                       LOCATION
      ---------------------------------------------                        --------
      Seq.    Series   Panel   Conveyor    Type of                         12 Sandborn St.
       #                       Number      Conveyor                        Tilton, NH 03276
      ---     ------   -----   --------    --------

<S>   <C>     <C>      <C>     <C>         <C>

1     301     500      n/a     GR552N      RG1916-Roller Gravity
------------------------------------------------------------------------------
1     302     500      n/a     GR552P      RG1916-Roller Gravity
------------------------------------------------------------------------------
1     303     500      n/a     GR552Q      RG1916-Roller Gravity
------------------------------------------------------------------------------
1     304     500      n/a     GR552R      RG1916-Roller Gravity
------------------------------------------------------------------------------
36    305     500      n/a     GCL500      5.75" Lapped Channel Guard Rail
------------------------------------------------------------------------------
1     306     600      600     LR600A      LRTE-Live Roller Transportation
------------------------------------------------------------------------------
1     307     600      600     LR600B      LRTE-Live Roller Transportation
------------------------------------------------------------------------------
1     308     600      600     LR600C      LRTE-Live Roller Transportation
------------------------------------------------------------------------------
1     309     600      600     LR600D      LRTE-Live Roller Transportation
------------------------------------------------------------------------------
1     310     600      600     LR600E      LRTE-Live Roller Transportationt
------------------------------------------------------------------------------
1     311     600      600     LR600F      LRTE-Live Roller Transportation
------------------------------------------------------------------------------
1     312     600      600     LR600G      LRTE-Live Roller Transportation
------------------------------------------------------------------------------
1     313     600      600     LR600H      LRTE-Live Roller Transportation
------------------------------------------------------------------------------
1     314     600      600     LR600J      LRTE-Live Roller Transportation
------------------------------------------------------------------------------
1     315     600      600     LR600K      LRTE-Live Roller Transportation
------------------------------------------------------------------------------
1     316     600      600     LR600L      LRTE-Live Roller Transportation
------------------------------------------------------------------------------
1     317     600      600     LR600M      LRTE-Live Roller Transportation
------------------------------------------------------------------------------
1     318     600      600     LR600N      LRTE-Live Roller Transportation
------------------------------------------------------------------------------
1     319     600      600     LR600P      LRTE-Live Roller Transportation
------------------------------------------------------------------------------
1     320     600      600     LR600Q      LRTE-Live Roller Transportation
------------------------------------------------------------------------------
1     321     600      600     LR600R      LRTE-Live Roller Transportation
------------------------------------------------------------------------------
1     322     600      600     LR600S      LRTE-Live Roller Transportation
------------------------------------------------------------------------------
1     323     600      600     IB602A      BSE-Indexing Belt
------------------------------------------------------------------------------
1     324     600      600     IB602B      BSE-Indexing Belt
------------------------------------------------------------------------------
1     325     600      600     IB602C      BSE-Indexing Belt
------------------------------------------------------------------------------
1     326     600      600     IB602D      BSE-Indexing Belt
------------------------------------------------------------------------------
1     327     600      600     IB602E      BSE-Indexing Belt
------------------------------------------------------------------------------
1     328     600      600     IB602F      BSE-Indexing Belt
------------------------------------------------------------------------------
1     329     600      600     IB602G      BSE-Indexing Belt
------------------------------------------------------------------------------
1     330     600      600     IB602H      BSE-Indexing Belt
------------------------------------------------------------------------------

</TABLE>

                                 Page 10 of 17


<PAGE>

<TABLE>
<CAPTION>

QTY   MANUFACTURER, DESCRIPTION MODEL NO./SERIAL NO.                       LOCATION
---   ---------------------------------------------                        --------
      Seq.    Series   Panel   Conveyor    Type of                         12 Sandborn St.
       #                       Number      Conveyor                        Tilton, NH 03276
      ---     ------   -----   --------    --------

<S>   <C>     <C>      <C>     <C>         <C>
1     272     500      n/a     DIV550R    LFS-Line Flow Spur
------------------------------------------------------------------------------
1     273     500      n/a     GRC551A    RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     274     500      n/a     GRC551B    RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     275     500      n/a     GRC551C    RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     276     500      n/a     GRC551D    RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     277     500      n/a     GRC551E    RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     278     500      n/a     GRC551F    RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     279     500      n/a     GRC551G    RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     280     500      n/a     GRC551H    RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     281     500      n/a     GRC551J    RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     282     500      n/a     GRC551K    RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     283     500      n/a     GRC551L    RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     284     500      n/a     GRC551M    RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     285     500      n/a     GRC551N    RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     286     500      n/a     GRC551P    RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     287     500      n/a     GRC551Q    RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     288     500      n/a     GRC551R    RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     289     500      n/a     GR552A    RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     290     500      n/a     GR552B    RG1916-Roller Gravity
------------------------------------------------------------------------------
1     291     500      n/a     GR552C    RG1916-Roller Gravity
------------------------------------------------------------------------------
1     292     500      n/a     GR552D    RG1916-Roller Gravity
------------------------------------------------------------------------------
1     293     500      n/a     GR552E    RG1916-Roller Gravity
------------------------------------------------------------------------------
1     294     500      n/a     GR552F    RG1916-Roller Gravity
------------------------------------------------------------------------------
1     295     500      n/a     GR552G    RG1916-Roller Gravity
------------------------------------------------------------------------------
1     296     500      n/a     GR552H    RG1916-Roller Gravity
------------------------------------------------------------------------------
1     297     500      n/a     GR552J    RG1916-Roller Gravity
------------------------------------------------------------------------------
1     298     500      n/a     GR552K    RG1916-Roller Gravity
------------------------------------------------------------------------------
1     299     500      n/a     GR552L    RG1916-Roller Gravity
------------------------------------------------------------------------------
1     300     500      n/a     GR552M    RG1916-Roller Gravity
------------------------------------------------------------------------------

</TABLE>


                                 Page 11 of 17


<PAGE>

<TABLE>
<CAPTION>

QTY   MANUFACTURER, DESCRIPTION MODEL NO./SERIAL NO.                       LOCATION
---   ---------------------------------------------                        --------
      Seq.    Series   Panel   Conveyor    Type of                         12 Sandborn St.
       #                       Number      Conveyor                        Tilton, NH 03276
      ---     ------   -----   --------    --------

<S>   <C>     <C>      <C>     <C>         <C>
1     331     600      600     IB602J      BSE-Indexing Belt
------------------------------------------------------------------------------
1     332     600      600     IB802K      BSE-Indexing Belt
------------------------------------------------------------------------------
1     333     600      600     IB602L      BSE-Indexing Belt
------------------------------------------------------------------------------
1     334     600      600     IB602M      BSE-Indexing Belt
------------------------------------------------------------------------------
1     335     600      600     IB602N      BSE-Indexing Belt
------------------------------------------------------------------------------
1     336     600      600     IB602P      BSE-Indexing Belt
------------------------------------------------------------------------------
1     337     600      600     IB602Q      BSE-Indexing Belt
------------------------------------------------------------------------------
1     338     600      600     IB602R      BSE-Indexing Belt
------------------------------------------------------------------------------
1     339     600      600     IB602S      BSE-Indexing Belt
------------------------------------------------------------------------------
1     340     600      600     LRM604A     LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     341     600      600     LRM604B     LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     342     600      600     LRM604C     LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     343     600      600     LRM604D     LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     344     600      600     LRM604E     LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     345     600      600     LRM604F     LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     346     600      600     LRM604G     LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     347     600      600     LRM604H     LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     348     600      600     LRM604J     LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     349     600      600     LRM604K     LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     350     600      600     LRM604L     LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     351     600      600     LRM604M     LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     352     600      600     LRM604N     LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     353     600      600     LRM604P     LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     354     600      600     LRM604Q     LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     355     600      600     LRM604R     LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     356     600      600     LRC606      LRSC-Live Roller Curve
------------------------------------------------------------------------------
1     357     600      600     PB610       BRC-Powered Belt
------------------------------------------------------------------------------
1     358     600      600     PB612       BRC-Powered Belt
------------------------------------------------------------------------------


</TABLE>


                                 Page 12 of 17


<PAGE>

<TABLE>
<CAPTION>

QTY   MANUFACTURER, DESCRIPTION MODEL NO./SERIAL NO.                       LOCATION
---   ---------------------------------------------                        --------
      Seq.    Series   Panel   Conveyor    Type of                         12 Sandborn St.
       #                       Number      Conveyor                        Tilton, NH 03276
      ---     ------   -----   --------    --------

<S>   <C>     <C>      <C>     <C>         <C>
1     359     500      600     LRC614      LRC-Live Roller Curve
------------------------------------------------------------------------------
1     360     500      600     LRC616      LRC-Live Roller Curve
------------------------------------------------------------------------------
1     361     500      600     PB1618      BIC-15 Degree Incline Belt
------------------------------------------------------------------------------
1     362     500      600     LRA620      LRZC-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     363     500      600     BSB622      BMSE-Brake/Motor Belt
------------------------------------------------------------------------------
1     364     600      600     PB630       BRC-Powered Belt
------------------------------------------------------------------------------
1     365     600      600     PB632       BRC-Powered Belt
------------------------------------------------------------------------------
1     366     600      600     LRC634      LRC-Live Roller Curve
------------------------------------------------------------------------------
1     367     600      600     LRC636      LRC-Live Roller Curve
------------------------------------------------------------------------------
1     368     600      600     PB1638      BIC-15 Degree Belt Incline
------------------------------------------------------------------------------
1     369     600      600     LRA640      LRZE-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     370     600      600     BSB642      BMSE-Brake/Meter Belt
------------------------------------------------------------------------------
1     371     600      600     BM650       PBM-Powered Belt Merge
------------------------------------------------------------------------------
1     372     600      600     SOR652      BRC-Sort Belt
------------------------------------------------------------------------------
1     373     600      600     LRA854      LRZE-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     374     600      600     DIV680      LRSC-Live Roller Spur Curve
------------------------------------------------------------------------------
1     375     600      600     PB1662      BIC-15 Degree Belt Incline
------------------------------------------------------------------------------
1     376     600      600     LRA664      LRZE-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     377     600      n/a     DIV670      LFS-Line Flow Spur
------------------------------------------------------------------------------
1     378     600      n/a     LRC674      LRC-Live Roller Curve
------------------------------------------------------------------------------
1     379     600      600     LRA676      LRZE-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     380     600      n/a     CH678       CHT-Chute
------------------------------------------------------------------------------
1     381     600      n/a     GR680       RG1916-Roller Gravity
------------------------------------------------------------------------------
105   382     600      n/a     GA500       1.5" Angle Guard Rail (bulk)
------------------------------------------------------------------------------
43    383     600      n/a     GCL600      5.75" Lapped Channel Guard Rail
------------------------------------------------------------------------------
1     384     700      n/a     LRC724      LRC-Live Roller Curve
------------------------------------------------------------------------------
1     385     700      700     LRA726      LRZE-Zero Pressure Accumulation
------------------------------------------------------------------------------
1     386     700      700     BSB728      BMSE-Brake/Motor Belt
------------------------------------------------------------------------------
1     387     700      700     BM730       PAM-Powered Belt Merge
------------------------------------------------------------------------------

</TABLE>


                                 Page 13 of 17


<PAGE>

<TABLE>
<CAPTION>

Qty        Manufacturer, Description Model No./Serial No.                   Location
           ---------------------------------------------                    --------
      Seq.    Series   Panel   Conveyor    Type of                          12 Sandborn St.
       #                       Number      Conveyor                         Tilton, NH 03276
<S>   <C>     <C>      <C>     <C>         <C>

1     388      700      700     BC732       PBC-Powered Belt Curve
--------------------------------------------------------------------------------
1     389      700      700     SB734       SB-Scale Belt
--------------------------------------------------------------------------------
1     390      700      700     SOR736      BRC-Sort Belt
--------------------------------------------------------------------------------
1     391      700      700     SOR738      BRC-Sort Belt
--------------------------------------------------------------------------------
1     392      700      700     LRC740      LRC-Live Roller Curve
--------------------------------------------------------------------------------
1     393      700      n/a     LRC742      LRC-Live Roller Curve
--------------------------------------------------------------------------------
1     394      700      n/a     LRM744      LREWS-Live Roller Merge
--------------------------------------------------------------------------------
1     395      700      n/a     LRA746      LRZC-Zero Pressure Accumulation
--------------------------------------------------------------------------------
1     396      700      n/a     BSB748      BMSE-Brake/Meter Belt
--------------------------------------------------------------------------------
1     397      700      n/a     DIV750A     LFS-Line Flow Spur
--------------------------------------------------------------------------------
1     398      700      n/a     DIV750B     LFS-Line Flow Spur
--------------------------------------------------------------------------------
1     399      700      n/a     DIV750C     LFS-Line Flow Spur
--------------------------------------------------------------------------------
1     400      700      n/a     DIV750D     LFS-Line Flow Spur
--------------------------------------------------------------------------------
1     401      700      n/a     DIV750E     LFS-Line Flow Spur
--------------------------------------------------------------------------------
1     402      700      n/a     GRC751A     RGC150-Roller Gravity Curve
--------------------------------------------------------------------------------
1     403      700      n/a     GRC751B     RGC150-Roller Gravity Curve
--------------------------------------------------------------------------------
1     404      700      n/a     GRC751C     RGC150-Roller Gravity Curve
--------------------------------------------------------------------------------
1     405      700      n/a     GRC751D     RGC150-Roller Gravity Curve
--------------------------------------------------------------------------------
1     406      700      n/a     GRC751E     RGC150-Roller Gravity Curve
--------------------------------------------------------------------------------
1     407      700      n/a     CH752A      CHT-Chute
--------------------------------------------------------------------------------
1     408      700      n/a     CH752B      CHT-Chute
--------------------------------------------------------------------------------
1     409      700      n/a     CH752C      CHT-Chute
--------------------------------------------------------------------------------
1     410      700      n/a     CH752D      CHT-Chute
--------------------------------------------------------------------------------
1     411      700      n/a     CH752E      CHT-Chute
--------------------------------------------------------------------------------
1     412      700      n/a     GR753A      RG1916-Roller Gravity
--------------------------------------------------------------------------------
1     413      700      n/a     GR753B      RG1916-Roller Gravity
--------------------------------------------------------------------------------
1     414      700      n/a     GR753C      RG1916-Roller Gravity
--------------------------------------------------------------------------------
1     415      700      n/a     GR753D      RG1916-Roller Gravity
----------------------------------------------------------------------------
1     416      700      n/a     GR753E      RG1916-Roller Gravity
--------------------------------------------------------------------------------
1     417      700      n/a     DIV760      LFS-Line Flow Spur
----------------------------------------------------------------------------

</TABLE>


                                 Page 14 of 17


<PAGE>

<TABLE>
<CAPTION>

QTY   MANUFACTURER, DESCRIPTION MODEL NO./SERIAL NO.                       LOCATION
---   ---------------------------------------------                        --------
      Seq.    Series   Panel   Conveyor    Type of                         12 Sandborn St.
       #                       Number      Conveyor                        Tilton, NH 03276
      ---     ------   -----   --------    --------

<S>   <C>     <C>      <C>     <C>         <C>
1     418     700      n/a     GRC761      RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     419     700      700     PB1762      BIC-15 Degree Belt Incline
------------------------------------------------------------------------------
1     420     700      n/a     GRC764      RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     421     700      n/a     GR766       RG1916-Roller Gravity
------------------------------------------------------------------------------
1     422     700      n/a     GRC768      RGC160-Roller Gravity Curve
------------------------------------------------------------------------------
1     423     700      n/a     CH770       CHT-Chule
------------------------------------------------------------------------------
1     424     700      n/a     GR772       RG1916-Roller Gravity
------------------------------------------------------------------------------
59    425     700      n/a     GCL700      5.75" Lapped Channel Guard Rail (bulk)
------------------------------------------------------------------------------
1     426     800      100     PB800A      BIC-12.5 Degree Incline Trash Belt
------------------------------------------------------------------------------
1     427     800      100     PB800B      BIC-12.5 Degree Incline Trash Belt
------------------------------------------------------------------------------
1     428     800      100     PB800C      BIC-12.5 Degree Incline Trash Belt
------------------------------------------------------------------------------
1     429     800      100     PB800D      BIC-12.5 Degree Incline Trash Belt
------------------------------------------------------------------------------
1     430     800      100     PB810       BIC-15 Degree Incline Trash Belt
------------------------------------------------------------------------------
1     431     800      300-2   PB820       BIC-12.5 Degree Incline Trash Belt
------------------------------------------------------------------------------
1     432     800      n/a     CH821       CT-Chule
------------------------------------------------------------------------------
1     433     800      300-2   PB822       BSC-Trash Belt
------------------------------------------------------------------------------
1     434     800      300-2   PB824       BIC-15 Degree Incline Trash Belt
------------------------------------------------------------------------------
1     435     800      300-2   PB830       BIC-12.5 Degree Incline Trash Belt
------------------------------------------------------------------------------
1     436     800      n/a     CH832       CHT-Chule
------------------------------------------------------------------------------
1     437     800      300-2   PB833       BSC-Trash Belt
------------------------------------------------------------------------------
1     438     800      300-2   PB834       BIC-15 Degree Incline Trash Belt
------------------------------------------------------------------------------
1     439     800      400     PB840       BSC-Trash Belt
------------------------------------------------------------------------------
1     440     800      400     PB842       BSC-Trash Belt
------------------------------------------------------------------------------
1     441     800      800     PB844       BIC-15 Degree Incline Trash Belt
------------------------------------------------------------------------------
1     442     800      800     PB850       BSC-Trash Belt
------------------------------------------------------------------------------
1     443     800      800     PB855       BSC-Trash Belt
------------------------------------------------------------------------------
1     444     800      800     CH857       CHT-Chule
------------------------------------------------------------------------------
1     445     800      800     PB860A      BSSE-Pitched Trash Belt
------------------------------------------------------------------------------
1     446     800      800     PB860B      BSE-Pitched Trash Belt
------------------------------------------------------------------------------
1     447     800      800     PB860C      BSE-Pitched Trash Belt
------------------------------------------------------------------------------

</TABLE>


                                 Page 15 of 17


<PAGE>

<TABLE>
<CAPTION>

QTY   MANUFACTURER, DESCRIPTION MODEL NO./SERIAL NO.                        LOCATION
---   ---------------------------------------------                         --------
      Seq.    Series   Panel   Conveyor    Type of                          12 Sandborn St.
       #                       Number      Conveyor                         Tilton, NH 03276
      ---     ------   -----   --------    --------

<S>   <C>     <C>      <C>     <C>         <C>

1     448     800      800     PB860D      BSE-Pitched Trash Belt
------------------------------------------------------------------------------
1     449     800      800     PB860E      BSE-Pitched Trash Belt
------------------------------------------------------------------------------
1     450     800      800     PB860F      BSE-Pitched Trash Belt
------------------------------------------------------------------------------
1     451     800      800     PB860G      BSE-Pitched Trash Belt
------------------------------------------------------------------------------
1     452     800      800     PB860H      BSE-Pitched Trash Belt
------------------------------------------------------------------------------
1     453     800      800     PB860J      BSE-Pitched Trash Belt
------------------------------------------------------------------------------
1     454     800      800     PB860K      BSE-Pitched Trash Belt
------------------------------------------------------------------------------
1     455     800      800     PB860L      BSE-Pitched Trash Belt
------------------------------------------------------------------------------
1     456     800      800     PB860M      BSE-Pitched Trash Belt
------------------------------------------------------------------------------
1     457     800      800     PB860N      BSE-Pitched Trash Belt
------------------------------------------------------------------------------
1     458     800      800     PB860P      BSE-Pitched Trash Belt
------------------------------------------------------------------------------
1     459     800      800     PB860Q      BSE-Pitched Trash Belt
------------------------------------------------------------------------------
1     460     800      800     PB860R      BSE-Pitched Trash Belt
------------------------------------------------------------------------------
1     461     800      800     PB862       BSC-Trash Belt
------------------------------------------------------------------------------
1     462     800      800     PB864       BSC-Trash Belt
------------------------------------------------------------------------------
1     463     800      800     PB866       BIC-15 Degree Incline Trash Belt
------------------------------------------------------------------------------
1     464     800      n/a     CH870A      CHT-Drop Chute
------------------------------------------------------------------------------
1     465     800      n/a     CH870B      CHT-Drop Chute
------------------------------------------------------------------------------
1     466     800      n/a     CH870C      CHT-Drop Chute
------------------------------------------------------------------------------
1     467     800      n/a     CH870D      CHT-Drop Chute
------------------------------------------------------------------------------
1     468     800      n/a     CH880A      CHT-Drop Chute
------------------------------------------------------------------------------
1     469     800      n/a     CH880B      CHT-Drop Chute
------------------------------------------------------------------------------
1     470     800      n/a     CH880C      CHT-Drop Chute
------------------------------------------------------------------------------

</TABLE>


                                 Page 16 of 17


<PAGE>

<TABLE>
<CAPTION>

QTY   MANUFACTURER, DESCRIPTION MODEL NO./SERIAL NO.                       LOCATION
---   ---------------------------------------------                        --------
      Seq.    Series   Panel   Conveyor    Type of                         12 Sandborn St.
       #                       Number      Conveyor                        Tilton, NH 03276
      ---     ------   -----   --------    --------

<S>   <C>     <C>      <C>     <C>         <C>
1     471     800      n/a     CH880D      CHT-Drop Chule
------------------------------------------------------------------------------
81    472     800      n/a     GA800       1.5" Angle Guard Rail (bulk)
------------------------------------------------------------------------------
118   473     800      n/a     GCL800      5.75" Lapped Channel Guard Rail (bulk)
------------------------------------------------------------------------------
52    474     800      n/a     GCL18-800   18" Channel Guard Rail (bulk)
------------------------------------------------------------------------------
      475     900      500                 Auto Bag Sorter
------------------------------------------------------------------------------
1     476     PL       n/a     PL01        Platform (Crossovers Only)
------------------------------------------------------------------------------
1     477     PL       n/a     PL02        Platform
------------------------------------------------------------------------------
1     478     PL       n/a     PL03        Platform
------------------------------------------------------------------------------
1     479     PL       n/a     PL04        Platform
------------------------------------------------------------------------------
1     480     PL       n/a     PL05        Platform
------------------------------------------------------------------------------

</TABLE>

         Above equipment distributed by: Designed Conveyor Systems, Inc.