EXHIBIT 10.49

                          MORTGAGE, FIXTURE FILING AND
                         ASSIGNMENT OF LEASES AND RENTS


                                      from



                             KOLAR, INC., Mortgagor


                                       to


                              JPMORGAN CHASE BANK,
                       as Administrative Agent, Mortgagee



                            DATED AS OF JUNE 25, 2002


                          PRINCIPAL AMOUNT: $704,484.41


                       After recording, please return to:



                             Herrick, Feinstein LLP
                                  2 Park Avenue
                            New York, New York 10016



                             ATTN: David Rosen, Esq.



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                                                                      [New York]
                          MORTGAGE, FIXTURE FILING AND
                         ASSIGNMENT OF LEASES AND RENTS

                                   (Tranche C)

         THIS MORTGAGE, FIXTURE FILING AND ASSIGNMENT OF LEASES AND RENTS dated
as of June 25, 2002 is made by KOLAR, INC., a Delaware corporation
("Mortgagor"), whose address is 200A Executive Drive, Edgewood, New York 11717
to JPMORGAN CHASE BANK, a New York banking corporation ("JPM"), as
Administrative Agent for the Lenders (each term as defined in the Restated
Credit Agreement hereinafter defined; JPM, in such capacity, "Mortgagee"), whose
address is 270 Park Avenue, New York, New York 10017. References to this
"Mortgage" shall mean this instrument and any and all renewals, modifications,
amendments, supplements, extensions, consolidations, substitutions, spreaders
and replacements of this instrument.

                                   Background

A. Mortgagor is the owner of the parcels of real property described on Schedule
A attached (such real property, together with all of the buildings,
improvements, structures and fixtures now or subsequently located thereon (the
"Improvements"), being collectively referred to as the "Real Estate").

B. Mortgagor is a party to that certain Amended and Restated Credit Agreement
dated as of even date herewith (as the same may be amended, supplemented,
modified, extended, restated or replaced from time to time, the "Restated Credit
Agreement") among Mortgagor, CPI Aerostructures, Inc., the several banks and
other financial institutions from time to time parties thereto (the "Lenders")
and JPM, as Administrative Agent for the Lenders. In the event of any conflict
between the terms and provisions of this Mortgage and the provisions of the
Restated Credit Agreement, the applicable terms and provisions of the Mortgage
shall govern and control. Capitalized terms used and not defined herein shall
have the respective meanings assigned thereto in the Restated Credit Agreement.

C. Pursuant to the Restated Credit Agreement, JPM as the Tranche C Term Loan
Lender thereunder has made a certain Tranche C Term Loan to Mortgagor in the
aggregate principal amount of $704,484.41, (the "Tranche C Loan").

D. The Tranche C Loan is evidenced by a promissory note of Mortgagor made
payable to the order of the Mortgagee (as the same may be amended, restated,
replaced, modified or otherwise supplemented from time to time, collectively,
the "Tranche C Note"). The Tranche C Loan bears interest at the rate set forth
in the Credit Agreement. References in this Mortgage to the "Default Rate" shall
mean, at any time, the rate of interest applicable to overdue principal amounts
of the Tranche C Loan as provided in the Credit Agreement.

E. It is a condition precedent to the obligation of JPM to make the Tranche C
Loan to Mortgagor that Mortgagor shall have executed and delivered this Mortgage
to Mortgagee for the benefit of JPM.



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                                Granting Clauses

         For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Mortgagor agrees that to secure:

         (a) (i) the repayment of the indebtedness evidenced by the Tranche C
Note, and (ii) all interest (including, without limitation, interest accruing
after the maturity of the Tranche C Loan and interest accruing after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to Mortgagor whether or not a claim
for post-filing or post-petition interest is allowed in such proceeding) and
fees, indemnities, costs, expenses (including, without limitation, all
reasonable fees and disbursements of counsel to Mortgagee that are required to
be paid by Mortgagor in respect of the Tranche C Note pursuant to the terms of
the Restated Credit Agreement or this Mortgage) or otherwise payable thereon
(the items set forth in clauses (i) and (ii) being referred to collectively as
the "Indebtedness"); and

         (b) the performance of all covenants, agreements, obligations and
liabilities of Mortgagor (the "Obligations") whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, the Tranche C
Loan under the Restated Credit Agreement, the Tranche C Note, this Mortgage, any
other document securing payment of the Indebtedness (the "Security Documents")
and any amendments, supplements, extensions, renewals, restatements,
replacements or modifications of any of the foregoing (the Note, the Security
Documents and all other documents and instruments from time to time evidencing,
securing or guaranteeing the payment of the Indebtedness or the performance of
the Obligations, as any of the same may be amended, supplemented, extended,
renewed, restated, replaced or modified from time to time, are collectively
referred to as the "Loan Documents");

MORTGAGOR HEREBY GRANTS TO MORTGAGEE A LIEN UPON AND A SECURITY INTEREST IN, AND
HEREBY MORTGAGES, GRANTS, ASSIGNS, TRANSFERS AND SETS OVER TO MORTGAGEE:

         (A) the Real Estate;

         (B) all the estate, right, title, claim or demand whatsoever of
Mortgagor, in possession or expectancy, in and to the Real Estate or any part
thereof;

         (C) all right, title and interest of Mortgagor in, to and under all
easements, rights of way, gores of land, streets, ways, alleys, passages, sewer
rights, waters, water courses, water and riparian rights, development rights,
air rights, mineral rights and all estates, rights, titles, interests,
privileges, licenses, tenements, hereditaments and appurtenances belonging,
relating or appertaining to the Real Estate, and any reversions, remainders,
rents, issues, profits and revenue thereof and all land lying in the bed of any
street, road or avenue, in front of or adjoining the Real Estate to the center
line thereof;

         (D) all of the fixtures, chattels, business machines, machinery,
apparatus, equipment, furnishings, fittings and articles of personal property of
every kind and nature whatsoever, and all appurtenances and additions thereto
and substitutions or replacements thereof (together with, in each case,
attachments, components, parts and accessories) currently owned or subsequently
acquired by Mortgagor and now or subsequently attached to, or contained in or
used or usable in any way in connection with any operation or letting of the
Real Estate, including but without limiting the generality of the foregoing, all
screens, awnings, shades, blinds, curtains, draperies, artwork, carpets, rugs"
storm doors and windows, furniture and furnishings, heating, electrical, and
mechanical equipment, lighting, switchboards, plumbing, ventilating, air
conditioning and air-cooling apparatus, refrigerating, and incinerating
equipment, escalators, elevators, loading and unloading equipment and systems,
stoves, ranges, laundry equipment, cleaning systems (including window cleaning
apparatus), telephones, communication systems (including satellite dishes and
antennae), televisions, computers, sprinkler systems and other fire prevention
and extinguishing apparatus and materials, security systems, motors, engines,
machinery, pipes, pumps, tanks, conduits, appliances, fittings and fixtures of
every kind and description Call of the foregoing in this paragraph (D) being
referred to as the "Equipment");

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         (E) all right, title and interest of Mortgagor in and to all
substitutes and replacements of, and all additions and improvements to, the Real
Estate and the Equipment, subsequently acquired by or released to Mortgagor or
constructed, assembled or placed by Mortgagor on the Real Estate, immediately
upon such acquisition, release, construction, assembling or placement,
including, without limitation, any and all building materials whether stored at
the Real Estate or offsite, and, in each such case, without any further
mortgage, conveyance, assignment or other act by Mortgagor;

         (F) all right, title and interest of Mortgagor in, to and under all
leases, subleases, underlettings, concession agreements, management agreements,
licenses and other agreements relating to the use or occupancy of the Real
Estate or the Equipment or any part thereof, now existing or subsequently
entered into by Mortgagor and whether written or oral and all guarantees of any
of the foregoing (collectively, as any of the foregoing may be amended,
restated, extended, renewed or modified from time to time, the "Leases"), and
all rights of Mortgagor in respect of cash and securities deposited thereunder
and the right to receive and collect the revenues, income, rents, issues and
profits thereof, together with all other rents, royalties, issues, profits,
revenue, income and other benefits arising from the use and enjoyment of the
Mortgaged Property (as defined below) (collectively, the "Rents");

         (G) all trade names, trade marks, logos, copyrights, good will and
books and records relating to or used in connection with the operation of the
Real Estate or the Equipment or any part thereof; all general intangibles
related to the operation of the Improvements now existing or hereafter arising;

         (H) all unearned premiums under insurance policies now or subsequently
obtained by Mortgagor relating to the Real Estate or Equipment and Mortgagor's
interest in and to all such insurance policies and the proceeds thereof
(including title insurance policies) including the right to collect and receive
such proceeds, subject to the provisions relating to insurance generally set
forth below; and all awards and other compensation, including the interest
payable thereon and the right to collect and receive the same, made to the
present or any subsequent owner of the Real Estate or Equipment for the taking
by eminent domain, condemnation or otherwise, of all or any part of the Real
Estate or any easement or other right therein;

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         (I) all right, title and interest of Mortgagor, in and to (i) all
contracts from time to time executed by Mortgagor or any manager or agent on its
behalf relating to the ownership, construction, maintenance, repair, operation,
occupancy, sale or financing of the Real Estate or Equipment or any part thereof
and all agreements relating to the purchase or lease of any portion of the Real
Estate or any property which is adjacent or peripheral to the Real Estate,
together with the right to exercise such options and all leases of Equipment
(collectively, the "Contracts"), (ii) all consents, licenses, building permits,
certificates of occupancy and other governmental approvals relating to
construction, completion, occupancy, use or operation of the Real Estate or any
part thereof (collectively, the "Permits") and (iii) all drawings, plans,
specifications and similar or related items relating to the Real Estate
(collectively, the "Plans");

         (J) any and all monies now or subsequently on deposit for the payment
of real estate taxes or special assessments against the Real Estate or for the
payment of premiums on insurance policies covering the foregoing property or
otherwise on deposit with or held by Mortgagee as provided in this Mortgage; all
capital, operating, reserve or similar accounts held by or on behalf of
Mortgagor and related to the operation of the Mortgaged Property, whether now
existing or hereafter arising and all monies held in any of the foregoing
accounts and any certificates or instruments related to or evidencing such
accounts;

         (K) all accounts and revenues arising from the operation of the
Improvements including, without limitation, (i) any right to payment now
existing or hereafter arising for rental of space or for goods sold or leased or
for services rendered, whether or not yet earned by performance, arising from
the operation of the Improvements or any other facility on the Mortgaged
Property and (ii) all rights to payment from any consumer credit-charge card
organization or entity including, without limitation, payments arising from the
use of the American Express Card, the Visa Card, the Carte Blanche Card, the
Mastercard or any other credit card, including those now existing or hereafter
created, substitutions therefor, proceeds thereof (whether cash or non-cash,
movable or immovable, tangible or intangible) received upon the sale, exchange,
transfer, collection or other disposition or substitution thereof and any and
all of the foregoing and proceeds therefrom; and

         (L) all proceeds, both cash and noncash, of the foregoing;

         (All of the foregoing property and rights and interests now owned or
held or subsequently acquired by Mortgagor and described in the foregoing
clauses (A) through (E) are collectively referred to as the "Premises", and
those described in the foregoing clauses (A) through (L) are collectively
referred to as the "Mortgaged Property").

TO HAVE AND TO HOLD the Mortgaged Property and the rights and privileges hereby
mortgaged unto Mortgagee, its successors and assigns for the uses and purposes
set forth, until the Indebtedness is fully paid and the Obligations fully
performed.

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SUBORDINATION

                  Notwithstanding anything to the contrary contained herein,
this Mortgage is and shall at all times whether before, after or during the
pending of any bankruptcy, reorganization or other insolvency proceeding be
junior, subject and subordinate in each and every respect to the first lien of
that certain Mortgage, Fixture Filing and Assignments of Rents and Leases dated
as of October 9, 1997 and recorded on October 9, 1997 in the office of the
County Clerk for Tompkins County in Book 1127, page 225 made by Mortgagor to JPM
(formerly The Chase Manhattan Bank) as Administrative Agent, (in such capacity,
including its successors and assigns, "Prior Mortgagee"), and to any and all
renewals, modifications, amendments, supplements, extensions, consolidations,
substitutions, spreaders and replacements thereof and increases in the amount
secured thereby (the "Prior Mortgage"), and to all Permitted Encumbrances (as
defined in the Prior Mortgage), and the Prior Mortgage shall be and remain a
first lien against the premises encumbered hereby for so long as the debt
secured by the Prior Mortgage is outstanding.

                  For so long as the debt secured by the Prior Mortgage shall be
outstanding, Mortgagor and Mortgagee agree that:

                  (a) Mortgagee shall not amend or consent to any amendment to
or other modification of the Tranche C Note or this Mortgage without the prior
written consent of the Tranche A Loan Lenders;

                  (b) The rights of Mortgagee to take, demand or receive,
directly or indirectly, by set-off, redemption, purchase or in any other manner,
any payment or security for the indebtedness evidenced by the Tranche C Note are
subject to and governed by that certain Tranche C Intercreditor and
Subordination Agreement dated as of the date hereof by and among Mortgagor,
Mortgagee, JPM as the Tranche C Loan Lender, and CPI Aerostructures, Inc., as
the same may be amended, supplement, restated, replaced or otherwise modified
from time to time.

                              Terms and Conditions

                  Mortgagor further represents, warrants, covenants and, agrees
with Mortgagee as follows:

1. Warranty of Title. Mortgagor warrants the title to the Premises, subject only
to the matters that were set forth in Schedule B of the title insurance policy
previously issued to Mortgagee to insure the lien of a Mortgage previously
issued to Mortgagee by Tycor Title Insurance Company on October 9, 1997, in
respect of the Mortgage to which this Mortgage is subordinate as provided herein
(the "Permitted Exceptions"). Mortgagor also represents and warrants that (i)
the execution and delivery of this Mortgage by the Mortgagor does not constitute
a "fraudulent conveyance" within the meaning of Title 11 of the United States
Code as now constituted or under any other applicable statute, and (ii) no
bankruptcy or insolvency proceedings are pending or contemplated by or against
the Mortgagor.

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2. Payment of Indebtedness. Mortgagor shall pay the Indebtedness at the times
and places and in the manner specified in the Note and shall perform all the
Obligations.

3. Requirements.

         (a) Mortgagor shall promptly comply with, or cause to be complied with,
and conform to all present and future laws, statutes, codes, ordinances, orders,
judgments, decrees, rules, regulations and requirements, and irrespective of the
nature of the work to be done, of each of the United States of America, any
State and any municipality, local government or other political subdivision
thereof and any agency, department, bureau, board, commission or other
instrumentality of any of them, now existing or subsequently created
(collectively, "Governmental Authority") which has jurisdiction over the
Mortgaged Property and all covenants, restrictions and conditions now or later
of record which may be applicable to any of the Mortgaged Property, or to the
use, manner of use, occupancy" possession, operation, maintenance, alteration,
repair or reconstruction of any of the Mortgaged Property. All present and
future laws, statutes, codes, ordinances, orders, judgments, decrees, rules,
regulations and requirements of every Governmental Authority applicable to
Mortgagor or to any of the Mortgaged Property and all covenants, restrictions,
and conditions which now or later may be applicable to any of the Mortgaged
Property are collectively referred-to as the "Legal Requirements".

         (b) From and after the date of this Mortgage, Mortgagor shall not by
act or omission permit any building or other improvement on any premises not
subject to the lien of this Mortgage to rely on the Premises or any part thereof
or any interest therein to fulfill any Legal Requirement, and Mortgagor hereby
assigns to Mortgagee any and all rights to give consent for all or any portion
of the Premises or any interest therein to be so used. Mortgagor shall not by
act or omission impair the integrity of any of the Real Estate so as to
constitute an illegal subdivision or to prohibit the Premises and Improvements
from being conveyed as one zoning or tax lot. Mortgagor represents that the
Premises are not part of a larger tract of land owned by Mortgagor or its
affiliates or otherwise considered as part of one zoning or tax lot, or, if they
are that any authorization or variance required for the subdivision of such
larger tract which a sale of the Premises would entail has been obtained from
all appropriate Governmental Authorities so that the Premises and Improvements
constitute one zoning or tax lot capable of being conveyed as such. Any act or
omission by Mortgagor which would result in a violation of any of the provisions
of this subsection shall be void.

         (c) Mortgagor shall have the right to contest or object in good faith
to the validity or applicability to the Premises of any Legal Requirement by
appropriate legal proceedings, but such right shall not be deemed or construed
in any way as relieving, modifying, or extending Mortgagor's covenant to comply
with any such Legal Requirement as provided in this Section unless (i) Mortgagor
has given prior written notice to Mortgagee of Mortgagor's intent so to contest
or object to a Legal Requirement, (ii) Mortgagor shall demonstrate to
Mortgagee's satisfaction that the legal proceedings shall operate conclusively
to prevent the sale of the Mortgaged Property, or any part thereof, for the
noncompliance with the contested Legal Requirement prior to final determination
of such proceedings and (iii) Mortgagor shall furnish a good and sufficient bond
or surety as requested by and reasonably satisfactory to Mortgagee in the amount
equal to any interest and penalty which may be imposed for noncompliance with
such Legal Requirement and which could become a charge against the Real Estate
or any part of the Mortgaged Property.

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4. Payment of Taxes and Other Impositions. (a) Promptly when due, Mortgagor
shall pay and discharge all taxes of every kind and nature (including, without
limitation, all real and personal property, income, franchise, withholding,
transfer, gains, profits and gross receipts taxes), all charges for any easement
or agreement maintained for the benefit of any of the Mortgaged Property, all
general and special assessments, levies, permits, inspection and license fees,
all water and sewer rents and charges, vault taxes, and all other public charges
even if unforeseen or extraordinary, imposed upon or assessed against or which
may become a lien on any of the Mortgaged Property, or arising in respect of the
occupancy, use or possession thereof, together with any penalties or interest on
any of the foregoing (all of the foregoing are collectively referred to as the
"Impositions"). Mortgagor shall, within 30 days after request by Mortgagee,
deliver to Mortgagee (i) original or copies of receipted bills and cancelled
checks evidencing payment of such Imposition if it is a real estate tax or other
public charge and (ii) evidence acceptable to Mortgagee showing the payment of
any other such Imposition. If by law any Imposition, at Mortgagor's option, may
be paid in installments (whether or not interest shall accrue on the unpaid
balance of such Imposition) , Mortgagor may elect to pay such Imposition in such
installments and shall be responsible for the payment of such installments with
interest, if any.

         (b) Nothing herein shall affect any right or remedy of Mortgagee under.
this Mortgage or otherwise, without notice or demand to Mortgagor, to pay any
Imposition after the date such Imposition shall have become due. Any sums paid
by Mortgagee in discharge of any Impositions shall be payable on demand by
Mortgagor to Mortgagee together with interest at the Default Rate.

         (c) Mortgagor shall not claim, demand or be entitled to receive any
credit or credits toward the satisfaction of this Mortgage or on any interest
payable thereon for any taxes assessed against the Mortgaged Property or any
part thereof, and shall not claim any deduction from the taxable value of the
Mortgaged Property by reason of this Mortgage.

         (d) Mortgagor shall have the right before any delinquency occurs to
contest or object in good faith to the amount or validity of any Imposition by
appropriate legal proceedings, but such right shall not be deemed or construed
in any way as relieving, modifying, or extending Mortgagor's covenant to pay any
such Imposition at the time and in the manner provided in this Section unless
(i) Mortgagor has given prior written notice to Mortgagee of Mortgagor's intent
so to contest or object to an Imposition, (ii) Mortgagor shall demonstrate to
Mortgagee's satisfaction that the legal proceedings shall operate conclusively
to prevent the sale of the Mortgaged Property, or any part thereof, to satisfy
such Imposition prior to final determination of such proceedings and (iii)
Mortgagor shall furnish a good and sufficient bond or surety as requested by and
reasonably satisfactory to Mortgagee in the amount of the Impositions which are
being contested plus any interest and penalty which may be imposed thereon and
which could become a lien against the Real Estate or any part of the Mortgaged
Property.

         (e) Upon written notice to Mortgagor, Mortgagee shall be entitled to
require Mortgagor to pay monthly in advance to Mortgagee the equivalent of
1/12th of the estimated annual Impositions. Mortgagee may commingle such funds
with its own funds and Mortgagor shall not be entitled to interest thereon. Any
funds so collected by Mortgagee shall be used to pay Impositions as they become
due.

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5. Insurance. (a) Mortgagor shall maintain or cause to be maintained on all of
the Premises

                  (i) property insurance against loss or damage by fire,
lightning, windstorm, tornado, water damage, flood, earthquake and by such other
further risks and hazards as now are or subsequently may be covered by an "all
risk" policy or a fire policy covering "special" causes of loss. The policy
shall include building ordinance law endorsements and the policy limits shall be
automatically reinstated after each loss;

                  (ii) comprehensive general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the language
of such endorsement), covering all claims for personal injury, bodily injury or
death, or property damage occurring on, in or about the Premises in an amount
not less than $10,000,000 combined single limit with respect to injury and
property damage relating to any one occurrence plus such excess limits as
Mortgagee shall request from time to time;

                  (iii) when and to the extent required by Mortgagee, insurance
against loss or damage by any other risk commonly insured against by persons
occupying or using like properties in the locality or localities in which the
Real Estate is situated;

                  (iv) insurance against rent loss, extra expense or business
interruption (and/or soft costs, in the case of new construction), if
applicable, in amounts satisfactory to Mortgagee, but not less than one year's
gross rent or gross income;

                  (v) during the course of any construction or repair of
Improvements, comprehensive general liability insurance under a policy including
the "broad form CGL endorsement" (or which incorporates the language of such
endorsement), (including coverage for elevators and escalators, if any). The
policy shall include coverage for independent contractors and completed
operations. The completed operations coverage shall stay in effect for two years
after construction of any Improvements has been completed. The policy shall
provide coverage on an occurrence basis against claims for personal injury,
including, without limitation, bodily injury, death or property damage occurring
on, in or about the Premises and the adjoining streets, sidewalks and
passageways, such insurance to afford immediate minimum protection to a limit of
not less than that required by Mortgagee with respect to personal injury, bodily
injury or death to any one or more persons or damage to property;

                  (vi) during the course of any construction or repair of the
Improvements, workers, compensation insurance (including employer's liability
insurance) for all employees of Mortgagor engaged on or with respect to the
Premises in such amounts as are reasonably satisfactory to Mortgagee, but in no
event less than the limits established by law;

                  (vii) during the course of any construction, addition,
alteration or repair of the Improvements, builder's risk completed value form
insurance against "all risks of physical loss," including collapse, water
damage, flood and earthquake and transit coverage, during construction or
repairs of the Improvements, with deductible approved by Mortgagee, in
nonreporting form, covering the total value of work performed and equipment,
supplies and materials furnished (with an appropriate limit for soft costs in
the case of construction);

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                  (viii) boiler and machinery property insurance covering
pressure vessels, air tanks, boilers, machinery, pressure piping, heating, air
conditioning and elevator equipment and escalator equipment, provided the
Improvements contain equipment of such nature, and insurance against rent, extra
expense, business interruption and soft costs, if applicable, arising from any
such breakdown, in such amounts as are reasonably satisfactory to Mortgagee but
not less than the lesser of $1,000,000 or 10% of the value of the Improvements;

                  (ix) if any portion of the Premises are located in an area
identified as a special flood hazard area by the Federal Emergency Management
Agency or other applicable agency, flood insurance in an amount satisfactory to
Mortgagee, but in no event less than the maximum limit of coverage available
under the National Flood Insurance Act of 1968, as amended; and

                  (x) such other insurance in such amounts as Mortgagee may
reasonably request from time to time.

Each insurance policy (other than flood insurance written under the National
Flood Insurance Act of 1968, as amended, in which case to the extent available)
shall (i) provide that it shall not be cancelled, non-renewed or materially
amended without 30-days, prior written notice to Mortgagee, (ii) with respect to
all property insurance, provide for deductibles not to exceed $25,000, contain a
"Replacement Cost Endorsement" without any deduction made for depreciation and
with no co-insurance penalty (or attaching an agreed amount endorsement
satisfactory to Mortgagee), with loss payable solely to Mortgagee (modified, if
necessary, to provide that proceeds in the amount of replacement cost may be
retained by Mortgagee without the obligation to rebuild) as its interest may
appear, without contribution, under a "standard" or "New York" mortgagee clause
acceptable to Mortgagee and be written by insurance companies having an A.M.
Best Company, Inc. rating of A or higher and a financial size category of not
less than XII, or otherwise as approved by Mortgagee, and (iii) contain an
"manuscript" endorsement providing that Mortgagor may not unilaterally cancel
such policy without Mortgagee's prior written consent. Liability insurance
policies shall name Mortgagee as an additional insured and contain a waiver of
subrogation against Mortgagee; all such policies shall indemnify and hold
Mortgagee harmless from all liability claims occurring on, in or about the
Premises and the' adjoining streets, sidewalks and passageways. The amounts of
each insurance policy and the form of each such policy shall at all times be
satisfactory to Mortgagee. Each policy shall expressly provide that any proceeds
which are payable to Mortgagee shall be paid by check payable to the order of
Mortgagee only and requiring the endorsement of Mortgagee only. If any required
insurance shall expire, be withdrawn, become void by breach of any condition
thereof by Mortgagor or by any lessee of any part of the Mortgaged Property or
become void or unsafe by reason of the failure or impairment of the capital of
any insurer, or if for any other reason whatsoever such insurance shall become
unsatisfactory to Mortgagee, Mortgagor shall immediately obtain new or
additional insurance satisfactory to Mortgagee. Mortgagor shall not take out any
separate or additional insurance which is contributing in the event of loss
unless it is properly endorsed and otherwise satisfactory to Mortgagee in all
respects.

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         (b) Mortgagor shall deliver to Mortgagee an original of each insurance
policy required to be maintained, or a certificate of such insurance acceptable
to Mortgagee, together with a copy of the declaration page for each such policy.
Mortgagor shall (i) pay as they become due all premiums for such insurance, (ii)
not later than 15 days prior to the expiration of each policy to be furnished
pursuant to the provisions of this Section, deliver a renewed policy or
policies, or duplicate original or originals thereof, marked "premium paid," or
accompanied by such other evidence of payment satisfactory to Mortgagee with
standard non-contributory mortgage clauses in favor of and acceptable to
Mortgagee. Upon request of Mortgagee, Mortgagor shall cause its insurance
underwriter or broker to certify to Mortgagee in writing that all the
requirements of this Mortgage governing insurance have been satisfied.

         (c) If Mortgagor is in default of its obligations to insure or deliver
any such prepaid policy or policies, then Mortgagee, at its option and without
notice, may effect such insurance from year to year, and pay the premium or
premiums therefor, and Mortgagor shall pay to Mortgagee on demand such premium
or premiums so paid by Mortgagee with interest from the time of payment at the
Default Rate.

         (d) Mortgagor shall increase the amount of property insurance required
to equal 100% replacement cost pursuant to the provisions of this Section at the
time of each renewal of each policy (but not later than 12 months from the date
of this Mortgage and each successive 12 month period to occur thereafter) by
using the F.W. Dodge Building Index to determine whether there shall have been
an increase in the replacement value since the most recent adjustment and, if
there shall have been such an increase, the amount of insurance required shall
be adjusted accordingly.

         (e) Mortgagor promptly shall comply with and conform to (i) all
provisions of each such insurance policy, and (ii) all requirements of the
insurers applicable to Mortgagor or to any of the Mortgaged Property or to the
use, manner of use, occupancy, possession, operation, maintenance, alteration or
repair of any of the Mortgaged Property. Mortgagor shall not use or permit the
use of the Mortgaged Property in any manner which would permit any insurer to
cancel any insurance policy or void coverage required to be maintained by this
Mortgage.

         (f) (f) If the Mortgaged Property, or any part thereof, shall be
destroyed or damaged by fire or any other casualty, whether insured or
uninsured, or in the event any claim is made against Mortgagor for any personal
injury, bodily injury or property damage incurred on or about the Premises,
Mortgagor shall give immediate notice thereof to Mortgagee. If the Mortgaged
Property is damaged by fire or other casualty, then provided no Event of Default
shall have occurred and be continuing, (i) if the cost to repair such damage is
less than the lesser of (x) 5% of the replacement cost of the Improvements at
the affected Real Estate site and (y) $100,000, both as determined by Mortgagee
in its sole and absolute discretion, Mortgagor shall have the right to adjust
such loss, and (ii) if the cost to repair such damage exceeds the foregoing
limit but is less than $150,000 as determined by Mortgagee in its sole and
absolute discretion, Mortgagor and Mortgagee shall jointly adjust such loss and,
under both clauses (i)and (ii) above, provided that in each instance (A)
Mortgagor shall have notified Mortgagee in writing within ten (10) days of the
date of such fire or other casualty that Mortgagor elects to repair the
Mortgaged Property substantially to its value, condition and character
immediately prior to such fire or other casualty and (B) the insurance proceeds

                                       10

<Page>

relating to such loss are received by Mortgagee at least six (6) months prior to
the date of the final maturity of the Loans, then the insurance proceeds
relating to such loss shall be paid over to Mortgagor; provided that Mortgagor
shall, promptly after any such damage, repair all such damage regardless of
whether any insurance proceeds have been received or whether such proceeds, if
received, are sufficient to pay for the costs of repair. If the Mortgaged
Property is damaged by fire or other casualty, and the cost to repair such
damage exceeds $150,000, or if an Event of Default shall have occurred and be
continuing, then Mortgagor authorizes and empowers Mortgagee, at Mortgagee's
option and in Mortgagee's sole discretion, as attorney-in-fact for Mortgagor, to
make proof of loss, to adjust and compromise any claim under any insurance
policy, to appear in and prosecute any action arising from any policy, to
collect and receive insurance proceeds and to deduct therefrom Mortgagee's
expenses incurred in the collection process. Each insurance company concerned is
hereby authorized and directed to make payment for all loss directly to
Mortgagee. Mortgagee shall have the right to require Mortgagor to repair or
restore the Mortgaged Property, and Mortgagor hereby designates Mortgagee as its
attorney-in-fact for the purpose of making any election required or permitted
under any insurance policy relating to repair or restoration. The insurance
proceeds or any part thereof received by Mortgagee may be applied by Mortgagee
toward reimbursement of all costs and expenses of Mortgagee in collecting such
proceeds, and the balance, at Mortgagee's option in its sole and absolute
discretion, to the principal (to the installments in inverse order of maturity,
if payable in installments) and interest due or to become due under the Note, to
fulfill any other Obligation of Mortgagor, to the restoration or repair of the
property damaged, or released to Mortgagor. In the event Mortgagee elects to
release such proceeds to Mortgagor, Mortgagor shall be obligated to use such
proceeds to restore or repair the Mortgaged Property. Application by Mortgagee
of any insurance proceeds toward the last maturing installments of principal and
interest due or to become due under the Note shall not excuse Mortgagor from
making any regularly scheduled payments due thereunder, nor shall such
application extend or reduce the amount of such payments. In the event of
foreclosure of this Mortgage or other transfer of title to the Mortgaged
Property in extinguishment of the Indebtedness, all right, title and interest of
Mortgagor in and to any insurance policies then in force shall pass to the
purchaser or grantee and Mortgagor hereby appoints Mortgagee its
attorney-in-fact, in Mortgagor's name, to assign and transfer all such policies
and proceeds to such purchaser or grantee.

         (g) Upon written notice to Mortgagor, Mortgagee after an Event of
Default shall be entitled to require Mortgagor to pay monthly in advance to
Mortgagee the equivalent of 1/12th of the estimated annual premiums due on such
insurance. Mortgagee may commingle such funds with its own funds and Mortgagor
shall not be entitled to interest thereon. Any funds so collected by Mortgagee
shall be used to pay insurance premiums as they become due.

         (h) Mortgagor may maintain insurance required under this Mortgage by
means of one or more blanket insurance policies maintained by Mortgagor only
with Mortgagee's prior written consent; in the event any such consent shall be
given by Mortgagee, (A) any such policy shall specify, or Mortgagor shall
furnish to Mortgagee a written statement from the insurer so specifying, the
maximum amount of the total insurance afforded by such blanket policy that is
allocated to the Premises and the other Mortgaged Property and any sublimits in
such blanket policy applicable to the Premises and the other Mortgaged Property,
(B) each such blanket policy shall include an endorsement providing that, in the
event of a loss resulting from an insured peril, insurance proceeds shall be
allocated to the Mortgaged Property in an amount equal to the coverages required
to be maintained by Mortgagor as provided above and (C) the protection afforded
under any such blanket policy shall be no less than that which would have been
afforded under a separate policy or policies relating only to the Mortgaged
Property.

                                       11
<Page>

6. Restrictions on Liens and Encumbrances. Except for the lien of this Mortgage
and the Permitted Exceptions, and as otherwise expressly permitted under the
Restated Credit Agreement, Mortgagor shall not further mortgage, nor otherwise
encumber the Mortgaged Property nor create or suffer to exist any lien, charge
or encumbrance on the Mortgaged Property, or any part thereof, whether superior
or subordinate to the lien of this Mortgage and whether recourse or
non-recourse.

7. Due on Sale and Other Transfer Restrictions. Mortgagor shall not sell,
transfer, convey or assign all or any portion of, or any interest in, the
Mortgaged Property. Further, without the prior written consent of Mortgagee in
its sole discretion, the ultimate beneficial ownership of Mortgagor and the
partners of Mortgagor (in the case of a partnership) shall not be changed or
altered, by sale, assignment, transfer, pledge foreclosure or otherwise, from
the ultimate beneficial ownership on the date hereof.

8. Limitation on Fundamental Changes. Mortgagor agrees that:

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

         (ii) Mortgagor shall not engage in any business other than the
ownership and operation of the Mortgaged Property and the business conducted
there as of the date of this Mortgage without the prior written consent of
Mortgagee.

9. Maintenance; No Alteration; Inspection; Utilities. (a) Mortgagor shall
maintain or cause to be maintained all the Improvements in good condition and
repair and shall not commit or suffer any waste of the Improvements. Mortgagor
shall repair, restore, replace or rebuild promptly any part of the Premises
which may be damaged or destroyed by any casualty whatsoever. The Improvements
shall not be demolished or materially altered, nor any material additions built,
without the prior written consent of Mortgagee.

         (b) Mortgagee and any persons authorized by Mortgagee, at any
reasonable time and as often as may reasonably be desired upon notice given
reasonably in advance, shall have the right to enter and inspect the Premises
and the right to inspect all work done, labor performed and materials furnished
in and about the Improvements and the right to inspect and make copies of all
books, contracts and records of Mortgagor relating to the Mortgaged Property.

         (c) Mortgagor shall pay or cause to be paid when due all utility
charges which are incurred for gas, electricity, water or sewer services
furnished to the Premises and all other assessments or charges of a similar
nature, whether public or private, affecting the Premises or any portion
thereof, whether or not such assessments or charges are liens thereon.

                                       12

<Page>

10. Condemnation/Eminent Domain. Immediately upon obtaining knowledge of the
institution of any proceedings for the condemnation of the Mortgaged Property,
or any portion thereof, Mortgagor will notify Mortgagee of the pendency of such
proceedings. Mortgagor authorizes Mortgagee, at Mortgagee's option and in
Mortgagee's sole discretion, as attorney-in-fact for Mortgagor, to commence,
appear in and prosecute, in Mortgagee's or Mortgagor's name, any action or
proceeding relating to any condemnation of the Mortgaged Property, or any
portion thereof, and to settle or compromise any claim in connection with such
condemnation. If Mortgagee elects not to participate in such condemnation
proceeding, then Mortgagor shall, at its expense, diligently prosecute any such
proceeding and shall consult with Mortgagee, its attorneys and experts and
cooperate with them in any defense of any such proceedings. All awards and
proceeds of condemnation shall be assigned to Mortgagee to be applied in the
same manner as insurance proceeds, as provided above, and Mortgagor agrees to
execute any such assignments of all such awards as Mortgagee may request.

11. Restoration. If Mortgagee elects to release funds to Mortgagor for
restoration of any of the Mortgaged Property, then such restoration shall be
performed only in accordance with the following conditions:

         (a) prior to the commencement of any restoration, the plans and
specifications for such restoration, and the budgeted costs, shall be submitted
to and approved by Mortgagee;

         (b) prior to making any advance of restoration funds, Mortgagee shall
be satisfied that the remaining restoration funds are sufficient to complete the
restoration and to pay all related expenses, including interest on the
Indebtedness and real estate taxes on the Premises, during restoration;

         (c) at the time of any disbursement of the restoration funds, (A) no
Default (as defined below) shall then exist, (B) no mechanics, or materialmen's
liens shall have been filed and remain undischarged, except those discharged by
the disbursement of the requested restoration funds and (C) a satisfactory
bring-down or continuation of title insurance on the Premises shall be delivered
to Mortgagee;

         (d) disbursements shall be made from time to time in an amount not
exceeding the cost of the work completed since the last disbursement, upon
receipt of satisfactory evidence of the stage of completion and of performance
of the work in a good and workmanlike manner and in accordance with the
contracts, plans and specifications acceptable to Mortgagee;

         (e) with respect to each advance of restoration funds, Mortgagee may
retain 10% of the amount of such advance as a holdback until the restoration is
fully completed;

         (f) the restoration funds shall bear no interest and may be commingled
with Mortgagee's other funds;

                                       13

<Page>

         (g) Mortgagee may impose such other conditions as are customarily
imposed by construction lenders; and

         (h) any restoration funds remaining shall be retained by Mortgagee and
may be applied by Mortgagee, in its sole discretion, to the Indebtedness in the
inverse order of maturity.

12. Leases. (a) Mortgagor shall not (i) execute an assignment or pledge of any
Lease relating to all or any portion of the Mortgaged Property other than in
favor of Mortgagee, or (ii) without the prior written consent of Mortgagee,
execute or permit to exist any Lease of any of the Mortgaged Property.

         (b) As to any Lease consented to by Mortgagee, Mortgagor shall:

                  (i) promptly perform all of the provisions of the Lease on the
part of the lessor thereunder to be performed;

                  (ii) promptly enforce all of the provisions of the Lease on
the part of the lessee thereunder to be performed;

                  (iii) appear in and defend any action or proceeding arising
under or in any manner connected with the Lease or the obligations of Mortgagor
as lessor or of the lessee thereunder;

                  (iv) exercise, within 5 days after a request by Mortgagee, any
right to request from the lessee a certificate with respect to the status
thereof;

                  (v) simultaneously deliver to mortgagee copies of any notices

of default which Mortgagor may at any time forward to or receive from the
lessee;

                  (vi) promptly deliver to Mortgagee a fully executed
counterpart of the Lease; and

                  (vii) promptly deliver to Mortgagee, upon Mortgagee's request,
an assignment of the Mortgagor's interest under such Lease.

         (c) Mortgagor shall deliver to Mortgagee, within 10 days after a
request by Mortgagee, a written statement, certified by Mortgagor as being true,
correct and complete, containing the names of all lessees and other occupants of
the Mortgaged Property, the terms of all Leases and the spaces occupied and
rentals payable thereunder, and a list of all Leases which are then in default,
including the nature and magnitude of the default; such statement shall be
accompanied by credit information with respect to the lessees and such other
information as Mortgagee may request.

         (d) All Leases entered into by Mortgagor after the date hereof, if any,
and all rights of any lessees thereunder shall be subject and subordinate in all
respects to the lien and provisions of this Mortgage unless Mortgagee shall
otherwise elect in writing.

                                       14

<Page>

         (e) As to any Lease now in existence or subsequently consented to by
Mortgagee, Mortgagor shall not accept a surrender or terminate, cancel, rescind,
supplement, alter, revise, modify or amend such Lease or permit any such action
to be taken nor shall Mortgagor accept the payment of rent more than thirty (30)
days in advance of its due date. The provisions of this subsection are made with
reference to Section 291-f of the Real Property Law of the State of New York.

         (f) If any act or omission of Mortgagor would give any lessee under any
Lease the right, immediately or after lapse of a period of time, to cancel or
terminate such Lease, or to abate or offset against the payment of rent or to
claim a partial or total eviction, such lessee shall not exercise such right
until it has given written notice of such act or omission to Mortgagee and until
a reasonable period for remedying such act or omission shall have elapsed
following the giving of such notice without a remedy being effected.

         (g) In the event of the enforcement by Mortgagee of any remedy under
this Mortgage, the lessee under each Lease shall, if requested by Mortgagee or
any other person succeeding to the interest of Mortgagee as a result of such
enforcement, attorn to Mortgagee or to such person and shall recognize Mortgagee
or such successor in interest as lessor under the Lease without change in the
provisions thereof; provided however, that Mortgagee or such successor in
interest shall not be: (i) bound by any payment of an installment of rent or
additional rent which may have been made more than 30 days before the due date
of such installment; (ii) bound by any amendment or modification to the Lease
made without the consent of Mortgagee or such successor in interest; (iii)
liable for any previous act or omission of Mortgagor (or its predecessors in
interest); (iv) responsible for any monies owing by Mortgagor to the credit of
such lessee or subject to any credits, offsets, claims, counterclaims, demands
or defenses which the lessee may have against Mortgagor (or its predecessors in
interest); (v) bound by any covenant to undertake or complete any construction
of the Premises or any portion thereof; or (vi) obligated to make any payment to
such lessee other than any security deposit actually delivered to Mortgagee or
such successor in interest. Each lessee or other occupant, upon request by
Mortgagee or such successor in interest, shall execute and deliver an instrument
or instruments confirming such attornment. In addition, Mortgagor agrees that
each Lease entered into after the date of this Mortgage shall include language
to the effect of subsections (d)-(g) of this Section; provided that the
provisions of such subsections shall be self-operative and any failure of any
Lease to include such language shall not impair the binding effect of such
provisions on any lessee under such Lease.

13. Further Assurances/Estoppel Certificates. To further assure Mortgagee's
rights under this Mortgage, Mortgagor agrees upon demand of Mortgagee to do any
act or execute any additional documents (including, but not limited to, security
agreements on any personalty included or to be included in the Mortgaged
Property and a separate assignment of each Lease in recordable form) as may be
required by Mortgagee to confirm the lien of this Mortgage and all other rights
or benefits conferred on Mortgagee. Mortgagor, within 5 business days after
request, shall deliver, in form and substance satisfactory to Mortgagee, a
written statement, duly acknowledged, setting forth the amount of the
Indebtedness, and whether any offsets, claims, counterclaims or defenses exist
against the Indebtedness and certifying as to such other matters as Mortgagee
shall reasonably request.

                                       15

<Page>

14. Mortgagee's Right to Perform. If Mortgagor fails to perform any of the
covenants or agreements of Mortgagor, Mortgagee, without waiving or releasing
Mortgagor from any obligation or default under this Mortgage, may, at any time
(but shall be under no obligation to) pay or perform the same, and the amount or
cost thereof, with interest at the Default Rate, shall immediately be due from
Mortgagor to Mortgagee. To the extent that any such amounts or costs paid by
Mortgagee shall constitute payment of (i) Impositions; (ii) premiums on
insurance policies covering the Premises; (iii) expenses incurred in upholding
or enforcing the lien of this Mortgage, including, but not limited to the
expenses of any litigation to prosecute or defend the rights and lien created by
this Mortgage; (iv) costs of removal of or otherwise related to Hazardous
Materials (as defined below) or asbestos; or (v) any amount, costs or charge to
which Mortgagee becomes subrogated, upon payment, whether under recognized
principles of law or equity, or under express statutory authority; then, and in
each such event, such amounts or costs, together with interest thereon at the
Default Rate, shall be added to the Indebtedness and shall be secured by this
Mortgage and shall be a lien on the Mortgaged Property prior to any right, title
to, interest in, or claim upon the Mortgaged Property attaching subsequent to
the lien of this Mortgage. if. any payment required to be made by Mortgagor
under this Mortgage shall not be paid by Mortgagor within fifteen (15) days
after the date upon which it is due, then in addition to any interest thereon at
the Default Rate as may be provided for herein, Mortgagor shall pay to Mortgagee
upon demand an amount equal to two percent (2%) of such unpaid payment to defray
expenses incurred by Mortgagee in handling and processing such delinquent
payment, which amount shall be added to the Indebtedness and shall be secured by
this Mortgage and shall be a lien on the Mortgaged Property prior to any right,
title to, interest in, or claim upon the Mortgaged Property attaching subsequent
to the lien of this Mortgage. No payment or advance of money by Mortgagee under
this Section shall be deemed or construed to cure Mortgagor's default or waive
any right or remedy of Mortgagee.

15. Mortgagor's Existence, etc. Mortgagor shall do all things necessary to
preserve and keep in full force and effect its existence, franchises, rights and
privileges under the laws of the state in which it was formed and its right to
own property and transact business in each state in which the Real Estate is
located. Mortgagor represents and warrants that Mortgagor is' a duly organized
and validly, existing corporation or general or limited partnership, as the case
may be, in good standing, and this Mortgage has been executed by a duly
authorized partner or officer thereof, as applicable. This Mortgage constitutes
the legal, valid and binding obligation of Mortgagor, enforceable against
Mortgagor in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally.

16. Financial Statements; Certificates; Other Information. (a) Mortgagor shall
deliver to Mortgagee (i) all financial statements, certificates and other
information required to be delivered under the Restated Credit Agreement, and
(ii) within 120 days after the end of each of its fiscal years a rent roll for
the Premises, certified by a Responsible Officer.

         (b) Mortgagor shall furnish to Mortgagee:

                  (i) concurrently with the delivery of the financial statements
referred to in subsection (a) a certificate of a Responsible Officer stating
that, to the best of such person's knowledge, after such examination or
investigation as is necessary to enable such person to make an informed
judgment, Mortgagor during such period has observed or performed all of its
covenants and other agreements, and satisfied every condition, contained in this
Mortgage and all other documents evidencing, securing or relating to the
Indebtedness to be observed, performed or satisfied by it, and that such person
has obtained no knowledge of any Event of Default or any event which with the
giving of notice or passage of time, or both, would constitute an Event of
Default ("Default"), except as specified in such certificate; and

                  (ii) promptly, such additional financial and other information
as mortgagee may from time to time reasonably request.

                                       16

<Page>

17. Notice of Certain Occurrences. Mortgagor shall give notice to Mortgagee
promptly upon the occurrence of:

         (a) any litigation or proceeding affecting the Mortgaged Property or
any part thereof or interest therein in which the amount involved is $50,000 or
more and not fully covered by insurance or in which injunctive or similar relief
is sought; and

         (b) a material adverse change in the operations or condition of the
Mortgaged Property or any part thereof.

18. Hazardous Material. (a) For the purposes of this Mortgage, the following
terms shall have the following meanings: (i) the term "Hazardous Material" shall
mean any material or substance that, whether by its nature or use, is now or
hereafter defined or regulated as a hazardous waste, hazardous substance,
pollutant or contaminant under any Environmental Requirement, or which is toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise hazardous or which is or contains petroleum, gasoline,
diesel fuel, another petroleum hydrocarbon product, asbestos,
asbestos-containing materials or polychlorinated biphenyls and (ii) the
"Environmental Requirements" shall collectively mean all present and future
laws, statutes, common law, ordinances, rules, regulations, orders, codes,
licenses, permits, decrees, judgments, directives or the equivalent of or by any
Governmental Authority and relating to or addressing the protection of the
environment or human health.

         (b) Mortgagor hereby represents and warrants to Mortgagee that to the
best of Mortgagor's knowledge after diligent inquiry (i) no Hazardous Material
is currently located at, on, in, under or about the Mortgaged Property, except
as specifically set forth in that certain Phase I Environmental Assessment dated
August 15, 1997 made by Lexicon Environmental Associates, Inc., (ii) no
Hazardous Material is currently located at, in, on, under or about the Mortgaged
Property in manner which violates any Environmental Requirement, or which
requires cleanup or corrective action of any kind under any Environmental
Requirement, (iii) no releasing, emitting, discharging, leaching, dumping,
disposing or transporting of any Hazardous Material from the Mortgaged Property
onto any other property or from any other property onto or into the Mortgaged
Property has occurred or is occurring in violation of any Environmental
Requirement, (iv) no notice of violation, non-compliance, liability or potential
liability, lien, complaint, suit, order or other notice with respect to the
Mortgaged Property is presently outstanding under any Environmental Requirement,
nor does mortgagor have knowledge or reason to believe that any such notice will
be received or is being threatened, and (v) the Mortgaged Property and the
operation thereof are in full compliance with all Environmental Requirements.

                                       17

<Page>


         (c) Mortgagor shall comply, and shall cause all tenants or other
occupants of the Mortgaged Property to comply, in all respects with all
Environmental Requirements, and will not generate, store, handle, process,
dispose of or otherwise use, and will not permit any tenant or other occupant of
the Mortgaged Property to generate, store, handle, process, dispose of or
otherwise use, Hazardous Materials at, in, on, or about the Mortgaged Property
in a manner that could lead or potentially lead to the imposition on Mortgagor,
Mortgagee or the Mortgaged Property of any liability or lien of any nature
whatsoever under any Environmental Requirement. Mortgagor shall notify Mortgagee
promptly in the event of any spill or other release of any Hazardous Material
at, in, on, under or about the Mortgaged Property which is required to be
reported to a Governmental Authority under any Environmental Requirement, will
promptly forward to Mortgagee copies of any notices received by Mortgagor
relating to alleged violations of any Environmental Requirement or any potential
liability under any Environmental Requirement and will promptly pay when due any
fine or assessment against Mortgagee, Mortgagor or the Mortgaged Property
relating to any Environmental Requirement. If at any time it is it is determined
that the operation or use of the Mortgaged Property in violation of any
applicable Environmental Requirement or that there are Hazardous Materials
located at, in, on, under or about the Mortgaged Property violates any
applicable Environmental Requirement or that there are Hazardous Materials
located at, in, on, under or about the Mortgaged Property which, under any
Environmental Requirement, require special handling in collection, storage,
treatment or disposal, or any form of cleanup or corrective action, Mortgagor
shall, within thirty (30) days after receipt of notice thereof from any
Governmental Authority or from Mortgagee, take, at Mortgagor's sole cost and
expense, such actions as may be necessary to fully comply in all respects with
all Environmental Requirements, provided, however, that if such compliance
cannot reasonably be completed within such thirty (30) day period, mortgagor
shall commence such necessary action within such thirty (30) day period and
shall thereafter diligently and expeditiously proceed to fully comply in all
respects and in a timely fashion with all Environmental Requirements.

         (d) If Mortgagor fails to timely take, or to diligently and
expeditiously proceed to complete in a timely fashion, any such action described
in clause (c) above, Mortgagee may, in its sole and absolute discretion, make
advances or payments toward the performance or satisfaction of the same, but
shall in no event be under any obligation to do so. All sums so advanced or paid
by. Mortgagee (including, without limitation, counsel and consultant fees and
expenses, investigation and laboratory fees and expenses, and fines or other
penalty payments) and all sums advanced or paid in connection with any judicial
or administrative investigation or proceeding relating thereto, will
immediately, upon demand, become due and payable from Mortgagor and shall bear
interest at the Default Rate from the date any such sums are so advanced or paid
by Mortgagee until the date any such sums are repaid by Mortgagor to Mortgagee.
Mortgagor will execute and deliver, promptly upon request, such instruments as
Mortgagee may deem useful or necessary to permit Mortgagee to take any such
action, and such additional notes and mortgages, as Mortgagee may require to
secure all sums so advanced or paid by Mortgagee. If a lien is filed against the
Mortgaged Property by any Governmental Authority resulting from the need to
expend or the actual expending of monies arising from an action or omission,
whether intentional or unintentional, of Mortgagor or for which Mortgagor is
responsible, resulting in the releasing, spilling, leaking, leaching, pumping,
emitting, pouring, emptying or dumping of any Hazardous Material into the waters
or onto land located within or without the State where the Mortgaged Property is
located, then Mortgagor will, within thirty (30) days from the date that
Mortgagor is first given notice that such lien has been placed against the
Mortgaged Property (or within such shorter period of time as may be specified by
Mortgagee if such Governmental Authority has commenced steps to cause the
Mortgaged Property to be sold pursuant to such lien), either (a) pay the claim
and remove the lien, or (b) furnish a cash deposit, bond, or such other security
with respect thereto as is satisfactory in all respects to Mortgagee and is
sufficient to effect a complete discharge of such lien on the Mortgaged
Property.

                                       18

<Page>

         (e) Mortgagee may, at its option, at intervals of not less than one
year, or more frequently if Mortgagee reasonably believes that a Hazardous
Material or other environmental condition violates or threatens to violate any
Environmental Requirement, cause an environmental audit of the Mortgaged
Property or portions thereof to be conducted to confirm Mortgagor's compliance
with the provisions of this paragraph, and Mortgagor shall cooperate in all
reasonable ways with Mortgagee connection with any such audit. If such audit
discloses that a violation of or a liability under an Environmental Requirement
exists or if such audit was required or prescribed by law, regulation or
governmental or quasi-governmental authority, Mortgagor shall pay all costs and
expenses incurred in connection with such audit; otherwise, the costs and
expenses of such audit shall, notwithstanding anything to the contrary set forth
in this paragraph, be paid by Mortgagee.

         (f) If this mortgage is foreclosed, or if the Mortgaged Property is
sold pursuant to the provisions of this Mortgage, or if Mortgagor tenders a deed
or assignment in lieu of foreclosure or sale, Mortgagor shall deliver the
Mortgaged Property to the purchaser at foreclosure or sale or to Mortgagee, its
nominee, or wholly-owned subsidiary, as the case may be, in a condition that
complies in all respects with all Environmental Requirements.

         (g) Mortgagor will defend, indemnify, and hold harmless Mortgagee, the
Tranche C Lender, and all participants, employees, agents, officers, and
directors of Mortgagee and the Tranche C Lender from and against any and all
claims, demands, penalties, causes of action, fines, liabilities, settlements,
damages, costs, or expenses of whatever kind or nature, known or unknown,
foreseen or unforeseen, contingent or otherwise (including, without limitation,
counsel and consultant fees and expenses, investigation and laboratory fees and
expenses, court costs, and litigation expenses) arising out of, or in any way
related to, (i) any breach by Mortgagor of any of the provisions of this Section
18, (ii) the presence, disposal, spillage, discharge, emission, leakage,
release, or threatened release of any Hazardous Material which is at, in, on,
under, about, from or affecting the Mortgaged Property, including, without
limitation, any damage or injury resulting from any such Hazardous Material to
or affecting the Mortgaged Property or the soil, water, air, vegetation,
buildings, personal property, persons or animals located on the Mortgaged
Property or on any other property or otherwise, (iii) any personal injury
(including wrongful death) or property damage (real or personal) arising out of
or related to any such Hazardous Material, (iv) any lawsuit brought or
threatened, settlement reached, or order or directive of or by any Governmental
Authority relating to such Hazardous Material, or (v) any violation of any
Environmental Requirement or any policy or requirement of Mortgagee hereunder.
The aforesaid indemnification shall, notwithstanding any exculpatory or other
provision of any other document or instrument now or hereafter executed and
delivered in connection with the Tranche C Loan evidenced by the Tranche C Note
and secured by this Mortgage, constitute the personal recourse undertakings,
obligations and liabilities of Mortgagor.

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         (h) The obligations and liabilities of Mortgagor under this Section 18
shall survive and continue in full force and effect and shall not be terminated,
discharged or released, in whole or in part, irrespective of whether the
Indebtedness has been paid in full and the Obligations fully performed, and
irrespective of any foreclosure of this Mortgage, sale of the Mortgaged Property
pursuant to the provisions of this Mortgage or acceptance by Mortgagee, its
nominee or affiliate of a deed or assignment in lieu of foreclosure or sale and
irrespective of any other fact or circumstance of any nature whatsoever.

19. Asbestos. Mortgagor shall not install or permit to be installed in the
Premises friable asbestos or any substance containing asbestos and deemed
hazardous by any Legal Requirement respecting such material, or any other
building material deemed to be harmful, hazardous or injurious by relevant Legal
Requirements and with respect to any such material currently present in the
Premises shall promptly either (a) remove any material which such Legal
Requirements deem harmful, hazardous or injurious and require to be removed or
(b) otherwise comply with such Legal Requirements, at Mortgagor's expense. If
Mortgagor shall fail to so remove or otherwise comply, Mortgagee may declare an
Event of Default and/or do whatever is necessary to eliminate such substances
from the Premises or otherwise comply with the applicable Legal Requirement, and
the costs thereof, with interest at the Default Rate, shall be immediately due
from Mortgagor to Mortgagee. Mortgagor shall give Mortgagee and its agents and
employees access to the Premises to remove such asbestos or substances.
Mortgagor shall defend, indemnify, and save Mortgagee harmless from all loss,
costs, damages and expense (including attorneys' fees and costs and
consequential damages) asserted or proven against Mortgagee by any party, as a
result of the presence of such substances or any removal or compliance with such
Legal Requirements. The foregoing indemnification shall be a recourse obligation
of Mortgagor and shall survive repayment of the Note, notwithstanding any
limitation on recourse which may be contained herein or in any of the Loan
Documents or the delivery of any satisfaction, release or release deed,
discharge or deed of reconveyance, or the assignment of this Mortgage by
Mortgagee.

20. Events of Default. The occurrence of any one or more of the following events
shall constitute an Event of Default:

         (a) an Event of Default shall occur under the Restated Credit
Agreement;

         (b) a failure to make payment of any sums required to be paid hereunder
(including, without limitation, any Imposition) within the period required by
specific provision of this Mortgage or, if no such period is so provided, by no
later than three clays after written notice; or

         (c) a failure (i) to keep in force the insurance required by this
Mortgage, or (ii) to comply with and conform to all provisions and requirements
of the insurance policies and the insurers thereunder which would affect
Mortgagor's ability to keep in force the insurance required by this Mortgage or
to collect any proceeds therefrom, or (iii) to comply with any other material
provisions of this Mortgage regarding insurance; or if on application of
Mortgagee two or more insurance companies lawfully doing business in the State
of New York refuse to issue policies of any of the insurance required by this
Mortgage; or

                                       20

<Page>

         (d) upon the actual waste, removal or demolition of, or material
alteration to, any part of the Premises (other than necessary replacements of
worn or obsolete Equipment) , construction of any new Improvements or if the
Mortgaged Property is not kept in good condition and repair; or

         (e) upon failure to comply promptly (except in accordance with the
express provisions of Section 3(c) of this Mortgage) with any Legal Requirement
or order or notice of violation of law or ordinance issued by any Governmental
Authority having jurisdiction over the Premises, which failure could materially
adversely affect the Mortgaged Property; or

         (f) if any representation or warranty made by Mortgagor in this
Mortgage or in any certificate, document or financial or other statement
furnished under or in connection with this Mortgage shall prove to have been
incorrect in any material respect on or as of the date made or deemed made; or

         (g) if any of the Mortgaged Property is damaged or destroyed by an
uninsured casualty and Mortgagor does not immediately provide funds for the
restoration of the damage caused by such casualty; or

         (h) if Mortgagor shall further mortgage, pledge or otherwise encumber
the Mortgaged Property or any part thereof or any interest therein or create or
suffer to exist any lien, charge or other encumbrance on the Mortgaged Property
or any part thereof, whether superior or subordinate to the lien of this
Mortgage, whether recourse or non-recourse; or

         (i) if (i) Mortgagor shall (A) sell, transfer, convey or assign the
Mortgaged Property or any part thereof or any interest therein (by operation of
law or otherwise) , or (B) lease any of the Mortgaged Property without the prior
written consent of Mortgagee; or (ii) if the ultimate beneficial ownership of
Mortgagor shall change or be altered by sale, assignment, transfer, pledge
foreclosure or otherwise, from the ultimate beneficial ownership on the date
hereof; or

         (j) if Mortgagor shall (i) fail to occupy substantially all of the
Mortgaged Property, or (ii) suspend operation of the business conducted by
Mortgagor as of the date hereof (whether at the Mortgaged Property or
otherwise); or

         (k) this Mortgage or any of the other Security Documents shall cease
for any reason to be in full force and effect or Mortgagor shall' so assert in
writing; or

         (l) if Mortgagee shall permit any additional lien or mortgage to
encumber the Mortgaged Property (whether superior or subordinate, recourse or
non-recourse) , any default shall occur in connection with such lien or
mortgage; or

         (m) a failure of Mortgagor to duly perform and observe, or a violation
or breach of, any other terms, covenants, provisions or conditions of this
Mortgage and the continuation thereof for a 30-day period after notice shall
have been given to Mortgagor by Mortgagee specifying such default and requiring
such default be remedied; which period may be extended to the extent required
(but not longer than 180 days) if such default is not susceptible of cure within
30 days so long as Mortgagor has commenced to cure such default within such
30-day period and is thereafter diligently prosecuting such cure to completion
and so long as such delay is not likely to have a material adverse effect on
either the Mortgaged Property or Mortgagee's rights under this Mortgage;
provided, however, any such default that can be cured by the payment of money
shall be promptly cured after notice by Mortgagee.

                                       21

<Page>

21. Remedies.

         (a) Upon the occurrence of any Event of Default, in addition to any
other rights and remedies Mortgagee may have pursuant to the Loan Documents, or
as provided by law, and without limitation, (a) if such event is an Event of
Default specified in clause (i) or (ii) of Section 7(f) of the Restated Credit
Agreement, automatically the Indebtedness and all other amounts owing under the
Note, this Mortgage and the other Security Documents immediately shall become
due and payable, and (b) if such event is any other Event of Default, with the
consent of the Required Lender Mortgagee may, or upon the request of the
Required Lender Mortgagee shall, by notice to Mortgagor, declare the
Indebtedness (together with accrued interest thereon) and all other amounts
payable under the Note, this Mortgage and the other Security Documents to be
immediately due and payable. Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived. In addition, upon the occurrence of any Event of Default,
Mortgagee may immediately take such action, without notice or demand, as it
deems advisable to protect and enforce its rights against Mortgagor and in and
to the Mortgaged Property, including, but not limited to, the following actions,
each of which may be pursued concurrently or otherwise, at such time and in such
manner as Mortgagee may determine, in its sole discretion, without impairing or
otherwise affecting the other rights and remedies of Mortgagee:

                  (i) Mortgagee may, to the extent permitted by applicable law,
         (A) institute and maintain an action of mortgage foreclosure against
         all or any part of the Mortgaged Property, (B) institute and maintain
         an action on the Note, (C) sell all or part of the Mortgaged Property
         (Mortgagor expressly granting to Mortgagee the power of sale), or (D)
         take such other action at law or in equity for the enforcement of this
         Mortgage or any of the Loan Documents as the law may allow. Mortgagee
         may proceed in any such action to final judgment and execution thereon
         for all sums due hereunder, together with interest thereon at the
         Default Rate and all costs of suit, including, without limitation,
         reasonable attorneys, fees and disbursements. Interest at the Default
         Rate shall be due on any judgment obtained by Mortgagee from the date
         of judgment until actual payment is made of the full amount of the
         judgment.

                  (ii) Mortgagee may personally, or by its agents, attorneys and
         employees and without regard to the adequacy or inadequacy of the
         Mortgaged Property or any other collateral as security for the
         Indebtedness and Obligations enter into and upon the Mortgaged Property
         and each and every part thereof and exclude Mortgagor and its agents
         and employees therefrom without liability for trespass, damage or
         otherwise (Mortgagor hereby agreeing to surrender possession of the
         Mortgaged Property to Mortgagee upon demand at any such time) and use,
         operate, manage, maintain and control the Mortgaged Property and every
         part thereof. Following such entry and taking of possession, Mortgagee
         shall be entitled, without limitation, (x) to lease all or any part or
         parts of the Mortgaged Property for such periods of time and upon such
         conditions as Mortgagee may, in its discretion, deem proper, (y) to
         enforce, cancel or modify any Lease and (i) generally to execute, do
         and perform any other act, deed, matter or thing concerning the
         Mortgaged Property as Mortgagee shall deem appropriate as fully as
         Mortgagor might do.

                                       22

<Page>

         (b) The holder of this Mortgage, in any action to foreclose it, shall
be entitled to the appointment of a receiver. In case of a foreclosure sale, the
Real Estate may be sold, at Mortgagee's election, in one parcel or in more than
one parcel and Mortgagee is specifically empowered, (without being required to
do so, and in its sole and absolute discretion) to cause successive sales of
portions of the Mortgaged Property to be held.

         (c) In the event of any breach of any of the covenants, agreements,
terms or conditions contained in this Mortgage, and notwithstanding to the
contrary any exculpatory or non-recourse language which may be contained herein,
Mortgagee shall be entitled to enjoin such breach and obtain specific
performance of any covenant, agreement, term or condition and Mortgagee shall
have the right to invoke any equitable right or remedy as though other remedies
were not provided for in this Mortgage.

22. Right of Mortgagee to Credit Sale. Upon the occurrence of any sale made
under this Mortgage, whether made under the power of sale 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. In
lieu of paying cash therefor, Mortgagee may make settlement for the purchase
price by crediting upon the Indebtedness or other sums secured by this Mortgage
the net sales price after deducting therefrom the expenses of sale and the cost
of the action and any other sums which Mortgagee is authorized to deduct under
this Mortgage. In such event, this Mortgage, the Note and documents evidencing
expenditures secured hereby may be presented to the person or persons conducting
the sale in order that the amount so used or applied may be credited upon the
Indebtedness as having been paid.

23. Appointment of Receiver. If an Event of Default shall have occurred and be
continuing, Mortgagee as a matter of right and without notice to Mortgagor,
unless otherwise required by applicable law, and without regard to the adequacy
or inadequacy of the Mortgaged Property or any other collateral as security for
the Indebtedness and Obligations or the interest of Mortgagor therein, shall
have the right to apply to any court having jurisdiction to appoint a receiver
or receivers or other manager of the Mortgaged Property, and Mortgagor hereby
irrevocably consents to such appointment and waives notice of any application
therefor (except as may be required by law) . Any such receiver or receivers
shall have all the usual powers and duties of receivers in like or similar cases
and all the powers and duties of Mortgagee in case of entry as provided in this
Mortgage, including, without limitation and to the extent permitted by law, the
right to enter into leases of all or any part of the Mortgaged Property, and
shall continue as such and exercise all such powers until the date of
confirmation of sale of the Mortgaged Property unless such receivership is
sooner terminated.

24. Extension, Release, etc. (a) Without affecting the lien or charge of this
Mortgage upon any portion of the Mortgaged Property not then or theretofore
released as security for the full amount of the Indebtedness, Mortgagee may,
from time to time and without notice, agree to (i) release any person liable for
the Indebtedness, (ii) extend the maturity or alter any of the terms of the
Indebtedness or any guaranty thereof, (iii) grant other indulgences, (iv)
release or reconvey, or cause to be released or reconveyed at any time at
Mortgagee's option any parcel, portion or all of the Mortgaged Property, (v)
take or release any other or additional security for any obligation herein
mentioned, or (vi) make compositions or other arrangements with debtors in
relation thereto. If at any time this Mortgage shall secure less than all of the
principal amount of the ' Indebtedness, it is expressly agreed that any
repayments of the principal amount of the Indebtedness shall not reduce the
amount of the lien of this Mortgage until the lien amount shall equal the
principal amount of the Indebtedness outstanding.

                                       23

<Page>

         (b) 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 the lien of this Mortgage or any liens,
rights, powers or remedies of Mortgagee hereunder, and such liens, rights,
powers and remedies shall continue unimpaired.

         (c) If Mortgagee shall have the right to foreclose this Mortgage,
Mortgagor authorizes Mortgagee at its option to foreclose the lien of this
mortgage subject to the rights of any tenants of the Mortgaged Property. The
failure to make any such tenants parties defendant to any such foreclosure
proceeding and to foreclose their rights will not be asserted by Mortgagor as a
defense to any proceeding instituted by Mortgagee to collect the Indebtedness or
to foreclose the lien of this Mortgage.

         (d) Unless expressly provided otherwise, in the event that ownership of
this Mortgage and title to the Mortgaged Property or any estate therein shall
become vested in the same person or entity, this Mortgage shall not merge in
such title but shall continue as a valid lien on the Mortgaged Property for the
amount secured hereby.

25. Security Agreement under Uniform Commercial Code. (a) It is the intention of
the parties hereto that this Mortgage shall constitute a Security Agreement
within the meaning of the Uniform Commercial Code (the "Code") of the State of
New York. If an Event of Default shall occur under this Mortgage, then in
addition to having any other right or remedy available at law or in equity,
Mortgagee shall have the option of either (i) proceeding under the Code and
exercising such rights and remedies as may be provided to a secured party by the
Code with respect to all or any portion of the Mortgaged Property which is
personal property (including, without limitation, taking possession of and
selling such property) or (ii) treating such property as real property and
proceeding with respect to both the real and personal property constituting the
Mortgaged Property in accordance with Mortgagee's rights, powers and remedies
with respect to the real property (in which event the default provisions of the
Code shall not apply). If Mortgagee shall elect to proceed under the Code, then
five days, notice of sale of the personal property shall be deemed reasonable
notice and the reasonable expenses of retaking, holding, preparing for sale,
selling and the like incurred by Mortgagee shall include, but not be limited to,
attorneys' fees and legal expenses. At Mortgagee's request, Mortgagor shall
assemble the personal property and make it available to Mortgagee at a place
designated by Mortgagee which is reasonably convenient to both parties.

         (b) Mortgagor and Mortgagee agree, to the extent permitted by law,
that: (i) all of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) this Mortgage
upon recording or registration in the real estate records of the proper office
shall constitute a financing statement filed as a "fixture filing" within the
meaning of Sections 9-313 and 9-402 of the Code; (iii) Mortgagor is the record
owner of the Real Estate; and (iv) the addresses of Mortgagor and Mortgagee are
as set forth on the first page of this Mortgage.

                                       24

<Page>

         (c) Mortgagor, upon request by Mortgagee from time to time, shall
execute, acknowledge and deliver to Mortgagee one or more separate security
agreements, in form satisfactory to Mortgagee, covering all or any part of the
Mortgaged Property and will further execute, acknowledge and deliver, or cause
to be executed, acknowledged and delivered, any financing statement, affidavit,
continuation statement or certificate or other document as Mortgagee may request
in order to perfect, preserve, maintain, continue or extend the security
interest under and the priority of this Mortgage and such security instrument.
Mortgagor further agrees to pay to Mortgagee on demand all costs and expenses
incurred by Mortgagee in connection with the preparation, execution, recording,
filing and re-filing of any such document and all reasonable costs and expenses
of any record searches for financing statements Mortgagee shall reasonably
require. Mortgagor shall from time to time, on request of Mortgagee, deliver to
Mortgagee an inventory in reasonable detail of any of the Mortgaged Property
which constitutes personal property. If Mortgagor shall fail to furnish any
financing or continuation statement within 10 days after request by Mortgagee,
then pursuant to the provisions of the Code, Mortgagor hereby authorizes
Mortgagee, without the signature of Mortgagor, to execute and file any such
financing and continuation statements. The filing of any financing or
continuation statements in the records relating to personal property or chattels
shall not be construed as in any way impairing the right of Mortgagee to proceed
against any personal property encumbered by this Mortgage as real property, as
set forth above.

26. Assignment of Rents. Mortgagor hereby assigns to Mortgagee the Rents as
further security for the payment of the Indebtedness and performance of the
obligations, and Mortgagor grants to Mortgagee the right to enter the Mortgaged
Property for the purpose of collecting the same and to let the Mortgaged
Property or any part thereof, and to apply the Rents on account of the
Indebtedness. The foregoing assignment and grant is present and absolute and
shall continue in effect until the Indebtedness is paid in full, but Mortgagee
hereby waives the right to enter the Mortgaged Property for the purpose of
collecting the Rents and Mortgagor shall be entitled to collect, receive, use
and retain the Rents until the occurrence of an Event of Default under this
mortgage; such right of Mortgagor to collect, receive, use and retain the Rents
may be revoked by Mortgagee upon the occurrence of any Event of Default under
this Mortgage by giving not less than five days' written notice of such
revocation to Mortgagor; in the event such notice is given, Mortgagor shall pay
over to Mortgagee, or to any receiver appointed to collect the Rents, any lease
security deposits, and shall pay monthly in advance to Mortgagee, or to any such
receiver, the fair and reasonable rental value as determined by Mortgagee for
the use and occupancy of the Mortgaged Property or of such part thereof as may
be in the possession of Mortgagor or any affiliate of Mortgagor, and upon
default in any such payment Mortgagor and any such affiliate will vacate and
surrender the possession of the Mortgaged Property to Mortgagee or to such
receiver, and in default thereof may be evicted by summary proceedings or
otherwise. Mortgagor shall not accept prepayments of installments of Rent to
become due for a period of more than one month in advance (except for security
deposits and estimated payments of percentage rent, if any) . The agreement
contained in this Section has been made with reference to section 291-f of the
Real Property Law of the State of New York.

27. Trust Funds. (a) Mortgagor shall receive the advances secured hereby subject
to the trust fund provisions of Section 13 of the Lien Law of the State of New
York.

                                       25

<Page>

         (b) All lease security deposits of the Real Estate shall be treated as
trust funds not to be commingled with any other funds of Mortgagor. Within 10
days after request by Mortgagee, Mortgagor shall furnish Mortgagee satisfactory
evidence of compliance with this subsection, together with a statement of all
lease security deposits by lessees and copies of all Leases not previously
delivered to Mortgagee, which statement shall be certified by Mortgagor.

28. Additional Rights. (a) The clauses and covenants contained in this Mortgage
that are construed by Section 254 of the Real Property Law of the State of New
York shall be construed as provided in those sections, except that the
provisions of subsection 4 of such Section 254 shall not in any manner apply to
or construe the provisions of this Mortgage; the additional clauses and
covenants contained herein shall afford rights supplemental to and not exclusive
of the rights conferred by the clauses and covenants construed by such Section
254 and shall not impair, modify, alter or defeat such rights (except that the
provisions of this Mortgage governing insurance shall be exclusive of and shall
be in substitution for the rights which would be conferred by the clauses and
covenants construed by such subsection 4 of such Section 254), notwithstanding
that such additional clauses and covenants may relate to the same subject matter
or provide for different or additional rights in the same or similar
contingencies as the clauses and covenants construed by such Section 254; the
rights of Mortgagee arising under clauses and covenants contained in this
Mortgage shall be separate, distinct and cumulative and none of them shall be in
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, anything herein or otherwise to the contrary notwithstanding, and in
the event of any inconsistencies between the provisions of such Section 254 and
the provisions of this Mortgage, the provisions of this Mortgage shall prevail.

         (b) The holder of any subordinate lien on the Mortgaged Property shall
have no right to terminate any Lease whether or not such Lease is subordinate to
this Mortgage nor shall any holder of any subordinate lien join any tenant under
any Lease in any action to foreclose the lien or modify, interfere with, disturb
or terminate the rights of any tenant under any Lease. By recordation of this
Mortgage all subordinate lienholders are subject to and notified of this
provision, and any action taken by any such lienholder contrary to this
provision shall be null and void. Upon the occurrence of any Event of Default,
Mortgagee may, in its sole discretion and without regard to the adequacy of its
security under this Mortgage, apply all or any part of any amounts on deposit
with Mortgagee under this Mortgage against all or any part of the Indebtedness.
Any such application shall not be construed to cure or waive any Default or
Event of Default or invalidate any act taken by Mortgagee on account of such
Default or Event of Default.

29. Changes in Method of Taxation. In the event of the passage after the date
hereof of any law of any Governmental Authority deducting from the value of the
Premises for the purposes of taxation any lien thereon, or changing in any way
the laws for the taxation of mortgages or debts secured thereby for federal,
state or local purposes, or the manner of collection of any such taxes, and
imposing a tax, either directly or indirectly, on mortgages or debts secured
thereby, the holder of this Mortgage shall have the right to declare the
Indebtedness due on a date to be specified by not less than 30 days' written
notice to be given to Mortgagor unless within such 30-day period Mortgagor shall
assume as an Obligation hereunder the payment of any tax so imposed until full
payment of the Indebtedness and such assumption shall be permitted by law.

                                       26

<Page>

30. Notices. All notices, requests, demands and other communications hereunder
shall be given in the manner and to the addresses determined under subsection
10.2 of the Restated Credit Agreement. If any party other than Mortgagor shall
be entitled to receive copies of notices, demands or approvals, failure of
Mortgagee to send such copies shall not impair the effectiveness of any notice
sent to Mortgagor.

31. No Oral Modification. This Mortgage may not be changed or terminated orally.
Any agreement made by Mortgagor and Mortgagee after the date of this Mortgage
relating to this Mortgage shall be superior. to the rights of the holder of 'any
intervening or subordinate lien or encumbrance.

32. Partial Invalidity. In the event any one or more of the provisions contained
in this Mortgage shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, but each shall be construed as if
such invalid, illegal or unenforceable provision had never been included.
Notwithstanding to the contrary anything contained in this Mortgage or in any
provisions of the Indebtedness or Loan Documents, the obligations of Mortgagor
and of any other obligor under the Indebtedness or Loan Documents shall be
subject to the limitation that Mortgagee shall not charge, take or receive, nor
shall Mortgagor or any other obligor be obligated to pay to Mortgagee, any
amounts constituting interest in excess of the' maximum rate permitted by law to
be charged by Mortgagee.

33. Mortgagor's Waiver of Rights. To the fullest extent permitted by law,
Mortgagor waives the benefit of all laws now existing or that may subsequently
be enacted providing for (i) any appraisement before sale of any portion of the
Mortgaged Property, (ii) any extension of the time for the enforcement of the
collection of the Indebtedness or the creation or extension of a period of
redemption from any sale made in collecting such debt and (iii) exemption of the
Mortgaged Property from attachment, levy or sale under execution or exemption
from civil process. To the full extent Mortgagor may do so, Mortgagor agrees
that Mortgagor will not at any time insist upon, plead, claim or take the
benefit or advantage of any law now or hereafter in force providing for any
appraisement, valuation, stay, exemption, extension or redemption, or requiring
foreclosure of this Mortgage before exercising any other remedy granted
hereunder and Mortgagor, for Mortgagor and its successors and assigns, and for
any and all persons ever claiming any interest in the Mortgaged Property, to the
extent permitted by law, hereby waives and releases all rights of redemption,
valuation, appraisement, stay of execution, notice of election to mature or
declare due the whole of the secured indebtedness and marshalling in the event
of foreclosure of the liens hereby created.

34. Remedies Not Exclusive. Mortgagee shall be entitled to enforce payment of
the Indebtedness and performance of the Obligations and to exercise all rights
and powers under this Mortgage or under any of the other Loan Documents or other
agreement or any laws now or hereafter in force, notwithstanding some or all of
the Indebtedness and obligations may now or hereafter be otherwise secured,
whether by mortgage, security agreement, pledge, lien, assignment or otherwise.
Neither the acceptance of this Mortgage nor its enforcement, shall prejudice or
in any manner affect Mortgagee's right to realize upon or enforce any other
security now or hereafter held by Mortgagee, it being agreed that Mortgagee
shall be entitled to enforce this Mortgage and any other security now or
hereafter held by Mortgagee in such order and manner as Mortgagee may determine
in its absolute discretion. No remedy herein conferred upon or reserved to
Mortgagee is intended to be exclusive of any other remedy herein or by law
provided or permitted, but each shall be cumulative and shall be in addition to
every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute. Every power or remedy given by any of the Loan Documents
to Mortgagee or to which it may otherwise be entitled, may be exercised,
concurrently or independently, from time to time and as often as may be deemed
expedient by Mortgagee. In no event shall Mortgagee, in the exercise of the
remedies provided, in this Mortgage (including, without limitation, in
connection with the assignment of Rents to Mortgagee, or the appointment of a
receiver and the entry of such receiver on to all or any part of the Mortgaged
Property), be deemed a "mortgagee in possession," and Mortgagee shall not in any
way be made liable for any act, either of commission or omission, in connection
with the exercise of such remedies.

                                       27

<Page>

35. Multiple Security. If (a) the Premises shall consist of one or more parcels,
whether or not contiguous and whether or not located in the same county, or (b)
in addition to this Mortgage, Mortgagee shall now or hereafter hold one or more
additional mortgages, liens, deeds of trust or other security (directly or
indirectly) for the Indebtedness upon other property in the State in which the
Premises are located (whether or not such property is owned by Mortgagor or by
others) or (c) both the circumstances described in clauses (a) and (b) shall be
true, then to the fullest extent permitted by law, Mortgagee may, at its
election, commence or consolidate in a single foreclosure action all foreclosure
proceedings against all such collateral securing the Indebtedness (including the
Mortgaged Property), which action may be brought or consolidated in the courts
of any county in which any of such collateral is located. Mortgagor acknowledges
that the right to maintain a consolidated foreclosure action is a specific
inducement to Mortgagee to extend the Indebtedness, and Mortgagor expressly and
irrevocably waives any objections to the commencement or consolidation of the
foreclosure proceedings in a single action and any objections to the laying of
venue or based on the grounds of forum non conveniens which it may now or
hereafter have. Mortgagor further agrees that if Mortgagee shall be prosecuting
one or more foreclosure or other proceedings against a portion of the Mortgaged
Property or against any collateral other than the Mortgaged Property, which
collateral directly or indirectly secures the Indebtedness, or if Mortgagee
shall have obtained a judgment of foreclosure and sale or similar judgment
against such collateral, then, whether or not such proceedings are being
maintained or judgments were obtained in or outside the State in which the
Premises are located, Mortgagee may commence or continue foreclosure proceedings
and exercise its other remedies granted in this Mortgage against all or any part
of the Mortgaged Property and Mortgagor waives any objections to the
commencement or continuation of a foreclosure of this Mortgage or exercise of
any other remedies hereunder based on such other proceedings or judgments, and
waives any right to seek to dismiss, stay, remove, transfer or consolidate
either any action under this Mortgage or such other proceedings on such basis.
Neither the commencement nor continuation of proceedings to foreclose this
Mortgage nor the exercise of any other rights hereunder nor the recovery of any
judgment by Mortgagee in any such proceedings shall prejudice, limit or preclude
Mortgagee's right to commence or continue one or more foreclosure or other
proceedings or obtain a judgment against any other collateral (either in or
outside the State in which the Premises are located) which directly or
indirectly secures the Indebtedness, and Mortgagor expressly waives any
objections to the commencement of, continuation of, or entry of a judgment in
such other proceedings or exercise of any remedies in such proceedings based
upon any action or judgment connected to this Mortgage, and Mortgagor also
waives any right to seek to dismiss, stay, remove, transfer or consolidate
either such other proceedings or any action under this Mortgage on such basis.
It is expressly understood and agreed that to the fullest extent permitted by
law, Mortgagee may, at its election, cause the sale of all collateral which is
the subject of a single foreclosure action at either a single sale or at
multiple sales conducted simultaneously and take such other measures as are
appropriate in order to effect the agreement of the parties to dispose of and
administer all collateral securing the Indebtedness (directly or indirectly) in
the most economical and least time-consuming manner.

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36. Expenses; Indemnification. (a) Mortgagor shall pay or reimburse Mortgagee
for all expenses incurred by Mortgagee before and after the date of this
Mortgage with respect to any and all transactions contemplated by this Mortgage
including without limitation, the preparation of any document reasonably
required hereunder or any amendment, modification, restatement or supplement to
this Mortgage, the delivery of any consent, nondisturbance agreement or similar
document in connection with this Mortgage or the enforcement of any of
Mortgagee's rights. Such expenses shall include, without limitation, all title
and conveyancing charges, recording and filing fees and taxes, mortgage taxes,
intangible personal property taxes, escrow fees, revenue and tax stamp expenses,
insurance premiums (including title insurance premiums), title search and title
rundown charges, brokerage commissions, finders, fees, placement fees, court
costs, surveyors', photographers', appraisers', architects', engineers',
consulting professional's, accountants' and attorneys' fees and disbursements.
Mortgagor acknowledges that from time to time Mortgagor may receive statements
for such expenses, including without limitation attorneys' fees and
disbursements. Mortgagor shall pay such statements promptly upon receipt.

         (b) If (i) any action or proceeding shall be commenced by Mortgagee
(including but not limited to any action to foreclose this Mortgage or to
collect the Indebtedness), or any action or proceeding is commenced to which
Mortgagee is made a party, or in which it becomes necessary to defend or uphold
the lien of this Mortgage (including, without limitation, any proceeding or
other action relating to the bankruptcy, insolvency or reorganization of any
Obligor), or in which Mortgagee is served with any legal process, discovery
notice or subpoena and (ii) in each of the foregoing instances such action or
proceeding in any manner relates to or arises out of this Mortgage or
Mortgagee's lending to Mortgagor or acceptance of a guaranty from a Guarantor of
the Indebtedness or of any of the Obligations or any of the transactions
contemplated by this Mortgage, then Mortgagor will immediately reimburse or pay
to Mortgagee all of the expenses which have been or may be incurred by Mortgagee
with respect to the foregoing (including reasonable counsel fees and
disbursements), together with interest thereon at the Default Rate, and
following the occurrence of a Default any such sum and the interest thereon
shall be a lien on the Mortgaged Property, prior to any right, or title to,
interest in or claim upon the Mortgaged Property attaching or accruing
subsequent to the lien of this Mortgage, and shall be deemed to be secured by
this Mortgage. In any action or proceeding to foreclose this Mortgage, or to
recover or collect the Indebtedness, the provisions of law respecting the
recovering of costs, disbursements and allowances shall prevail unaffected by
this covenant.

         (c) Mortgagor shall indemnify and hold harmless Mortgagee and
Mortgagee's affiliates, and the respective directors, officers, agents and
employees of Mortgagee and its affiliates from and against all claims, damages,
losses and liabilities (including, without limitation, reasonable attorneys'
fees and expenses) arising out of or based upon any matter related to this
Mortgage, the Mortgaged Property or the occupancy, ownership, maintenance or
management of the Mortgaged Property by Mortgagor, including, without
limitation, any claims based on the alleged acts or omissions of any employee or
agent of Mortgagor. This indemnification shall be in addition to any other
liability which Mortgagor may otherwise have to Mortgagee.

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37. Successors and Assigns. All covenants of Mortgagor contained in this
Mortgage are imposed solely and exclusively for the benefit of Mortgagee and its
successors and assigns, and no other person or entity shall have standing to
require compliance with such covenants or be deemed, under any circumstances, to
be a beneficiary of such covenants, any or all of which may be freely waived in
whole or in part by Mortgagee at any time if in its sole discretion it deems
such waiver advisable. All such covenants of Mortgagor shall run with the land
and bind Mortgagor, the successors and assigns of Mortgagor (and each of them)
and all subsequent owners, encumbrancers and tenants of the Mortgaged Property,
and shall inure to the benefit of Mortgagee, its successors and assigns. The
word "Mortgagor" shall be construed as if it read "Mortgagors" whenever the
sense of this mortgage so requires and if there shall be more than one
Mortgagor, the obligations of Mortgagors shall be joint and several.

38. No Waivers, etc. Any failure by Mortgagee to insist upon the strict
performance by Mortgagor of any of the terms and provisions of this Mortgage
shall not be deemed to be a waiver of any of the terms and provisions hereof,
and Mortgagee, notwithstanding any such failure, shall have the right thereafter
to insist upon the strict performance by Mortgagor of any and all of the terms
and provisions of this Mortgage to be performed by Mortgagor. Mortgagee may
release, regardless of consideration and without the necessity for any notice to
or consent by the holder of any subordinate lien on the Mortgaged Property, any
part of the security held for the obligations secured by this Mortgage without,
as to the remainder of the security, in any way impairing or affecting the lien
of this Mortgage or the priority of such lien over any subordinate lien.

39. Governing Law, etc. This Mortgage shall be governed by and construed and
interpreted in accordance with the laws of the State of New York. Mortgagor
hereby irrevocably agrees that any legal action, suit, or proceeding against it
with respect to its obligations, liabilities or any other matter under or
arising out of or in connection with this Mortgage or the other Loan Documents
or for recognition or enforcement of any judgment rendered in any such action,
suit or proceeding may be brought in the United States Courts for the Southern
District of New York, or in the courts of the State of New York, as Mortgagee
may elect, and, by execution and delivery of this Mortgage, Mortgagor hereby
irrevocably accepts and submits to the nonexclusive jurisdiction of each of the
aforesaid courts in persona, generally and unconditionally with respect to any
such action, suit or proceeding for itself and in respect of its property.
Mortgagor further agrees that final judgment against it in any action, suit, or
proceeding referred to herein shall be conclusive and may be enforced in any
other jurisdiction, by suit on the judgment, a certified or exemplified copy of
which shall be conclusive evidence of the fact and of the amount of its
indebtedness.

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40. Waiver of Trial by Jury. Mortgagor and Mortgagee each hereby irrevocably and
unconditionally waive trial by jury in any action, claim, suit or proceeding
relating to this Mortgage and for any counterclaim brought therein. Mortgagor
hereby waives all rights to interpose any counterclaim in any suit brought by
Mortgagee hereunder and all rights to have any such suit consolidated with any
separate suit, action or proceeding.

41. 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 and the word
"Mortgagor" shall mean "each Mortgagor or any subsequent owner or owners of the
Mortgaged Property or any part thereof or interest therein, and the word
"Mortgagee" shall mean "Mortgagee or any successor administrative agent for the
holder (s) of the Tranche C Note".

42. Nonresidential. THIS MORTGAGE DOES NOT COVER REAL PROPERTY PRINCIPALLY
IMPROVED BY ONE OR MORE STRUCTURES CONTAINING IN THE AGGREGATE NOT MORE THAN SIX
RESIDENTIAL DWELLING UNITS, EACH HAVING ITS OWN SEPARATE COOKING FACILITIES.

43. Last Dollars Secured; Priority. This Mortgage secures only a portion of the
indebtedness owing or which may become owing by Mortgagor to the Lenders. The
parties agree that any payments or repayments of such indebtedness shall be and
be deemed to be applied first to the portion of the indebtedness that is not
secured hereby, it being the parties' intent that the portion of the
indebtedness last remaining unpaid shall be secured hereby.

44. MAXIMUM SECURED AMOUNT. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED
HEREIN, THE MAXIMUM AMOUNT OF PRINCIAPL INDEBTEDNESS SECURED BY THIS MORTGAGE AT
THE TIME OF EXECUTION OR WHICH UNDER ANY CONTINGENCY MAY HEREAFTER BECOME
SECURED HEREBY AT ANY TIME IS SEVEN HUNDRED FIVE THOUSAND DOLLARS ($705,000);
PROVIDED, THAT SUCH LIMITATION SHALL NOT LIMIT THE SECURITY OF THIS MORTGAGE
WITH RESPECT TO (I) INTEREST ON THE AFORESAID MAXIMUM AMOUNT OF PRINCIPAL
INDEBTEDNESS AT THE RATE APPLICABLE TO THE TRANCHE TERM LOANS AS PROVIDED IN THE
CREDIT AGREEMENT, (II) AFTER A DEFAULT BY MORTGAGOR TO PAY OR PERFORM SAME, SUMS
TO PAY IMPOSITIONS AS PROVIDED FOR HEREIN, (III) AFTER A DEFAULT BY MORTGAGOR TO
PAY OR PERFORM SAME, SUMS TO PAY PREMIUMS ON INSURANCE POLICIES COVERING THE
MORTGAGED PROPERTY AS PROVIDED FOR HEREIN, (IV) EXPENSES INCURRED IN UPHOLDING
OR ENFORCING THE LIEN OF THIS MORTGAGE, INCLUDING, BUT NOT LIMITED TO, THE
EXPENSES OF ANY LITIGATION TO PROSECUTE OR DEFEND THE RIGHTS AND LIEN CREATED BY
THIS MORTGAGE, (V) AFTER DEFAULT BY MORTGAGOR TO PAY OR PERFORM SAME, EXPENSES
INCURRED TO PROTECT THE PROPERTY SECURED BY THIS MORTGAGE, (VI) ANY AMOUNT,
COSTS OR CHARGE TO WHICH THIS MORTGAGE BECOMES SUBROGATED, UPON PAYMENT, WHETHER
UNDER RECOGNIZED PRINCIPLES OF LAW OR EQUITY, OR UNDER EXPRESS STATUTORY
AUTHORITY AND (VII) ANY OTHER AMOUNT SECURED BY THIS MORTGAGE WHICH IF NOT
LIMITED BY SUCH LIMITATION WOULD NOT RENDER THIS MORTGAGE INDEFINITE OR INCREASE
THE AMOUNT OF MORTGAGE RECORDING TAXES, IF ANY, PAYABLE WITH RESPECT TO THIS
MORTGAGE

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45. Mortgagor will pay all applicable mortgage recording tax imposed pursuant to
Article 11 of the New York Tax Law incurred in connection with the recordation
of this Mortgage.

         This Mortgage has been duly executed by Mortgagor on the date first
above written.

                                KOLAR, INC.


                                By:   /s/ Edward J. Fred
                                      Name:  Edward J. Fred
                                      Title: President

STATE OF NEW YORK )
                  :ss:
COUNTY OF NEW YORK)

On the 25th day of June in the year 2000 before me, the undersigned, personally
appeared Edward J. Fred, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed
to the within instrument and acknowledged to me that he/she/they executed the
same in his/her/their capacity(ies), and that by his/her/their signature(s) on
the instrument, the individual(s), or the person upon behalf of which the
individual(s) acted, executed the instrument.


/s/
Signature and Office of individual
taking acknowledgment


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                             SCHEDULE A DESCRIPTION

Parcel A

I:
                  ALL THAT TRACT OR PARCEL OF LAND situate in the City of
Ithaca, County of Tompkins, State of New York, bounded and described as follows:
BEGINNING at a point at the intersection of the east line of Cliff Street and
the north line of former Cascadilla Street (unopened), running thence North
05(Degree) 30' East along the east line of Cliff Street a distance of 450 feet
to a nail set; running thence South 87(Degree) 51' East a distance of 118.7 feet
to a point; running thence South 01(Degree) 49' West for a distance of 159.8
feet to a point; running thence South 01(Degree) 37' West for a distance of 307
feet to a point; running thence North 81(Degree) 09' West a distance of 149.8
feet to the point and place of beginning.

II:
                  ALL THAT TRACT OR PARCEL OF LAND situate in the City of
Ithaca, County of Tompkins, State of New York, bounded and described as follows:
BEGINNING at a point in the North line of former Cascadilla Street (unopened
street), said point being located South 81(Degree) 09'East for a distance of
149.8 feet from the intersection of said streetline with the east line of Cliff
Street; running thence South 81(Degree)09' East for a distance of 50 feet to an
iron pipe set; running thence North 01(Degree) 39'East for a distance of 473.83
feet to an iron pipe found; running thence North 89(Degree) 17' West passing
through an iron stake at 38 feet and continuing for a total distance of 49.3
feet to a point; running thence South 01(Degree) 49' West for a distance of
159.8 feet to a point; running thence South 01(Degree) 37' West for a distance
of 307 feet to the point and place of beginning.

III:
                  ALL THAT TRACT OR PARCEL OF LAND situate in the City of
Ithaca, County of Tompkins, State of New York, bounded and described as follows:
BEGINNING at an iron pipe found in the west line of Cliff Street, said point
being the southeast corner of Tax Map Number 42-1-9, being lands reputedly of
Rea; running thence North 80(Degree) 58' West passing through an iron pipe at a
distance of 7.2 feet, and continuing for a total distance of 60 feet to a point;
running thence South 07(Degree) 14'West passing through an iron pipe found at a
distance of 86 feet and continuing for a total distance of 146 feet to a point
in the centerline of an existing ravine; running thence Easterly along the
centerline of said ravine for a distance of 70 feet to a point in the west line
of Cliff Street, said course having a chord bearing and distance of South
69(Degree) 07'East - 66.5 feet; running thence North 5(Degree) 30'East for a
distance of 154 feet to the point and place of beginning.

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PARCEL B
                  ALL THAT TRACT OR PARCEL OF LAND situate in the City of
Ithaca, County of Tompkins, State of New York, bounded and described as follows:

                  BEGINNING at a nail set in the at line of Cliff Street, said
nail being located North 05(Degree) 30' East a distance of 450 feet from the
intersection of Cliff Street with the North line of former Cascadilla Street
(unopened); running thence North 05(Degree) 30' East along the east line of
Cliff Street for a distance of 47.5 feet to an iron pin set; running thence
North 00(Degree) 49' West along the east line of Cliff Street for a distance of
241.9 feet to an iron pin set; running thence North 89(Degree) 11' East for a
distance of 130.0 feet to an iron pin set; running thence South 00(Degree) 49'
East for a distance of 248.4 feet to an iron pin set; running thence South
05(Degree) 30' West for a distance of 47.5 feet to an iron pipe found; running
thence North 89(Degree) 17' West for a distance of 11.3 feet to a point; running
thence North 87(Degree) 51' West for a distance of 118.70 feet to the point and
place of beginning.

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