THIS MORTGAGE, made the 2nd day of December, 1998, BETWEEN WESTERN
BEEF PROPERTIES, INC., a New York corporation with a principal office and place
of business at 47-05 Metropolitan Avenue, Ridgewood, New York 11383 (hereinafter
called the "Owner"), the mortgagor, and NORTH FORK BANK, a New York banking
corporation having an office at 275 Broad Hollow Road, Melville, New York 11747
(hereinafter called the "Mortgagee"), the mortgagee

                                   WITNESSETH

            That to secure the payment of an indebtedness in the sum of ONE
MILLION SEVEN HUNDRED THOUSAND ($1,700,000.00) DOLLARS lawful money of the
United States, together with interest thereon (the "Indebtedness") as evidenced
by a note of even date (the "Note"), the Owner hereby mortgages to the Mortgagee
the entire premises hereinafter described, which premises are located at 1030
Union Avenue, Bronx, New York (Block 2679, Lot 1), a/k/a 1041 Prospect Avenue,
Bronx, New York, a/k/a 815-23 E. 165th Street, Bronx, New York, 1057-59
Prospect Avenue, Bronx, New York (Block 2679 Lot 34), 1053-1055 Prospect Avenue,
Bronx, New York (Block 2679, Lot 34), East 165th Street, Bronx, New York (Block
2679, Lot 57) and 1020 Union Avenue, Bronx, New York (Block 2679, Lot 63),
(hereinafter referred to as the "Premises"), and being more particularly
described in Exhibit A annexed hereto and made a part hereof.

            TOGETHER with all right, title and interest of the Owner in and to
the land lying in the streets and roads in front of and adjoining said premises.

            TOGETHER with all fixtures, chattels and articles of personal
property now or hereafter permanently attached to or used in connection with
said premises, including but not limited to furnaces, boilers, oil burners,
radiators and piping, coal stokers, plumbing and bathroom fixtures,
refrigeration, air conditioning and sprinkler systems, wash-tubs, sinks, gas and
electric fixtures, stoves, ranges, awnings, screens, window shades, elevators,
motors, dynamos, refrigerators, kitchen cabinets, incinerators, plants and
shrubbery, and all other equipment and machinery, appliances, fittings, and
fixtures of every kind in or used in the operation of the buildings standing on
said premises, together with any and all replacements thereof and additions
thereto;

            TOGETHER with all awards heretofore and hereafter made to the Owner
for taking by eminent domain the whole or any part of said premises or any
easement therein, including any awards for changes of grade of streets, which
said awards are hereby assigned to the Mortgagee, who is hereby authorized to
collect and receive the proceeds of such awards and to give proper receipts and
acquittances therefor, and to apply the same toward the payment of the mortgage
debt, notwithstanding the fact that the amount owing thereon may not then be due
and payable; and the said Owner hereby agrees, upon request, to make, execute
and deliver any and all assignments and other instruments sufficient for the
purpose of assigning said awards to the Mortgagee, free, clear and discharged of
any encumbrances of any kind or nature whatsoever.

            The Mortgage is and shall be and remain a valid first lien against
the Premises, and is and shall be and remain also a lien on, and is hereby
spread to cover the entire Premises and all buildings, improvements, fixtures
and articles of personal property now or hereafter permanently affixed to,
placed
<PAGE>

upon or used in connection with the operation of the Premises and the proceeds
thereof, all of which are covered by the Mortgage, which Mortgage shall also
constitute a security agreement. This provision shall be self-operative, but
the Owner will execute and deliver to the Mortgagee on demand, and hereby
irrevocably appoints the Mortgagee the attorney-in-fact of the Owner to execute,
deliver and file such financing statements and other instruments as the
Mortgagee may require in order to impose the lien of the Mortgage upon said
fixtures and personal property. If the lien of the Mortgage on any fixtures or
personal property is subject to a security interest covering such fixtures or
personal property, then in the event of any default under the Mortgage, all the
right, title and interest to the Owner in and to any and all deposits are hereby
assigned to the Mortgagee, together with the benefit of any payments now or
hereafter made thereon.

            The Mortgage is and shall be and remain also a valid first lien on,
and is hereby spread to cover all proceeds of the conversion, voluntary or
involuntary, of the Premises or any part thereof into cash or liquidated claims,
including, without limitation, proceeds of casualty insurance, title insurance
or any other insurance maintained on the Premises and the Building Equipment (as
herein defined), and to all awards and/or other compensation ("Awards")
heretofore and hereafter made to the Owners of the Premises and Building
Equipment by any governmental or other lawful authorities for the taking, by
eminent domain, condemnation or otherwise, of all or any part of the Premises
and Building Equipment or any easement or other rights therein, including Awards
for any change of grade of streets.

            The Mortgage is and shall be and remain also a valid first lien on,
and is hereby spread to cover (i) all rents, issues and profits, revenues,
income and other benefits due or to become due to the Owner for the use,
operation or occupancy of the Premises, (ii) any amounts refunded or to be
refunded by taxing authorities from amounts paid for real estate taxes, water
and sewer rents and charges affecting the Premises, and (iii) any amounts
refunded or to be refunded by any insurer from amounts paid for insurance
premiums for insurance affecting the Premises.

            AND the Owner further covenants with the Mortgagee as follows:

            1. That the Owner will punctually pay the Indebtedness as
hereinbefore provided, all in legal tender of the United States of America for
the payment of public or private debt.

            2. (a) That the Owner shall keep the buildings on the mortgaged
premises and all fixtures, chattels and articles of personal property now or
hereafter attached to or used in connection with the mortgaged premises,
including, without limitation, furnaces, boilers, oil burners, radiators and
piping, coal stokers, plumbing and bathroom fixtures, refrigeration, air
conditioning and sprinkler systems, dishwashers, wash-tubs, sinks, gas and
electric fixtures, stoves, ranges, awnings, screens, window shades, elevators,
motors, dynamos, refrigerators, kitchen cabinets, incinerators, computers,
security equipment, plants and shrubbery, and all other equipment and machinery,
appliances, fittings and fixtures of every kind in or used in the operation of
the buildings standing on the mortgaged premises, and any and all replacements
thereof and additions thereto (collectively, the "Building Equipment"), insured
for the benefit of the Mortgagee (i) against loss by fire; and other hazards
covered by an all-risk coverage insurance


                                       2
<PAGE>

policy for the full insurable value thereof (which, unless the Mortgagee shall
otherwise agree in writing, shall mean the full repair and replacement value
thereof without reduction for depreciation or co-insurance, but in no event less
than the outstanding amount of the indebtedness) with deductible from the loss
payable for any casualty in amounts approved by Mortgagee, in its sole
discretion; all policies of insurance carried in accordance with this
subparagraph shall contain a "Replacement Cost Endorsement" satisfactory to
Mortgagee; (ii) Boiler and machinery insurance covering pressure vessels, air
tanks, boilers, machinery, pressure piping, heating, air-conditioning and
elevator equipment and escalator equipment, provided the Premises contains
equipment of such nature; (iii) against war risks as, when and to the extent
such insurance is obtainable from the United States of America or an agency
thereof; (iv) against loss of rentals due to any of the foregoing causes; (v)
against loss by flood if the Premises or any part thereof are located in an area
now or hereafter identified by the Secretary of Housing and Urban Development or
other identifying agencies as an area having special flood hazards and in which
flood insurance has been made available under the National Flood Insurance Act
of 1968, as amended or replaced; and (vi) when and to the extent required by the
Mortgagee, against any other risk insured against by persons or parties
operating like properties in the locality of the Premises; that the Owner will
reimburse the Mortgagee for any premiums paid for insurance made by the
Mortgagee on the Owner's default in taking out such insurance, or in so
assigning and delivering the policies, together with interest thereon at the
rate per annum specified in Paragraph 4 hereof, and the same (with interest
thereon) shall be added to the indebtedness secured by the Mortgage;

                  (b) that such insurance shall be provided by policies written
in terms and amounts, and by companies satisfactory to the Mortgagee, and losses
thereunder shall be payable to the Mortgagee pursuant to a New York standard
mortgagee endorsement;

                  (c) that regardless of the types or amounts of insurance
required and approved by the Mortgagee, the Owner will assign and deliver to the
Mortgagee all policies of insurance acquired by the Owner to insure against any
loss or damage to the Premises or any part thereof, or evidence of coverage
under a blanket policy which shall be satisfactory to the Mortgagee as
additional security for the indebtedness;

                  (d) that, notwithstanding the provisions of Subdivision 4 of
Section 254 of the New York Real Property Law, the Mortgagee shall be entitled
to retain and apply the proceeds of any insurance, whether against fire or other
hazard, to the payment of the indebtedness secured hereby, or, if the Mortgagee
in its sole discretion shall so elect, the Mortgagee may, on terms it deems
appropriate, hold any or all of such proceeds for application to payment of the
cost of restoration;

                  (e) that not less than thirty (30) days prior to the
expiration date of each policy furnished by the Owner pursuant to this Article,
the Owner will deliver to the Mortgagee a renewal policy or policies marked
"premium paid" or accompanied by other evidence of payment satisfactory to the
Mortgagee; and

                  (f) that in the event of a foreclosure of the Mortgage, the
purchaser of the Premises or any part hereof shall succeed to all the rights of
the Owner, including any rights to the proceeds of insurance and to unearned
premiums, in and to all policies of insurance assigned and delivered (or
required to be


                                       3
<PAGE>

assigned and delivered) to the Mortgagee pursuant to this Article.

                  (g) all insurance policies and endorsements required hereunder
shall be fully paid for and contain such provisions and expiration dates and be
in such form and issued by insurance companies satisfactory to Mortgagee and
licensed to do business in the State of New York. Each policy shall provide that
such policy may not be cancelled or materially changed except upon thirty (30)
days' prior written notice to the Mortgagee of the intention of non-renewal,
cancellation or material change and that no act or thing done by the Owner shall
invalidate the policy as against the Mortgagee. All policies of insurance
required by the terms of this Mortgage shall contain an endorsement or agreement
by the insurer that any loss shall be payable in accordance with the terms of
such policy notwithstanding any act of negligence of Owner which might otherwise
result in forfeiture of said insurance and the further agreement of the insurer
waiving all rights of set off, counterclaim, recoupment, deduction or
subrogation against Owner.

                  (h) in the event of damage or destruction to the Premises or
the Building Equipment, whether insured or uninsured, the Owners shall give
prompt written notice thereof to the Mortgagee and shall promptly commence and
diligently continue to perform repair, restoration and rebuilding of the portion
of the Premises and Building Equipment so damaged or destroyed (hereinafter
referred to as the "work") to restore the Premises and the Building Equipment in
full compliance with all Legal Requirements and so that the Premises and the
Building Equipment shall be at least equal in value and general utility as they
were prior to the damage or destruction.

                  (i) the Owner immediately shall deliver to the Mortgagee any
proceeds of insurance paid on account of any damage or destruction to the
Premises ("Proceeds") which are paid directly to the Owner by the casualty
insurance carrier with respect to any damage or destruction to the Premises or
the Building Equipment, or any part thereof. All Proceeds paid directly to the
Owner and delivered to the Mortgagee as aforesaid, together with all Proceeds
paid directly to the Mortgagee on account of damage or destruction to the
Premises, shall in the Mortgagee's sole discretion be applied by Mortgagee (i)
to the payment of the Indebtedness, notwithstanding the fact that the
Indebtedness may not then be due and payable, or (ii) upon written request of
Owner to the payment of the cost of the work referred to in subparagraph (h)
above. All proceeds which are applied, in the Mortgagee's discretion, to the
payment of the Indebtedness shall be applied as follows: first, to the payment
of delinquency or "late" charges, if any; secondly, to accrued and unpaid
interest on the Indebtedness; and thirdly, to the reduction of the principal sum
of the Indebtedness; provided, however, that such application to the payment of
the Indebtedness shall not release the Owner from, or otherwise affect, the
Owner's obligations hereunder to repair and restore the Premises and Building
Equipment. It is intended that, anything contained in Subdivision 4 of Section
254 of the New York Real Property Law to the contrary notwithstanding, no trust
shall be created by the receipt by the Mortgagee of any proceeds of insurance,
but only a debtor-creditor relationship between the Mortgagee and to Owner for
an amount equal to but not in excess of such proceeds which the Mortgagee shall
be entitled to dispose of as herein provided, nor shall there be any obligations
on the Mortgagee to pay any interest thereon.

                  (j) any claims under any policy of insurance provided
hereunder shall be settled or adjusted jointly by the


                                       4
<PAGE>

Owner and the Mortgagee; provided, however, in the event that the Owner and the
Mortgagee fail to agree, the decision of the Mortgagee shall govern.

            3. That no building or other property now or hereafter covered by
the lien of the Mortgage shall be removed, demolished or materially altered
without the prior written consent of the Mortgagee, except that Owner shall have
the right, without such consent, to remove and dispose of, free from the lien of
the Mortgage, such Building Equipment as from time to time may become worn out
or obsolete, provided that either (a) simultaneously with or prior to such
removal, any such equipment shall be replaced with other equipment of a value at
least equal to that of the replaced equipment and free from any security
agreement, and by such removal and replacement the Owner shall be deemed to have
subjected such Building Equipment to the lien of the Mortgage, or (b) any net
cash proceeds received from such disposition shall be paid over promptly to the
Mortgagee to be applied to the last installments due on the Indebtedness secured
by the Mortgage, without any charge for prepayment.

            4. That in the event of any default in the performance of any of the
Owner's covenants or agreements herein, the Mortgagee may after giving the
notice provided for herein, at the option of the Mortgagee, perform the same and
the cost thereof, with interest at a rate equal to five (5%) percent per annum
above the then current rate payable under this Note and Mortgage, but in no
event in excess of the maximum rate allowed to be charged by law (the
"Delinquency Rate"), shall immediately be due from the Owner to the Mortgagee
and shall be secured by he Mortgage. Upon a default under the Mortgage or if the
principal sum secured by the Mortgage shall not be paid at its maturity, or on
its acceleration pursuant to Article 20 or any other provision hereof, interest
thereon shall thereafter be computed and paid at the said rate per annum
specified in this Article 4. If, after the principal sum secured by the Mortgage
becomes immediately due and payable by reason of a default by the Owner under
the Note or the Mortgage, or the terms hereof, the Owner, prior to the
foreclosure and sale of the Premises, tenders payment of the amount necessary to
satisfy the principal amount then owing and all accrued interest and other sums
then due under the Note, the Mortgage, and the terms hereof such tender shall
constitute an evasion of the prepayment terms under the Note and shall be deemed
a voluntary prepayment under the Note, and to the extent permitted by applicable
law, the Owner shall pay to the Mortgagee, together with such payment of
principal, interest and other sums then due under the Note, a prepayment charge
as provided for in the Note, if any.

            5. That the Owner will, except to the extent same are covered by
amounts actually paid to the Mortgagee pursuant to Article 36 hereof, pay, prior
to the imposition of late penalties, late charges or interest for failure to
timely pay same, all taxes, assessments, water rents, sewer rents and other
governmental impositions or charges or any kind or nature now or hereafter
levied against the Premises, any part thereof, or any articles of personal
property covered by the Mortgage, and also (without limitation) any and all
license fees or similar charges which may at any time be imposed by the
municipality in which the Premises are situated for the use of vaults, chutes,
areas and other space beyond the lot line and on or abutting the public
sidewalks in front of or adjoining the Premises (together with any and all
penalties or interest on any of the foregoing), and in default thereof the
Mortgagee may pay the same and the Owner will repay the same with interest
thereon at the rate per annum specified in Article 4 hereof, and the same shall
be added to the indebtedness secured hereby and be secured by the Mortgage; that


                                       5
<PAGE>

upon request of the Mortgagee, the Owner will, upon notice and demand, exhibit
to the Mortgagee receipts for the payment of all items specified in this Article
prior to the date when the same shall become delinquent.

            6. That the Mortgagee, in any action to foreclose the Mortgage,
shall be entitled (without notice of any kind to the Owner, without regard to
the adequacy of any security for the debt, and without regard to the solvency of
any person, firm or corporation liable for the payment thereof) to the
appointment of a receiver of the rents and profits of the Premises.

            7. That the Owner, within three (3) days upon request in person or
within ten (10) days upon request by mail, will furnish written statement duly
acknowledged setting forth the entire unpaid principal amount secured by the
Mortgage, the rate of interest and maturity date hereof, and stating either that
no offsets or defenses exist against the mortgage debt, or if such offsets or
defenses are alleged to exist, the amount and the nature thereof.

            8. That notice and demand or request may be made in writing and may
be served in person or by mail.

            9. That the Owner: (a) warrants title to the Premises and the
Building Equipment; (b) shall execute and deliver, from time to time, such
further instruments (including further security agreements) as may be requested
by the Mortgagee to confirm the lien of the Mortgage on any Building Equipment
or otherwise; (c) upon request, shall make, execute, acknowledge, and deliver
any and all instruments sufficient for the purpose of confirming the assignment
to the Mortgagee of awards for the taking by eminent domain of the whole or any
part of the Premises or any easement therein, including any awards for changes
of grade of streets, free, clear and discharged of any encumbrances of any kind
or nature whatsoever; (d) shall not, without the prior written consent of the
Mortgagee, further encumber the Premises for debt or otherwise; (e) shall not,
without the prior written consent of the Mortgagee, lease all or substantially
all of the Premises or sell, assign, convey or otherwise transfer, directly or
indirectly, the Premises or any part thereof or any interest therein, except as
may herein otherwise be expressly provided; (f) if the Owner is a corporation,
the Owner shall not, nor shall the present holders of a majority of the voting
stock thereof shall, without the prior written consent of the Mortgagee, sell,
assign, transfer, pledge, hypotheccate or otherwise transfer the Owner's or such
stockholders voting stock as security for debt or otherwise; and (g) if the
Owner is a partnership, joint venture, syndicate or other group (collectively,
the "partnership"), the Owner shall not, nor shall the present holders of a
majority of the record or beneficial interest thereof, without the prior written
consent of the Mortgagee, sell, assign, transfer, pledge, hypothecate or
otherwise transfer the Owner's or any partner's, individual's or entity's
interest therein as security for debt or otherwise. North Fork Bank consents to
the placement of a second mortgage on the herein described premises in an amount
yet to be determined but satisfactory to North Fork Bank and its counsel and in
a form satisfactory to North Fork Bank and its counsel. If the Mortgagee and/or
its counsel consent to the Owner's making and delivering a subordinate mortgage
covering all or any part of the Premises (including a purchase money mortgage),
among other requirements that the Mortgagee may impose, any such subordinate
mortgage covering the Premises executed and delivered subsequent to the
execution and delivery of this Mortgage shall contain express covenants to the
effect that (i) such Mortgage is and shall remain in all respects subject and
subordinate to the


                                       6
<PAGE>

Mortgage and to any modifications, consolidations, extensions or renewals
thereof, (ii) no tenant under any lease of any portion of the Premises will be
made a party defendant in any foreclosure of such Subordinate Mortgage, nor will
any other action be taken in connection with such foreclosure which would have
the effect of terminating any such lease, (iii) no portion of the rents, issues
and profits of the Premises shall be collected in connection with the
foreclosure of such Subordinate Mortgage except through a receiver appointed by
the court in which such foreclosure action is brought, after due notice of the
application of the appointment of such receiver shall have been given to the
Mortgagee, (iv) the rents, issues and profits collected by any such receiver
shall be applied first to the payment of taxes, maintenance and operating
charges and disbursements incurred in connection with the operation and
maintenance of the Premises and next to the payment of principal and interest
due under the Mortgage at the time of such application, before any portion of
such rents, issues and profits shall be applied to such Subordinate Mortgage,
(v) if during the pendency of any such foreclosure action, an action shall be
brought for the foreclosure of the Mortgage and an application shall be made for
an extension of such receivership for the benefit of the Mortgagee, all such
rents, issues and profits held by such receiver as of the date of such
application shall be applied by the receiver solely for the benefit of the
Mortgagee, and the holder of such Subordinate Mortgage shall not be entitled to
any portion thereof, and (vi) due notice of the commencement of any foreclosure
of such Subordinate Mortgage shall be given to the Mortgagee and true copies of
all papers served or entered in such action will be delivered to the Mortgagee.

            10. That in case of a foreclosure sale, the Premises, or so much
thereof as may be affected by the Mortgage, may be sold in one parcel (or
otherwise, as the Mortgagee shall, from time to time, determine).

            11. That if any action or proceeding be commenced (including,
without limitation, an action to foreclose the Mortgage or to collect the
indebtedness secured hereby), in which the Mortgagee becomes a party or
participates, by reason of being the holder of the Mortgage or the debt secured
hereby, all sums paid or incurred by the Mortgagee for the expense of so
becoming a party or participating (including reasonable counsel fees) shall on
notice and demand be paid by the Owner, together with interest thereon at the
rate per annum specified in Article 4 hereof, and shall be a lien on the
Premises, prior to any right or title to, interest in, or claim upon, the
Premises subordinate to the lien of the Mortgage, and shall be secured by the
Mortgage; and that in any action or proceeding to foreclose the Mortgage, or to
recover or collect the debt secured hereby, the provisions of law respecting the
recovery of costs, disbursements and allowances shall apply in addition to the
foregoing. Owner waives any and all right to claim or recover against Mortgagee,
its officers, employees, agents and representatives, for loss of or damage to
Owner, the Premises, Owner's property or the property of others under Owner's
control from any cause whatsoever, except for the willful misconduct or gross
negligence of Mortgagee, its officers, employees, agents or representatives.

            12. That the Owner will maintain the Premises and the Building
Equipment in good condition and repair, will not commit, permit or suffer any
waste thereof or the conduct of any nuisance or unlawful occupation or business
on, or use of, the Premises or any part thereof; will not, directly or
indirectly, without the prior written consent of the Mortgagee, threaten,
commit, permit or suffer to occur any alteration, demolition or removal of the
Premises; that the Owner will promptly repair,


                                       7
<PAGE>

restore, replace or rebuild any part of the Premises or the Building Equipment
now or hereafter subject to the lien of the Mortgage which may be damaged or
destroyed by any casualty whatsoever (and whether or not covered by insurance)
or which may be affected by any proceeding of the character referred to in
Paragraph 13; that Owner will comply with Legal Requirements affecting Owner or
the Premises and to cause the tenants under the leases to comply with all Legal
Requirements affecting the Premises, whether the same be directed to the
erection, repair, manner of use or structural alteration of buildings or
otherwise; and that the Owner will not initiate, join in, execute or consent to
the creation of or any change in any private restrictive covenant, zoning
ordinance, or right created thereunder, or other public or private restrictions,
limiting or defining the uses which may be made of the Premises or any part
thereof without the prior written consent of the Mortgagee.

            13. (a) The Owner, immediately upon obtaining knowledge of the
institution of any proceedings for the condemnation of the Premises or any
portion thereof, shall notify the Mortgagee of the pendency of such proceedings.
The Mortgagee, at its election and in its discretion, may participate in any
such proceedings and the Owner, from time to time, shall deliver to the
Mortgagee all instruments requested by it to permit such participation. All
awards or other taking or purchase in lieu thereof, of the Premises or any
portion thereof (the "Awards"), shall be paid in accordance with the provisions
of this Paragraph 13. All awards or other taking or purchase in lieu thereof, of
the Premises or any part thereof, are hereby assigned to and shall be paid to
the Mortgagee. The Owner, upon the request by the Mortgagee, shall make, execute
and deliver any and all instruments requested for the purposes of confirming the
assignment of the aforesaid awards and compensation to the Mortgagee free and
clear of any liens, charges or encumbrances of any kind or nature whatsoever.
The Owner hereby authorizes the Mortgagee to collect and receive such Awards, to
give the proper receipts and acquittances therefor and, in the Mortgagee's
discretion, to apply the same as hereinafter provided.

                  (b) That notwithstanding any taking by eminent domain or other
governmental action causing injury to, or decrease in value of, the Premises or
any part thereof and/or creating a right to compensation therefor, including,
without limitation, the change of the grade of any street, the Owner shall
continue to pay interest, computed at the rate per annum hereinabove provided,
on the entire unpaid principal amount secured by the Mortgage, until the award
or compensation for such taking or other action shall have been actually
received by the Mortgagee and such award or compensation need not be applied by
the Mortgagee in reduction of principal but may be applied in such proportions
and priority as the Mortgagee, in the Mortgagee's sole discretion, may elect, to
the payment of principal, interest or other sums secured by the Mortgage and/or
to payment to the Owner, on such terms as the Mortgagee may in its sole
discretion specify, for the sole purpose of altering, restoring or rebuilding
any part of the Premises which may have been altered, damaged or destroyed as a
result of any such taking or other action; that if, prior to the receipt by the
Mortgagee of such award or compensation, the Premises or any part thereof shall
have been sold on foreclosure of the Mortgage, the Mortgagee shall have the
right to receive said award or compensation to the extent of any deficiency
found to be due upon such sale, with interest thereon as specified in Paragraph
4, whether or not a deficiency judgment on the Mortgage shall have been sought
or recovered or denied, together with counsel fees and any and all other costs
and disbursements incurred by the


                                       8
<PAGE>

Mortgagee in connection with the collection of such award or compensation.

                  (c) In the event that a portion of the Premises is taken or
condemned so that there is less than a complete taking, then, the Owner promptly
shall commence and diligently continue to repair, restore, replace or rebuild
the Premises in accordance with the provisions of Paragraph 2 hereof, as if such
taking or condemnation had resulted in "damage or destruction to the Premises"
(within the meaning of said Paragraph 2), substantially to its condition
immediately prior to such taking or condemnation or, if the foregoing is not
possible, as to constitute the same a distinct and functional architectural
unit.

            14. That the Mortgagee and any persons authorized by the Mortgagee
shall have the right to enter and inspect the Premises or any part thereof at
all reasonable times during business hours and upon reasonable notice (which may
be by telephone) except that any inspection required in connection with any
emergency shall not require notice and may be conducted at any time. If, at any
time after a default the management or maintenance of the Premises or any part
thereof shall be determined by the Mortgagee to be unsatisfactory, the Owner
shall employ, for the duration of such default, as managing agent of the
Premises, such person or firm as from time to time shall be approved by the
Mortgagee.

            15. The Owner shall keep adequate records and books of account
identifying income received and expenses paid and shall permit the Mortgagee, by
its agents, accountants and attorneys, to visit and inspect the Premises and
examine its records and books of account and to discuss its affairs, finances
and accounts with the officers of the Owner at such reasonable times during
business hours and on such reasonable notice as ma y be requested by Mortgagee.
That the Owner shall furnish to the Mortgagee: within ninety (90) days after the
end of each calendar year, a statement of the income and expense of the Premises
for such year prepared on an accrual basis in accordance with generally accepted
accounting principles, consistently applied, and such other statements
pertaining to the operation of the Premises as may reasonably be requested by
the Mortgagee, all certified by independent certified public accountants
satisfactory to the Mortgagee, such interim financial or other information with
respect to the operation of the Premises as the Mortgagee may reasonably
request; and annually and otherwise within ten (10) days after written request,
a then current rent roll showing the names of tenants, space occupied by each
tenant, rent and other charges payable by each tenant (gross and per square foot
in the case of commercial tenants), lease security, if any, and lease or
occupancy expiration dates, options for renewal, rental during renewal terms,
cancellation provisions and other relevant information. If the Owner shall have
leased all or substantially all of the Premises to another lessee, such
statements shall cover the earnings and expenses in the latest fiscal year of
the lessee under such lease. In the case of such a lease, if the lessee shall be
an affiliate of the owner, the Owner will also furnish to the Mortgagee the
lessee's balance sheet as of such fiscal year, all in reasonable detail and
stating in comparative form the figures as of the end of and for the previous
fiscal year, and verified by an authorized financial officer of the lessee.
Notwithstanding anything herein or otherwise to the contrary, if a lease of all
or substantially all of the Premises is made, whether to an affiliate or
otherwise, without the Mortgagee's prior written approval, the Mortgagee can
elect to accelerate the entire principal sum plus accrued interest then secured
hereunder. If there are any guarantors of


                                       9
<PAGE>

the Indebtedness, such guarantors shall furnish the Mortgagee annually, within
ninety (90) days of the end of each calendar year, with a balance sheet and a
copy of their tax returns as well as any other information concerning such
guarantors as may be reasonably requested by the Mortgagee or as is specifically
provided for in paragraphs (46), (47), and (48) hereinafter set forth.

            16. That the Owner hereby assigns to the Mortgagee, as further
security for the payment of the indebtedness secured hereby, the rents, issues
and profits of the premises, together with all leases and other documents
evidencing such rents, issues and profits now or hereafter in effect and the
Owner's interest in any and all deposits held as security under said leases, and
shall, upon demand, deliver to the Mortgagee an executed counterpart of each
such lease or other document. Nothing contained in the foregoing sentence shall
be construed to bind the Mortgagee to the performance of any of the covenants,
conditions or provisions contained in any such lease or other document or
otherwise to impose any obligation on the Mortgage (including, without
limitation, any liability under the covenant of quiet enjoyment contained in any
lease in the event that any tenant shall have been joined as a party defendant
in any action to foreclose the Mortgage and shall have been barred and
foreclosed thereby of all right, title and interest and equity of redemption in
the Premises), except that the Mortgagee shall be accountable for money actually
received pursuant to such assignment. The Owner hereby further grants to the
Mortgagee the right (i) to enter upon and take possession of the Premises for
the purpose of collecting the said rents, issues and profits, (ii) to dispossess
by summary proceedings or otherwise any tenant defaulting in the payment thereof
to the Mortgagee, (iii) to let the Premises, or any part thereof, and (iv) to
apply said rents, issues and profits, after payment of all necessary charges and
expenses, on account of the indebtedness secured hereby. Such assignment and
grant shall continue in effect until the Indebtedness and all other obligations
secured by the Mortgage are paid, the execution of this Mortgage constituting
and evidencing the irrevocable consent of the Owner to the entry upon and taking
possession of the Premises by the Mortgagee pursuant to such grant, whether
foreclosure has been instituted or not, and without applying for a receiver. The
Mortgagee, however, hereby waives the right to enter upon and take possession of
the Premises for the purpose of collecting said rents, issues and profits, and
the Owner shall be entitled to collect and receive the same until the occurrence
of an Event of Default. The Owner agrees to use said rents, issues and profits
in payment of principal and interest due or becoming due on the Mortgage and in
payment of taxes, assessments, water rates, sewer rents and carrying charges
and/or other expenses becoming due against the Premises. Such rights of the
Owner to collect and receive said rents, issues and profits may be revoked by
the Mortgagee upon any such default by the Owner by giving not less than five
(5) days written notice of such revocation, served personally upon or sent by
registered or certified mail to the Owner. The Owner hereby agrees to execute
and deliver to the Mortgagee such additional documents as the Mortgagee shall
request in order to further evidence the foregoing assignment.

            17. That, in the event of any default under the Mortgage, the Owner
will pay monthly in advance to the Mortgagee, on its entry into possession
pursuant to Paragraph 16 hereof, or to any receiver appointed to collect said
rents, issues and profits, the fair and reasonable rental value for the use and
occupation of the Premises or of such part thereof as may be in the possession
of the Owner (or any party deemed affiliated with the Owner), and upon default
in any such payment, will vacate and


                                       10
<PAGE>

surrender possession of the Premises or such part thereof, as the case may be,
to the Mortgagee or to such receiver and, in default thereof, may be evicted by
summary proceedings.

            18. (a) That the Owner has no right or power, as against the
Mortgagee without its prior written consent, to cancel, abridge or otherwise
modify the leases or subleases of or affecting Premises or any part thereof, or
any of the terms, provisions or covenants thereof, so as to diminish Mortgagee's
security in the Premises, or to accept prepayments of installments of rent to
become due thereunder, and shall not do so without such consent. This agreement,
insofar as it affects any lease or sublease which is not primarily for the
residential purposes of the owner of the leasehold estate and which, at the date
hereof, has an unexpired term of not less than five (5) years, is made with
reference to Section 291-f of the New York Real Property Law.

                  The Owner shall furnish to the Mortgagee, within thirty (30)
days after a request by the Mortgagee, a written statement of the respective
leases on any portion of the Premises, the space occupied and the rentals
payable thereunder.

                  All leases shall be subordinate to this Mortgage, and the
Mortgagee shall not be bound by any payment of rent or additional rent for more
than one month in advance, except prepayments in the nature of security for the
performance by the Lessee of its obligations under the Lease. In addition, the
following requirements shall apply to every non-residential Lease: (i) each
Lease shall be executed substantially in the form submitted to and approved by
Mortgagee prior to the execution thereof, which approval shall not be
unreasonably withheld or delayed, (ii) to the extent not so provided by
applicable law, each lease shall provide that in the event of the enforcement by
Mortgagee of any of the remedies provided for by law or by this Mortgage, the
Lessee thereunder will, on request of any person succeeding to the interest of
the Owner as a result of such enforcement, automatically become the lessee of
said successor in interest, without any change in the terms or other provision
of such Lease, provided, however, that the Mortgagee shall not be bound by any
amendment or modification of the Lease made without the consent of the Mortgagee
or such successor in interest or the payment of any rent for more than one month
in advance. Each Lease shall also provide that, upon request by said successor
in interest, such Lessee shall execute and deliver an instrument or instruments
confirming such attornment.

                  (b) That the Owner shall not enter into a lease of all or
substantially all of the Premises without the express prior consent of the
Mortgagee. If the Mortgagee shall consent to any such lease, then (i) such lease
shall expressly provide that the leasehold estate created thereby shall be
subject and subordinate to the leasehold estates of subtenants created by
existing subleases, notwithstanding any clause in any such sublease purporting
to subordinate such sublease and the rights of the subtenant thereunder to
ground or underlying leases, (ii) such lease shall require that each sublease
thereafter made and each renewal of any existing sublease shall provide that,
(A) in the event of the termination of the underlying lease, the sublease shall
not terminate or be terminable by the subtenant; (B) in the event of any action
for the foreclosure of the Mortgage, the sublease shall not terminate or be
terminable by the subtenant by reason of the termination of the underlying lease
unless a subtenant is specifically named in and joined in any such action and
unless a judgment is obtained therein against the subtenant; and (C) in the
event that the underlying lease is terminated as aforesaid, the subtenant shall


                                       11
<PAGE>

attorn to the lessor under the underlying lease or to the purchaser at the sale
of the Premises on such foreclosure, as the case may be, and (iii) the lessee in
such lease shall agree, and be authorized by the Owner, to direct and require
the subtenants and other occupants of space in the Premises to pay to the
Mortgagee on its entry into possession pursuant to Paragraph 16 hereof, or to a
receiver appointed to collect the rents, issues and profits of the Premises, the
rents payable by them under the terms of their subleases or occupancy agreements
upon being notified by the Mortgagee of any default under the Mortgage and of
the Mortgagee's entry into possession of the Premises, or of the appointment of
any such receiver, with the same force and with like effect as if said lease had
not been entered into and the Owner were entitled to receive the said space
rents directly.

            The Owner shall upon ten (10) days prior written notice from
Mortgagee furnish to Mortgagee copies of all leases affecting the Premises.

            19. That upon notice and demand, the Owner shall, from time to time,
execute, acknowledge and deliver or cause to be executed, acknowledged and
delivered to the Mortgagee, in form satisfactory to the Mortgagee one or more
separate assignments (confirmatory of the general assignment provided in
Paragraph 16 hereof) of the lessor's interest in any lease or sublease now or
hereafter affecting the whole or any part of the Premises, or one or more
agreements pursuant to Section 291-f of the New York Real Property Law,
restricting the Owner's right or power, as against the Mortgagee, without its
consent, to cancel, abridge or otherwise modify, or accept prepayments of
installments of rent to become due under, any lease or sublease hereafter in
existence which is of the character described in the second sentence of
Paragraph 18(a) hereof. The Owner shall pay to the Mortgagee the expenses
incurred by the Mortgagee in connection with the preparation and recording of
any such assignment or agreement. With respect to any lease referred to in
Paragraph 18 (b) hereof, or which at any time is covered by any such agreement
or any such assignment of lessor's interest in such lease, the Owner will (i)
fulfill or perform each and every condition and covenant of the same to be
fulfilled or performed by the lessor thereunder, (ii) give prompt notice to the
Mortgagee of any notices of default by the lessee thereunder received by the
Owner, together with a complete copy of any such notice, and (iii) enforce,
short of termination thereof, the performance or observance of each and every
covenant and condition thereof by the lessee thereunder to be performed or
observed.

            20. (a) That the whole or said principal sum and interest shall
become due, at the option of the Mortgagee, upon the occurrence of any of the
following events, unless the same are cured within the applicable grace periods,
if any, provided therefor:

                        (i) after default in the payment of any installment of
principal or interest for ten (10) days; or

                        (ii) after default in the payment of any tax, water
rate, sewer rent, assessment or vault tax or license fee or other charge, levy
or imposition against or affecting any part of the Premises prior to the date
penalties accrue for failure to pay said charge, it being understood and agreed
that an assessment which has been made payable in installments at the
application of the Owner or any lessee of the Premises shall, for the purposes
of this clause, be deemed due and payable prior to the time of installment
becoming a lien on the mortgaged premises; or if the Owner fails to furnish the
Mortgagee with receipted tax bills or other reasonable proof of payment of the


                                       12
<PAGE>

aforesaid items by no later than the dates on which such items must be paid so
as not to constitute a default hereunder; or

                        (iii) after default, after notice and demand, either in
assigning and delivering the policies of insurance herein described or referred
to, or in reimbursing the Mortgagee for premiums paid on such insurance, as
hereinbefore provided; or

                        (iv) upon the actual or threatened waste, removal,
demolition or material alternation of any building or other property on the
Premises, except as permitted by Paragraph 3; or

                        (v) upon assignment by the Owner of the whole or any
part of the rents, issues or profits arising from the Premises to any person or
entity without the prior written consent of the Mortgagee or the lease by Owner
of all or substantially all of the Premises without the prior written consent of
Mortgagee; or

                        (vi) if the buildings on the Premises are not maintained
in reasonably good repair; or

                        (vii) after failure to comply with any requirement or
order or notice of violation of law or ordinance issued by any governmental
department claiming jurisdiction over the Premises within the time period
provided in said order, notice or violation or if no such time periods is set
forth in same then within two (2) months from the issuance thereof or such
longer reasonable time period if Owner promptly commenced and diligently
proceeds to cure same; or

                        (viii) the refusal, on application of the Owner or the
Mortgagee, by two or more fire insurance companies lawfully doing business in
the State of New York to issue policies insuring the buildings on the Premises;
or

                        (ix) the passage of any law deducting from the value of
real property for the purposes of taxation any lien thereon, or changing in any
way the taxation of mortgages or debts secured thereby for State or local
purposes, or the manner of collecting such taxes and imposing a tax, either
directly or indirectly, on the Mortgage or the debt secured hereby, unless such
law shall permit the Owner to pay, and the Owner pays such tax or taxes within
the thirty (30) day period following notice to the Owner of such law; or

                        (x) the failure by the Owner to make payment of any
other sums required to be paid hereunder within the period required by any
specific provision of the Mortgage, or, if no such period is so provided, within
ten (10) days after written notice thereof shall have been given by the
Mortgagee; or

                        (xi) the failure by the Owner to comply with any other
covenants or conditions contained in the Mortgage (except with respect to the
failure to pay money), which failure shall continue unremedied for the period
within which performance is required to be made by any specific provision of the
Mortgage, or, if no such period is so provided, for a period of ten (10) days
after written notice thereof shall have been given by the Mortgagee or, with
respect to any such default which shall be of such nature that it cannot
reasonably be cured or remedied within ten (10) days, if the Owner shall not
promptly commence within such ten (10) days and thereafter exercise due
diligence and continuous effort to remedy the same; or


                                       13
<PAGE>

                        (xii) the Owner or any guarantor of the indebtedness
secured by the Mortgage (the "Guarantor") shall: (a) commence a voluntary case
for relief as a debtor under the United States Bankruptcy Code or file a
petition to take advantage of any other present or future insolvency act or
other applicable law relating to bankruptcy, insolvency, reorganization or
relief of debtors; (b) make an assignment for the benefit of creditors; or (c)
consent to, or acquiesce in, the appointment of a receiver, liquidator, trustee,
custodian or other similar official of itself or of the whole or any substantial
part of its properties or assets; or

                        (xiii) without the consent or acquiescence of the Owner
or any Guarantor, (a) a court of competent jurisdiction shall enter an order,
judgment or decree appointing a receiver, liquidator, trustee, custodian or
other similar official of the Owner or Guarantor or of the whole or any
substantial part of the property of assets of the Owner or Guarantor, and such
order, judgment or decree shall not be vacated, or set aside, or stayed, within
thirty (30) days after the entry thereof, or (b) an involuntary case under said
Bankruptcy Code shall be commenced against the Owner or any Guarantor or a
petition shall be filed against either seeking similar relief under any other
present or future insolvency act or other applicable law relating to bankruptcy,
insolvency, reorganization or relief of debtors, and such case or petition shall
remain undismissed for thirty (30) days, or (c) under the provisions of any
other law for the relief or aid of debtors, any court of competent jurisdiction
shall assume custody or control of the Owner or any Guarantor or of the whole or
any substantial part of either's property or assets, and such custody or control
shall remain unterminated or unstayed for thirty (30) days; or

                        (xiv) a judgment for Fifty Thousand ($50,000.00) Dollars
or more shall be rendered against the Owner which shall not be discharged or
bonded pending appeal within thirty (30) days from the entry thereof; or

                        (xv) any representation, warranty or statement contained
in any writing delivered to the Mortgagee prior to or simultaneously with the
execution and delivery hereof shall prove to be incorrect or incomplete in any
material respect at the time when made; or

                        (xvi) without the prior written consent of the
Mortgagee, (a) the Premises or any part thereof or any interest therein shall be
sold, assigned, conveyed or otherwise transferred, except for residential leases
with a term of three (3) years or less and commercial leases with a term of less
than five (5) years, made in the ordinary course of business; or (b) if the
Premises or any part thereof shall be further encumbered for debt by the Owner;
or (c) if the Owner shall be a corporation, its voting stock shall be sold,
assigned, transferred, pledged, hypothecated or otherwise transferred by the
Owner or the present holders of a majority of the voting stock thereof as
security for debt or otherwise; or (d) if the Owner shall be a partnership,
joint venture, syndicate or other group, (collectively "partnership") all or any
portion of the record or beneficial interest of the Owner or the present holders
of a majority of such interest shall be sold, assigned, or transferred, pledged,
hypothecated or otherwise transferred by the Owner or such holder of a majority
of such interest as security for debt or otherwise. In determining whether to
grant or withhold its consent under this clause (xvi) the Mortgagee, without
limitation of its rights hereunder or otherwise, may not only consider the
character and financial ability of the proposed purchaser, transferee or
encumbrancer, but may also condition its


                                       14
<PAGE>

consent on a change in the terms of payment of the Note, including an increase
in the rate of interest payable thereunder. In any event, it is understood and
agreed that Mortgagee may arbitrarily withhold its consent under this or any
provision of the Mortgage; or

                        (xvii) after default by the Owner in any of the terms
and/or conditions of any other Mortgage affecting the Premises.

                        (xviii) after default by the Owner, any partner of the
Owner (if a partnership) any officer or shareholder of the Owner (if a
corporation) or any person or entity which shall control, be controlled by, or
be under common control with any of the foregoing, under any agreement with the
Mortgagee now hereafter in effect.

                  (b) The Mortgagee may upon the occurrence of any Event of
Default take such action, as it deems advisable to protect and enforce its
rights against the Owner and in and to the Premises and Building Equipment,
including, but not limited to, the following actions, each of which may be
pursued concurrently or otherwise, at which time and in such order as Mortgagee
may determine, in its sole discretion, without impairing or otherwise affecting
the other rights and remedies of the Mortgagee: (1) declare the entire unpaid
Indebtedness to be immediately due and payable; or (2) enter into or upon the
Premises, either personally or by its agents, nominees or attorneys and
dispossess the Owner and its agents and servants therefrom, and thereupon the
Mortgagee may (a) use, operate, manage, control, insure, maintain, repair,
restore and otherwise deal with all and every part of the Premises and conduct
the business at the Premises; (b) exercise all rights and powers of the Owner
with respect to the Premises, whether in the name of the Owner or otherwise, and
(c) apply the receipts from the Premises to the payment of the Indebtedness,
after deducting therefrom all expenses (including attorney's fees and broker's
fees) incurred in connection with the aforesaid operations or (3) institute
proceedings for the complete or partial foreclosure of this Mortgage in which
case the Premises may be sold for cash or upon credit in one or more parcels; or
(4) institute an action, suit or proceeding in equity for the specific
performance of any covenants, condition or any agreement contained herein or in
the Note or in the Assignment of Leases and Rents; or (5) recover judgment on
the Note either before, during or after any proceedings for the enforcement of
this Mortgage; and (6) apply for the appointment of a trustee, receiver,
liquidator or conservator of the Premises, or (7) pursue such other remedies as
the Mortgagee may have under applicable law.

            The purchase money proceeds or avails of any sale made under or by
virtue of the exercise of any of the rights of the Mortgagee, together with any
other sums which then may be held by the Mortgagee under this Mortgage, shall be
applied as follows: First: To the payment of the costs and expenses of any such
sale, including reasonable compensation to the Mortgagee, its agents and
counsel, and of any judicial proceedings wherein the same may be made, and of
all expenses, liabilities and advances made or incurred by the Mortgagee under
this Mortgage, together with interest as provided herein on all advances made by
the Mortgagee and all taxes or assessments, except any taxes, assessments or
other charges subject to which the Premises shall have been sold; Second: To the
payment of interest, delinquency and late charges remaining unpaid under the
Note; Third: To the payment of the entire outstanding principal sum of the Note;
Fourth: To the payment of any other sums required to be paid by the Owner
pursuant to any provision of this Mortgage, the Note or


                                       15
<PAGE>

the Assignment of the Leases and Rents; Fifth: The payment of the surplus, if
any, to whomsoever may be lawfully entitled to receive the same. The Mortgagee
and any receiver of the Premises, or any part thereof, shall be liable to
account for only those rents, issues and profits actually received by it.

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

            21. That any payment made in accordance with the terms of the
Mortgage by any person at any time liable for the payment of the whole or any
part of the sums now or hereafter secured by the Mortgage, or by any subsequent
owner of the Premises, or by any other person whose interest in the Premises
might be prejudiced in the event of a failure to make such payment, or by any
stockholder, officer or director of a corporation which at any time may be
liable for such payment or may own or have such an interest in the Premises,
shall be deemed, as between the Mortgagee and all persons who at any time may be
liable as aforesaid or may own the Premises, to have been on behalf of all such
persons.

            22. That any failure by the Mortgagee to insist upon the strict
performance of any of the terms and provisions hereof shall not be deemed to be
a waiver of any of the terms and provisions hereof, and the Mortgagee,
notwithstanding any such failure, shall have the right thereafter to insist upon
the strict performance by the Owner of any and all of the terms and provisions
of the Mortgage; that neither the Owner nor any other person now or hereafter
obligated for the payment of any sums now or hereafter secured by the Mortgage
shall be relieved of such obligation by reason of the failure of the Mortgagee
to comply with any request by the Owner, or by any other person so obligated, to
take action to foreclose the Mortgage or otherwise enforce any of the provisions
of the Mortgage or any obligations secured by the Mortgage, or by reason of the
release, regardless of consideration, of any Guarantor or of the whole or any
part of the security held for the indebtedness secured by the Mortgage, or by
reason of any agreement or stipulation between any subsequent owner or owners of
the Premises and the Mortgagee extending the time of payment or modifying the
term of the Mortgage without first having obtained the consent of the Owner or
such other person, and in the latter event, the Owner and all such other persons
shall continue to be liable to make such payments according to the terms of any
such agreement of extension or modification unless expressly released and
discharged in writing by the Mortgagee; that, regardless of consideration and
without the necessity for any notice to or consent by the holder of any
subordinate lien on the Premises, the Mortgagee may release the obligation of
anyone at any time liable for any of the indebtedness secured by the Mortgage or
any part of the security held for the indebtedness without, as to the security
or the remainder thereof, in any wise impairing or affecting the lien hereof or
the priority thereof over any subordinate encumbrance; and that the Mortgagee
may resort for the payment of the indebtedness secured hereby to any other
security therefore held by the Mortgagee in such order and manner as the
Mortgagee may elect.

            23. The Owner shall pay any and all taxes, charges, filing,
registration and recording fees, excises and levies imposed upon the Mortgagee
by reason of its ownership of


                                       16
<PAGE>

the Note or this Mortgage, the Assignment of Leases and Rents, or any security
instrument with respect to the Building Equipment or with respect to its
interest therein and any instrument of further assurance, other than income,
franchise and doing business taxes, and shall pay all stamp taxes and other
taxes required to be paid on the Note or the Mortgage. In the event the Owner
fails to make such payments within five (5) days after written notice thereof
from the Mortgagee, then the Mortgagee shall have the right, but shall not be
obligated, to pay the amounts due, and the Owner shall, on demand, reimburse the
Mortgagee for said amounts, together with interest thereon at the Delinquency
Rate from the date said amounts are so advanced until the same are paid to the
Mortgagee.

            24. That when and if the Owner and the Mortgagee shall respectively
become Debtor and Secured Party in any Uniform Commercial Code Financing
Statement affecting Building Equipment or other property referred to or
described herein, this Mortgage shall be deemed the Security Agreement as
defined in the Uniform Commercial Code of the State of New York and the remedies
for any violation of the covenants, terms and conditions of the agreements
contained shall be (a) as prescribed herein, (b) by general law, and (c) as to
such part of the security which is also reflected in said Financing Statement,
by the specific statutory consequences now or hereafter enacted and specified in
said Uniform Commercial Code, all at the Mortgagee's sole election. The filing
of such a Financial Statement in the record normally having to do with personal
property shall never be construed as in any way derogating from or impairing
this declaration and hereby stated intention of the parties hereto, that all
items of Building Equipment and other property used in connection with the
production of income from the Premises (tenant furniture only excepted) or
adapted for use therein or which are described or reflected in the Mortgage are,
and at all times and for all purposes and in all proceedings, both legal and
equitable, shall be, regarded as part of the real estate irrespective of whether
or not (a) any such item is physically attached to the improvements, (b) serial
numbers are used (herein or otherwise) for the better identification of certain
equipment, or (c) any such item is referred to or reflected in any such
Financing Statement so filed at any time. Similarly, the mention in any such
Financing Statement of (x) the rights in or the proceeds of any fire and/or
hazard insurance policy, (y) any award in eminent domain proceedings for a
taking or for loss of value, or (z) the debtor's interest as lessor in any
present or future lease or rights to income growing out of the use or occupancy
of the Premises, whether pursuant to a lease or otherwise, shall never be
construed as in any way altering any of the rights of the Mortgagee as
determined by this instrument or impugning the priority of the Mortgagee's lien
granted hereby or by any other recorded document, but such mention in the
Financing Statement is declared to be for the protection of the Mortgagee in the
event any court or judge shall at any time hold with respect to (x), (y) or (z)
that notice of the Mortgagee's priority of interest, to be effective against a
particular class of persons, including but not limited to the Federal government
and any subdivisions or entity of the Federal government, must be filed in the
Uniform Commercial Code records. Pursuant to Section 9-402(2)(e) of said
Uniform Commercial Code, the Owner hereby authorizes the Mortgagee, without the
signature of the Owner, to execute and file Financing Statements (or
continuations thereof) if the Mortgagee shall determine that such are necessary
or advisable in order to perfect or continue its security interest in any
fixtures, chattels or articles of personal property covered by the Mortgage, and
shall pay to the Mortgagee on demand any expenses incurred by the Mortgagee in
connection


                                       17
<PAGE>

with the preparation, execution and filing of such statements and any
continuation statements that may be filed by the Mortgagee.

            25. That the Owner will not at any time insist upon, or plead, or in
any manner whatever claim or take any stay or extension or moratorium law, any
exemption from execution or sale of the Premises or any part thereof, wherever
enacted, now or at any time hereafter in force, which may affect the covenants
and terms of performance of the Mortgage, nor claim, take or insist upon any
benefit or advantage of any law now or hereafter in force providing for the
valuation or appraisal of the Premises, or any part thereof, prior to any sale
or sales thereof which may be made pursuant to any provision herein, or pursuant
to the decree, judgment or order of any court of competent jurisdiction; nor,
after any such sale or sales, claim or exercise any right under any statute
heretofore or hereafter enacted to redeem the property so sold or any part
thereof, and the Owner, to the extent permitted by law, hereby expressly waives
all benefit or advantage of any such law or laws and covenants not to hinder,
delay or impede execution of any power herein granted or delegated to the
Mortgagee, but to suffer and permit the execution of every power as though no
such law or laws had been made or enacted. The Owner, for itself and all who may
claim under it, waives, to the extent that it lawfully may, all right to have
the Premises marshalled upon any foreclosure hereof.

            26. That if the Owner consists of more than one party, such parties
shall be jointly and severally liable under any and all obligations, covenants
and agreements of the Owner contained herein.

            27. That the clauses and covenants contained herein which are
construed by Section 254 of the New York Real Property Law shall be construed as
provided in that section, except as otherwise provided in Paragraph 2 hereof;
that 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 (or any other laws of the State of New
York, including Section 271 and 272 of the New York Real Property Law) and shall
not impair, modify, alter or defeat such rights, 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 Section 254; that the rights of the
Mortgagee arising under the clauses and covenants contained in the Mortgage
and/or herein shall be separate, distinct and cumulative, and none of them shall
be in exclusion of the others; that no act of the 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.

            28. That the execution of the Mortgage has been duly authorized by
the Board of Directors of the Owner, if a corporation.

            29. That the Owner will, in compliance with Section 13 of the New
York Lien Law, receive the advances secured hereby and will hold the right to
receive such advances as a trust fund to be applied first for the purpose of
paying the cost of improvement and will apply the same first to the payment of
the cost of improvement before using any part of the total of the same for any
other purpose.

            30. That wherever used in the Mortgage, unless the context clearly
indicates a contrary intent or unless otherwise


                                       18
<PAGE>

specifically provided herein, the word "lease" shall mean "tenancy, subtenancy,
lease or sublease", the word "Owner" shall mean "Owner and Owners" whenever the
sense of the Mortgage so requires, the word "Person" or "Parties" shall mean "an
individual, corporation, partnership or unincorporated association" , and the
word "Premises" shall include the real estate herein described and further
described on Exhibit A hereto, together with all improvements thereon,
including, without limitation, the Building Equipment, and to the extent the
context so requires, the condemnation awards and any other rights or property
interests at any time made subject to the lien of the mortgage by the terms
hereof (and/or, if necessary for the further protection of the Mortgagee, any
part thereof). If there be more than one Owner, the covenants and warranties of
the Mortgage shall be joint and several.

            31. That the Mortgage cannot be changed or terminated orally.

            32. That the Owner: (a) shall keep the Mortgage a valid mortgage
lien upon the Premises; (b) shall not at any time create or allow to accrue or
exist any debt, lien or charge which would be prior to or on a parity with the
lien of the Mortgage upon any part of the Premises; and (c) shall not cause or
permit the lien of the Mortgage to be diminished or impaired in any way. Within
ten (10) days after notification of the filing of any lien on the Premises, the
Owner shall release or discharge the same of record by payment, bonding or
otherwise.

            33. That, notwithstanding the grace period set forth in Article
20(a)(i) hereof, the Mortgagee may collect a late charge, not to exceed four
(4) cents for each dollar of each installment of principal, and/or interest
and/or other sum which is not made within ten (10) days of when due, or, if
applicable, which cannot be debited from its account due to insufficient balance
on its debit date.

            34. That the Owner shall pay all fees and charges incurred in the
preparation, execution and enforcement of this Mortgage and granting of consent
herein, including, without limitation, the fees and disbursements of the
Mortgagee's attorneys, charges for appraisals, fees and expenses relating to
examination of title, title insurance premiums, surveys and mortgage recording
documentary, transfer or other similar taxes and revenue stamps, and in default
thereof the Mortgagee may pay the same and the Owner will repay the same with
interest thereon at the rate per annum specified in Paragraph 4 hereof and the
same shall be added to the indebtedness secured hereby and be secured by the
Mortgage.

            35. All payments, including escrow and prior late charges, owing
under this Mortgage and the Note shall be paid to the Mortgagee on the date due
and payable by wire transfer or the deposit or credit of other immediately
available funds to the Mortgagee at 275 Broad Hollow Road, Melville, New York
11747, Attention: Loan Servicing Department, or to such other address as the
Mortgagee may direct in writing.

            36. That, at the option of the Mortgagee, the obligations of the
Owner to pay the insurance premiums, taxes, and assessments, water and sewer
charges assessed against the Premises shall be discharged as follows: on the
first day of every month the Owner shall deposit with the Mortgagee a sum equal
to one-twelfth (1/12) of the annual amount of insurance premiums, taxes,
assessments, water and sewer charges assessed against the Premises (as estimated
from time to time by the Mortgagee). The sums to be deposited as aforesaid and
any


                                       19
<PAGE>

additional sums deposited as hereinafter provided shall be held by the Mortgagee
not as a trust fund, but are to be applied by the Mortgagee in payment of
insurance premiums, taxes, assessments, water charges and sewer rents, if,
whether now or hereafter levied or assessed, on the lands and premises covered
hereby on the dates specified by law or otherwise for the payment thereof. If at
any time the Mortgagee determines that the balance of said fund in the hands of
the Mortgagee, thirty (30) days before the due date of any such item, will be
insufficient to pay any item when due, the Owner will, upon demand, make a
further deposit of money with the Mortgagee to cover the deficiency in said fund
to meet said item. If at any time there shall be a surplus in said fund, it
shall be applied by the Mortgagee in the reduction of the next installment for
the payment of taxes as hereinabove provided. The Owner shall not be entitled to
any interest upon said fund. If the Mortgage shall be assigned, all funds on
deposit may be transferred by the Mortgagee to the assignee. If the Premises be
conveyed subject to the Mortgage, all funds on deposit shall be held by the
Mortgagee to the credit of the new owner for the payment of insurance premiums,
taxes, water and sewer charges and assessments. If at any time a tender or offer
of payment of the mortgage debt shall be made, whether by a party having a legal
right to do so or not, the Mortgagee or the then holder of the Mortgage in
receiving such payment shall apply any balance of said fund toward the payment
of interest and the remainder, if any, toward the reduction of principal. Upon
the application of the balance of the fund in said account as hereinabove
provided, there shall be no further obligation on the part of the Mortgagee with
respect to said fund. It is further understood and agreed that in case of
failure by the Owner to make any of the foregoing deposits or additional
deposits, as and when required by the foregoing provisions of this Paragraph,
the whole principal sum then secured by the Mortgage and all interest accrued
thereon shall, at the option of the Mortgagee, immediately become due and
payable. If the Owner defaults under the Mortgage, all sums held under this
Paragraph can be applied to the debt secured by the Mortgage.

            37. (a) The Owner represents and warrants that, to the best of
Owner's knowledge, after due inquiry and investigation, the Premises is not now
and has not ever been used to generate, manufacture, refine, transport, treat,
store, handle, dispose, transfer, produce, process or in any manner deal with,
Hazardous Materials (as hereinafter defined), and that no Hazardous Materials
have ever been installed, placed, or in any manner dealt with on the Premises,
and that no owner of the Premises or any tenant, subtenant, occupant, prior
tenant, prior subtenant or prior occupant has received any notice or advice from
any governmental agency or any tenant, subtenant or occupant with regard to
Hazardous Materials on, from or affecting the Premises. The Owner covenants that
the Premises shall be kept free of Hazardous Materials, and shall not be used to
generate, manufacture, refine, transport, treat, store, handle, dispose,
transfer, produce, process or in any manner deal with, Hazardous Materials, and
the Owner shall not cause or permit, as a result of any intentional or
unintentional act or omission on the part of the Owner or any tenant or
subtenant or occupant, the installation of Hazardous Materials in the Premises
or onto any other property or suffer the presence of Hazardous Materials on the
Premises. The Owner shall agree to comply with and ensure compliance by all
tenants, subtenants and occupants with all applicable federal, state and local
laws, ordinances, rules and regulations, with respect to Hazardous Materials,
and shall keep the Premises free and clear of any liens imposed pursuant to such
laws, ordinances, rules or regulations. In the event that the Owner received or
receives any notice or advice from any


                                       20
<PAGE>

governmental agency, any tenant, subtenant or occupant with regard to Hazardous
Materials on, from or affecting the Premises, the Owner shall agree to
immediately notify the Mortgagee. The Owner shall conduct and complete all
investigations, studies, sampling, and testing, and all remedial, removal, and
other actions necessary to clean up and remove all Hazardous Materials, on, from
or affecting the Premises in accordance with all applicable federal, state, and
local laws, ordinances, rules, regulations, and policies and to the satisfaction
of the Mortgagee. For these purposes, "Hazardous Materials" shall include,
without limitation, any flammable explosives, gasoline, petroleum products,
polychlorinated biphenyls, radioactive materials, hazardous materials, hazardous
wastes, hazardous or toxic substances, or related or similar materials, asbestos
or any materials containing asbestos, or any other substance or material as
defined by any federal, state or local environmental law, ordinance, rules, or
regulation including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section
9601, et seq.), the Hazardous Materials Transportation Act, as amended (49
U.S.C. Section 1801, et seq.), the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Section 6901, et seq.), and in the regulations adopted and
publications promulgated pursuant thereto. These obligations and liabilities of
the owner shall survive any foreclosure involving the Premises or the delivery
of a deed in lieu of foreclosure.

                  (b) The Owner shall protect, indemnify and save harmless the
Mortgagee from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including without limitation
reasonable attorney's fees and expenses), imposed upon or incurred by or
asserted against the Mortgagee by reason of (i) the presence, disposal, escape,
seepage leakage, spillage, discharge, emission, release, or threatened release
of any Hazardous Materials on, from or affecting the Premises or any other
property; (ii) any personal injury (including wrongful death) or property damage
(real or personal) arising out of or related to such Hazardous Materials; (iii)
any lawsuit brought or threatened, settlement reached, or government order
relating to such Hazardous Materials; or (iv) any violation of laws, orders,
regulations, requirements, or demands of government authorities, or any policies
or requirements of the Mortgagee which are based upon or in any related to such
Hazardous Materials including, without limitation, attorney or consultant fees,
investigation and laboratory fees, court costs and litigation expenses.

                  (c) To enforce Owner's obligations under this section, the
Mortgagee may conduct or cause to be conducted future environmental audits and
tests of the Premises from time to time as it deems necessary in its sole
discretion. The Owner shall pay the cost of such audits or tests. Should the
Mortgagee in its sole discretion believe there to be a use of, or a condition
existing on, the Premises which would violate applicable federal, state or local
laws, or which would constitute a dangerous, unhealthy or noxious use thereof or
condition thereon, or which would give rise to potential liability for hazardous
substances, the Mortgagee may, but shall not be obligated to, perform or cause
to be performed any remedial action, including but not limited to removal and
clean-up, which the Mortgagee in its sole discretion believes necessary under
the circumstances. The Owner shall reimburse the Mortgagee for any such expenses
incurred, regardless of whether the Owner would have ultimately been responsible
for such costs under applicable law.


                                       21
<PAGE>

            38. That the Owner covenants and agrees that if at any time the
Owner shall make a payment to the Mortgagee for interest, principal, escrow
deposits under Paragraph 36, or any other charges for fees due under this
Mortgage, on either a date later than such item's due date or in an amount less
than that required hereunder, the Mortgagee shall have the right to apply such
payment, when received, toward the discharge of the aforesaid items, in such
proportions and priorities as the Mortgagee, in its sole discretion, may elect,
without waiver of its rights hereunder.

            39. That, notwithstanding anything to the contrary contained herein,
in no event shall the total of all charges payable under the Note and the
Mortgage which are or could be held to be in the nature of interest exceed the
maximum rate permitted to be charged under applicable law. If the Mortgagee
receives any payment which is or would be in excess of that permitted to be
charged under any applicable usury law, such payment shall have been, and shall
be deemed to have been made in error and shall automatically be applied to
reduce the principal balance outstanding on the Note.

            40. (a) The Owner covenants and agrees to pay or cause to be paid
all taxes, filing fees and other charges (collectively, the "Article 31-B
Expenses") imposed or payable under the provisions of Article 31-B of the New
York Gains Tax Law (the "Gains Tax Law"), in connection with any transfer of the
Premises by the Owner or the Mortgagee, the making or satisfaction of this
Mortgage, the taking of any action permitted to be taken hereunder by the
Mortgagee including, without limitation, foreclosure, the granting of a deed or
assignment in lieu of foreclosure or the appointment of a receiver, or any
transfer pursuant to any sale of the Premises on a foreclosure, and hereby
covenants and agrees to execute and file all required forms, applications,
affidavits and other documents or instruments required pursuant to the
provisions of the Gains Tax Law and to submit fully executed copies of same to
the Mortgagee upon request. The Owner hereby irrevocably constitutes and
appoints the mortgagee as the Owner's attorney-in-fact to execute and file any
instrument which the Mortgagee may deem necessary or appropriate in connection
with any Article 31-B Expenses or matters relating to the Gains Tax Law.

                  (b) The Owner shall, from time to time, within fifteen (15)
days after request by the Mortgagee but no more than once each year except after
an event of default, furnish to the Mortgagee, a statement (which may be relied
upon by any person) setting forth in detail satisfactory to the Mortgagee any
changes to the Owner's "original purchase price (as such term is defined in the
Gains Tax Law) in the Premises.

                  (c) The Owner shall indemnify and hold the Mortgagee harmless
and defend it against any loss or liability, cost or expense (including, without
limitation, attorneys' fees and disbursements) and all claims, actions,
procedures and suits arising out of, or incurred in connection with, the
Mortgagor's failure promptly to comply with and perform its covenants and
agreements contained in this paragraph 40. Anything herein, in the Note, the
Mortgage or in the Assignment of Leases and Rent to the contrary
notwithstanding, the obligations of Owner under this Paragraph 40 shall be the
personal obligations of Owner, whether or not Owner is personally obligated to
pay the Indebtedness and notwithstanding the provisions of Paragraph 39 with the
same force and effect as though each of them had personally executed and
delivered this Mortgage.


                                       22
<PAGE>

                  (d) The provisions of this Paragraph 40 shall survive any sale
of the Premises on a foreclosure of this Mortgage or by deed in lieu of
foreclosure.

            41. The Owner shall have the privilege to prepay all said principal
sum in accordance with the prepayment provisions contained in the Note of even
date herewith.

            42. (a) All notices hereunder shall be in writing and shall be
deemed to have been sufficiently given or served for all purposes when delivered
in person or sent by certified mail, return receipt requested, to any party
hereto at its address above stated or at such other address of which it shall
have notified the party giving such notice in writing as aforesaid.

                  (b) The provisions and covenants of this Mortgage shall be
binding upon the Owner and shall inure to the benefit of the Mortgagee,
subsequent holder of this Mortgage and their respective successors and assigns.

                  (c) The Owner shall do, execute, acknowledge and deliver, at
the sole cost and expense of the Owner, all and every such further acts, deeds,
conveyances, mortgages, assignments, estoppel certificates, notices of
assignment, transfers and assurances as the Mortgagee may reasonably require
from time to time in order to better assure, convey, assign, transfer and
confirm unto the Mortgagee, the rights now or hereafter intended to be granted
to the Mortgagee under this Mortgage, any other instrument executed in
connection with this Mortgage or any other instrument under which the Owner may
be or may hereafter become bound to convey, mortgage or assign to the Mortgagee
for carrying out the intention of facilitating the performance of the terms of
this Mortgage. The Owner hereby appoints the Mortgagee its attorney-in-fact to
execute, acknowledge and deliver for and in the name of the Owner any and all of
the instruments mentioned in this Article 40(c) and this power, being coupled
with an interest, shall be irrevocable as long as any part of the Indebtedness
remains unpaid.

                  (d) The Owner waives the right to a trial by jury or the right
to assert any set-offs or counterclaims in any action brought by the Mortgagee
to foreclosure the Mortgage. This Agreement supersedes any prior oral
communications between the parties and any such oral communications are deemed
merged into this Mortgage.

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

                  (f) This Mortgage cannot be altered, amended, modified or
discharged orally and no executory agreement shall be effective to modify or
discharge it in whole or in part, unless it is in writing and signed by the
party against whom enforcement of the modification, alteration, amendment or
discharge is sought.

            This Mortgage, and all the covenants, terms and provisions herein
set forth, shall run with the land and bind the Owner, the heirs, executors,
administrators, personal and legal representative, successors and assigns of the
Owner and all subsequent encumbrances, tenants and subtenants of the Premises,
and shall inure to the benefit of the Mortgagee and the successors and assigns
of the Mortgagee.


                                       23
<PAGE>

            43. This Mortgage does not cover real property principally improved
or to be improved by one or more structures containing in the aggregate not more
than six residential dwelling units, each having their own separate cooking
facilities.

            44. Owner agrees to maintain all tenant security deposits affecting
the premises in a tenant security account and also maintain a deposit or
operating account at a branch of the Mortgagee designated by the Mortgagee
during the entire life of the loan.

            45. All payments shall be made by automatic debit from an account
maintained at the bank in which borrower shall maintain a balance sufficient to
pay any and all monthly payments. The interest on the Note shall be paid monthly
in arrears, computed on the basis of a 360 day year and actual number of days
elapsed.

            46. Borrower and/or Guarantors agree to furnish audited fiscal
Financial Statements and 10-K (if public company) reports periodically and
within one hundred twenty (120) days of their respective fiscal end of years.

            47. Guarantors agree to furnish copies of quarterly Financial
Statements to North Fork Bank within ninety (90) days of Guarantors fiscal end
of quarter and agree not to further pledge and/or encumber inventory and/or
receivables located at the mortgage premises without the consent of North Fork
Bank.

            IN WITNESS WHEREOF, this Mortgage has been duly executed by the
parties hereto as of the day and year first above written.


                                           WESTERN BEEF PROPERTIES INC.

                                           By: /s/ Frank Castellana V.P.
                                              ---------------------------------
                                               FRANK CASTELLANA,               
                                               Executive Vice-President


STATE OF NEW YORK   )
                    )   SS.:
COUNTY OF SUFFOLK   )

            On this 2 day of December, 1998, before me personally came FRANK
CASTELLANA to me known, who, being by me duly sworn, did depose and say that he
resides at 47-05 Metropolitan Avenue, Ridgewood, New York; that he is the
Executive Vice-President of WESTERN BEEF PROPERTIES INC. the corporation
described in and which executed the foregoing instrument; and that he signed his
name to said instrument by order of the Board of Directors of said corporation.


                                               /s/ James W. Burns
                                              ---------------------------------
                                              Notary Public

                                          JAMES W. BURNS
                                    Notary Public State of New York
                                            No. 4524231
                                      Qualified in Nassau County
                                   Commission Expires June 30, 2000


                                       24
<PAGE>

                                  SCHEDULE "A"

ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough of Bronx, County of Bronx, City of New York, State of New York, bounded
and described as follows:

BEGINNING at the corner formed by the intersection of the northerly side of East
165th Street with the easterly side of Union Avenue;

THENCE northerly along said easterly side of Union Avenue, 378.10 feet;

THENCE easterly along a line which forms an exterior angle of 89 degrees 48
minutes 18 seconds with the last mentioned course, 89.63 feet;

THENCE northerly along a line which forms an exterior angle of 90 degrees 19
minutes 37 seconds with the last mentioned course, 49.69 feet;

THENCE easterly along a line which forms an interior angle of 90 degrees 19
minutes 10 seconds with the last-mentioned course, 85 feet; 

THENCE southerly along a line which forms an interior angle of 89 degrees 44
minutes 10 seconds with the last mentioned course, 26.81 feet;

THENCE easterly along a line which forms an exterior angle of 90 degrees 27
minutes 32 seconds with the last mentioned course, 145.04 feet to the westerly
side of Prospect Avenue as legally opened;

THENCE southerly along said westerly side of Prospect Avenue, 243.53 feet;

THENCE westerly at right angles to said westerly side of Prospect Avenue, 144.77
feet;

THENCE southerly along a line which forms an exterior angle of 90 degrees 06
minutes 50 seconds with the last mentioned course, 10.67 feet;

THENCE westerly along a line which forms an interior angle of 90 degrees 06
minutes 50 seconds with the last mentioned course, 0.21 feet;

THENCE southerly at right angles to the last mentioned course, 39.34 feet;

THENCE westerly along a line which forms an interior angle of 90 degrees 52
minutes 15 seconds with the last mentioned course, 50 feet;

THENCE southerly along a line which forms an exterior angle of 90 degrees 52
minutes 15 seconds with the last mentioned course and part of the distance
through a party wall, 107.23 feet to the northerly side of East 165th Street;

THENCE westerly along said northerly side of East 165th Street, 135.00 feet to
the point or place of BEGINNING.

AS TO PARCEL A (BLOCK 2679 LOTS 1 AND 57):

ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough of Bronx, County of Bronx, City of New York, State of New York, bounded
and described as follows:

BEGINNING at a point on the northerly side of East 165th Street as legally
opened distant 20 feet easterly from the corner formed by the intersection of
said northerly side of East 165th Street with the easterly side of Union Avenue
as legally opened;

RUNNING THENCE northerly parallel with said easterly side of Union Avenue, 84.80
feet;

THENCE westerly parallel with said northerly side of East 165th Street, 20 feet
to said easterly side of Union Avenue;

THENCE northerly along said easterly side of Union Avenue, 293.30 feet;

THENCE easterly along a line which forms an exterior angle of 89 degrees 48
minutes 18 seconds with the last mentioned course, 89.63 feet;

THENCE northerly along a line which forms an exterior angle of 90 degrees 19
minutes 37 seconds with the last mentioned course, 49.69 feet;

THENCE easterly along a line which forms an interior angle of 90 degrees 19
minutes 37 seconds with the last mentioned course, 85 feet;

THENCE southerly along a line which forms an interior angles of 89 degrees 44
minutes 10 seconds with the last mentioned course, 103.30 feet;
<PAGE>

                             SCHEDULE "A" CONTINUED

THENCE easterly along a line which forms an exterior angle of 90 degrees 15
minutes 50 seconds with the last mentioned course, 144.43 feet to the westerly
side of Prospect Avenue as legally opened;

THENCE southerly along said westerly side of Prospect Avenue, 167.58 feet;

THENCE westerly at right angles to said westerly side of Prospect Avenue, 144.77
feet;

THENCE southerly along a line which forms an interior angle of 90 degrees 06
minutes 50 seconds with the last mentioned course, 10.67 feet;

THENCE westerly along a line which forms an interior angle of 90 degrees 06
minutes 50 seconds with the last mentioned course, 0.21 feet;

THENCE southerly at right angles to the last mentioned course, 39.34 feet;

THENCE westerly along a line which forms an exterior angle of 90 degrees 52
minutes 15 seconds with the last mentioned course, 50 feet;

THENCE southerly along a line which forms an interior angle of 90 degrees 52
minutes 15 seconds with the last mentioned course and part of the distance
through a party wall, 107.23 feet to the northerly side of East 165th Street;

THENCE westerly along said northerly side of East 165th Street, 105 feet to the
point or place of BEGINNING.

AS TO PARCEL B (BLOCK 2679 LOT 63):

ALL that certain lot, piece or parcel of land, situate, lying and being in the
Borough of Bronx, County of Bronx, City and State of New York known and
designated as Lot 63 in Block 2679, Section 10 on the Tax Map of the City of New
York for the Borough of Bronx, as said Map was on 4/28/82. 

AS TO PARCEL C (BLOCK 2679 LOT 35):

ALL that certain lot, piece or parcel of land, situate, lying and being in the
Borough of Bronx, County of Bronx, City and State of New York known and
designated as Lot 35 in Block 2679, Section 10 on the Tax Map of the City of New
York for the Borough of Bronx, as said Map was on 8/3/76.

AS TO PARCEL D (BLOCK 2679 LOT 34):

All that certain plot, piece or parcel of land, situate, lying and being in the
Borough of Bronx, City and State of New York, bounded and described as said Tax
Nap as on 7/25/72 as Section 10 Block 2679 Lot 34.
<PAGE>

                                   SCHEDULE B

                              ESTOPPEL CERTIFICATE

North Fork Bank
275 Broad Hollow Road
Melville, New York 11747

     Re:    Lease dated _______________________ (the "Lease") between
            ____________________________________(the "Landlord") and
            ____________________________________(the "Tenant")
            Relating to premises at ____________________________________
            (the "Property").

            Proposed Mortgage between __________________________________
            as mortgagor and North Fork Bank as mortgagee
            (the "Mortgage").

Gentlemen:

                  The undersigned is Tenant under the Lease and, hereby
certifies to the mortgagee as follows:

                  a.    The Lease is unmodified and in full force and effect;

                  b.    Under the Lease, Tenant is presently obligated to pay
                        rent at the rate of $________________ per month. Rent is
                        paid through and including ____________________ 19  . No
                        rent has been or will be paid more than 30 days in
                        advance, and Tenant has no claim against the Landlord
                        for any deposits or other sums;

                  c.    No notice of default or termination of the Lease has
                        been served on Tenant under the terms of the Lease;

                  d.    To the best of Tenant's knowledge, neither it nor the
                        Landlord are in default in any way under the Lease. In
                        addition, Tenant certifies that no event has occurred
                        that with the passage of time or giving of notice would
                        constitute default under the Lease by either it or the
                        Landlord.

                  e.    There has not been filed by or against nor, to the best
                        of the knowledge and belief of Tenant, is there
                        threatened against or contemplated by Tenant, a petition
                        in bankruptcy, any assignment for the benefit of
                        creditors, or any partition seeking reorganization or
                        arrangement under the bankruptcy laws of the United
                        States or of any state thereof.

                  f.    The address for notices to be sent to Tenant is as set
                        forth in the Lease.

                  g.    Tenant has no right of first refusal, option or other
                        right to purchase the Property or any part thereof,
                        including, without limitation, the Premises.


                                       26
<PAGE>

                  h.    The Lease is subject and subordinate to the Mortgage.

                  i.    Tenant understands that Landlord intends to assign the
                        Lease to Lender and agrees that if Lender so requests
                        pursuant to such assignment, Tenant will pay all rents
                        and other charges due and payable under said Lease
                        directly to Lender.


                                          ____________________________________

                                          ____________________________________


                                       27
<PAGE>

                                                  Mortgage No.

                      -------------------------------------
                      WESTERN BEEF PROPERTIES, INC., f/k/a
                      EAST CENTRAL MEATS, INC.

                                       TO

                                 NORTH FORK BANK

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

                         MORTGAGE AND SECURITY AGREEMENT

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

                            The land affected by the
                           within instrument lies in:

1030 Union Ave.          XXXXXXXX   Block 2679   Lot    1  County   Bronx 
1057-1059 Prospect Ave.  XXXXXXXX   Block 2679   Lot   34  County   Bronx 
1053-1055 Prospect Ave.  XXXXXXXX   Block 2679   Lot   35  County   Bronx 
815-823 E. 165th Street  XXXXXXXX   Block 2679   Lot   57  County   Bronx 
1020 Union Avenue        XXXXXXXX   Block 2679   Lot   63  County   Bronx 
                                                                          

                              RECORD AND RETURN TO:

                       BENJAMIN J. KLEMANOWICZ, JR., P.C.
                         1001 Franklin Avenue, Suite 311
                           Garden City, New York 11530


                                       28
<PAGE>

                                  MORTGAGE NOTE
$ 1,700,000.00                                                  December 2, 1998

      FOR VALUE RECEIVED, WESTERN BEEF PROPERTIES INC., a New York corporation
with an office at 47-05 Metropolitan Avenue, Ridgewood, New York 11383 (the
"Maker") promises to pay to NORTH FORK BANK, a New York banking corporation, or
order, at 275 Broad Hollow Road, Melville, New York 11747, Attention: Loan
Servicing Department (the "Payee"), or at such other place as may be designated
in writing by the holder of this Note, the principal sum of ONE MILLION SEVEN
HUNDRED ($1,700,000.00) DOLLARS with interest thereon from the date hereof at
the per annum rate equal to North Fork Bank's Prime Rate, as same may adjust
from time to time, in monthly interest only payments, commencing on the 4th day
of January, 1999, and continuing on the 4th day of each succeeding month
thereafter, until the 4th day of December, 2001, the Maturity Date, when any
unpaid balance, together with any interest as may then be due and owing, shall
be paid in full. Each payment when received by the holder thereof will be
applied to interest at the rate aforesaid then to principal until the Maturity
Date, namely, December 4, 2001 on which date all outstanding principal, together
with interest then due, shall be paid in their entirety.

      The Maker shall have full right to prepay this indebtedness, in whole or
in part, at any time, without penalty.

      Presentment for payment, notice of dishonor, protest and notice of protest
are hereby waived.

      This Note is secured by a mortgage made by the Maker to the Payee of even
date herewith (the "Mortgage"), on the premises known as 1030 Union Avenue,
Block 2679 Lot 1, a/k/a 1041 Prospect Avenue, Block 2679, Lot 34, 1053-1055
Prospect Avenue, Block 2679, Lot 35, East 165th Street Block 2679 Lot 57 and
1020 Union Avenue, Block 2679 Lot 63, Bronx, New York (the "Premises") and is
subject to the terms and provisions of the Mortgage, to which reference is made
for description of the events of default and the rights of acceleration of
maturity in the event of default.

      All notices hereunder shall be in writing and shall be deemed to have been
sufficiently given or served for all purposes when delivered in person or sent
by certified mail, return receipt requested, to any party hereto at its address
above stated or at such other address of which it shall have notified the party
given such notice in writing as aforesaid.

      The provisions and covenants of this Note shall be binding upon the Maker
and shall inure to the benefit of the Payee, any subsequent holder of this
Mortgage and their respective successors and assigns. Any privileges granted to
Maker shall inure to the benefit of any successors or assigns of the Mortgaged
premises.

      The Payee may collect a late charge, not to exceed four (4) cents for each
dollar of each installment of principal, and/or interest and and/or other sum
which is not made within ten (10) days of when due, or, if applicable, which
cannot be debited from its account due to insufficient balance on its debit
date.

      All payments shall be made by automatic debit from an account maintained
at the bank in which borrower shall maintain a balance sufficient to pay any and
all monthly payments. The interest on the Note shall be paid monthly in arrears,
computed on the basis of a 360 day year and actual number of days elapsed.

      This note may not be changed or terminated orally.


                                            WESTERN BEEF PROPERTIES INC.

                                            BY: /s/ Frank Castellana
                                                -----------------------------
                                                Frank Castellana, Exec. VP
<PAGE>

STATE OF NEW YORK
                   Ss:
COUNTY OF SUFFOLK

      On the 2nd day of December, 1998 before me personally came FRANK
CASTELLANA to me known, who, being by me duly sworn, did depose and say that he
resides at 47-05 Metropolitan Avenue, Ridgewood, New York 11383 That he is the
Executive Vice-President of WESTERN BEEF PROPERTIES INC. the corporation
described in and which executed the foregoing instrument; and that he signed his
name to said instrument by order of the Board of Directors of said corporation.


                                          /s/ James W. Burns
                                          ------------------------------
                                          Notary Public

                                                      JAMES W. BURNS            
                                                Notary Public State of New York 
                                                        No. 4524231             
                                                  Qualified in Nassau County    
                                               Commission Expires June 30, 2000