Exhibit 4.03
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                                    MORTGAGE
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                        THIS IS A FUTURE ADVANCE MORTGAGE

         THIS MORTGAGE is made on July 31, 2003, by and between NEMATRON
CORPORATION, a Michigan corporation, whose address is 5840 Interface Drive, Ann
Arbor, Michigan 48103 ("Grantor"), and NORTH COAST TECHNOLOGY INVESTORS, LP, a
Michigan Limited Partnership ("Lender"), whose address is 206 South Fifth
Avenue, Ann Arbor, Michigan 48104.

         IN CONSIDERATION of loans, advances or other financial accommodations
from Lender to Grantor, Grantor does hereby covenant, promise and agree to and
with the Lender, which covenants, promises and agreements shall, to the extent
permitted by law, be deemed to run with the land, as follows:

1.   Definitions.  The following  terms shall have the  following  meanings when
     used in this Mortgage:
a.   "Lease(s)" means and includes all leases and rental agreements,  written or
     unwritten,  now or hereafter demising the Property in whole or in any part,
     and all amendments, modifications,  extensions, renewals, substitutions and
     replacements for any of the foregoing.
b.   "Liabilities" means all loans, advances or other financial  accommodations,
     including  any renewals or extensions  thereof,  from the Lender to Grantor
     and any and all  liabilities  and  obligations  of any and  every  kind and
     nature  heretofore,  now or  hereafter  owing from  Grantor to the  Lender,
     however incurred or evidenced,  whether primary,  secondary,  contingent or
     otherwise,  whether  arising under the Note, and any and all extensions and
     renewals  thereof,  this  Mortgage,  under  any other  security  agreement,
     promissory note, guaranty, mortgage, lease, instrument, document, contract,
     letter of credit or similar agreement heretofore, now or hereafter executed
     by  Grantor  and  delivered  to the  Lender,  or by  oral  agreement  or by
     operation of law plus all interest, costs, expenses and reasonable attorney
     fees  which may be made or  incurred  by the  Lender  in the  disbursement,
     administration or collection of such liabilities and obligations and in the
     protection, maintenance and liquidation of the Property and the performance
     of the covenants and conditions of this Mortgage,  and ANY FUTURE ADVANCES,
     WITH INTEREST  THEREON,  made to Grantor by the Lender which are secured by
     this Mortgage pursuant to the provisions hereof.
c.   "Note"  means a  promissory  note from  Grantor to Lender in the  principal
     amount of $1,700,000 dated July 16, 2003, a promissory note from Grantor to
     Lender in the  principal  amount of $750,000  dated March 23,  2001;  and a
     promissory  note  from  Grantor  to  Lender  in  the  principal  amount  of
     $3,000,000 dated April 14, 2003.
d.   "Property" means the premises  situated in the State of Michigan  described
     in Exhibit "A" attached  hereto,  together with (1) all the estate,  title,
     interest  and rights of  Grantor in such  premises  and all  buildings  and
     improvements of every kind and description now or hereafter  placed on such
     premises,  (2) all of the rents, profits, and leases of such premises,  and
     the tenements, hereditaments,  easements, privileges and appurtenances with
     respect to such premises,  including heretofore or hereafter vacated alleys
     and streets abutting the premises,  and (3) all goods (including furniture,
     fixtures,  equipment and appliances),  accounts and general intangibles now
     owned or  hereafter  acquired by Grantor  and now or at any time  hereafter
     related to,  affixed  to,  attached  to,  placed upon or used in any way in
     connection  with  the  use,   occupancy  or  operation  of  such  premises,
     including, but not limited to, all lighting, heating, cooling, ventilating,
     air  conditioning,   plumbing,  sprinkling,  communicating  and  electrical
     systems,  and  machinery,  appliances,  fixtures and  equipment  pertaining
     thereto,   awnings,   stoves,   refrigerators,    dishwashers,   disposals,
     incinerators,  carpeting  and drapes,  and all other  furniture,  fixtures,
     equipment and appliances of every type, nature and description.

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2.   Grant of Mortgage.  Grantor does hereby  MORTGAGE and WARRANT to the Lender
     and its  successors  and  assigns  forever the  Property  and grants to the
     Lender and its successors and assigns a continuing security interest in the
     Property to secure the timely repayment and performance of the Liabilities,
     to have and to hold the Property, with all of the tenements, hereditaments,
     easements,   appurtenances  and  other  rights  and  privileges   thereunto
     belonging or in any manner now or hereafter  appertaining  thereto, for the
     use and benefit of the Lender upon the conditions hereinafter set forth.

3.   Future Advances. Upon request of Grantor, the Lender at the Lender's option
     prior to release of this  Mortgage,  may make  future  advances to Grantor.
     Such  future  advances,  with  interest  thereon,  shall be secured by this
     Mortgage when  evidenced by promissory  notes stating that they are secured
     hereby.

4.   Covenant to Pay  Liabilities.  Grantor  shall  promptly pay and perform all
     Liabilities  for which it is liable or  obligated  in  accordance  with the
     terms thereof. Grantor acknowledges and agrees that this Mortgage shall not
     be  extinguished  and the priority of this Mortgage shall not be altered in
     any way until a  Mortgage  discharge  has been  executed  by the Lender and
     recorded in the proper  county,  even if the  Liabilities  are reduced to a
     balance of zero at any time or from time to time.

5.   Covenant  of  Title.  At the time of the  execution  and  delivery  of this
     Mortgage,  Grantor is the owner of the Property in fee simple,  free of all
     easements,  liens and encumbrances  whatever (other than those easements of
     record as of the date  hereof,  the rights of the public in any part of the
     Property used or taken for road purposes,  a mortgage  dated  September 30,
     2002, in favor of Chelsea State Bank (the "First Mortgage"),  and any other
     mortgages,  liens or  encumbrances  to which the  Lender has  consented  in
     writing),  and will forever warrant and defend the same against any and all
     other claims whatever, and the lien created hereby is and will be kept as a
     valid lien upon the  Property and every part  thereof,  subject only to the
     foregoing exceptions.

6.   Maintenance  of Property.  Grantor shall at all times preserve and maintain
     the Property in good repair, working order and condition and shall make all
     necessary  improvements  and  repairs  so the value and  efficiency  of the
     Property is at all times maintained and Lender's  security is not impaired.
     Lender  shall have the right to enter upon and inspect the  Property at all
     reasonable times and if, upon inspection of the Property, Lender determines
     the Property or any part thereof requires repair,  maintenance,  or care of
     any kind which the Grantor,  after  notice from  Lender,  fails to perform,
     Lender may declare Grantor to be in default under this Mortgage and may, at
     Lender's  option,  by its agent,  enter,  repair and care for the Property,
     paying such amount therefor as the Lender deems appropriate,  and all costs
     incurred  by  Lender  shall  be added to the  Liabilities  secured  by this
     Mortgage.

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7.   Payment  of Taxes,  Liens  and  Insurance.  Grantor  shall pay when due all
     taxes,  assessments,  and governmental charges levied upon the Property and
     all claims, liens, encumbrances, levies, judgments and charges which are at
     any time levied,  recorded,  placed upon, or assessed against the Property,
     and shall  promptly  deliver to Lender  receipts  evidencing  such payment;
     provided,  however,  that  Grantor  will  not be  required  to pay any tax,
     assessment,  governmental charge, claim, lien, encumbrance,  levy, judgment
     or charge if Grantor is in good faith  contesting the validity  thereof and
     has provided for payment of the entire  amount of any such  contested  tax,
     assessment,  governmental charge, claim, lien, encumbrance,  levy, judgment
     or charge in a cash reserve  deposited  with Lender or in such other manner
     as is satisfactory to Lender.

8.   Insurance. Until the Liabilities are fully satisfied, Grantor will keep the
     Property  continuously  insured  against loss by fire,  windstorm and other
     hazards,  casualties and contingencies,  including  vandalism and malicious
     mischief,  in such  amounts and for such  periods as may be required by the
     Lender. Grantor shall pay promptly when due all premiums for such insurance
     and deliver to the Lender, upon request, receipts showing such payment. All
     insurance  shall be carried  in  companies  approved  by the Lender and the
     policies and renewals  thereof shall be held by, and pledged to, the Lender
     (unless the Lender shall direct or permit otherwise) as additional security
     hereunder, and shall have attached thereto a mortgagee clause acceptable to
     the Lender,  making all loss or losses under such  policies  payable to the
     Lender, its successors and assigns, as its or their interest may appear. In
     the event of loss or damage to the Property,  Grantor shall give  immediate
     notice in writing by mail to the Lender,  who may make proof of loss if not
     made promptly by Grantor.

     In the event the amount of the loss is an amount equal to $100,000 or less,
     the insurance  proceeds  shall be released to the Grantor,  upon request by
     the Grantor.  Grantor shall be obligated to use such proceeds to restore or
     repair the Property unless the Lender otherwise specifies in writing.

     In the  event  the  amount  of the  loss is  greater  than  $100,000,  each
     insurance  company concerned is hereby authorized and directed upon request
     by the  Lender,  to make  payment  for  such  loss,  to the  extent  of the
     Liabilities,  directly  to the Lender  instead of to Grantor and the Lender
     jointly.  Provided there has occurred no Event of Default hereunder nor any
     event  which  with  notice  or the passage of time or both would  become an
     Event of Default  hereunder  and  further  provided  that the Lender  shall
     reasonably  determine  that  sufficient  funds are available from insurance
     proceeds  and any funds to be  provided by Grantor to repair or restore the
     Property  within a reasonable  time and that such repair or  restoration is
     economically  feasible,  the Lender agrees, upon request by the Grantor, to
     apply the  insurance  proceeds  to repair or restore  the  Property,  after
     reimbursement  of all costs and expenses of the Lender in  collecting  such
     proceeds, subject to the following terms and conditions:

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a.   The Lender shall retain all insurance  proceeds in a  non-interest  bearing
     escrow account to be disbursed to pay the costs of repair or restoration in
     accordance with procedures reasonably established by the Lender.
b.   All plans and specifications for repair or restoration shall be approved by
     the Lender prior to the commencement of any repair or restoration.
c.   All  repair  or  restoration  shall be done by or under  the  direction  of
     Grantor, shall be in accordance with the approved plans and specifications,
     shall  be in a  workmanlike  manner  free  from  all  defects,  shall be in
     compliance with all statutes,  ordinances, rules and regulations applicable
     thereto and shall be completed free of all construction  liens except those
     being  contested in good faith by appropriate  proceedings and with respect
     to which Grantor shall have provided the Lender satisfactory security.
d.   The Lender  shall have the right,  at  Grantor's  expense,  to inspect  all
     repairs and restoration and, if the Lender  reasonably  determines that any
     work or  materials  are not in  conformity  with  the  approved  plans  and
     specifications  or other  requirements of sub-paragraph  (c) above, to stop
     the work and order replacement or correction thereof by Grantor.
e.   The Lender  shall not be obligated to make  disbursements  more  frequently
     than  monthly  and the  remaining  undisbursed  proceeds  shall  always  be
     sufficient  to meet the total  estimated  remaining  costs to complete  the
     repair or restoration.
f.   All  insurance  proceeds  in excess of the amounts  necessary  to repair or
     restore  the  Property  may be  applied,  at the  Lender's  option,  to the
     Liabilities (without penalty for prepayment), to fulfill any other covenant
     herein or any other  obligation  of Grantor to the  Lender,  or released to
     Grantor.  In the event all of the  conditions  to the use of the  insurance
     proceeds to repair or restore the Property which are outlined above are not
     satisfied,  the Lender, at its option,  may apply the insurance proceeds or
     any part thereof,  first, toward reimbursement of all costs and expenses of
     the  Lender in  collecting  such  proceeds,  and then,  to the  Liabilities
     (without any penalty for prepayment),  to fulfill any other covenant herein
     or any other obligation of Grantor to the Lender,  or to the restoration or
     repair of the Property. Application by the Lender of any insurance proceeds
     to the  Liabilities  shall  not  excuse,  extend or  reduce  the  regularly
     scheduled  payments due  thereunder.  In the event of  foreclosure  of this
     Mortgage or other  transfer of title to the Property in  extinguishment  of
     the  Liabilities,  all right,  title and  interest of Grantor in and to any
     insurance policies then in force shall pass to the purchaser or grantee and
     Grantor hereby appoints the Lender its attorney-in-fact, in Grantor's name,
     to assign and transfer all such policies and proceeds to such  purchaser or
     grantee.

9.   Eminent  Domain.  In the event the entire Property is taken under the power
     of eminent domain, the entire award or payment in lieu of condemnation,  to
     the full extent of the Liabilities, shall be paid to the Lender. The Lender
     shall apply such award or payment,  first,  toward  reimbursement of all of
     the Lender's costs and expenses incurred in connection with collecting such
     award or payment,  and then,  at the Lender's  option,  to the  Liabilities
     (without any penalty for prepayment),  to fulfill any other covenant herein
     or to any other  obligation  of  Grantor to the  Lender.  In the event of a
     partial  taking of the  Property  under the power of  eminent  domain,  the
     entire award or payment in lieu of condemnation,  to the full extent of the
     Liabilities,  shall be paid over to the Lender. Provided there has occurred
     no Event of  Default  hereunder,  nor any event  which  with  notice or the
     passage of time or both would become an Event of Default hereunder, and the
     Lender shall reasonably  determine that sufficient funds are available from
     the award or payment  and any funds to be  provided by Grantor to repair or
     restore the remaining  portion of the Property within a reasonable time and
     that such  repair or  restoration  is  economically  feasible,  the  Lender
     agrees,  upon  request  by the  Grantor,  to apply the award or  payment to
     repair  or  restore  the   remaining   portion  of  the   Property,   after
     reimbursement  of all costs and  expenses of the Lender in  collecting  the
     award or payment, subject to the following terms and conditions:

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a.   The Lender  shall  retain the award or  payment in a  non-interest  bearing
     escrow account to be disbursed to pay the costs of repair or restoration in
     accordance with procedures reasonably established by the Lender.
b.   All plans and specifications for repair or restoration shall be approved by
     the Lender prior to the commencement of any repair or restoration.
c.   All  repair  or  restoration  shall be done by or under  the  direction  of
     Grantor, shall be in accordance with the approved plans and specifications,
     shall  be in a  workmanlike  manner  free  from  all  defects,  shall be in
     compliance with all statutes,  ordinances, rules and regulations applicable
     thereto and shall be completed free of all construction  liens except those
     being  contested in good faith by appropriate  proceedings and with respect
     to which Grantor shall have provided the Lender satisfactory security.
d.   The Lender  shall have the right,  at  Grantor's  expense,  to inspect  all
     repairs and restoration and, if the Lender  reasonably  determines that any
     work or  materials  are not in  conformity  with  the  approved  plans  and
     specifications  or other  requirements of sub-paragraph  (c) above, to stop
     the work and order replacement or correction thereof by Grantor.
e.   The Lender  shall not be obligated to make  disbursements  more  frequently
     than  monthly  and the  remaining  undisbursed  proceeds  shall  always  be
     sufficient  to meet the total  estimated  remaining  costs to complete  the
     repair or restoration.
f.   All proceeds of the award or payment in excess of the amounts  necessary to
     repair or restore the Property may be applied,  at the Lender's option,  to
     the  Liabilities  (without  penalty for  prepayment),  to fulfill any other
     covenant  herein or any other  obligation  of  Grantor  to the  Lender,  or
     released to Grantor.

     In the event all of the conditions to the use of the  award or  payment  to
     repair or restore the Property  which are outlined above are not satisfied,
     the  Lender,  at its  option,  may apply the award or  payment  or any part
     thereof,  first,  toward  reimbursement  of all costs and  expenses  of the
     Lender in collecting  such award or payment,  and then, to the  Liabilities
     (without any penalty for prepayment),  to fulfill any other covenant herein
     or any other obligation of Grantor to the Lender,  or to the restoration or
     repair of the Property. Application by the Lender of any condemnation award
     or payment or portion thereof to the Liabilities  shall not excuse,  extend
     or reduce the regularly  scheduled  payments due thereunder.  The Lender is
     hereby  empowered in the name of Grantor to receive,  and give  acquittance
     for, any such award or payment,  whether it is joint or several;  provided,
     however,  that the  Lender  shall not be held  responsible  for  failure to
     collect any such award or payment, regardless of the cause of such failure.

10.  Removal  of  Improvements.   Except  for  replacement,   maintenance,   and
     relocation  in the ordinary  course of business,  Grantor  shall not remove
     from the Property any  improvement,  accessions,  fixtures,  machinery,  or
     equipment  pertaining to or forming a part of the Property without Lender's
     prior  written  consent.  All  replacements  shall  be  with  improvements,
     fixtures,  machinery and equipment of the same or better quality than those
     replaced.

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11.  Lender's  Right to Make  Expenditures.  Should  an Event of  Default  occur
     hereunder as a result of Grantor's  failure to pay any taxes or assessments
     or  procure  and  maintain  insurance  or  make  necessary  repairs  to the
     Property,  the  Lender  may pay such  taxes and  assessments,  effect  such
     insurance  and make such  repairs,  and the monies so paid by it shall be a
     further  lien on the  Property,  payable  forthwith,  with  interest at the
     highest rate  applicable to the  Liabilities.  The Lender may make advances
     without curing the Event of Default and without  waiving the Lender's right
     of  foreclosure  or any  other  right or remedy of the  Lender  under  this
     Mortgage.  The  exercise  of the right to make  advances  pursuant  to this
     paragraph  shall be  optional  with the Lender and not  obligatory  and the
     Lender  shall not be liable in any case for failure to exercise  such right
     or for failure to continue exercising such right once having exercised it.

12.  Compliance   with  Law.   Grantor  will  comply  promptly  with  all  laws,
     ordinances,  regulations  and  orders  of  all  public  authorities  having
     jurisdiction  over  the  Property  relating  to  the  use,   occupancy  and
     maintenance  thereof,  and shall upon request promptly submit to the Lender
     evidence of such  compliance.  Nothing  herein  shall be deemed to prohibit
     Grantor from contesting the  enforceability  or  applicability  of any law,
     ordinance,  regulation or order; provided, however, that the Lender, in its
     sole  discretion,  may  require  that  Grantor  comply  with any such  law,
     ordinance,  regulation or order during the pendency of any such contest and
     all appeals therefrom.  Grantor will not permit the Property or any portion
     thereof to be used for any unlawful purpose.

13.  Environmental   Warranties,   Compliance,   and  Indemnification.   Grantor
     represents  and  warrants  to Lender  that  neither  Grantor  nor any prior
     lessee,  owner or operator of the Property  has violated any  Environmental
     Laws (as subsequently  defined) which concern or affect the Property or any
     part thereof.  Grantor agrees to at all times strictly observe and promptly
     comply with all  Environmental  Laws.  Grantor agrees to notify the Lender,
     not later than ten (10) after  Grantor's  receipt,  of any letter,  notice,
     summons, complaint, citation,  investigation, or other communication issued
     by or on  behalf  of any  governmental  agency or  department,  or  private
     person,  regarding any complaint or alleged  violation of any Environmental
     Law  concerning  the  Property.  Grantor  agrees to indemnify  and hold the
     Lender harmless from any and all losses, costs, suits, harm, liability, and
     damages of any and every kind,  including  reasonable  attorney fees, which
     result  from or are  related to any  violation(s)  by Grantor or  Grantor's
     predecessors in title to the Property of any Environmental Laws, and agrees
     that such  indemnity  shall  survive the  foreclosure  or discharge of this
     Mortgage  and shall  continue  so long as  Lender  has any  interest  in or
     liability for the Property. Grantor agrees to allow the Lender or its agent
     access  to  the  Property  to  confirm   Grantor's   compliance   with  all
     Environmental  Laws and Lender may at any time, at Grantor's  sole cost and
     expense,  hire, or require Grantor to hire, an environmental  consultant to
     inspect,  test and audit the  Property  and advise  the  Lender  concerning
     Grantor's  compliance with Environmental Laws. Any costs paid by Lender for
     violations of  Environmental  Laws or to hire an  environmental  consultant
     shall be added to the  Liabilities  secured  by this  Mortgage.  If Grantor
     shall  lease  the  Property  or  any  part  thereof,   Grantor   agrees  to
     specifically  provide in any such  lease(s)  that Lender or its agent shall
     have access to the leased  premises to insure the lessee's full  compliance
     with all  Environmental  Laws and any lessee violation of any Environmental
     Law shall constitute a violation of Grantor's environmental  warranties and
     agreements under this Mortgage.  The term  "Environmental  Laws" shall mean
     all laws,  regulations and rules of the United States of America,  State of
     Michigan,  local authorities and their respective  agencies and departments
     which pertain to the environment  including,  but without  limitation,  the
     Clean Air Act (42 USC 7401 et seq.), Clean Water Act (33 USC 1251 et seq.),
     Resource  Conservation  and  Recovery  Act of 1976 (42 USC  6901 et  seq.),
     Comprehensive  Environmental  Response,  Compensation  and Liability Act of
     1980 (42 USC 9601 et seq.), Hazardous Materials  Transportation Act (49 USC
     1801 et  seq.),  Solid  Waste  Disposal  Act (42 USC 6901 et  seq.),  Toxic


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     Substances  Control  Act (15 USC 2601 et seq.),  and the  Michigan  Natural
     Resources and  Environmental  Protection Act (MCL 324.101 et seq.), as each
     of such laws have been or are  hereafter  amended,  together with all rules
     and regulations promulgated by the U.S. Environmental  Protection Agency or
     the Michigan Departments of Natural Resources or of Environmental  Quality,
     and all additional  environmental  laws, rules and regulations in effect on
     the date of this Mortgage and as are hereafter enacted.

14.  Assignment of Rents and Leases. As additional  security for the Liabilities
     and performance of the covenants and agreements set forth herein,  pursuant
     to Michigan Compiled Laws 565.81 et seq. and Michigan Compiled Laws 554.231
     et seq., each as amended,  Grantor hereby assigns to the Lender, and grants
     Lender a security  interest in, any oil and gas located in, on or under the
     Property, any and all Leases of the Property, and all rents, issues, income
     and profits  derived from the use of the  Property or any portion  thereof,
     whether due or to become due. These assignments shall run with the land and
     shall be good and valid against Grantor and all persons claiming by, under,
     or through  Grantor from the date of  recording of this  Mortgage and shall
     continue to be operative during  foreclosure or any other proceedings taken
     to enforce this Mortgage.  If any foreclosure sale results in a deficiency,
     the   assignments   shall  continue  as  security  during  the  foreclosure
     redemption period. Grantor covenants with and warrants to Lender that as of
     the date of this Mortgage:

a.   Each Lease is in full force and effect and there are no  defaults  existing
     thereunder; and
b.   Grantor has not, except as provided in the First Mortgage:  (1) executed or
     granted any prior  assignment,  encumbrance,  or  security  interest in any
     Lease or the rentals  thereunder;  (2)  performed  any acts or executed any
     other  instruments  or agreements  which would limit or prevent Lender from
     obtaining  the  benefit  of and  exercising  its rights  conferred  by this
     Mortgage;  or (3) executed or granted any modification of any Lease, either
     orally or in writing;

     and, as of the date of this Mortgage and for so long as any of the
     Liabilities remains unpaid or unperformed:

c.   Grantor  shall  promptly  inform  Lender  of,  assign,  and  deliver,   any
     subsequent Lease of the Property or any part thereof, and make, execute and
     deliver to the Lender,  upon demand, any and all documents,  agreements and
     instruments  as may,  in  Lender's  opinion,  be  necessary  to protect the
     Lender's rights under this Mortgage; provided, that Grantor's failure to do
     so will not  impair  Lender's  interest  in or rights  with  respect to any
     subsequent  Lease, nor in any way affect the applicability of this Mortgage
     to such Lease and the unpaid rents due or to become due thereunder; and
d.   Grantor shall not, without the prior written consent of Lender:  (1) Cancel
     or accept  surrender  of a Lease;  (2)  modify or alter a Lease in any way,
     either orally or in writing;  (3) reduce the amount of or postpone  payment
     of any Lease rents; (4) consent to any assignment of the lessee's  interest
     in a Lease, or any subletting thereunder;  (5) collect or accept payment of
     rents  under a Lease for more than one (1) month in  advance;  (6) make any
     other assignment,  pledge,  encumbrance, or other disposition of a Lease or
     any Lease rents, issues,  income or profits. Any of the above acts, if done
     without the Lender's prior written consent, shall be null and void; and


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e.   Grantor shall perform and discharge  each and every  obligation,  covenant,
     and agreement  required to be performed by the landlord under any Lease and
     should  Grantor  fail to do so the  Lender,  at  Lender's  sole  option and
     without releasing Grantor from any such obligation, may make or do the same
     in such manner and to such extent as the Lender deems  necessary to protect
     its rights and interests under this Mortgage.  Any and all costs,  expenses
     and sums  paid by the  Lender in  performing  under  any  Lease,  including
     reasonable attorney fees, shall be added to the Liabilities secured by this
     Mortgage. This assignment of rents is given as collateral security only and
     will not be construed as obligating  Lender to perform any of the covenants
     or undertakings required to be performed by Grantor under any Lease.

15.  Assignment  of Contracts  and  Agreements.  Grantor  hereby  assigns to the
     Lender, as further security for the Liabilities,  Grantor's interest in all
     agreements,  contracts  (including  contracts  for the lease or sale of the
     Property or any  portion  thereof),  licenses  and  permits  affecting  the
     Property. Such assignment shall not be construed as a consent by the Lender
     to any agreement,  contract,  license, or permit so assigned,  or to impose
     upon the Lender any  obligations  with respect  thereto.  Grantor shall not
     cancel or amend any of the  agreements,  contracts,  licenses  and  permits
     hereby  assigned  (nor  permit  any of the  same to  terminate  if they are
     necessary or desirable  for the operation of the  Property),  except in the
     ordinary course of business, without first obtaining, on each occasion, the
     written  approval of the Lender.  This paragraph shall not be applicable to
     any  agreement,  contract,  license  or  permit  that  terminates  if it is
     assigned  without the consent of any party thereto  (other than Grantor) or
     issuer thereof, unless such consent has been obtained or this assignment is
     ratified by such party or issuer;  nor shall this paragraph be construed as
     a present  assignment of any  agreement,  contract,  license or permit that
     Grantor is required by law to hold in order to operate the Property for the
     purposes intended.

16.  Due on Sale.  The Lender in making the loan  secured  by this  Mortgage  is
     relying upon the integrity of Grantor and its  undertaking  to maintain the
     Property.  If  Grantor  should  (a) sell,  transfer,  convey or assign  the
     Property,  or any  right,  title  or  interest  therein,  whether  legal or
     equitable,  whether  voluntarily or involuntarily,  by outright sale, deed,
     installment  sale  contract,  land contract,  contract for deed,  leasehold
     interest  (other  than leases to tenants)  with a term  greater  than three
     years,  lease  option  contract or any other method of  conveyance  of real
     property interests; or (b) cause, permit or suffer any change in control or
     management of the Grantor; or (c) cause, permit or suffer any change in the
     current  management and control of the Property or in the degree of control
     Grantor exercises or is empowered to exercise over the decisions  affecting
     the ownership  and  operation of the Property as of the date hereof,  then,
     and in any such event,  the Lender  shall have the right at its sole option
     thereafter to declare all sums secured hereby and then unpaid to be due and
     payable forthwith although the period limited for the payment thereof shall
     not then have  expired,  anything  contained to the  contrary  hereinbefore
     notwithstanding,  and  thereupon to exercise all of its rights and remedies
     under this Mortgage. If the ownership of the Property, or any part thereof,
     becomes  vested in a person  other than the  Grantor  (with or without  the
     Lender's consent), the Lender may deal with such successor or successors in
     interest with reference to this Mortgage, and the Liabilities,  in the same
     manner as with the Grantor,  without in any manner vitiating,  releasing or
     discharging the Grantor's liability  hereunder or upon the Liabilities.  No
     sale of the Property and no  forbearance or extensions by the Lender of the


                                       8
<PAGE>

     time for payment of the Liabilities or the performance of the covenants and
     agreements herein provided shall in any way operate to release,  discharge,
     modify,  change or affect the lien of this  Mortgage  or the  liability  of
     Grantor, if any, on the Liabilities or for the performance  hereof,  either
     in whole or in part.

17.  Secondary Financing. Grantor will not, without the prior written consent of
     the Lender, mortgage or pledge the Property or any part thereof as security
     for any other loan or obligation of Grantor. If any such mortgage or pledge
     is entered into without the prior written consent of the Lender, the entire
     Liabilities,  may, at the option of the Lender, be declared immediately due
     and payable  without  notice.  Further,  Grantor also shall pay any and all
     other  obligations,  liabilities or debts which may become liens,  security
     interests,  or  encumbrances  upon or charges  against the Property for any
     repairs or improvements that are now or may hereafter be made thereon,  and
     shall not,  without the Lender's  prior written  consent,  permit any lien,
     security  interest,  encumbrance or charge of any kind to accrue and remain
     outstanding  against the Property or any part thereof,  or any improvements
     thereon, irrespective of whether such lien, security interest,  encumbrance
     or  charge  is junior  to the lien of this  Mortgage.  Notwithstanding  the
     foregoing,  if any personal  property by way of additions,  replacements or
     substitutions  is hereafter  purchased and installed,  affixed or placed by
     Grantor on the Property  under a security  agreement,  the lien or title of
     which is  superior  to the lien  created by this  Mortgage,  all the right,
     title and interest of Grantor in and to any and all such personal property,
     together  with the  benefit of any  deposits or  payments  made  thereon by
     Grantor,  shall  nevertheless  be and are hereby assigned to the Lender and
     are covered by the lien of this Mortgage.

18.  Waste.  Grantor's  failure,   refusal  or  neglect  to  pay  any  taxes  or
     assessments  levied against the Property or any insurance premiums due upon
     policies of insurance  covering the Property  will  constitute  waste under
     Michigan  Compiled  Laws  600.2927,  and the  Lender  shall have a right to
     appointment  of a receiver of the Property and of the rents and income from
     the  Property,  with  such  powers  as the Court  making  such  appointment
     confers.  Grantor hereby  irrevocably  consents to such appointment in such
     event,  and agrees that Lender's costs and expenses,  including  reasonable
     attorney  fees,   incurred  in  such  proceeding  shall  be  added  to  the
     Liabilities  secured  by this  Mortgage.  Payment  by the Lender for and on
     behalf of  Grantor  of any  delinquent  taxes,  assessments,  or  insurance
     premiums  payable by Grantor under the terms of this Mortgage will not cure
     the default herein described nor in any manner impair the Lender's right to
     appointment of a receiver as set forth herein.

19.  Remedies  Upon  Default.  Immediately  upon the  occurrence  of an event of
     default under any of the  Liabilities or any default in the  performance of
     any of the covenants,  conditions and agreements contained in this Mortgage
     (an "Event of Default"),  the Lender may, in addition to and not in lieu of
     or substitution for, all other rights and remedies provided by law:

a.   Accelerate  Liabilities.  Without notice,  except as expressly  required by
     law,  declare the entire unpaid and  outstanding  principal  balance of the
     Liabilities,  and  all  accrued  interest,  to be due and  payable  in full
     forthwith,  and at the Lender's option,  to bring suit therefor and to take
     any and all steps and  institute  any and all  other  proceedings  that the
     Lender deems  necessary to enforce the  Liabilities and to protect the lien
     of this Mortgage.


                                       9
<PAGE>

b.   Advance Sums for Other Liens.  Upon the  occurrence of any Event of Default
     arising  out of the  existence  of any lien upon the  Property,  the Lender
     shall have the right (without being obligated to do so or to continue to do
     so),  without  notice to  Grantor,  to  advance  on and for the  account of
     Grantor such sums as the Lender in its sole  discretion  deems necessary to
     cure such  Event of  Default  or to induce  the  holder of any such lien to
     forbear from  exercising its rights  thereunder.  The repayment of all such
     advances,  with  interest  thereon at the highest  rate  applicable  to the
     Liabilities from the date of each such advance, shall be secured hereby and
     shall be immediately due and payable without demand.
c.   Mortgage  Foreclosure.  To foreclose this Mortgage and sell the Property at
     public auction or venue pursuant to Michigan Compiled Laws 600.3201 et seq.
     or  judicially  foreclose  this Mortgage  under the  provisions of Michigan
     Compiled Laws 600.3101 et seq.,  and Grantor  agrees to pay all of Lender's
     costs and expenses,  including  reasonable  attorney  fees,  which shall be
     added to the Liabilities secured by this Mortgage.  At any foreclosure sale
     held under the  foregoing  Michigan  statutes,  Grantor  agrees that in its
     foreclosure  sale bid price the Lender  shall be allowed to deduct from the
     appraised value of the Property:  (i) the unpaid balance of any mortgage or
     other liens which have  priority over the lien of this  Mortgage;  and (ii)
     the sum of all unpaid property taxes and assessments and insurance premiums
     due and to become  due on the  Property  through  the date  upon  which the
     foreclosure  redemption  period shall expire.  Any foreclosure sale may, at
     the sole option of the Lender,  be made en masse or in parcels,  any law to
     the contrary notwithstanding, and Grantor hereby knowingly, voluntarily and
     intelligently  waives any right to require any such  foreclosure sale to be
     made in parcels or any right to select  which  parcels  shall be sold.  The
     proceeds of any foreclosure sale shall be applied, as the Lender elects, to
     the payment of Lender's collection and other expenses, including reasonable
     attorney fees, and/or payment of the Liabilities, with the surplus, if any,
     to Grantor or Grantor's successor in interest.  Commencement of proceedings
     to foreclose this Mortgage in any manner  authorized by law shall be deemed
     an exercise of the Lender's option to accelerate the Liabilities. After the
     date upon which the maturity of the  Liabilities  secured by this  Mortgage
     has been accelerated,  Lender's acceptance of any amount(s) paid by Grantor
     less than the full unpaid principal balance of the Liabilities plus accrued
     interest,  late  charges and Lender's  costs and expenses in this  Mortgage
     described,  shall not waive the default or acceleration,  but shall only be
     credited  upon the  unpaid  balance  of the  Liabilities  unless the Lender
     specifically   agrees  in  writing  to  waive  any  such   default   and/or
     acceleration.
d.   This  Mortgage  contains a power of sale and upon default may be foreclosed
     by advertisement. In a foreclosure by advertisement, no hearing is involved
     and the only notice  required is publication  of a foreclosure  notice in a
     local newspaper and posting a copy of the notice upon the Property. If this
     Mortgage is foreclosed by  advertisement  under the  provisions of Michigan
     Compiled Laws 600.3201 et seq., Grantor hereby knowingly,  voluntarily, and
     intelligently  waives all  rights  under the  Constitution  and laws of the
     State of Michigan  and the  Constitution  and laws of the United  States of
     America  to any  notice or  hearing in  connection  with a  foreclosure  by
     advertisement except as set forth in the Michigan statute.


                                       10
<PAGE>

e.   Collection of Rents. Enter into peaceful  possession of the Property and/or
     to collect  and  receive all rents,  issues,  income and  profits  from the
     Property,  terminate any tenancy,  maintain proceedings to recover rents or
     possession  of any of the Property from any tenant or  trespasser,  rent or
     lease the  Property  or any portion  thereof  upon such terms as the Lender
     deems best,  and have the right to all oil and gas  royalties and any other
     income  from the  Property.  Lender,  in such  order as  Lender in its sole
     discretion elects, may apply the proceeds of any rents, issues, profits and
     income to: (i) preservation, maintenance or operation of the Property, (ii)
     payment of taxes due on the Property; and (iii) payment of the Liabilities.
     Grantor irrevocably consents and agrees that the lessee(s) under any Lease,
     upon demand and notice from Lender of Grantor's default,  shall be required
     to pay all  rents,  issues,  profits  and  income to  Lender,  without  any
     obligation  upon such  lessee(s) to determine  the actual  existence of any
     default by Grantor. Lender may enter upon the Property or any part thereof,
     by its officers,  agents,  or employees,  for the  collection of the rents,
     issues and profits and for the operation and  maintenance  of the Property,
     and  Grantor  hereby  authorizes  Lender in  general  to  perform  all acts
     necessary  for the operation  and  maintenance  of the Property in the same
     manner and to the same extent that the Grantor might so act. Such entry and
     taking  possession  of the Property or any part  thereof by Lender,  may be
     made by actual entry and possession or by written notice served  personally
     upon or sent by certified mail to the last owner of the Property  appearing
     on the  records  of the  Lender,  as the  Lender  elects,  without  further
     authorization or notice.
     In  connection with the Lender's right to possession of the Property  upon
     the  occurrence of  an Event  of  Default,  as  specified  in the foregoing
     paragraph,  Grantor  acknowledges  that it has been advised that there is a
     significant body of case law in Michigan which purportedly provides that in
     the absence of a showing of waste of a character sufficient to endanger the
     value of the Property, or other special factors, a mortgagor is entitled to
     remain in possession of the  Property,  and to enjoy the income,  rents and
     profits therefrom, during the pendency of foreclosure proceedings and until
     the expiration of the  redemption  period,  even if the mortgage  documents
     expressly provide to the contrary. Grantor further acknowledges that it has
     been advised that the Lender  recognizes the value of the security  covered
     hereby  is  inextricably   intertwined   with  the   effectiveness  of  the
     management, maintenance and general operation of the Property, and that the
     Lender  would not make the loan secured  hereby  unless it could be assured
     that it would have the right to take possession of the Property in order to
     manage or to control management thereof, and to enjoy the income, rents and
     profits  therefrom,  immediately upon the occurrence of an Event of Default
     hereunder,  notwithstanding that foreclosure  proceedings may not have been
     instituted,  or are pending, or the redemption period may not have expired.
     Accordingly, Grantor hereby knowingly, intelligently and voluntarily waives
     all right to possession of the Property from and after the occurrence of an
     Event of Default  hereunder,  upon demand for possession by the Lender, and
     Grantor  agrees not to assert  any  objection  or  defense to the  Lender's
     request or petition to a court for possession.  The rights hereby conferred
     upon the Lender have been agreed upon prior to the  occurrence  of an Event
     of Default  hereunder  and the  exercise  by the Lender of any such  rights
     shall not be deemed to put the  Lender  in the  status of a  "mortgagee  in
     possession".  Grantor  acknowledges that this provision is material to this
     transaction  and that the Lender would not make the loan secured hereby but
     for this paragraph.


                                       11
<PAGE>

f.   Title Reports.  Procure  mortgage  foreclosure  or title  reports.  Grantor
     covenants to pay  forthwith  to the Lender all sums paid for such  purposes
     with interest at the highest rate applicable to the  Liabilities,  and such
     sums and the  interest  thereon  shall  constitute  a further lien upon the
     Property.
g.   Appraisals and Audits.  Procure appraisals,  environmental  audits and such
     other  investigations  or  analyses  of  the  Property  as the  Lender  may
     determine to be required by regulatory or accounting  rules,  procedures or
     practices or to otherwise be prudent or necessary.  Grantor shall grant the
     Lender free and  unrestricted  access to the  Property  for such  purposes.
     Grantor  covenants  to pay  forthwith  to the Lender all sums paid for such
     purposes with interest at the highest rate  applicable to the  Liabilities,
     and such sums and the interest thereon shall constitute a further lien upon
     the Property.

20.  Costs of Legal  Proceedings.  The Grantor shall pay the Lender a reasonable
     attorney's  fee in  addition  to all other  legal  costs in case the Lender
     shall  become a party,  either  as  plaintiff  or  defendant,  to any legal
     proceedings in relation to the Property or the lien created  hereby,  which
     sums shall be secured hereby and shall be payable  forthwith at the highest
     rate applicable to the Liabilities.

21.  Books and  Records.  The  Grantor  covenants  and  agrees to furnish to the
     Lender promptly  certificates  of occupancy and such other books,  records,
     documents,  information  and  statements  pertaining  to the  Grantor,  the
     Property and its operations and any guarantor(s) as the Lender may request.
     All books,  records and other  information  provided  by Grantor  hereunder
     shall  be in a form  that is  acceptable  to the  Lender  and all  costs of
     providing the same shall be borne entirely by Grantor.

22.  Security  Agreement  and  Financing  Statements.   Grantor  shall  execute,
     acknowledge  and deliver any and all such further  conveyances,  documents,
     mortgages  and  assurances  as  the  Lender  may  reasonably   require  for
     accomplishing the purposes hereof,  including financing statements required
     by the Lender to protect its interest  under the provisions of the Michigan
     Uniform Commercial Code, as amended,  forthwith upon the written request of
     the Lender.  Upon any failure of Grantor to do so, the Lender may  execute,
     record,  file,  re-record and refile any and all such  documents for and in
     the name of Grantor,  and Grantor hereby irrevocably appoints the Lender as
     agent and  attorney-in-fact  of Grantor for the  foregoing  purposes.  This
     instrument  is intended by the parties to be, and shall be construed  as, a
     security agreement, as that term is defined and used in Article Nine of the
     Michigan Uniform Commercial Code, as amended, and shall grant to the Lender
     a security interest in that portion of the Property with respect to which a
     security interest can be granted under Article Nine of the Michigan Uniform
     Commercial  Code,  as amended,  which  security  interest  shall  include a
     security interest in all personalty owned by Grantor,  whether now owned or
     subsequently acquired,  which is or in the future may be physically located
     on or affixed to the Property  described in Exhibit "A" hereto,  regardless
     of whether  such  personalty  consists of fixtures  under  Michigan  law, a
     security  interest in the  proceeds  and  products  of the  proceeds of all
     insurance  policies  now or  hereafter  covering  all or any  part  of such
     collateral. For purposes of Article Nine of the Michigan Uniform Commercial
     Code,  (a) Grantor  herein is the  "debtor",  (b) the Lender  herein is the
     "secured party",  (c) information  concerning the security interest created
     hereby may be  obtained  from the Lender at its address set forth on page 1
     hereof,  and (d)  Grantor's  mailing  address  is that set  forth on page 1
     hereof.

                                       12
<PAGE>

23.  Non-Lender  Liens,  Insolvency  Proceedings.  If  any  non-Lender  mortgage
     foreclosure  proceeding or any Federal,  State or local tax lien,  seizure,
     levy,  forfeiture,  or any other lien or  proceeding  shall be  instituted,
     recorded, or filed against the Property which is not discontinued, reserved
     for in cash in an amount and manner  satisfactory to Lender, or bonded by a
     company  satisfactory  to Lender within thirty (30) days after  initiation,
     recording or filing,  or if any  insolvency  or  receivership  proceedings,
     either  voluntary or involuntary,  are instituted by or against Grantor for
     the liquidation or  rehabilitation  of Grantor's assets and affairs,  or if
     any criminal  proceedings are initiated wherein  forfeiture of the Property
     is a potential  penalty,  the Lender may, at its option and without notice,
     declare the entire  Liabilities to be  immediately  due and payable and may
     institute all such proceedings,  including foreclosure of this Mortgage, as
     the Lender deems necessary to protect its interest in the Property.

24.  First Mortgage.  Grantor expressly  covenants and agrees that Grantor shall
     not borrow any  additional  sum nor incur any  additional  indebtedness  or
     other  obligation  secured by the First  Mortgage,  shall  promptly pay the
     First  Mortgage  indebtedness  in accordance  with the terms of the note or
     obligation secured by the First Mortgage, shall fully and promptly keep and
     perform all of the terms, conditions,  and covenants of the First Mortgage,
     and  other  agreements  pertaining  thereto,  and any  default  by  Grantor
     thereunder shall  constitute a default by Grantor under this Mortgage.  The
     Lender may, at Lender's  sole option but without  obligation to do so, cure
     any default by Grantor in any  indebtedness or other  agreement  secured by
     the First  Mortgage,  as the Lender  deems  necessary  to protect  Lender's
     mortgage lien,  assignments and security interests under this Mortgage, and
     all moneys  advanced by Lender and all costs incurred in effecting any such
     cure, including reasonable attorney fees, shall be added to the Liabilities
     secured by this Mortgage.  Grantor  hereby  consents and agrees that Lender
     may contact the holder of the First Mortgage and any or other lienor at any
     time to obtain the payment status, unpaid balance,  copies of any documents
     and  agreements  pertaining  to  Grantor  or the  Property,  and such other
     information as Lender deems advisable.

25.  Binding  Effect.  Until this  Mortgage is  discharged  in full,  all of the
     covenants  and  conditions  hereof  shall  run with  the land and  shall be
     binding upon the successors and assigns of Grantor,  and shall inure to the
     benefit of the successors and assigns of the Lender.  Any reference  herein
     to "Grantor" or the "Lender" shall include their respective  successors and
     assigns.

26.  Notices.  All  notices,  demands and  requests  required or permitted to be
     given to  Grantor  hereunder  or by law  shall  be  deemed  delivered  when
     deposited in the United  States mail,  with full postage  prepaid  thereon,
     addressed  to Grantor at the last  address of Grantor on the records of the
     Lender.

27.  No Waiver. No waiver by the Lender of any right or remedy granted hereunder
     shall  affect  or  extend  to any  other  right  or  remedy  of the  Lender
     hereunder,  nor affect the subsequent  exercise of the same right or remedy
     by the Lender for any  further  or  subsequent  Event of Default by Grantor
     hereunder,  and all such rights and  remedies of the Lender  hereunder  are
     cumulative. Time is of the essence.

                                       13
<PAGE>

28.  Severability.  If any provision(s)  hereof are in conflict with any statute
     or rule of law of the State of Michigan or are otherwise  unenforceable for
     any reason whatever,  then such provision(s)  shall be deemed null and void
     to the extent of such  conflict  or  unenforceability,  but shall be deemed
     separable  from and  shall not  invalidate  any  other  provisions  of this
     Mortgage.

29.  Pronouns.  If more than one person joins in the execution  hereof, or is of
     the feminine sex, or a  corporation,  the pronoun and relative words herein
     used shall be read as if in plural, feminine or neuter, respectively.

IN WITNESS WHEREOF,  this Mortgage was executed and delivered by the undersigned
on the date stated in the first paragraph above.

Grantor:

NEMATRON CORPORATION



By: /s/ Matthew S. Galvez
    ---------------------

Its:
President






STATE OF MICHIGAN
COUNTY OF WASHTENAW

The  foregoing  instrument  was  acknowledged  before me on October  15, 2003 by
Matthew S.  Galvez,  who is the  President of NEMATRON  CORPORATION,  a Michigan
corporation, on behalf of the corporation.

  /s/ Christine M. Herriman
  -------------------------

  Notary Public, Washtenaw County, MI
  My commission expires: October 15, 2005
                         ----------------




DRAFTED BY:                          WHEN RECORDED RETURN TO:

Michael J. Sauer, Esq.               Michael J. Sauer, Esq.
Braun Kendrick Finkbeiner P.L.C.     Braun Kendrick Finkbeiner P.L.C.
4301 Fashion Square Boulevard        4301 Fashion Square Boulevard
Saginaw, MI  48603                   Saginaw, MI  48603


                                       14
<PAGE>






                                    EXHIBIT A

Land  in  Scio  Township,  County  of  Washtenaw,  of  Michigan,  described  as:

COMMENCING  AT THE SOUTH 1/4 CORNER OF SECTION 21,  TOWN 2 SOUTH,  RANGE 5 EAST,
SCIO TOWNSHIP, WASHTENAW COUNTY, MICHIGAN, THENCE NORTH 00 DEGREES 14 MINUTES 00
SECONDS WEST  1322.45  FEET ALONG THE NORTH AND SOUTH 1/4 LINE OF SAID  SECTION;
THENCE  NORTH 56 DEGREES 08 MINUTES 00 SECONDS  EAST 219.04 FEET TO THE POINT OF
BEGINNING;  THENCE CONTINUING NORTH 56 DEGREES 08 MINUTES 00 SECONDS EAST 103.69
FEET,  THENCE  NORTH 39 DEGREES 59 MINUTES 50 SECONDS  EAST 31.08 FEET ALONG THE
CENTER LINE OF HONEY  CREEK;  THENCE SOUTH 78 DEGREES 54 MINUTES 40 SECONDS EAST
661.22  FEET;  THENCE  SOUTH 13 DEGREES 42 MINUTES 20 SECONDS  WEST  218.54 FEET
ALONG THE WESTERLY  RIGHT-OF-WAY LINE OF JACKSON INDUSTRIAL DRIVE;  THENCE ALONG
THE NORTHERLY RIGHT-OF-WAY LINE OF JACKSON INDUSTRIAL COURT WESTERLY 461.67 FEET
ALONG  THE ARC OF A 495.28  FOOT  RADIUS  CIRCULAR  CURVE TO THE LEFT  THROUGH A
CENTRAL  ANGLE OF 53 DEGREES 24 MINUTES 25 SECONDS  HAVING A CHORD  WHICH  BEARS
SOUTH 73 DEGREES 10 MINUTES 55 SECONDS WEST 445.13 FEET; THENCE NORTH 35 DEGREES
37 MINUTES 15 SECONDS WEST 475.71 FEET TO THE POINT OF BEGINNING,  BEING PART OF
THE WEST HALF OF THE SOUTHEAST QUARTER,  SECTION 21, TOWN 2 SOUTH, RANGE 5 EAST,
SCIO TOWNSHIP, WASHTENAW COUNTY, MICHIGAN.


                                       15
<PAGE>