RESTATED MORTGAGE AND SECURITY AGREEMENT


         Dated  this  24th  day  of  June  1999,   by  and   between   Boundless
Technologies, Inc. , 100 Marcus Boulevard, Hauppauge, NY 11788 ("Mortgagor") and
INDEPENDENCE  COMMUNITY BANK, having an office at 179 Pacific Street,  Brooklyn,
New York 11201 ("Mortgagee").

                                   DEFINITIONS

         Mortgagor  and  Mortgagee  agree  that,  unless the  context  otherwise
specifies  or  requires,  the  following  terms shall have the  meanings  herein
specified,  such  definitions  to be applicable  equally to the singular and the
plural forms of such terms.

         "Chattels"  means all partitions,  screens,  awnings,  venetian blinds,
window shades, draperies,  carpeting,  pipes, ducts, conduits,  dynamos, motors,
engines,  compressors,,  generators,  boilers, stokers,  furnaces, pumps, tanks,
elevators,  escalators,  vacuum cleaning  systems,  call systems,  switchboards,
sprinkler systems, fire prevention and extinguishing  apparatus,  refrigerating,
air  conditioning,  heating,  dishwashing,  plumbing,  ventilating,  gas, steam,
electrical and lighting fittings and fixtures,  licenses or permits of any kind,
operating  supplies  and all  building  materials,  equipment  and  goods now or
hereafter  delivered to the Premises and intended to be installed  therein,  and
all other fixtures of every kind and character  whatsoever  excluding such items
which may be owned by tenants of the  Premises  other than  Mortgagor,  together
with all  renewals,  replacements  and  substitutions  thereof and additions and
accessions  thereto in which the  Mortgagor  now has,  or at any time  hereafter
acquires,  an interest and which are now or hereafter  located or situated in or
upon,  or affixed or  attached  to, or used in  connection  with the  enjoyment,
occupancy  and/or  operation  of, all or any  portion of the  Premises,  and the
proceeds of all of the foregoing items.

         "Commitment  Letter" means that certain  commitment  letter relating to
the Loan issued by the Mortgagee to Mortgagor.

     "Default Rate" means the default rate of interest as set forth in the Note.

     "Guaranty"  means the Guaranty of the Loan signed by Boundless  Corporation
(the "Guarantor").

         "Improvements"  means all buildings,  structures and other improvements
presently  existing or hereafter  constructed on the land described in Exhibit A
attached hereto.

         "Loan"  means  the  $6,750,000  loan from  Mortgagee  to  Mortgagor  as
evidenced by the Note and secured by this Mortgage.

         "Loan Documents" means the Note, the Mortgage,  Guaranty, and any other
document  executed or delivered by or on behalf of Mortgagor in connection  with
the Loan.

         "Mortgage" means this Mortgage and Security Agreement together with any
future amendments, modifications or supplements hereto or hereof.

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<PAGE>

         "Mortgage Amount"  means the sum of $6,750,000.

         "Mortgagor" means Boundless Technologies, Inc.

         "Note" means that certain  Restated  Promissory  Note from Mortgagor to
Mortgagee of even date herewith in the principal sum of $6,750,000 which Note is
secured by this Mortgage.

         "Premises" means the land described in Exhibit A annexed hereto,  known
as  100  Marcus  Boulevard,   Hauppauge,  New  York  11788,  together  with  the
Improvements  thereon or to be  constructed  thereon or therein,  and all of the
easements, rights, privileges and appurtenances thereunto belonging or in anyway
appertaining  thereto including,  but not limited to, all of the estate,  right,
title, interest,  claim or demand whatsoever of the Mortgagor therein and in and
to the strips and gores, streets and ways adjacent thereto, whether in law or in
equity,  in possession  or  expectancy,  now or hereafter  acquired and also any
other  realty  or  personalty  encompassed  by the  term  "Mortgaged  Property",
elsewhere herein defined.


                              W I T N E S S E T H :


         WHEREAS,  this Mortgage  restates and replaces the  following  mortgage
which has been  modified  and  extended to form a single  lien of  $6,750,000.00
pursuant to Restatement,  Extension,  Assumption and  Modification  Agreement of
even date herewith  recorded  simultaneously  herewith with the clerk of Suffolk
county:

                  (a) Mortgage made by Applied Digital Data Systems,  Inc. ( now
known as  Boundless  Technologies,  Inc.) to AT&T Global  Information  Solutions
Company,  in the  principal  amount of  $8,000,000  dated  December  9, 1994 and
recorded  December 22, 1994 with the Suffolk  County Clerk in Liber 18899,  page
434, and which  mortgage was assigned to Mortgagee by assignment  dated June 22,
1999 to be recorded herewith.

     WHEREAS,  Mortgagee  has agreed to make the Loan  pursuant to the terms and
conditions of the Commitment Letter; and

         WHEREAS,  the  Mortgagor  will  borrow  the  Mortgage  Amount  from the
Mortgagee in accordance  with the Commitment  Letter,  and said  indebtedness is
evidenced by the Note;

         WHEREAS,  the  parties  intend  that the Note  shall be secured by this
Mortgage.

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                                GRANTING CLAUSE

         NOW,  THEREFORE,  Mortgagor,  in consideration of the premises,  and in
order to secure the  Mortgage  Amount and all interest due thereon and all other
costs and expenses due hereunder  and under the Note,  and the  performance  and
discharge  of all  the  provisions  hereof,  of the  Note  and  all  other  Loan
Documents,  hereby  gives,  grants,  bargains,  mortgages,  pledges and grants a
security interest to Mortgagee,  in all of Mortgagor's estate,  right, title and
interest  in,  to and  under  any and all of the  following  described  property
whether now owned or hereafter  acquired (all such properties being collectively
referred to as the "Mortgaged Property"):

         A. All of Mortgagor's  right, title and interest in and to the Premises
and all right, title and interest of the Mortgagor in and to the Improvements on
the  Premises  or to be  constructed  thereon  and  all  fixtures  and  building
materials of every kind and nature now or hereafter situated in, on or about, or
affixed  or  attached  to the  Improvements  or the  Premises  or any  building,
structure or other improvement now or hereafter standing,  constructed or placed
upon or within the Premises, and all and singular the tenements,  hereditaments,
easements,  rights-of-way  or use, rights,  privileges and  appurtenances to the
Premises,  now or  hereafter  belonging  or in  any  way  appertaining  thereto,
including, without limitation, any such right, title, interest, claim and demand
in, to and under any agreement granting,  conveying or creating, for the benefit
of the  Premises,  any  easement,  right or license in any way  affecting  other
property and in, to and under any streets, ways, alleys, vaults, gores or strips
of land adjoining the Premises, or any parcel thereof, and all claims or demands
either in law or in  equity,  in  possession  or  expectancy,  of, in and to the
Premises.

         B. All right,  title and interest of the Mortgagor in and to all awards
heretofore  made or hereafter to be made for the taking by eminent domain of the
whole or any part of the above  described  premises,  or any estate or  easement
therein,  including  any  awards for  change of grade of  streets,  all of which
awards are hereby  assigned  to the  Mortgagee,  which is hereby  authorized  to
collect and receive the proceeds of such awards and to give proper  receipts and
acquittance  therefor and the Mortgagee shall have the right and option to apply
such excess  towards  the payment of any sum owing on account of this  Mortgage,
the Note and the  indebtedness  secured thereby,  notwithstanding  the fact that
such sum may not then be due and payable.

         C. The Chattels and the products and proceeds thereof.

         D. All  present  and future  leases,  subleases  and  licenses  and any
guarantees thereof, rents, issues and profits and additional rents now or at any
time  hereafter  covering  or  affecting  all or any  portion  of the  Mortgaged
Property and all proceeds of, and all privileges and appurtenances  belonging or
in any way appertaining to, the Mortgaged Property, or any part thereof, and all
other property subjected or required to be subjected to the lien and/or security
interest of this  Mortgage,  including,  without  limitation,  all of the rents,
maintenance  payments,  tolls,  issues,  awards (including,  without limitation,
condemnation awards and insurance proceeds), products and profits thereof, which
rents,  maintenance payments,  tolls, issues,  awards,  products and profits are
hereby  expressly  assigned with the right to take and collect the same upon the
terms  hereinafter set forth;  and all the estate,  right,  title,  interest and
claim whatsoever, at law and in equity, which Mortgagor now has or may hereafter
acquire in and to the aforementioned  property and every part thereof,  provided
that so long  as no  Event  of  Default  (as  hereinafter  defined)  shall  have
occurred, all such rents, maintenance payments,  tolls, issues, awards, products
and  profits  shall  remain with and under the  control of  Mortgagor  except as
otherwise  expressly provided herein or in any other agreement between Mortgagor
and Mortgagee.

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<PAGE>

         E. All right, title and interest of Mortgagor in and to all agreements,
or contracts,  now or hereafter entered into for the sale,  leasing,  brokerage,
development,  management,  maintenance  and/or operation of the Premises (or any
part thereof),  including all moneys due and to become due  thereunder,  and all
permits,  licenses, bonds, insurance policies, plans and specifications relative
to the  construction  and/or  operation of the  Improvements  upon the Mortgaged
Property.

         F. All proceeds of the conversion,  voluntary or involuntary, of any of
the foregoing into cash or liquidated  claims,  including,  without  limitation,
proceeds of insurance and condemnation awards, and all right, title and interest
of  Mortgagor in and to all unearned  premiums  accrued,  accruing and to accrue
under any or all insurance policies obtained by Mortgagor.

         TO HAVE AND TO HOLD the Mortgaged Property, unto the Mortgagee and its
successors and assigns,  upon the terms,  provisions  and conditions  herein set
forth, forever, and Mortgagor does hereby bind itself and its successors,  legal
representatives,  and assigns to warrant and forever defend all and singular the
Mortgaged  Property unto the Mortgagee and its successors,  against every person
whomsoever lawfully claiming or to claim the same or any part thereof.

                                     PART I

                              SECURED INDEBTEDNESS

         This  Mortgage,  and all rights,  titles,  interests,  liens,  security
interests,  powers,  privileges and remedies created hereby or arising hereunder
or by virtue  hereof,  are given to secure the  payment and  performance  of the
indebtedness  up to the  Mortgage  Amount plus  accrued  interest  thereon,  the
obligations  and  liabilities  of Mortgagor  arising under the Note and/or under
this  Mortgage,  and  any  renewals,  extensions,  amendments  or  modifications
thereof,  or any other Loan  Document  and any and all fees,  costs or  expenses
incurred by Mortgagee,  including, but not limited to, taxes, recording expenses
and reasonable  attorneys'  fees in connection  with the closing of the Loan and
the  consummation  thereof,  after default,  the  administration  and collection
thereof,  and all costs incurred of whatever nature by Mortgagee in the exercise
of any rights hereunder or any Loan Document (all of the foregoing indebtedness,
obligations and liabilities being referred to herein as the "Liabilities").

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<PAGE>

                                    ARTICLE I

                     PARTICULAR WARRANTIES, REPRESENTATIONS
                         AND COVENANTS OF THE MORTGAGOR

         Section 1.01 Mortgagor hereby warrants and represents as follows:

                  (a) Mortgagor is the actual,  record and beneficial  owner and
holder  of a good and  marketable  title to an  indefeasible  fee  estate in the
Mortgaged  Property,  subject only to such  exceptions to title as are listed in
the title policy insuring the lien of this Mortgage and approved by Mortgagee as
permitted  exceptions.  Mortgagor is the owner of all of the remaining Mortgaged
Property;  Mortgagor  will own the Chattels  free and clear of liens and claims;
and this Mortgage is and will remain a valid and  enforceable  first lien on the
Mortgaged Property.

                  (b) Mortgagor has full power and lawful  authority to mortgage
the Mortgaged  Property in the manner and form herein done or intended hereafter
to be done. The Mortgagor will preserve such title, and will forever warrant and
defend the validity  and priority of the lien hereof,  against the claims of all
persons and parties whomsoever.

                  (c) The Premises is not located in an area  identified  by the
Secretary  of Housing  and Urban  Development  as an area having  special  flood
hazards.

         Section  1.02  Mortgagor  will,  at  its  sole  expense,  do,  execute,
acknowledge  and  deliver  every  further  act,  deed,   conveyance,   mortgage,
assignment,  notice of assignment,  transfer or assurance as the Mortgagee shall
from  time to time  reasonably  require,  for the  better  assuring,  conveying,
assigning,  transferring  and  confirming  unto the  Mortgagee  the property and
rights hereby conveyed, mortgaged or assigned or intended now or hereafter so to
be, or which the  Mortgagor  may be or may  hereafter  become  bound to  convey,
mortgage  or  assign to the  Mortgagee  or for  carrying  out the  intention  or
facilitating  the  performance  of the terms of this  Mortgage,  and for filing,
registering or recording this Mortgage and, on demand, will execute and deliver,
and hereby  authorizes  the Mortgagee to execute in the name of the Mortgagor to
the extent it may  lawfully  do so, one or more  financing  statements,  chattel
mortgages or comparable security instruments,  and renewals thereof, to evidence
more effectively the lien hereof upon the Chattels.

         Section  1.03  (a)  Mortgagor  forthwith  upon  the  execution  of this
Mortgage,  and thereafter  from time to time,  will, at its expense,  cause this
Mortgage  and any security  instrument  creating a lien or  evidencing  the lien
hereof upon the Chattels and each  instrument of further  assurance to be filed,
registered  or  recorded in such manner and in such places as may be required by
any present or future law in order to publish notice of and fully to protect the
lien hereof upon, and the interest of the Mortgagee in, the Mortgaged Property.

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<PAGE>
    (b) Mortgagor will pay all taxes, filing,  registration and recording fees,
and all expenses incident to the execution and  acknowledgment of the Note, this
Mortgage,  any supplemental  mortgage, any other Loan Document, and any security
instrument  with  respect  to  the  Chattels,  and  any  instrument  of  further
assurance,  and all federal,  state,  county and municipal stamp taxes and other
taxes, duties, imposts,  assessments and charges arising out of or in connection
with the execution and delivery of the Note,  this  Mortgage,  any  supplemental
mortgage,  any other Loan Document,  any security instrument with respect to the
Chattels or any instrument or further assurance, other than income, franchise or
other  similar  taxes  imposed on  Mortgagee  in  respect  of income  derived by
Mortgagee under the Note.

         Section 1.04  Mortgagor  will timely pay the principal and all interest
and all  other  sums to become  due in  respect  of the Note and any other  Loan
Document  at the time and place and in the manner  specified  in the Note and in
the Loan Documents,  without offset, counterclaim or defense, all in immediately
available funds.

         Section 1.05 All right,  title and interest of the  Mortgagor in and to
all   extensions,   improvements,   betterments,   renewals,   substitutes   and
replacements of, and all additions and appurtenances to, the Mortgaged Property,
hereafter acquired by or released to the Mortgagor or constructed,  assembled or
placed by the Mortgagor on the  Premises,  and all  conversions  of the security
constituted thereby, immediately upon such acquisition,  release,  construction,
assembling,  placement or conversion, as the case may be, and in each such case,
without  any  further  mortgage,  conveyance,  assignment  or  other  act by the
Mortgagor,  shall  become  subject  to the lien of this  Mortgage  as fully  and
completely,  and with the same effect,  as though now owned by the Mortgagor and
specifically  described in the granting clauses hereof, but at any and all times
the Mortgagor will execute and deliver to the Mortgagee any and all such further
assurances,  mortgages,  conveyances or assignments thereof as the Mortgagee may
reasonably require for the purpose of expressing and specifically subjecting the
same to the lien of this Mortgage.

         Section  1.06  (a)  Within  120  days  of the end of  each  fiscal  (or
calendar,  if applicable)  year of the Mortgagor and each  Guarantor  during the
term hereof,  the Mortgagor and each Guarantor  shall provide to the Mortgagee a
year end financial statement with respect to Mortgagor and Guarantor which shall
be  prepared  by  an  independent  certified  public  accountant  acceptable  to
Mortgagee  in  accordance   with  generally   accepted   accounting   principals
consistently applied and which shall be audited.

         Section  1.07 (a)  Mortgagor,  from  time to time  when the same  shall
become due, and prior to the date of imposition of interest or penalty, will pay
and discharge,  or cause to be paid and discharged,  all taxes of every kind and
nature  (including  real and  personal  property  taxes and  income,  franchise,
withholding,  transfer or recordation  taxes,  profits and gross receipt taxes),
all general and special  assessments,  levies,  permits,  inspection and license
fees,  all water and sewer  rents and  charges,  and all other  public  charges,
whether of a like or different  nature,  imposed upon or assessed  against it or
the Mortgaged Property or any part thereof or upon the revenues,  rents, issues,
income and profits of the Premises or arising in respect of the  occupancy,  use
or  possession  thereof.  Mortgagor  will, at any time upon request by Mortgagee
promptly deliver to Mortgagee receipts evidencing the payment of same.

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<PAGE>

         Upon the  occurrence  of an Event of Default under this  Mortgage,  the
Mortgagee may, at any time and from time to time, at its option, to be exercised
by written notice to the Mortgagor, require the deposit by Mortgagor at the time
of each payment of an installment of interest or principal under the Note, of an
additional  amount sufficient to discharge the obligations under this subsection
(a) when they become due. The  determination of the amount so payable and of the
fractional  part  thereof  to be  deposited  with  the  Mortgagee,  so that  the
aggregate of such deposit shall be sufficient for this purpose, shall be made by
the  Mortgagee  in its  sole  discretion.  Such  amounts  shall  be  held by the
Mortgagee with interest in an interest  bearing account  acceptable to Mortgagee
and applied to the payment of the  obligations  in respect to which such amounts
were  deposited.  If one month  prior to the due date of any of the  obligations
under  this  subsection  (a) the  amounts  then on  deposit  therefor  shall  be
insufficient for the payment of such  obligations in full,  Mortgagor within ten
(10) days after  demand  shall  deposit  the amount of the  deficiency  with the
Mortgagee.  Nothing  herein  contained  shall be deemed  to affect  any right or
remedy of the Mortgagee  under the provisions of this Mortgage or of any statute
or rule of law to pay any such  amount  and to add the  amount so paid  together
with interest at the Default Rate to the indebtedness hereby secured.

                  (b) The  Mortgagor  will pay or discharge of record  within 60
days,  all lawful claims and demands of mechanics,  materialmen,  laborers,  and
others which,  if unpaid,  might result in, or permit the creation of, a lien on
the Mortgaged Property or any part thereof, or on the revenues,  rents,  issues,
income and profits arising  therefrom and in general will do or cause to be done
everything  necessary so that the lien hereof shall be fully  preserved,  at the
cost of Mortgagor, without expense to the Mortgagee.

                  (c) Mortgagor shall indemnify and hold Mortgagee harmless from
any and all tax claims which may be made against the  Mortgagee  relative to the
Loan or the Mortgaged Property (but not income or franchise taxes or assessments
in respect of income derived by Mortgagee under the Note).

                  (d)   Mortgagor   will  pay  all  taxes   including,   without
limitation,  any  mortgage,  transfer,  gains,  and  recordation  taxes (but not
income,  franchise or similar  taxes)  imposed on the Mortgagee by reason of its
ownership of the Note or this Mortgage.

         Section 1.08(A) Mortgagor agrees to at all times provide,  maintain and
keep in force the following policies of insurance:

                  (a) Insurance against loss or damage to the Mortgaged Property
by fire and any of the  risks  covered  by  insurance  of the type now  known as
"broad form coverage" in an amount satisfactory to Mortgagee and in amount which
is  sufficient  to void any  co-insurance  requirements,  and with a  deductible
approved by Mortgagee,  from the loss payable for any casualty.  The policies of
insurance  carried in  accordance  with this  subparagraph  (a) shall  contain a
"Replacement  Cost  Endorsement",  a waiver of  co-insurance  endorsement  and a
"Permission to Occupy Endorsement";

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<PAGE>
                  (b)  Comprehensive   public  liability  insurance   (including
coverage for  elevators  and  escalators,  if any, on the  Premises  and, if any
construction  of new  improvements  occurs  after  execution  of this  Mortgage,
completed   operations   coverage  for  one  year  after   construction  of  the
Improvements  has been  completed) on an  "occurrence  basis" against claims for
"personal  injury"  including,  without  limitation,  bodily  injury,  death  or
property  damage  occurring  on,  in or about  the  Premises  and the  adjoining
streets,  sidewalks and passageways,  such insurance to afford immediate minimum
protection to limits of not less than that required by Mortgagee;

                  (c)  Worker's  compensation   insurance  including  employer's
liability  insurance for all employees of Mortgagor,  if any, engaged on or with
respect  to the  Premises  in  such  amount  as is  reasonably  satisfactory  to
Mortgagee, or, if such limits are established by law, in such amounts;

                  (d)  During  the  course  of  any  demolition,   construction,
renovation  or repair  of  Improvements  on the  Mortgaged  Property,  builder's
completed value risk insurance  against "all risks of physical loss,"  including
collapse and transit coverage,  during  construction of such Improvements,  with
deductibles  satisfactory  to  Mortgagee,  in  non-reporting  form, in an amount
acceptable to Mortgagee.  Such policy of insurance shall contain the "permission
to occupy upon  completion  of work or  occupancy"  endorsement  and a waiver of
coinsurance endorsement;

                  (e) Boiler and machinery  insurance covering pressure vessels,
air tanks, boilers,  machinery,  pressure piping,  heating, air conditioning and
elevator equipment and escalator  equipment,  provided the Improvements  contain
equipment of such nature, and insurance against loss of occupancy or use arising
from any such breakdown, in such amounts as are satisfactory to Mortgagee;

                  (f) Flood loss insurance if the Mortgaged  Property is located
in an area  identified by the Secretary of Housing and Urban  Development  as an
area having  special  flood  hazards and in which flood  insurance has been made
available,  in an amount at least  equal to the  Mortgage  Amount or the maximum
limit of coverage available with respect to the Mortgaged Property, whichever is
less.

                  (g) Such other  insurance,  and in such  amounts,  as may from
time to time be  reasonably  required  by  Mortgagee  against  the same or other
hazards, including but not limited to rent loss insurance; and

                  (h) All policies of insurance relating to property required by
terms of this  Mortgage  shall  contain a standard  non-contributory  negligence
endorsement providing an agreement by the insurer that any loss shall be payable
in  accordance  with  the  terms  of  such  policy  notwithstanding  any  act or
negligence  of Mortgagor  which might  otherwise  result in  forfeiture  of such
insurance  and the further  agreement  of the insurer  waiving all rights of set
off, counterclaim or deductions against Mortgagor.

         (B) (a) All policies of insurance  shall be issued by companies  and in
amounts  reasonably  satisfactory  to  Mortgagee  and all  policies  of property
insurance shall have attached thereto the standard  mortgagee clause referred to
in subparagraph (h) above in favor of Mortgagee,  not subject to contribution or
co-insurance,  and in addition, standard New York endorsement for the benefit of
Mortgagee,  satisfactory  to Mortgagee and lender's loss payable for the benefit
of Mortgagee,  all in form  satisfactory  to Mortgagee.  Mortgagor shall furnish
Mortgagee with a signed  duplicate  original policy with respect to all required
insurance  coverage.  At least thirty (30) days prior to the  expiration of each
such policy,  Mortgagor  shall furnish  Mortgagee with evidence  satisfactory to
Mortgagee of the payment of premium and the  reissuance  of a policy  continuing
insurance in force as required by this Mortgage.  All such  policies,  including
policies for any amounts carried in excess of the required  minimum and policies
not  specifically  required  by  Mortgagee,  shall  be in form  satisfactory  to
Mortgagee,  shall be maintained in full force and effect,  shall be assigned and
delivered to  Mortgagee,  with  premiums  prepaid,  as  collateral  security for
payment of all obligations of the Mortgagor secured hereby,  and shall contain a
provision  that such policies  will not be canceled or amended  without at least
thirty (30) days prior written notice to Mortgagee and at no time shall there be
any reduction in the scope or limits of coverage. If the insurance,  or any part
thereof, shall expire, or be withdrawn, or become void for any reason, or if for
any  reason  whatever  the  insurance  shall  be  reasonably  unsatisfactory  to
Mortgagee,  Mortgagor  shall  immediately  upon  learning of such  expiration or
termination place new insurance on the Premises, satisfactory to Mortgagee.

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<PAGE>
                  (b) In the event Mortgagor fails to provide, maintain, keep in
force or deliver and furnish to Mortgagee the policies of insurance  required by
this  Mortgage,  Mortgagee  may,  upon ten (10)  days  prior  written  notice to
Mortgagor,  procure such insurance or  single-interest  insurance for such risks
covering  Mortgagee's  interest,  and  Mortgagor  will pay all premiums  thereon
promptly upon demand by  Mortgagee,  and until such payment is made by Mortgagor
the amount of all such premiums,  together with interest  thereon at the Default
Rate shall be secured by this Mortgage.

                  (c) After  the  happening  of any  casualty  to the  Mortgaged
Property  or any part  thereof  which  shall cost more than  $250,000 to repair,
Mortgagor  shall give prompt written notice thereof to Mortgagee,  and Mortgagee
may make proof of loss if not made promptly by  Mortgagor.  In the event of such
loss or damage all  proceeds  of  insurance  shall be payable to  Mortgagee  and
Mortgagee   shall  have  the  right  to  join  the  Mortgagor  in  adjusting  or
compromising any claims for loss, damage or destruction in excess of $250,000.00
under any policy or policies of insurance.  Each insurance  company concerned is
hereby authorized and directed to make payment under such insurance in excess of
$250,000,  including return of unearned premiums,  directly to Mortgagee instead
of to Mortgagor  and  Mortgagee  jointly,  and  Mortgagor  irrevocably  appoints
Mortgagee as Mortgagor's attorney-in-fact to endorse any draft therefor.

                  (d)       Intentionally Deleted.

                  (e) Any monies in excess of  $250,000  received as payment for
loss  under any  insurance  shall be paid over to the  Mortgagee  to be  applied
(provided,  however,  as set forth in paragraph 108(h) below,  Mortgage will not
unreasonably  refuse or delay consent to utilize such proceed for restoration of
the  Improvements) of the Mortgagee to the prepayment of the Note and/or for the
restoration  of the  Improvements.  Receipt  by  Mortgagee  and  application  in
reduction of indebtedness of any insurance proceeds less than the full amount of
the then outstanding  interest,  principal and other sums due under the Note and
this  Mortgage,  shall not  defer,  alter or modify  Mortgagor's  obligation  to
continue to pay the regular  installments of principal,  if any, interest on the
outstanding  principal  balance  and  other  charges  specified  in the Note and
herein.

                  (f)      Intentionally Deleted.

                  (g) Mortgagor shall not take out separate insurance concurrent
in form or contributing in the event of loss with that required to be maintained
under this Section 1.08, unless Mortgagee has approved the insurance company and
the form and content of the insurance policy, including, without limitation, the
naming  thereon of Mortgagee  as a named  insured with loss payable to Mortgagee
under a standard mortgagee  endorsement of the character above described and the
inclusion of a provision  therein  obligating said insurance  company to provide
Mortgagee with notice thirty (30) days prior to cancellation, lapse or amendment
of any policy.  Mortgagor shall immediately  notify Mortgagee  whenever any such
separate  insurance is taken out and shall  promptly  deliver to  Mortgagee  the
policy or policies of such insurance.

                                       9
<PAGE>
                  (h) If a part of the Mortgaged  Property shall be destroyed by
fire, flood or other casualty, and if the Mortgagee shall have decided to permit
Mortgagor  to use the  insurance  proceeds for the  restoration  of the Premises
(which permission shall not be unreasonably withheld or delayed), then Mortgagor
may use such  proceeds to restore the Mortgaged  Property  provided that (i) the
net insurance  proceeds are sufficient in the opinion of the Mortgagee on advice
from its  architect to restore the Mortgaged  Property,  or if such proceeds are
insufficient to restore the Mortgaged  Property,  Mortgagor shall have deposited
with the Mortgagee cash in an amount equal to the difference between the cost of
such  restoration and such proceeds,  (ii) there shall exist no Event of Default
under this  Mortgage,  and (iii) in the opinion of the  Mortgagee on advice from
its architect the Mortgaged Property can be completely  restored within 365 days
from the  occurrence  of such  casualty  or by the  maturity  date of the  Note,
whichever  occurs first. In the event  insurance  proceeds are used to repair or
restore the Mortgaged Property pursuant to this Section,  Mortgagor shall obtain
at its sole  cost and  expense,  an  architect  who  shall  submit  plans to the
Mortgagee for the repair or  restoration  of the Mortgaged  Property  indicating
that such repair or restoration can be completed  within the period provided for
herein,  together with a budget  itemizing the projected costs of such repair or
restoration.  Said plans and budget are subject to the approval of the Mortgagee
which approval shall not be  unreasonably  withheld or delayed.  Mortgagor shall
also obtain and post, at its sole cost and expense, all necessary Federal, State
and local  permits and  approvals  prior to the  commencement  of such repair or
restoration.  Mortgagor agrees that all insurance  proceeds to be used to repair
or restore the Mortgaged  Property  shall be held by the Mortgagee and disbursed
periodically:  (i) on  advice  from  the  Mortgagee's  architect  (who  shall be
employed by Mortgagee at  Mortgagor's  sole expense) that the work  completed or
materials  installed  conform  to said  budget  and plans,  as  approved  by the
Mortgagee;   and  (ii)  upon   presentment  of  receipted   bills  and  releases
satisfactory to the Mortgagee. The expenses incurred by the Mortgagee, including
reasonable  architects'  and  attorneys'  fees,  and all soft and hard  costs in
connection  with such  restoration,  shall be paid by  Mortgagor  to the  extent
insurance  proceeds are insufficient to pay same. At no time shall the Mortgagee
be  obligated  to  disburse  any  funds if the  undisbursed  balance  is, in the
reasonable  opinion  of the  Mortgagee  based  on  advice  from  its  architect,
insufficient to timely  complete the restoration of the Mortgaged  Property free
and clear of all liens unless adequate  security is posted.  Mortgagor agrees to
post such bonds, obtain such guaranteed maximum price general contract agreement
and/or enter into such agreements and  arrangements as the Mortgagee may require
to insure lien-free  completion of such repairs or restoration by the end of the
period provided herein for completion of such repairs or restoration.

         Section  1.09  (a) In the  event  the  Mortgaged  Property  or any part
thereof or interest therein,  be taken or damaged by eminent domain,  alteration
of the grade of any street,  or other  injury to or  materially  decrease in the
value of the  Mortgaged  Property,  by  reason  of any  public  or  quasi-public
improvement  or  condemnation  proceeding,   or  in  any  other  similar  manner
("Condemnation"),  or should Mortgagor  receive any notice or other  information
regarding such  Condemnation  or a proposed  Condemnation,  Mortgagor shall give
prompt written notice thereof to Mortgagee.

                  (b) Mortgagee  shall be entitled to receive all  compensation,
awards and other payments or relief up to the amount of this Mortgage payable as
a result of any such  Condemnation,  and shall be  entitled,  at its option,  to
participate in any  Condemnation  proceedings.  The Mortgagor  shall execute and
deliver to the  Mortgagee,  promptly  upon  request  therefor,  all  instruments
necessary  to enable  the  Mortgagee  to  participate  in any such  proceedings,
employing on Mortgagee's  behalf,  at Mortgagor's sole expense,  such counsel as
Mortgagee  shall  select.  Mortgagee  shall  also  be  entitled  to  join in any
compromise  or settlement in  connection  with any such  Condemnation.  All such
compensation,  awards,  damages,  rights  of  action  and  proceeds  awarded  to
Mortgagor (the "Proceeds") are hereby assigned to Mortgagee and Mortgagor agrees
to execute such further  assignments  of the Proceeds as Mortgagee  may require.
Mortgagee  shall be under no obligation to question the amount of any such award
or compensation and may accept the same in the amount paid.

                                       10
<PAGE>
                  (c)       Intentionally Deleted.

                  (d) Receipt by  Mortgagee  and  application  in  reduction  of
indebtedness  of any Proceeds less than the full amount of the then  outstanding
Liabilities shall not defer, alter or modify Mortgagor's  obligation to continue
to pay the  regular  installments  of  principal,  interest  on the  outstanding
principal balance and other charges specified in the Note and herein.

                  (e) If prior to the receipt of the Proceeds by  Mortgagee  the
Premises shall have been sold on foreclosure of this Mortgage,  Mortgagee shall,
nevertheless,  have the right to receive the Proceeds and to retain, for its own
account,  (i) an  amount  equal  to  the  reasonable  counsel  fees,  costs  and
disbursements  incurred  by  Mortgagee  in  connection  with  collection  of the
Proceeds  and not  repaid  by  Mortgagor  and (ii) the full  amount  of all such
Proceeds,  if Mortgagee is the successful  purchaser at the foreclosure sale, to
the extent of amounts owed under the Note or hereunder.

         Section  1.10 If Mortgagor  shall fail to perform any of the  covenants
contained  herein  or any  covenant  contained  in the  Note or any  other  Loan
Document  beyond notice and the expiration of the applicable  grace period,  the
Mortgagee  may upon  ten (10)  days  prior  written  notice,  but  shall  not be
obligated to, make advances  and/or  disbursements  to perform the same, and all
sums so advanced and/or  disbursed  shall be a lien upon the Mortgaged  Property
and shall be secured hereby. Mortgagor will repay on demand all sums so advanced
and/or  disbursed with interest at the Default Rate from the date of making such
advance and/or  disbursement until such sums have been repaid. The provisions of
this  Section  1.10  shall not  prevent  any  default in the  observance  of any
covenant  contained  herein  or in the  Note or any  other  Loan  Document  from
constituting an Event of Default.

         Section  1.11 (a)  Mortgagor  will keep  adequate  records and books of
account in accordance  with generally  accepted  accounting  principles and will
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 Mortgagor upon prior reasonable  notice
during business hours as may be requested by the Mortgagee.

                  (b)       Intentionally Deleted.

                  (c) The Mortgagor,  within five (5) business days upon request
in person or within ten (10) days upon  request by mail,  will furnish a written
statement duly acknowledged of the amount due whether,  to the best knowledge of
Mortgagor,  for  principal or interest on this  Mortgage and whether to the best
knowledge of Mortgagor,  any offsets or defenses or counterclaims  exist against
the Liabilities  and, if any are alleged to exist, the amount and nature of each
such offset or defense or counterclaim shall be set forth in full detail.

                  (d) The Mortgagor will deliver to the  Mortgagee,  within five
(5) business  days upon request in person or within ten (10)  business days upon
request by mail,  receipts for the payment of all real property taxes, water and
sewer rents,  and assessments  imposed upon or assessed against the Premises and
in addition,  evidence of payment of all premiums for insurance  required  under
this Mortgage.

         Section 1.12 Mortgagor will not threaten,  commit, permit or suffer any
waste  to  occur  on or to  the  Mortgaged  Property  or  any  part  thereof  or
structurally alter or demolish the Mortgaged Property or any part thereof in any
manner  or make  any  change  in its  use or any  change  which  will in any way
increase any fire or other hazards  arising out of  construction or operation of
the Mortgaged  Property.  Mortgagor  will, at all times,  maintain the Mortgaged
Property in good operating order and condition and will promptly make, from time
to time, all repairs,  renewals,  replacements,  additions and  improvements  in
connection   therewith   which  are  needful  or  desirable  to  such  end.  Any
improvements  which may now or  hereafter  be  located  on the Land shall not be
removed, demolished or substantially altered, nor shall any Chattels be removed,
without the prior  written  consent of Mortgagee,  except where the  appropriate
replacements  free of superior title,  liens and claims are immediately  made of
value  at least  equal to the  value of the  Chattels  removed,  in which  event
Mortgagor shall be entitled to proceeds of the Chattels so removed.

                                       11
<PAGE>
         Section  1.13 Except where  inconsistent  with the laws of the State of
New York,  Mortgagor  agrees  that if any  action or  proceeding  be  commenced,
including an action to foreclose  this  Mortgage or to collect the  indebtedness
hereby  secured,  to which action or proceeding the Mortgagee is made a party by
reason of the  execution  of this  Mortgage or the Note which it secures,  or in
which it becomes  necessary to defend or uphold the lien of this  Mortgage,  all
sums paid by the  Mortgagee  for the expense of any  litigation  to prosecute or
defend  the  transaction  and the  rights and liens  created  hereby  (including
reasonable  attorneys'  fees) shall be paid by Mortgagor  together with interest
thereon  from date of payment by Mortgagee  at the Default  Rate.  All such sums
paid and the interest  thereon shall be immediately due and payable,  shall be a
lien upon the Mortgaged  Property,  and shall be secured  hereby as shall be all
such sums incurred in  connection  with  enforcement  by Mortgagee of its rights
hereunder or under any other Loan Document.

         Section 1.14 Mortgagor  covenants  that the Mortgaged  Property is now,
and until the Liabilities are fully repaid, will be, provided with adequate gas,
sanitary sewer, storm sewer, electricity and water facilities and Mortgagor will
at  all  times  comply  with  all  applicable  laws  and  regulations  including
environmental regulations.

         Section 1.15 If the interest of the Mortgagee in the Mortgaged Property
or ae thereon shall be attacked, directly or indirectly, or if legal proceedings
shall be  instituted  against  Mortgagor  or Mortgagee  with respect  thereto or
against  Mortgagor,  Mortgagor,  upon its learning  thereof,  will promptly give
written notice thereof to the Mortgagee and Mortgagor will, at Mortgagor's  cost
and expense,  exert itself  diligently to cure,  or will cause to be cured,  any
defect  that may have  developed  or be  claimed  to  exist,  and will  take all
necessary and proper steps for the protection and defense thereof and will take,
or will cause to be taken,  such action as is  appropriate to the defense of any
such legal proceedings, including, but not limited to, the employment of counsel
and the prosecution and defense of litigation.

         Section 1.16      Intentionally Deleted.

         Section  1.17 In no event shall the  Mortgagor do or permit to be done,
or omit to do or permit  the  omission  of,  any act or  thing,  the  doing,  or
omission,  of which would  materially  impair the  security of this  Mortgage or
materially impair the value of the Mortgaged Property or any part thereof.

         Section 1.18 Mortgagor  will not directly or  indirectly,  by transfer,
mortgage,  conveyance,  or sale of an interest in Mortgagor permit, do or suffer
the  assignment,  lease,  transfer,  sale,  conveyance  or  encumbrance  of  the
Mortgaged  Property,  or any part thereof or any interest  therein,  without the
prior written consent of the Mortgagee.  While the Loan is outstanding,  neither
the structure nor the ownership of Mortgagor may be changed  without the express
written consent of the Mortgagee.

                                       12
<PAGE>
         Section 1.19      Intentionally Deleted.

         Section  1.20  Mortgagee  may  appear  in  and  defend  any  action  or
proceeding  at law or in  equity  or in  bankruptcy  purporting  to  affect  the
Premises or the security  hereof or the rights and powers of Mortgagee,  and any
appellate  proceedings,  and  in  such  event  Mortgagor  shall  pay  all of the
Mortgagee's costs, charges and expenses, including cost of evidence of title and
reasonable  attorneys'  fees incurred in such action or  proceeding.  All costs,
charges and expenses so incurred,  together with interest thereon at the Default
Rate  from the date of  payment  of same by  Mortgagee  as  aforesaid,  shall be
secured by the lien of this Mortgage and shall be due and payable upon demand.

         Section 1.21  Mortgagor  will  promptly  cure any  municipal  and other
violations  affecting the Mortgaged Premises and deliver dismissal  certificates
in respect of such violations to Mortgagee. In the event such violations are not
cured and such dismissal  certificates  are not delivered to Mortgagee within 30
days of any notice by Mortgagee to  Mortgagor,  or if not capable of cure within
30  days,  if  Mortgagor  has not  commenced  such  cure  and is not  diligently
prosecuting  the same,  then Mortgagee may cure same at Mortgagor's  expense and
the cost of curing such  violations  shall be payable to Mortgagee on demand and
shall be secured by this Mortgage.

         Section 1.22 (a) Mortgagor  will perform and comply  promptly with, and
cause the Premises to be maintained,  used and operated in accordance  with, all
applicable  federal,  state and local laws  pertaining to air and water quality,
hazardous waste, waste disposal,  air emissions and other environmental matters.
If Mortgagor  receives  any notice that  Mortgagor or the Premises is in default
under  or is not in  compliance  with any of the  foregoing,  or  notice  of any
proceeding  initiated  under or with respect to any of the foregoing,  Mortgagor
will promptly furnish a copy of such notice to Mortgagee.

                  (b)  Mortgagor  hereby  represents  and warrants  that neither
Mortgagor nor, to the best of Mortgagor's  knowledge,  any previous owner of the
Premises used, generated, stored or disposed of, on, under or about the Premises
any hazardous waste, toxic substances or related materials  (hereafter  referred
to as  "Hazardous  Materials")  in  violation  of  environmental  laws.  For the
purposes of this Agreement,  Hazardous Materials shall include, but shall not be
limited to, any substance,  material,  or waste which is or becomes regulated by
the State or local  government  authority or the United States  Government.  The
term "Hazardous Materials" herein includes,  without limitation, any material or
substance  which is listed in the United  States  Department  of  Transportation
Hazardous Materials Table (49 CFR 172.101) as amended from time to time, and any
material  or  substance  regulated  as a  hazardous  material  under  applicable
federal, state or local law, rule or regulation.

                  (c)  Mortgagor  covenants  that it  shall  keep or  cause  the
Premises  to be kept free of  Hazardous  Materials  and not cause or permit  the
Premises to be used to generate,  manufacture,  refine, transport, treat, store,
handle,  dispose,  produce or process Hazardous Materials,  except in compliance
with all applicable Federal, State and local laws or regulations.

                  (d) Mortgagor  covenants to ensure compliance by all operators
and occupants of the Premises with all applicable Federal, State and local laws,
ordinances,  rules and  regulations  and will ensure that all such operators and
occupants obtain and comply with any and all required  approvals,  registrations
or permits.

                                       13
<PAGE>
                  (e) Mortgagor shall, upon the reasonable request of Mortgagee,
conduct  and  complete  all  investigations,  studies,  samplings  and  testings
relative to Hazardous Materials at or affecting the Premises.

                  (f)  Mortgagor  shall  defend,  indemnify,  and hold  harmless
Mortgagee,  its employees,  agents,  officers and directors from and against any
claims, demands, penalties, fines, liabilities,  settlements,  damages, costs or
expenses of whatever  kind or nature known or unknown,  contingent or otherwise,
arising out of or in any way related to Hazardous  Materials at or affecting the
Premises or the soil, water, vegetation,  buildings, personal property, persons,
animals or  otherwise  and any personal  injury  (including  wrongful  death) or
property damage arising out of or related to such Hazardous  Materials excluding
any acts of Mortgagee or its employees, agents, contractors or invitees.

                  (g)   Foreclosure   shall  not  operate  as  a  discharge   of
Mortgagor's  engagements as to Hazardous  Materials;  and in the event Mortgagor
tenders a deed in lieu of  foreclosure,  Mortgagor shall deliver the Premises to
Mortgagee (or its designee) free of any and all Hazardous Materials.

                  (h) In the event  Mortgagor does not timely perform any of the
above  obligations,  Mortgagee  may upon ten (10) days prior  written  notice to
Mortgagor  perform said obligations at the expense of Mortgagor and such expense
shall be added to the amount secured by the lien of this Mortgage.

                  (i) If at any time it is  determined  that there are any toxic
and/or Hazardous  Materials located on the Premises,  Mortgagor shall diligently
commence  to  take  such  action,  at its  sole  expense,  to  comply  with  all
environmental requirements pertaining to such materials. Failure of Mortgagor to
diligently comply with all environmental requirements of Federal, state or local
law, statute,  ordinance or regulation,  rule, court or administrative  order or
decree,  or private  agreement,  shall  constitute  and be a default  under this
Mortgage and Mortgagee, in lieu of foreclosure, shall have the option to require
specific performance of Mortgagor's obligations hereunder.

         Section 1.23 The Mortgagor will not,  unless  required by law,  consent
to,  join in,  permit  or allow  any  change in the  zoning  laws or  ordinances
relating to or affecting the Premises and will promptly  notify the Mortgagee of
any changes to the zoning laws.

         Section 1.24 The Mortgagor, as further security for the payment of said
indebtedness and in addition to all the rights and remedies otherwise  available
to the  Mortgagee  under the  Notes and  Mortgages,  grants to the  Mortgagee  a
security  interest,  under the Uniform Commercial Code as in effect in the State
of New York in and to the Chattels  and all  equipment,  fixtures,  chattels and
articles of personal property of every kind now or hereafter attached to or used
in connection  with the Premises and owned by  Mortgagor.  Following an Event of
Default by the  Mortgagor  in any of the  terms,  covenants  and/or  obligations
contained  herein  or in the Note or in any of the  other  Loan  Documents,  the
Mortgagee  shall have, in addition to all the other rights and remedies  allowed
by Law, the rights and remedies of a secured party under the Uniform  Commercial
Code as in effect at that time.  The Mortgagor  further agrees that the security
interest  created  hereby also secures all expenses of the Mortgagee  (including
reasonable expenses for legal services of every kind, and cost of any insurance,
and  payment  of taxes or other  charges)  incurred  in or  incidental  to,  the
custody,  care, sale or collection of, or realization  upon, any of the property
secured  hereby or in any way relating to the  enforcement  or protection of the
rights of the Mortgagee hereunder.

         Section 1.25 The Mortgagor warrants and covenants that the Premises are
and will  continue to be in compliance  with all  applicable  local,  County and
State laws and regulations and all building,  housing and fire codes,  rules and
regulations. The Mortgagor further warrants and covenants that in the event that
the  Mortgagor  shall obtain notice that the Premises are in violation of any of
the aforesaid  municipal laws,  regulations or building,  housing or fire codes,
rules or  regulations,  whether as a result of a search of the public records or
otherwise, Mortgagor shall cure such violations in a reasonably diligent manner.

                                       14
<PAGE>
                                 ARTICLE II

                         EVENTS OF DEFAULT AND REMEDIES

         Section 2.01 The following shall constitute  Events of Default ("Events
of Default") under this Mortgage following 10 days prior written notice (30 days
in the event of non-monetary defaults unless same cannot be cured within said 30
days in which case provided  Mortgagor  takes  diligent  steps to cure same in a
commercially reasonable time frame, Mortgagor shall have such additional time to
cure said defaults) and an opportunity to cure within said period:

                  (a) if the Mortgagor or any  Guarantor  shall fail to pay when
due any  installment  of interest or principal  or any other sums payable  under
this  Mortgage,  Note, or any other Loan Document or under any other document or
agreement between Mortgagee and Mortgagor or any Guarantor; or

                  (b) if  default  shall  be  made  in  the  due  observance  or
performance  of any covenant,  term,  obligation,  condition or agreement on the
part of Mortgagor or Guarantor  contained  herein or in any other Loan Document;
or

                  (c) if any representation or warranty made by the Mortgagor or
Guarantor  herein  or in any  other  Loan  Document,  or if any  certificate  or
statement  delivered to Mortgagee  or by Mortgagor in  connection  with the Loan
shall be  incorrect  or  misleading  to an extent  deemed by  Mortgagee,  in its
reasonable judgment, to be substantial and material; or

                  (d) if an Event or Default shall have occurred  under the Note
or any other Loan Document;

     (e) if the  Mortgaged  Property  or any  material  part  thereof  shall  be
condemned; or

                  (f) if any easement over, across, under or otherwise affecting
the  Mortgaged  Property  or any  portion  thereof  shall be granted or released
without the  Mortgagee's  prior written  consent or if there shall be a material
default by Mortgagor under any easement,  covenant or restriction  affecting the
Premises or any portion  thereof or if any  easement in favor of the Premises or
any portion thereof shall be terminated or modified; or

                  (g) if the Mortgagor shall assign the rents from any lease for
all  or a part  of the  Premises,  without  the  prior  written  consent  of the
Mortgagee or shall consent to the  cancellation  or surrender of any such lease,
now existing or hereafter  made,  having an unexpired  term of one year or more,
without the prior  written  consent of the  Mortgagee,  which  consent or denial
thereof shall not be unreasonably  delayed  (unless,  after notice to Mortgagee,
such cancellation or surrender shall be in connection with the substitution of a
new  tenant  on terms not less  favorable  than the  terms of such  canceled  or
surrendered lease) or shall modify any such lease so as to shorten the unexpired
term thereof, or so as to decrease the amount of the rent payable thereunder, or
shall in any other manner  materially  impair the security of the  Mortgagee for
the payment of the debt secured by the Mortgage; or

                                       15
<PAGE>
                (h) if there  exists  any  actual  or  threatened  in  writing
demolition or removal of any building, or any portion thereof,  erected or to be
erected  upon  the  Premises,  or if the  buildings  on  the  Premises  are  not
maintained in reasonably  good repair for 30 days after notice  thereof has been
given  to  Mortgagor  or  if,  without  the  Mortgagee's  written  consent,  any
structural  alteration  in, or addition  to, any  building or  structure  on the
Premises  shall be made or any change shall occur in the use or occupancy of the
Premises from their present use or occupancy; or

                  (i) if the Premises or any part thereof are further mortgaged,
pledged or otherwise encumbered without Mortgagee's prior written consent; or

                  (j) if the Mortgagor shall renovate (other than  nonstructural
renovations which are permitted hereunder),  demolish or commence any structural
alteration  on the  Premises or any part  thereof  without  obtaining  the prior
written  consent  of the  Mortgagee  which  consent  shall  not be  unreasonably
withheld or delayed; or

                  (k) if  the  Mortgagor  or  any  Guarantor  fails  to  deliver
financial  statements,  tax returns and other financial  information pursuant to
the terms of this Mortgage or the Loan Documents.

         Section  2.02 Upon the  occurrence  of any such Event of  Default,  the
Mortgagee,  without  notice or  presentment,  each of which are hereby waived by
Mortgagor, may take such action as it deems advisable to protect and enforce its
rights  against  the  Mortgagor  and in and to the  Premises  including  but not
limited to, the following actions,  each of which may be pursued concurrently or
otherwise at such time and in such order as the Mortgagee may determine.

                  (a) Upon the occurrence of an Event of Default,  the Mortgagor
may declare the entire  principal of the Note then  outstanding (if not then due
and payable), and all accrued and unpaid interest thereon, to be due and payable
immediately,  and upon any such  declaration  the principal of the Note and said
accrued and unpaid  interest  shall become and be  immediately  due and payable,
anything in the Note or in this Mortgage to the contrary notwithstanding;

                  (b) Upon the  occurrence  of any such  Event of  Default,  the
Mortgagee may enter into and upon all or any part of the Premises,  and,  having
and  holding  the same,  may use,  operate,  manage and  control  the  Mortgaged
Property or any part thereof and conduct the business thereof, either personally
or by its superintendents,  managers, agents, servants,  attorneys or receivers;
and likewise, from time to time, at the expense of Mortgagor, Mortgagee may make
all  necessary  or proper  repairs,  renewals and  replacements  and such useful
alterations,  additions,  betterments and improvements thereto and thereon as to
it may  deem  advisable  in its  reasonable  judgment;  and in every  such  case
Mortgagee shall have the right to manage and operate the Mortgaged  Property and
to carry on the business thereof and exercise all rights and powers of Mortgagor
with respect  thereto  either in the name of Mortgagor or otherwise as Mortgagee
shall deem best; and Mortgagee shall be entitled,  with or without entering into
or upon the  Premises,  to collect  and receive  all gross  receipts,  earnings,
revenues,  rents,  maintenance  payments,  issues,  profits  and  income  of the
Mortgaged  Property and every part thereof,  all of which shall for all purposes
constitute  property of Mortgagee;  and, after deducting the reasonable expenses
of conducting the business  thereof and of all maintenance,  repairs,  renewals,
replacement,  alterations,  additions,  betterments and improvements and amounts
necessary to pay taxes, assessments, insurance and prior or other proper charges
upon the Mortgaged Property or any part thereof,  as well as just and reasonable
compensation  for the  services of  Mortgagee  and for all  attorneys,  counsel,
agents,  clerks,  servants  and  other  employees  by it  properly  engaged  and
employed, Mortgagee may apply the moneys arising as aforesaid in such manner and
at such times as Mortgagee  shall  determine in its discretion to the payment of
the  Liabilities  and the  interest  thereon,  when and as the same shall become
payable and/or to the payment of any other sums required to be paid by Mortgagor
under this Mortgage;

                                       16
<PAGE>
     (c) Upon the occurrence of any such Event of Default,  Mortgagor  covenants
and agrees as follows:

                  (1) Mortgagee may, with or without entry, personally or by its
agents or attorneys,  insofar as applicable,  sell the Mortgaged Property or any
part  thereof and  pursuant to the  procedures  provided by law, and all estate,
right,  title,  interest,  claim and  demand  therein,  and right of  redemption
thereof,  at one or more sales as an entity or in parcels,  and at such time and
place upon such  terms and after  such  notice  thereof  as may be  required  or
permitted by law; or

                  (2) Mortgagee may institute an action of mortgage  foreclosure
or institute other proceedings  according to law for the foreclosure hereof, and
may prosecute the same to judgment, execution and sale for the collection of the
Liabilities secured hereby, and all interest with respect thereto, together with
all taxes and insurance premiums advanced by Mortgagee and other sums payable by
Mortgagor  hereunder,  and all fees,  costs and  expenses  of such  proceedings,
including attorneys' fees and expenses; or

                  (3)  Mortgagee  may, if default be made in any  payment  after
notice  and  the  expiration  of  the  applicable  grace  period,  proceed  with
foreclosure of the liens  evidenced  hereby in  satisfaction of such item either
through the courts or by  conducting  the sale as herein  provided,  and proceed
with foreclosure of the security interest created hereby,  all without declaring
the whole of the  Liabilities  due, and provided  that if sale of the  Mortgaged
Property,  or any portion  thereof,  is made  because of default in payment of a
part of the Liabilities after notice and the, expiration of the applicable grace
period,  such sale may be made subject to the unmatured part of the Liabilities,
but as to such  unmatured  part of the  Liabilities  (and it is agreed that such
sale,  if so made,  shall not in any  manner  affect the  unmatured  part of the
Liabilities)  this Mortgage shall remain in full force and effect just as though
no sale had been made under the provisions of this paragraph.

                  (4)  Mortgagee  may take such steps to protect and enforce its
rights whether by action, suit or proceeding in equity or at law for appointment
of a receiver or for the  specific  performance  of any  covenant,  condition or
agreement in the Loan  Documents or in aid of the  execution of any power herein
granted, or for any foreclosure  hereunder,  or for the enforcement of any other
appropriate legal or equitable remedy or otherwise as the Mortgagee shall elect;
or

                  (5)  Mortgagee  may  exercise  in  respect  of  the  Mortgaged
Property consisting of personal property or fixtures, or both, all of the rights
and remedies  available to a secured  party upon  default  under the  applicable
provisions of the Uniform Commercial Code in effect in the State of New York; or

                  (6) Any sale as  aforesaid  may be  subject  to such  existing
tenancies as Mortgagee, in its sole discretion, may elect;

         Section 2.03 (a) The  Mortgagee  may adjourn from time to time any sale
by it to be made under or by virtue of this Mortgage by announcement at the time
and place  appointed  for such sale or for such  adjourned  sale or sales;  and,
except as otherwise  provided by any  applicable  provision  of law,  Mortgagee,
without further notice or publication,  may make such sale at the time and place
to which the same shall be so adjourned.

                                       17
<PAGE>
                  (b) Upon the completion of any sale or sales made by Mortgagee
under or by virtue of this  Article II,  Mortgagee,  or any officer of any court
empowered  to do so,  shall  execute and deliver to the  accepted  purchaser  or
purchasers a good and sufficient instrument, or good and sufficient instruments,
conveying,  assigning and transferring all estate,  right, title and interest in
and  to  the  properties,   interests  and  rights  sold.  Mortgagee  is  hereby
irrevocably appointed the true and lawful attorney of Mortgagor, in its name and
stead,  to make  all  the  necessary  conveyances,  assignments,  transfers  and
deliveries  of any part of the  Mortgaged  Property and rights so sold,  and for
that purpose  Mortgagee may execute all  necessary  instruments  of  conveyance,
assignment  and transfer and may substitute one or more persons with like power,
Mortgagor  hereby  ratifying and  confirming  all that its said attorney or such
substitute or  substitutes  shall  lawfully do by virtue  hereof.  Nevertheless,
Mortgagor, if so requested by Mortgagee,  shall ratify and confirm any such sale
or sales by  executing  and  delivering  to  Mortgagee  or to such  purchaser or
purchasers all such instruments as may be advisable,  in the reasonable judgment
of Mortgagee, for the purpose and as may be designated in such request. Any such
sale or sales made under or by virtue of this Article II, whether made under the
power of sale herein granted or under or by virtue of judicial proceedings or of
a judgment or decree of  foreclosure  and sale,  shall operate to divest all the
estate, right, title, interest,  claim and demand whatsoever,  whether at law or
in equity, of Mortgagor in and to the properties,  interests and rights so sold,
and shall be a perpetual  bar both at law and in equity  against  Mortgagor  and
against  any and all  persons  claiming  or who may claim the same,  or any part
thereof, from, through or under Mortgagor.

                  (c) Upon any sale,  whether  under  the  power of sale  hereby
given or by virtue  of  judicial  proceedings,  it shall  not be  necessary  for
Mortgagee,  or any public officer acting under  execution or order of court,  to
have present or constructive possession of any of the Mortgaged Property.

                  (d) The recitals contained in any conveyance made by Mortgagee
to any purchaser at any sale made pursuant hereto or under  applicable law shall
be full evidence of the matters therein stated,  and all  prerequisites  to such
sale shall be presumed to have been satisfied and performed.

                  (e) To the  extent  permitted  by law,  any such sale or sales
made under or by virtue of this Mortgage, whether under the power of sale hereby
granted and conferred, or under or by virtue of any judicial proceedings,  shall
operate to divest  all  right,  title,  interest,  claim and demand  whatsoever,
either by law or in equity,  of  Mortgagor  in and to the  premises and property
sold,  and  shall  be a  perpetual  bar,  both  at law  and in  equity,  against
Mortgagor,  its  successors  and  assigns,  and  against  any and all persons or
entities  claiming the premises and property  sold,  or any part  thereof,  from
through or under Mortgagor and its successors or assigns.

                                       18
<PAGE>
                  (f)      Omitted

                  (g) In case the liens or security interests  hereunder,  or by
the exercise of any other right or power,  shall be  foreclosed  by  Mortgagee's
sale or by other judicial or non-judicial action, the purchaser at any such sale
shall  receive,  as an incident to its  ownership,  immediate  possession of the
property  purchased,  and if  Mortgagor  or  Mortgagor's  successors  shall hold
possession of said  property,  or any part thereof,  subsequent to  foreclosure,
Mortgagor or Mortgagor's successors shall be considered as tenants at sufferance
of the purchaser at foreclosure  sale,  and anyone  occupying the property after
demand made for  possession  thereof  shall be guilty of forcible  detainer  and
shall be subject to eviction and removal, forcible or otherwise, with or without
process of law, and all damages by reason thereof are hereby expressly waived.

                  (h) In the event a foreclosure hereunder shall be commenced by
Mortgagee,  Mortgagee may at any time before the sale abandon the suit,  and may
then institute  suit for the  collection of the Note and for the  foreclosure of
the liens and security interest hereof. If Mortgagee should institute a suit for
the  collection  of the Note and for a  foreclosure  of the liens  and  security
interest hereof, it may at any time before the entry of a final judgment in said
suit dismiss the same and proceed to sell the  Mortgaged  Property,  or any part
thereof, in accordance with provisions of this Mortgage.

                  (i)  Should  any  default  occur  hereunder,   any  reasonable
expenses  incurred by Mortgagee in prosecuting,  resetting or settling the claim
of Mortgagee shall become an additional Liability of Mortgagor hereunder.

                  (j) In the event of any sale  made  under or by virtue of this
Article II (whether  made under the power of sale herein  granted or under or by
virtue of judicial  proceedings  or of a judgment or decree of  foreclosure  and
sale), the entire principal of, and interest on, the Note, if not previously due
and  payable,  and all other sums  required to be paid  pursuant to the Note and
this  Mortgage,  immediately  thereupon  shall,  anything in the Note or in this
Mortgage to the contrary notwithstanding, become due and payable.

                  (k) The  purchase  money  proceeds  or avails of any sale made
under or by virtue of this Article II,  together  with any other sums which then
may be held by Mortgagee  under this  Mortgage,  whether under the provisions of
this Article II or otherwise,  shall be applied in  accordance  with the laws of
the State of New York and to the extent not  inconsistent,  first to the payment
of the costs and  expenses  of such sale,  including  reasonable  counsel  fees,
second to the payment of the amounts due and owing under the Note for  principal
and interest  with  interest at the Default Rate from and after the happening of
any Event of Default, third to the payment of any other sums required to be paid
pursuant to any provision of this Mortgage, the Note or other Loan Document, all
with  interest at the Default  Rate from the date such sums were or are required
to be paid under this  Mortgage,  and fourth to the payment of the  surplus,  if
any, to whomsoever may be lawfully entitled to receive the same.

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

                                       19
<PAGE>
         Section 2.04 (a) In case an Event of Default  described in this Article
II shall have happened  then,  upon demand of Mortgagee,  Mortgagor  will pay to
Mortgagee the sums required to be paid by Mortgagor pursuant to any provision of
this  Mortgage,  and in  addition  thereto  such  further  amount  as  shall  be
sufficient to cover the costs and expenses of collection,  including  reasonable
compensation  to Mortgagee  its agents and counsel and any expenses  incurred by
Mortgagee  hereunder or in connection with any foreclosure  action. In the event
Mortgagor  shall fail forthwith to pay such amounts upon such demand,  Mortgagee
shall be entitled and empowered to institute  such action or  proceedings at law
or in equity as may be advised by its counsel for the  collection of the sums so
due and unpaid,  and may prosecute any such action or proceedings to judgment or
final decree.

                  (b)  Mortgagee  shall  be  entitled  to  recover  judgment  as
aforesaid  either before or after or during the pendency of any  proceedings for
the enforcement of the provisions of this Mortgage and the right of Mortgagee to
recover such judgment shall not be affected by any entry or sale  hereunder,  or
by the exercise of any other right,  power or remedy for the  enforcement of the
provisions of this Mortgage or the  foreclosure  of the lien hereof;  and in the
event  of a sale  of the  Mortgaged  Property  or any  part  thereof  and of the
application  of the  proceeds  of sale,  as provided  in this  Mortgage,  to the
payment of the  indebtedness  hereby  secured,  Mortgagee  shall be  entitled to
enforce  payment of, and to receive all amounts  then  remaining  due and unpaid
upon, the Note, and to enforce payment of all other charges,  payments and costs
due under  this  Mortgage  and shall be  entitled  to recover  judgment  for any
portion of the debt remaining unpaid, with interest thereon at the Default Rate.

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

                  (d) Any moneys thus collected by Mortgagee  under this Section
2.04  shall be  applied  by  Mortgagee  in  accordance  with the  provisions  of
paragraph (k) of Section 2.03.

         Section  2.05  After  the   happening  of  any  Event  of  Default  and
immediately upon the commencement of any action, suit or other legal proceedings
by Mortgagee to obtain  judgment for the  principal of, or interest on, the Note
and other sums  required to be paid by  Mortgagor  pursuant to any  provision of
this  Mortgage or of any nature in aid of the  enforcement  of the Note, or this
Mortgage,  Mortgagor will, if required by Mortgagee,  consent to the appointment
of a receiver or receivers of the Mortgaged  Property or any part thereof and of
all the earnings,  revenues,  rents,  maintenance payments,  issues, profits and
income  thereof in accordance  with Section 2.11 hereof.  After the happening of
any Event of Default or upon the  commencement  of any  proceedings to foreclose
this Mortgage or to enforce the specific performance hereof or in aid thereof or
upon the  commencement of any other judicial  proceeding to enforce any right of
Mortgagee,  Mortgagee  shall be entitled,  as a matter of right,  if it shall so
elect, without the giving of notice to any other party and without regard to the
adequacy or inadequacy of any security for the Mortgage indebtedness,  forthwith
either before or after declaring the unpaid  principal of the Note to be due and
payable, to the appointment of such a receiver or receivers.

         Section  2.06   Notwithstanding   the   appointment  of  any  receiver,
liquidator  or  trustee  of  Mortgagor  or of  any of  its  property,  or of the
Mortgaged  Property or any part thereof,  Mortgagee  shall be entitled to retain
possession and control of all property now or hereafter held under the Mortgage.

         Section 2.07 No remedy herein  conferred  upon or reserved to Mortgagee
is intended to be exclusive of any other remedy or remedies which  Mortgagee may
be entitled to exercise  against  Mortgagor and each and every such remedy shall
be cumulative, and shall be in addition to every other remedy given hereunder or
in any other Loan  Document or now or hereafter  existing at law or in equity or
by statute.  No delay or omission of Mortgagee to exercise any right, such right
or power,  or shall be construed to be a waiver of  Mortgagee's  right to demand
payment at anytime or of any such Event of Default or any acquiescence  therein;
and every power and remedy given in this  Mortgage or in any other Loan Document
to  Mortgagee  may be  exercised  from  time to time as often  as may be  deemed
expedient by Mortgagee.  The resort to any remedy  provided  hereunder or in any
other Loan  Document  or  provided  by law or at equity  shall not  prevent  the
concurrent or subsequent  employment of any other appropriate remedy or remedies
against  Mortgagor.  By the acceptance of payment of principal of or interest on
any of the  Liabilities  after its due date,  Mortgagee does not waive the right
either to demand payment at anytime or to require prompt payment when due of all
other amounts  secured hereby or to regard as an Event of Default the failure to
pay any other such amounts. Nothing in this Mortgage or in the Note shall affect
the obligation of Mortgagor to pay the Liabilities in the manner and at the time
herein expressed.

                                       20
<PAGE>
         Section 2.08 Mortgagor  will not at any time insist upon, or plead,  or
in any manner  whatever  claim or take any benefit or  advantage  of any stay or
extension  or  moratorium  law,  any  exemption  from  execution  or sale of the
Mortgaged  Property or any part thereof,  wherever  enacted,  now or at any time
hereafter in force,  which may affect the covenants and terms of  performance of
this  Mortgage  or any other Loan  Document,  or 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 Mortgaged Property, 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,  or,  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  Mortgagor  hereby  expressly  waives all  benefit or
advantage of any such law or laws and  covenant  not to hinder,  delay or impede
the  execution of any power herein  granted or  delegated to  Mortgagee,  but to
suffer and permit the execution of every power as though no such law or laws had
been made or enacted. Mortgagor, waives, to the extent that it lawfully may, all
right to have the  Mortgaged  Property or any part  thereof  marshaled  upon any
foreclosure hereof.

         Section  2.09 Upon the  occurrence  of any Event of Default and pending
the exercise by Mortgagee of its right to exclude Mortgagor from all or any part
of the Premises,  unless Mortgagor is legally entitled to continue possession of
the Premises,  Mortgagor agrees to pay the fair and reasonable  rental value for
the use and  occupancy of the Premises or any portion  thereof  which are in its
possession  for such period and, upon default of any such  payment,  will vacate
and surrender possession of the Premises to Mortgagee or to a receiver,  if any,
and in default  thereof may be evicted by any summary  action or proceeding  for
the recovery of  possession  of the Premises for  non-payment  of rent,  however
designated.  Any payments  received by Mortgagee  shall be applied in accordance
with Section 2.03(k) of this Mortgage.

         Section 2.10 In case of any sale under the foregoing provisions of this
Article II,  whether  made under the power of sale  hereby  given or pursuant to
judicial proceedings,  Mortgagee may bid for and purchase any property,  and may
make payment  therefor as hereinafter  set forth,  and, upon compliance with the
terms of said sale,  may hold,  retain  and  dispose  of such  property  without
further accountability therefor. For the purpose of making settlement or payment
for the property or properties purchased, Mortgagee shall be entitled to use and
apply such of the  Liabilities  held by it and any accrued  and unpaid  interest
thereon.

         Section  2.11 Upon  application  of Mortgagee to any court of competent
jurisdiction,  if any  Event of  Default  shall  have  occurred,  to the  extent
permitted  by law, a receiver  may be  appointed  to take  possession  of and to
operate,  maintain,  develop  and  manage  the  Mortgaged  Property  or any part
thereof. In every case when a receiver of the whole or any part of the Mortgaged
Property shall be appointed under this Section 2.11 or otherwise, the net income
and profits of the Mortgaged  Property shall,  subject to the order of any court
of competent jurisdiction,  be paid over to, and shall be received by, Mortgagee
to be applied as provided in Section 2.03(k) hereof.

         Section  2.12  Mortgagee  may  resort  to any  security  given  by this
Mortgage or to any other security now existing or hereafter  given to secure the
payment of any of the Liabilities  secured  hereby,  in whole or in part, and in
such portions and in such order as may seem best to Mortgagee in its  reasonable
discretion,  and any such action shall not in any way be  considered as a waiver
of any of the  rights,  benefits,  liens or  security  interest  created by this
Mortgage.

         Section 2.13 All remedies herein expressly  provided are in addition to
any and all remedies  provided for in the  Mortgages and the Notes and all other
remedies now or hereafter existing at law or in equity, and the Mortgagee shall,
in addition to the  remedies  herein  expressly  provided,  be entitled to avail
themselves or itself of all such other remedies as may now or hereafter exist at
law or in equity for the collection of the  indebtedness  and the enforcement of
the  covenants  herein and the  foreclosure  of the liens and security  interest
granted hereby,  and the resort to any remedy provided  hereunder or provided by
law shall not prevent  the  concurrent  or  subsequent  employment  of any other
appropriate remedy or remedies against Mortgagor.

                                       21
<PAGE>
                                   ARTICLE III

                                  MISCELLANEOUS

         Section  3.01  All of the  grants,  covenants,  terms,  provisions  and
conditions of this Mortgage shall run with the land and shall apply to, bind and
inure to the  benefit of the  successors  and assigns of the  Mortgagor  and the
successors  and assigns of the  Mortgagee.  All of the covenants and  warranties
made by the  Mortgagor in this  Mortgage  shall be joint and  several.  The term
"Mortgagee" as used herein, shall be deemed to mean the holder from time to time
of the Note at the time outstanding.

         Section 3.02 In the event any one or more of the  provisions  contained
in this  Mortgage  or in the Note  shall for any  reason be held to be  invalid,
illegal  or  unenforceable  in  any  respect,  such  invalidity,  illegality  or
unenforceability  shall,  at the  option  of  Mortgagee,  not  affect  any other
provision  of this  Mortgage  but this  Mortgage  shall be  construed as if such
invalid,  illegal or unenforceable  provision had never been contained herein or
therein.

         Section  3.03 All  notices  hereunder  shall be in writing and shall be
deemed to have been  sufficiently  given or served for all purposes when sent by
certified or registered mail or commercial courier service,  to any party hereto
at the following address:

                  (a)      If to Mortgagee:

                           Independence Community Bank
                           179 Pacific Street
                           Brooklyn, New York   11201

                           with a copy to:

                           Jaffe & Asher
                           52 Vanderbilt Avenue
                           New York, New York  10017
                           Attn: Larry M. Nessenson, Esq.

                  (b)      If to Mortgagor:

                           100 Marcus Boulevard
                           Hauppauge,  NY 11788

                           With a copy to:

                           Joseph Cannella, Esq.
                           Fischbein, Badillo, Wagner & Harding
                           909 Third Avenue
                           New York, NY 10022


or at such other  address as any of the parties may from time to time  designate
by written notice given as herein  required.  Mailed notices shall not be deemed
given or served until three  business days after the date of mailing  thereof or
if delivery  is by  nationwide  commercial  courier  service of notice  shall be
deemed  given  one  business  day  after the date of  delivery  thereof  to said
courier.  Rejection or refusal to accept,  or  inability  to deliver  because of
changed  addresses or because no notice of changed  address was given,  shall be
deemed a receipt of such notice.

         Section 3.04 The Default  Rate shall  continue to accrue and be paid on
any amount to which the  Default  Rate is applied  until said  amount is paid in
full.

                                       22
<PAGE>
         Section  3.05 This  Mortgage  and the  rights and  indebtedness  hereby
secured shall,  without regard to place of contract or payment, be construed and
enforced  according to the laws of the State of New York,  without giving effect
to its principles of conflicts of laws.

         Section  3.06 Neither this  Mortgage  nor any  provision  hereof may be
changed, waived,  discharged or terminated,  except by an instrument in writing,
signed by Mortgagee and Mortgagor.

         Section 3.07 This Mortgage  shall be deemed to be a security  agreement
pursuant to the Uniform Commercial Code of the State of New York.

         Section  3.08 In the event  that  Mortgagee,  in  enforcing  its rights
hereunder, determines that charges and fees incurred in connection with the Loan
may, under the applicable  usury laws,  cause the interest rate herein to exceed
the maximum  allowed by law, then such interest  shall be  recalculated  and any
excess over the maximum interest permitted by said laws shall be credited to the
then principal  outstanding balance to reduce said balance by that amount. It is
the intent of the parties hereto that Mortgagor under no circumstances  shall be
required to pay, nor shall Mortgagee be entitled to collect,  any interest which
is in excess of the maximum  legal rate  permitted  under the  applicable  usury
laws.

         Section  3.09  Mortgagor  will not claim or demand  or be  entitled  to
receive any credit or credits on the principal indebtedness to secure payment of
which this Mortgage is made, or on the interest payable thereon,  for so much of
the taxes  assessed  against the Mortgaged  Property as is equal to the tax rate
applied to the principal  indebtedness  due on this Mortgage or any part thereof
and no  deduction  shall be  claimed  from the  taxable  value of the  Mortgaged
Property by reason of this Mortgage.

         Section 3.10 No release of any part of the Mortgaged Property or of any
other property  conveyed to secure the  obligations  secured hereby shall in any
way alter,  vary or diminish the force,  effect or lien or security  interest of
this Mortgage on the Mortgaged  Property or portion thereof remaining subject to
the lien and security interest created hereby.

         Section 3.11 In the event  Mortgagor or any of  Mortgagor's  successors
conveys or leases  without the prior approval of the Mortgagee  (which  approval
shall not be unreasonably  withheld)  except as permitted herein any interest in
the Mortgaged Property,  or any part thereof, to any other party,  Mortgagee may
deal  with  any  owner or  lessee  of any part of the  Mortgaged  Property  with
reference to this Mortgage and to the Liabilities,  either by forbearance on the
part of Mortgagee or release of all or any part of the Mortgaged  Property or of
any other  property  securing  payment  of any  Liabilities,  without in any way
modifying or affecting Mortgagee's rights, remedies, liens or security interests
hereunder  (including  the right to demand payment at anytime or to exercise any
one or more of the  remedies  described or referred to in Article I, Article II,
or Article III hereof in the event such conveyance is made in  contravention  of
the  provisions  of this  Mortgage)  or the  liability of Mortgagor or any other
party liable for the payment of the Liabilities, in whole or in part. This shall
not be construed to allow any such conveyance or leasing by Mortgagor,  it being
understood  that  conveyance  or leasing of the  Mortgaged  Property or any part
thereof, except as permitted herein, is an Event of Default hereunder.

         Section 3.12 All options and rights of election herein provided for the
benefit of the  Mortgagee are  continuing,  and the failure to exercise any such
option or right or  election  upon a  particular  demand or default or breach or
upon any  subsequent  demand or  default  or breach  shall not be  construed  as
waiving the right to exercise  such option or election at any later date. By the
acceptance of payment of principal or interest after its due date, the Mortgagee
does not waive the right  either to  require  prompt  payment  at any time or to
payment when due of all other amounts secured hereby or to demand payment at any
time or to regard  as an Event of  Default  the  failure  to pay any other  such
amounts.  No  exercise of the rights and powers  herein  granted and no delay or
omission in the  exercise of such rights and powers shall be held to exhaust the
same or be construed as a waiver thereof,  and every such right and power may be
exercised at any time and from time to time.  All grants,  covenants,  terms and
conditions  hereof  shall  bind  Mortgagor  and  all  successive  owners  of the
Premises.

                                       23
<PAGE>
         Section  3.13  Mortgagor  shall pay any  transfer  or gains tax payable
pursuant  to the Tax Law of the  State of New  York as the same may be  amended,
supplemented  and/or  replaced  from  time to  time  upon a  foreclosure  of the
Mortgage or a transfer of the Premises in lieu of  foreclosure.  Mortgagor  will
deliver  to the  Mortgagee  at any time upon  request by the  Mortgagee  certain
information, affidavits, questionnaires and documents relating to computation of
the Tax which would be payable upon a  foreclosure  or transfer in lieu thereof.
Mortgagor  shall cooperate with Mortgagee in connection with compliance with the
Tax Law.  Mortgagor hereby appoints Mortgagee as Mortgagor's agent (which agency
is coupled with an interest in Mortgagee and is irrevocable) to execute and file
all  questionnaires,  affidavits  and  returns and  provide  all  documents  and
information  necessary  to comply with the Tax Law, if for any reason  Mortgagor
fails to do so, but without Mortgagee having any obligation to do so.

                  Mortgagor  hereby  indemnifies  and  agrees to hold  Mortgagee
harmless from any loss, cost,  damage and expense  (including but not limited to
attorneys'  fees in a reasonable  amount) which Mortgagee may suffer or incur by
reason  of  Mortgagor's  failure  to  comply  with its  obligations  under  this
paragraph.  The  foregoing  indemnity  shall  survive  any  termination  of this
Mortgage, whether by foreclosure,  deed in lieu of foreclosure or otherwise, but
it shall not survive payment in full of the Liabilities.

         Section 3.14      Intentionally Deleted.

         Section  3.15  Mortgagee  shall  have  the  right,  in  its  reasonable
discretion  if Mortgagee  reasonably  believes the same is required,  to require
updated appraisals and/or environmental reports of the Premises. Mortgagee shall
retain an appraiser and/or environmental inspector at Mortgagor's expense.

         Section 3.16      Intentionally Deleted.

         Section 3.17 This  Agreement  shall be binding  upon,  and inure to the
benefit of, the successors, heirs, executors,  administrators and assigns of the
respective parties hereto.

         Section 3.18 Mortgagor  irrevocably  submits to the jurisdiction of any
New York State or Federal court over any suit, action or proceeding  arising out
of or relating to this  Agreement or any Loan  Document.  The  Mortgagor  hereby
agrees that the  Mortgagee  shall have the option in its sole  discretion to lay
the venue of any such suit,  action or  proceeding in the courts of the State of
New York or the United  States of  America,  irrevocably  waives to the  fullest
extent  permitted by law any objection which Mortgagor may now or hereafter have
to the laying of the venue of any such  suit,  action or  proceeding  brought in
such court and any claim  that any suit,  action or  proceeding  brought in such
court has been brought in an  inconvenient  form.  The  Mortgagor  agrees that a
final  judgment of any such suit,  action or proceeding  brought in such a court
shall be conclusive and binding upon the Mortgagor.

         Section 3.19 Mortgagee  shall have the right, at its sole discretion at
any time, or from time to time,  to assign this Mortgage or invite  participants
to  participate  in portions of the  indebtedness  secured by this  Mortgage and
Mortgagor  agrees to execute any documents  requested by Mortgagee in connection
with such assignment or participation.

                                       24
<PAGE>
         Section 3.20. Wherever in this Mortgage the Mortgagee has agreed not to
unreasonably  withhold  its consent to any action by  Mortgagor,  the  Mortgagee
shall not unreasonably withhold, delay, or condition such consent.

         Section 3.21.  Release of Part of Mortgaged  Premises.  Upon request of
the Mortgagor and fulfillment of the conditions set forth below,  Mortgagee will
release a portion of the Premises from the lien of this  Mortgage  consisting of
no more than six (6) acres of vacant land (the "Released Portion").  In order to
obtain such release:

                  1.       The Mortgager must request such release in writing;

                  2.       No Event of Default shall exist hereunder;

                  3.       Mortgagee shall conduct an appraisal of the remainder
                           of the  Premises  without the  Released  Portion (the
                           "Remaining Premises") at Mortgagor's expense. If such
                           appraisal evidences that the ratio of the outstanding
                           balance  of the  Note to the  appraised  value of the
                           Remaining  Premises  is greater  that 75%,  Mortgagee
                           shall  make a  prepayment  simultaneously  with  such
                           release to decrease the ratio to 75%, and

                  4.       The Remaining  Premises must be marketable and not in
                           violation  of  any   governmental   laws,   rules  or
                           regulations  including,  without  limitation,  zoning
                           laws and regulations.

         Section 3.22 The Mortgagee shall not unreasonably refuse to assign this
Mortgage upon payment in full of the Liabilities secured hereby.

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


                                                    Boundless Technologies, Inc.


                                                    By:
                                                       -------------------------

                                       25
<PAGE>

                                   SCHEDULE A


PARCEL I

All  that  certain  plot,  piece  or  parcel  of land  with  the  buildings  and
improvements thereon erected, situate, lying and being in the Town of Smithtown,
County  of  Suffolk  and State of New  York,  being  part of Lot 6 as shown on a
certain map entitled "Map of Marcus  Industrial  Park at Smithtown" and filed in
the  Office of the Clerk of Suffolk  County of  October 4, 1967 as Map No.  4961
being bounded and described as follows:

BEGINNING at a point on the westerly side of Marcus  Boulevard  distant 333 feet
southerly  from the corner  formed by the  intersection  of the westerly side of
Marcus Boulevard with the southerly side of Arkay Drive:

RUNNING  THENCE  South 3 degrees 17 minutes 15 seconds  East along the  westerly
side of Marcus Boulevard 438.23 feet;

THENCE South 86 degrees 42 minutes 45 seconds West 690 feet;

THENCE  North 3 degrees 17 minutes 15 seconds West along land now or formerly of
ITT Communications, Inc. 448.24 feet;

THENCE North 86 degrees 42 minutes 45 seconds East 254 feet;

THENCE South 3 degrees 17 minutes 15 seconds East 10.01 feet;

THENCE North 86 degrees 42 minutes 45 seconds East 436 feet to the westerly side
of Marcus Boulevard and the point or place of BEGINNING.

                                       26
<PAGE>
                                   SCHEDULE A

PARCEL II

All  that  certain  plot,  piece  or  parcel  of land  with  the  buildings  and
improvements thereon erected, situate, lying and being at Hauppauge, in the Town
of Smithtown,  County of Suffolk and State of New York,  being part of Lot No. 6
on a certain map entitled "Map of Suffolk County  Business Center Section No. 2"
filed in the Office of the Clerk of the County of Suffolk on August 31,  1978 as
Map No. 6715 bounded and described as follows:

BEGINNING at a point on the southerly side of Arkay Drive,  also known as Arnold
Drive, distant 670.00 feet westerly along the same from the northwesterly end of
the curve  connecting  said southerly side of Arkay Drive with the westerly side
of Marcus Boulevard; and

RUNNING THENCE southerly along the westerly map line of "Marcus Industrial Park"
south 3 degrees 15 minutes 52 seconds East, a distance of 791.23 feet;

THENCE  westerly,  south 86 degrees 44 minutes 08 seconds  West,  a distance  of
450.00 feet;

THENCE  northerly,  North 3 degrees 15 minutes 52 seconds  West,  a distance  of
791.23 feet to the southerly side of Arkay Drive; and

THENCE  easterly,  North 86  degrees  44  minutes  08  seconds  East,  along the
southerly  side of Arkay Drive,  a distance of 450.00 feet to the point or place
of BEGINNING.

                                       27