Document:

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                                                                   Exhibit 10.48

<TABLE>
<S>                                                                                             <C>
154 Contract of sale for New York office, commercial and multi-family                           Distributed by Julius Blumberg, Inc.
residential premises. 1-86.                                                                                                NYC 10013
</TABLE>

Prepared by the Real Property Committee of the Association of the Bar or the
City of New York,

   NOTE: This form is intended to cover matters common to most transactions.
 Provisions should be added, altered or deleted to suit the circumstances of a
                            particular transaction.

   CONTRACT OF SALE--OFFICE, COMMERCIAL AND MULTI-FAMILY RESIDENTIAL PREMISES
--------------------------------------------------------------------------------

                               TABLE OF CONTENTS

Section 1.  Sale of premises and acceptable title

Section 2.  Purchase price, acceptable funds, existing mortgages, purchase
              money mortgage, escrow of downpayment and foreign persons

Section 3.  The closing

Section 4.  Representations and warranties of seller

Section 5.  Acknowledgements of purchaser

Section 6.  Seller's obligations as to leases

Section 7.  Responsibility for violations

Section 8.  Destruction, damage or condemnation

Section 9.  Covenants of seller

Section 10. Seller's closing obligations

Section 11. Purchaser's closing obligations

Section 12. Apportionments

Section 13. Objections to title, failure of seller or purchaser to perform and
              vendee's lien

Section 14. Broker

Section 15. Notices

Section 16. Limitations on survival of representations, warranties, covenants
              and other obligations

Section 17. Gains tax and miscellaneous provisions

Signatures and receipt by escrowee

Schedule A. Description of premises (to be attached)

Schedule B. Permitted exceptions

Schedule C. Purchase price

Schedule D. Miscellaneous

Schedule E. Rent schedule (to be attached)

         CONTRACT dated             1999 between

      MACQUESTEN REALTY COMPANY, a New York Partnership, having an office
           at 115 South MacQuesten Parkway, Mount Vernon, N.Y. 10550

("Seller") and

        MICHAEL ANTHONY JEWELERS, INC. a DELAWARE Corporation, having an
        office at 115 South MacQuesten Parkway, Mount Vernon, N.Y. 10550

("Purchaser").

     Seller and Purchaser hereby covenant and agree as follows:

SECTION 1. SALE OF PREMISES AND ACCEPTABLE TITLE

         Section 1 .01. Seller shall sell to Purchaser, and Purchaser shall
purchase from Seller, at the price and upon the terms and conditions set forth
in this contract: (a) the parcel of land more particularly described in Schedule
A attached hereto ("Land"); (b) all buildings and improvements situated on
the land (collectively, "Building"); (c) all right, title and interest of
Seller, if any, in and to the land lying in the bed of any street or highway in
front of or adjoining the Land to the center line thereof and to any unpaid
award for any taking by condemnation or any damage to the Land by reason of a
change of grade of any street or highway; (d) the appurtenances and all the
estate and rights of Seller in and to the Land and Building; and (e) all right,
title and interest of Seller, if any, in and to the fixtures, equipment and
other personal property attached or appurtenant to the Building (collectively,
"Premises"). The Premises are located at or known as

         60 South MacQuesten Parkway and 70 South MacQuesten Parkway, all in the
         city of Mount Vernon, State of New York

         Section 1.02. Seller shall convey and Purchaser shall accept fee simple
title to the Premises in accordance with the terms of this contract, subject
only to: (a) the matters set forth in Schedule B attached hereto (collectively,
"Permitted Exceptions"); and (b) such other matters as (i) the title insurer
specified in Schedule D attached hereto (or if none is so specified, then any
title insurer licensed to do business by the State of New York) shall be
willing, without special premium, to omit as exceptions to coverage or to and
(ii) shall be accepted by any lender described in Section 274-a of the Real
Property Law ("Institutional Lender") which has committed in writing to provide
mortgage financing to Purchaser for the purchase of the Premises ("Purchaser's
Institutional Lender").

         SECTION 2. PURCHASE PRICE, ACCEPTABLE FUNDS, EXISTING MORTGAGES,
PURCHASE MONEY MORTGAGE, ESCROW OF DOWNPAYMENT AND FOREIGN PERSONS

         2.01. The purchase price ("Purchase Price") to be paid by Purchaser
to Seller for the Premises as provided in Schedule C attached hereto is
$2, 450,000.00

         Section 2.02. All monies payable under this contract, unless otherwise
specified in this contract, shall be paid by (a) certified checks of Purchaser
or any person making a purchase money loan to Purchaser drawn on any bank,
savings bank trust company or savings and loan association having a banking
office in the State of New York or (b) official bank check drawn by any such
banking institution, payable to the order of the Seller, except that uncertified
checks of Purchaser payable to the order of Seller up to the amount of one-half
of one percent of the Purchase Price shall be acceptable for sums payable to
Seller at the Closing.

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         Section 2.03. (a) If Schedule C provides for the acceptance of title by
Purchaser subject to one or more existing mortgages (collectively, "Existing
Mortgage(s)"), the amounts specified in Schedule C with reference thereto may be
approximate. If at the Closing the aggregate principal amount of the Existing
Mortgage(s), as reduced by payments required thereunder prior to the Closing, is
less than the aggregate amount of the Existing Mortgage(s) as specified in
Schedule C, the difference shall be added to the monies payable at the Closing,
unless otherwise expressly provided herein.

         (b) If any of the documents constituting the Existing Mortgage(s) or
the note(s) secured thereby prohibits or restricts the conveyance of the
Premises or any part thereof without the prior consent of the holder or holders
thereof ("Mortgagee(s)") or confers upon the Mortgagee(s) the right to
accelerate payment of the indebtedness or to change the terms of the Existing
Mortgage(s) in the event that a conveyance is made without consent of the
Mortgagee(s), Seller shall notify such Mortgagee(s) of the proposed conveyance
to Purchaser within 10 days after execution and delivery of this contract,
requesting the consent of such Mortgagee(s) thereto. Seller and Purchaser shall
furnish the Mortgagee(s) with such information as may reasonably be required
in connection with such request and shall otherwise cooperate with such
Mortgagee(s) and with each other in an effort expeditiously to procure such
consent, but neither shall be obligated to make any payment to obtain such
consent. If such Mortgagee(s) shall fail or refuse to grant such consent in
writing on or before the date set forth in Schedule D or shall require as a
condition of the granting of such consent that the terms of the Existing
Mortgage(s) be changed and Purchaser is unwilling to accept such change, then
unless Seller and Purchaser mutually agree to extend such date or otherwise
modify the terms of this contract, Purchaser may terminate this contract in the
manner provided in Section 13.02.

         Section 2.06. In the event that Seller is a "foreign person", as
defined in Internal Revenue Code Section 1445 and regulations issued thereunder
(collectively, the "Code Withholding Section"), or in the event that Seller
fails to deliver the certification of non-foreign status required under Section
10.12(c), or in the event that Purchaser is not entitled under the Code With-
holding Section to rely on such certification, Purchaser shall deduct and with-
hold from the Purchase Price a sum equal to ten percent (10%) thereof and shall
at closing remit the withheld

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amount with Forms 8288 and 8288A (or any successors thereto) to the Internal
Revenue Service; and if the cash balance of the Purchase Price payable to Seller
at the Closing after deduction of net adjustments, apportionments and credits
(if any) to be made or allowed in favor of Seller at the Closing as herein
provided is less than ten percent (10%) of the Purchase Price, Purchaser shall
have the right to terminate this contract, in which event Seller shall refund
the Downpayment to Purchaser and shall reimburse Purchaser for title
examination and survey costs as if this contract were terminated pursuant to
Section 13.02. The right of termination provided for in this Section 2.06 shall
be in addition to and not in limitation of any other rights or remedies
available to Purchaser under applicable law.

SECTION 3.  THE CLOSING

         Section 3.01. Except as otherwise provided in this contract, the
closing of title pursuant to this contract ("Closing") shall take place on the
scheduled date and time of closing specified in Schedule D (the actual date of
the Closing being herein referred to as "Closing Date") at the place specified
in Schedule D.

SECTION 4.  REPRESENTATIONS AND WARRANTIES OF SELLER

         Seller represents and warrants to Purchaser as follows:

         Section 4.01. Unless otherwise provided in this contract, Seller is the
sole owner of the Premises.

         Section 4.02. If the Premises are encumbered by an Existing
Mortgage(s), no written notice has been received from the Mortgagee(s)
asserting that a default or breach exists thereunder which remains uncured and
no such notice shall have been received and remain uncured on the Closing Date.
If copies of documents constituting the Existing Mortgage(s) and note(s) secured
thereby have been exhibited to and initialed by Purchaser or its representative,
such copies are true copies of the originals and the Existing Mortgage(s) and
note(s) secured thereby have not been modified or amended except as shown in
such documents.

         Section 4.03. The information concerning written leases (which together
with all amendments and modifications thereof are collectively referred to as
"Leases") and any tenancies in the Premises not arising out of the Leases
(collectively, "Tenancies") set forth in Schedule E attached hereto ("Rent
Schedule") is accurate as of the date set forth therein or, if no date is set
forth therein, as of the date hereof, and there are no Leases or Tenancies of
any space in the Premises other than those set forth therein and any subleases
or subtenancies. Except as otherwise set forth in the Rent Schedule or
elsewhere in this contract:

         (a) all of the Leases are in full force and effect and none of them has
been modified, amended or extended;

         (b) no renewal or extension options have been granted to tenants;

         (c) no tenant has an option to purchase the Premises;

         (d) the rents set forth are being collected on a current basis and
there are no arrearages in excess of one month;

         (e) no tenant is entitled to rental concessions or abatements for any
period subsequent to the scheduled date of closing;

         (f) Seller has not sent written notice to any tenant claiming that such
tenant is in default, which default remains uncured;

         (g) no action or proceeding instituted against Seller by any tenant of
the Premises is presently pending in any court, except with respect to claims
involving personal injury or property damage which are covered by insurance; and

         (h) there are no security deposits other than those set forth in the
Rent Schedule.

         If any Leases which have been exhibited to and initialed by
Purchaser or its representative contain provisions that are inconsistent with
the foregoing representations and warranties, such representations and
warranties shall be deemed modified to the extent necessary to eliminate such
inconsistency and to conform such representations and warranties to the
provisions of the Leases.

         Section 4.04. If the Premises or any part thereof are subject to the
New York City Rent Stabilization Law, Seller is and on the Closing Date will be
a member in good standing of the Real Estate Industry Stabilization Association,
and, except as otherwise set forth in the Rent Schedule, there are no proceed-
ings with any tenant presently pending before the Conciliation and Appeals Board
in which a tenant has alleged an overcharge of rent or diminution of services
or similar grievance, and there are no outstanding orders of the Conciliation
and Appeals Board that have not been complied with by Seller.

         Section 4.05. If the Premises or any part thereof are subject to the
New York City Emergency Rent and Rehabilitation Law, the rents shown are not in
excess of the maximum collectible rents, and, except as otherwise set forth in
the Rent Schedule, no tenants are entitled to abatements as senior citizens,
there are no proceedings presently pending before the rent commission in which
a tenant has alleged an overcharge of rent or diminution of services or similar
grievance, and there are no outstanding orders of the rent commission that have
not been complied with by Seller.

         Section 4.06. If an insurance schedule is attached hereto, such
schedule lists all insurance policies presently affording coverage with respect
to the Premises, and the information contained therein is accurate as of the
date set forth therein or, if no date is set forth therein, as of the date
hereof.

         Section 4.07. If a payroll schedule is attached hereto, such schedule
lists all employees presently employed at the Premises, and the information
contained therein is accurate as of the date set forth therein or, if no date is
set forth therein, as of the date hereof, and, except as otherwise set forth in
such schedule, none of such employees is covered by a union contract and there
are no retroactive increases or other accrued and unpaid sums owed to any
employee.

         Section 4.08. If a schedule of service, maintenance, supply and
management contracts ("Service Contracts") is attached hereto, such schedule
lists all such contracts affecting the Premises, and the information set forth
therein is accurate as of the date set forth therein or, if no date is set forth
therein, as of the date hereof.

         Section 4.09. If a copy of a certificate of occupancy for the Premises
has been exhibited to and initialed by Purchaser or its representative, such
copy is a true copy of the original and such certificate has not been amended,
but Seller makes no representation as to compliance with any such certificate.

         Section 4.10. The assessed valuation and real estate taxes set forth in
Schedule D, if any, are the assessed valuation of the Premises and the taxes
paid or payable with respect thereto for the fiscal year indicated in such
schedule. Except as otherwise set forth in Schedule D, there are no tax
abatements or exemptions affecting the Premises.

         Section 4.11. Except as otherwise set forth in a schedule attached
hereto, if any, if the Premises are used for residential purposes, each
apartment contains a range and a refrigerator, and all of the ranges and
refrigerators and all of the items of personal property (or replacements
thereof) listed in such schedule, if any, are and on the Closing Date will be
owned by Seller free of liens and encumbrances other than the lien(s) of the
Existing Mortgage(s), if any.

         Section 4.12. Seller has no actual knowledge that any incinerator,
boiler or other burning equipment on the Premises is being operated in violation
of applicable law. If copies of a certificate or certificates of operation
therefor have been exhibited to and initialed by Purchaser or its
representative, such copies are true copies of the originals.

         Section 4.13. Except as otherwise set forth in Schedule D, Seller has
no actual knowledge of any assessment payable in annual installments, or any
part thereof, which has become a lien on the Premises.

         Section 4.14. Seller is not a "foreign person" as defined in the Code
Withholding Section.

SECTION 5. ACKNOWLEDGMENTS OF PURCHASER

         Purchaser acknowledges that:

         Section 5.01. Purchaser has inspected the Premises, is fully familiar
with the physical condition and state of repair thereof, and, subject to the
provisions of Section 7.01, Section 8.01, and Section 9.04, shall accept the
Premises "as is" and in their present condition, subject to reasonable use,
wear, tear and natural deterioration between now and the Closing Date, without
any reduction in the Purchase Price for any change in such condition by reason
thereof subsequent to the date of this contract.

         Section 5.02. Before entering into this contract, Purchaser has made
such examination of the Premises, the operation, income and expenses thereof and
all other matters affecting or relating to this transaction as Purchaser deemed
necessary. In entering into this contract, Purchaser has not been induced by and
has not relied upon any representations, warranties or statements, whether or
implied, made by Seller or any agent, employee or other representative of Seller
or by any broker or any other person representing or purporting to represent
Seller, which are not expressly set forth in this contract, whether or not any
such representations, warranties or statements were made in writing or orally.

SECTION 6. SELLER'S OBLIGATIONS AS TO LEASES

         Section 6.01. Unless otherwise provided in a schedule attached to this
contract, between the date of this contract and the Closing, Seller shall not,
without Purchaser's prior written consent, which consent shall not be
unreasonably withheld: (a) amend, renew or extend any Lease in any respect,
unless required by law; (b) grant a written lease to any tenant occupying space
pursuant to a Tenancy; or (c) terminate any Lease or Tenancy except by reason of
a default by the tenant thereunder.

         Section 6.02. Unless otherwise provided in a schedule attached to this
contract, between the date of this contract and the Closing, Seller shall not
permit occupancy of, or enter into any new lease for, space in the Building
which is presently vacant or which may hereafter become vacant without first
giving Purchaser written notice of the identity of the proposed tenant, together
with (a) either a copy of the proposed lease or a summary of the terms thereof
in reasonable detail and (b) a

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statement of the amount of the brokerage commission, if any, payable in
connection therewith and the terms of payment thereof. If Purchaser objects to
such proposed lease, Purchaser shall so notify Seller within 4 business days
after receipt of Seller's notice if such notice was personally delivered to
Purchaser, or within 7 business days after the mailing of such notice by Seller
to Purchaser, in which case Seller shall not enter into the proposed lease.
Unless otherwise provided in a schedule attached to this contract, Purchaser
shall pay to Seller at the Closing, in the manner specified in Section 2.02, the
rent and additional rent that would have been payable under the proposed lease
from the date on which the tenant's obligation to pay rent would have commenced
if Purchaser had not so objected until the Closing Date, less the amount of the
brokerage commission specified in Seller's notice and the reasonable cost of
decoration or other work required to be performed by the landlord under the
terms of the proposed lease to suit the premises to the tenant's occupancy
("Reletting Expenses"), prorated in each case over the term of the proposed
lease and apportioned as of the Closing Date. If Purchaser does not so notify
Seller of its objection, Seller shall have the right to enter into the proposed
lease with the tenant identified in Seller's notice and Purchaser shall pay to
Seller, in the manner specified in Section 2.02, the Reletting Expenses,
prorated in each case over the term of the lease and apportioned as of the later
of the Closing Date or the rent commencement date. Such payment shall be made by
Purchaser to Seller at the Closing. In no event shall the amount so payable to
Seller exceed the sums actually paid by Seller on account thereof.

         Section 6.03. If any space is vacant on the Closing Date, Purchaser
shall accept the Premises subject to such vacancy, provided that the vacancy
was not permitted or created by Seller in violation of any restrictions
contained in this contract. Seller shall not grant any concessions or rent
abatements for any period following the Closing without Purchaser's prior
written consent. Seller shall not apply all or any part of the security deposit
of any tenant unless such tenant has vacated the Premises.

         Section 6.04. Seller does not warrant that any particular Lease or
Tenancy will be in force or effect at the Closing or that the tenants will have
performed their obligations thereunder. The termination of any Lease or Tenancy
prior to the Closing by reason of the tenant's default shall not affect the
obligations of Purchaser under this contract in any manner or entitle Purchaser
to an abatement of or credit against the Purchase Price or give rise to any
other claim on the part of Purchaser.

         Section 6.05. Seller hereby indemnifies and agrees to defend Purchaser
against any claims made pursuant to Section 7-107 or Section 7-108 of the
General Obligations Law (the "GOL") by tenants who resided in the Premises on or
prior to the Closing Date other than (a) claims with respect to tenants'
security deposits paid, credited or assigned to Purchaser pursuant to Section
10.03, (b) claims made pursuant to Section 7-107 of the GOL with respect to
funds for which Seller was not liable, and (c) claims made pursuant to Section
7-108 of the GOL by tenants to whom Purchaser failed to give the written notice
specified in Section 7-108(c) of the GOL within thirty days after the Closing
Date. The foregoing indemnity and agreement shall survive the Closing and shall
be in lieu of any escrow permitted by Section 7-108(d) of the GOL, and Purchaser
hereby waives any right it may have to require any such escrow.

SECTION 7.  RESPONSIBILITY FOR VIOLATIONS

SECTION 8.  DESTRUCTION, DAMAGE OR CONDEMNATION

         Section 8.01. The provisions of Section 5-1311 of the General
Obligations Law shall apply to the sale and purchase provided for in this
contract.

SECTION 9.  COVENANTS OF SELLER

         Seller covenants that between the date of this contract and the
Closing:

         Section 9.01. The Existing Mortgage(s) shall not be amended or
supplemented or prepaid in whole or in part. Seller shall pay or make, as and
when due and payable, all payments of principal and interest and all deposits
required to be paid or made under the Existing Mortgage(s).

         Section 9.02. Seller shall not modify or amend any Service Contract or
enter into any new service contract unless the same is terminable without
penalty by the then owner of the Premises upon not more than 30 days' notice.

         Section 9.03. If an insurance schedule is attached hereto, Seller shall
maintain in full force and effect until the Closing the insurance policies
described in such schedule or renewals thereof for no more than one year of
those expiring before the Closing.

         Section 9.04. No fixtures, equipment or personal property included in
this sale shall be removed from the Premises unless the same are replaced with
similar items of at least equal quality prior to the Closing.

         Section 9.05. Seller shall not withdraw, settle or otherwise compromise
any protest or reduction proceeding affecting real estate taxes assessed
against the Premises for any fiscal period in which the Closing is to occur or
any subsequent fiscal period without the prior written consent of Purchaser,
which consent shall not be unreasonably withheld. Real estate tax refunds and
credits received after the Closing Date which are attributable to the fiscal
tax year during which the Closing Date occurs shall be apportioned between
Seller and Purchaser, after deducting the expenses of collection thereof,
which obligation shall survive the Closing.

         Section 9.06. Seller shall allow Purchaser or Purchaser's
representatives access to the Premises, the Leases and other documents required
to be delivered under this contract upon reasonable prior notice at reasonable
times.

SECTION 10. SELLER'S CLOSING OBLIGATIONS

         At or prior to the Closing, Seller shall deliver the following to
Purchaser:

         Section 10.01. A statutory form of bargain and sale deed without
covenant against grantor's acts, containing the covenant required by Section 13
of the Lien Law, and properly executed in proper form for recording so as to
convey the title required by this contract.

         Section 10.02. All Leases initialed by Purchaser and all others in
Seller's possession.

         Section 10.03. A schedule of all security deposits (and, if the
Premises contains six or more family dwelling units, the most recent reports
with respect thereto issued by each banking organization in which they are
deposited pursuant to GOL Section 7-103) and a check or credit to Purchaser in
the amount of any cash security deposits, including any interest thereon, held
by Seller on the Closing Date or, if held by an Institutional Lender, an
assignment to Purchaser and written instructions to the holder of such deposits
to transfer the same to Purchaser, and appropriate instruments of transfer or
assignment with respect to any security deposits which are other than cash.

         Section 10.04. A schedule updating the Rent Schedule and setting forth
all arrears in rents and all prepayments of rents.

         Section 10.05. All Service Contracts initialed by Purchaser and all
others in Seller's possession which are in effect on the Closing Date and which
are assignable by Seller.

<PAGE>   5

         Section 10.06. An assignment to Purchaser, without recourse or
warranty, of all of the interest of Seller in those Service Contracts, insurance
policies, certificates, permits and other documents to be delivered to Purchaser
at the Closing which are then in effect and are assignable by Seller.

         Section 10.07. (a) Written consent(s) of the Mortgagee(s), if required
under Section 2.03(b), and (b) certificate(s) executed by the Mortgagee(s) in
proper form for recording and certifying (i) the amount of the unpaid principal
balance thereof, (ii) the maturity date thereof, (iii) the interest rate, (iv)
the last date to which interest has been paid thereon and (v) the amount of any
escrow deposits held by the Mortgagee(s). Seller shall pay the fees for
recording such certificate(s). Any Mortgagee which is an Institutional Lender
may furnish a letter complying with Section 274-a of the Real Property Law in
lieu of such certificate.

         Section 10.08, An assignment of all Seller's right, title and interest
in escrow deposits for real estate taxes, insurance premiums and other amounts,
if any, then held by the Mortgagee(s).

          Section 10.09. All original insurance policies with respect to which
premiums are to be apportioned or, if unobtainable, true copies or certificates
thereof.

         Section 10.10. To the extent they are then in Seller's possession and
not posted at the Premises, certificates, licenses, permits, authorizations and
approvals issued for or with respect to the Premises by governmental and
quasi-governmental authorities having jurisdiction.

         Section 10.11. Such affidavits as Purchaser's title company shall
reasonably require in order to omit from its title insurance policy all
exceptions for judgments, bankruptcies or other returns against persons or
entities whose names are the same as or similar to Seller's name.

         Section 10.12(a) Checks to the order of the appropriate officers in
payment of all applicable real property transfer taxes and copies of any
required tax returns therefor executed by Seller, which checks shall be
certified or official bank checks if required by the taxing authority, unless
Seller elects to have Purchaser pay any of such taxes and credit Purchaser with
the amount thereof, (b) the Tentative Assessment and Return or Statement of No
Tax Due or affidavit (whichever is applicable) and the checks and other items
(if any) required under Section 17.09(a), and (c) a certification of non-foreign
status, in form required by the Code Withholding Section, signed under penalty
of perjury. Seller understands that such certification will be retained by
Purchaser and will be made available to the Internal Revenue Service on
request.

         Section 10.13. To the extent they are then in Seller's possession,
copies of current painting and payroll records. Seller shall make all other
Building and tenant files and records available to Purchaser for copying, which
obligation shall survive the Closing.

         Section 10.14. An original letter, executed by Seller or by its agent,
advising the tenants of the sale of the Premises to Purchaser and directing that
rents and other payments thereafter be sent to Purchaser or as Purchaser may
direct.

         Section 10.15. Notice(s) to the Mortgagee(s), executed by Seller or by
its agent, advising of the sale of the Premises to Purchaser and directing that
future bills and other correspondence should thereafter be sent to Purchaser or
as Purchaser may direct.

         Section 10.16. If Seller is a corporation and if required by Section
909 of the Business Corporation Law, a resolution of Seller's board of directors
authorizing the sale and delivery of the deed and a certificate executed by the
secretary or assistant secretary of Seller certifying as to the adoption of such
resolution and setting forth facts showing that the transfer complies with
the requirements of such law. The deed referred to in Section 10.01 shall also
contain a recital sufficient to establish compliance with such law.

         Section 10.17. Possession of the Premises in the condition required
by this contract, subject to the Leases and Tenancies, and keys therefor.

         Section 10.18. Any other documents required by this contract to be
delivered by Seller.

SECTION 11.  PURCHASER'S CLOSING OBLIGATIONS

         At the Closing, Purchaser shall:

         Section 11.01. Deliver to Seller checks in payment of the portion of
the Purchase Price payable at the Closing, as adjusted for apportionments under
Section 12, plus the amount of escrow deposits, if any, assigned pursuant to
Section 10.08.

         Section 11.03. Deliver to Seller an agreement indemnifying and agreeing
to defend Seller against any claims made by tenants with respect to tenants'
security deposits to the extent paid, credited or assigned to Purchaser under
Section 10.03.

         Section 11.04. Cause the deed to be recorded, duly complete all
required real property transfer tax returns and cause all such returns and
checks of the Seller in payment of such taxes to be delivered to the appropriate
officers promptly after the Closing.

         Section 11.05. Deliver any other documents required by this contract to
be delivered by Purchaser.

SECTION 12. APPORTIONMENTS

         Section 12.01. The following apportionments shall be made between the
parties at the Closing as of the close of business on the day prior to the
Closing Date:

         (a) prepaid rents and Additional Rents (as defined in Section 12.03);

         (b) interest on the Existing Mortgage(s);

         (c) real estate taxes, water charges, sewer rents and vault charges, if
any, on the basis of the fiscal period for which assessed, except that if there
is a water meter on the Premises, apportionment at the Closing shall be based on
the last available reading, subject to adjustment after the Closing when the
next reading is available;

         (d) wages, vacation pay, pension and welfare benefits and other fringe
benefits of all persons employed at the Premises whose employment was not
terminated at or prior to the Closing;

         (e) value of fuel stored on the Premises, at the price then charged by
Seller's supplier, including any taxes;

         (f) charges under transferable Service Contracts or permitted renewals
or replacements thereof;

         (g) permitted administrative charges, if any, on tenants' security
deposits;

         (h) dues to rent stabilization associations, if any;

         (i) insurance premiums on transferable insurance policies listed on a
schedule hereto or permitted renewals thereof;

         (j) Reletting Expenses under Section 6.02, if any; and

         (k) any other items listed in Schedule D.

         If the Closing shall occur before a new tax rate is fixed, the
apportionment of taxes at the Closing shall be upon the basis of the old tax
rate for the preceding period applied to latest assessed valuation. Promptly
after the new tax rate is fixed, the apportionment of taxes shall be recomputed.
Any discrepancy resulting from such recomputation and any errors or omissions in
computing apportionments at Closing shall be promptly corrected, which
obligations shall survive the Closing.

         Section 12.02. If any tenant is in arrears in the payment of rent on
the Closing Date, rents received from such tenant after the Closing shall be
applied in the following order of priority: (a) first to the month preceding the
month in which the Closing occurred; (b) then to the month in which the Closing
occurred; (c) then to any month or months following the month in which the
Closing occurred; and (d) then to the period prior to the month preceding the
month in which the Closing occurred. If rents or any portion thereof received by
Seller or Purchaser after the Closing are payable to the other party by reason
of this allocation, the appropriate sum, less a proportionate share of any
reasonable attorneys' fees, costs and expenses of collection thereof, shall be
promptly paid to the other party, which obligation shall survive the Closing.

         Section 12.03. If any tenants are required to pay percentage rent,
escalation charges for real estate taxes, operating expenses, cost-of-living
adjustments or other charges of a similar nature ("Additional Rents") and any
Additional Rents are collected by Purchaser after the Closing which are
attributable in whole or in part to any period prior to the Closing, then
Parchaser shall promptly pay to Seller Seller's proportionate share thereof,
less a proportionate share of any reasonable attorneys' fees, costs and expenses
of collection thereof, if and when the tenant paying the same has made all
payments of rent and Additional Rent then due to Purchaser pursuant to the
tenant's Lease, which obligation shall survive the Closing.

SECTION 13.  OBJECTIONS TO TITLE, FAILURE OF SELLER OR PURCHASER TO PERFORM AND
             VENDEE'S LIEN

         Section 13.01. Purchaser shall promptly order an examination of title
and shall cause a copy of the title report to be forwarded to Seller's attorney
upon receipt. Seller shall be entitled to a reasonable adjournment or
adjournments of the Closing for up to 60 days or until the expiration date of
any written commitment of Purchaser's Institutional Lender delivered to
Purchaser prior to the scheduled date of Closing, whichever occurs first, to
remove any defects in or objections to title noted in such title report and any
other defects or objections which may be disclosed on or prior to the Closing
Date.

<PAGE>   6
         Section 13.03. Any unpaid taxes, assessments, water charges and sewer
rents, together with the interest and penalties thereon to a date not less than
two days following the Closing Date, and any other liens and encumbrances which
Seller is obligated to pay and discharge or which are against corporations,
estates or other persons in the chain of title, together with the cost of
recording or filing any instruments necessary to discharge such liens and
encumbrances of record, may be paid out of the proceeds of the monies payable at
the Closing if Seller delivers to Purchaser on the Closing Date official bills
for such taxes, assessments, water charges, sewer rents, interest and penalties
and instruments in recordable form sufficient to discharge any other liens and
encumbrances of record. Upon request made a reasonable time before the Closing,
Purchaser shall provide at the Closing separate checks for the foregoing payable
to the order of the holder of any such lien, charge or encumbrance and otherwise
complying with Section 2.02. If Purchaser's title insurance company is willing
to insure both Purchaser and Purchaser's Institutional Lender, if any, that such
charges, liens and encumbrances will not be collected out of or enforced against
the Premises, then, unless Purchaser's Institutional Lender reasonably refuses
to accept such insurance in lieu of actual payment and discharge, Seller shall
have the right in lieu of payment and discharge to deposit with the title
insurance company such funds or assurances or to pay such special or additional
premiums as the title insurance company may require in order to so insure. In
such case the charges, liens and encumbrances with respect to which the title
insurance company has agreed so to insure shall not be considered objections to
title.

         Section 13.04. If Purchaser shall default in the performance of its
obligation under this contract to purchase the Premises, the sole remedy of
Seller shall be to retain the Downpayment as liquidated damages for all loss,
damage and expense suffered by Seller, including without limitation the loss of
its bargain.

         Section 13.05. Purchaser shall have a vendee's lien against the
Premises for the amount of the Downpayment, but such lien shall not continue
after default by Purchaser under this contract.

SECTION 14. BROKER

         Section 14.01. If a broker is specified in Schedule D, Seller and
Purchaser mutually represent and warrant that such broker is the only broker
with whom they have dealt in connection with this contract and that neither
Seller nor Purchaser knows of any other broker who has claimed or may have the
right to claim a commission in connection with this transaction, unless
otherwise indicated in Schedule D. The commission of such broker shall be paid
pursuant to separate agreement by the party specified in Schedule D. If no
broker is specified in Schedule D, the parties acknowledge that this contract
was brought about by direct negotiation between Seller and Purchaser and that
neither Seller nor Purchaser knows of any broker entitled to a commission in
connection with this transaction, Unless otherwise provided in Schedule D,
Seller and Purchaser shall indemnify and defend each other against any costs,
claims or expenses, including attorneys' fees, arising out of the breach on
their respective parts of any representations, warranties or agreements
contained in this paragraph. The representations and obligations under this
paragraph shall survive the Closing or, if the Closing does not occur, the
termination of this contract.

SECTION 15. NOTICES

         Section 15.01. All notices under this contract shall be in writing and
shall be delivered personally or shall be sent by prepaid registered or
certified mail, addressed as set forth in Schedule D, or as Seller or Purchaser
shall otherwise have given notice as herein provided.

SECTION 16. LIMITATIONS ON SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS
         AND OTHER OBLIGATIONS

         Section 16.01. Except as otherwise provided in this contract, no
representations, warranties, covenants or other obligations of Seller set forth
in this contract shall survive the Closing and no action based thereon shall be
commenced after the Closing. The representations, warranties, covenants and
other obligations of Seller set forth in Section 4.03, Section 6.01 and Section
6.02 shall survive until the Limitation Date specified in Schedule D (or if none
is so specified, the Limitation Date shall be the date which is six months after
the Closing Date), and no action based thereon shall be commenced after the
Limitation Date.

         Section 16.02. The delivery of the deed by Seller, and the acceptance
thereof by Purchaser, shall be deemed the full performance and discharge of
every obligation on the part of Seller to be performed hereunder, except those
obligations of Seller which are expressly stated in this contract to survive the
Closing.

SECTION 17. GAINS TAX AND MISCELLANEOUS PROVISIONS

         Section 17.01. If consent of the Existing Mortgagee(s) is required
under Section 2.03(b), Purchaser shall not assign this contract or its rights
hereunder without the prior written consent of Seller. No permitted assignment
of Purchaser's rights under this contract shall be effective against Seller
unless and until an executed counterpart of the instrument of assignment shall
have been delivered to Seller and Seller shall have been furnished with the name
and address of the assignee. The term "Purchaser" shall be deemed to include the
assignee under any such effective assignment.

         Section 17.02. This contract embodies and constitutes the entire
understanding between the parties with respect to the transaction contemplated
herein, and all prior agreements, understandings, representations and
statements, oral or written, are merged into this contract. Neither this
contract nor any provision hereof may be waived, modified, amended, discharged
or terminated except by an instrument signed by the party against whom the
enforcement of such waiver, modification, amendment, discharge or termination is
sought, and then only to the extent set forth in such instrument.

         Section 17.03. This contract shall be governed by, and construed in
accordance with, the law of the State of New York.

         Section 17.04. The captions in this contract are inserted for
convenience of reference only and in no way define, describe or limit the scope
or intent of this contract or any of the provisions hereof.

         Section 17.05. This contract shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs or successors and
permitted assigns.

         Section 17.06. This contract shall not be binding or effective until
properly executed and delivered by Seller and Purchaser.

         Section 17.07. As used in this contract, the masculine shall include
the feminine and neuter, the singular shall include the plural and the plural
shall include the singular, as the context may require.

         Section 17.08. If the provisions of any schedule or rider to this
contract are inconsistent with the provisions of this contract, the provisions
of such schedule or rider shall prevail. Set forth in Schedule D is a list of
any and all schedules and riders which are attached hereto but which are not
listed in the Table of Contents.

         Section 17.09. (a) Seller and Purchaser agree to comply in a timely
manner with the requirements of Article 31-B of the Tax Law of the State of New
York and the regulations applicable thereto, as the same from time to time may
be amended (collectively, the "Gains Tax Law"). Purchaser agrees to deliver to
Seller a duly executed and acknowledged Transferee Questionnaire
simultaneously with the execution of this contract or within five (5) business
days after subsequent written request from Seller or Seller's attorney. At the
Closing, Seller shall deliver (i) an official Statement of No Tax Due or (ii)
an official Tentative Assessment and Return accompanied by a certified check or
official bank check drawn on any banking institution described in Section
2.02(a), payable to the order of the State Tax Commission in the amount of the
tax shown to be due thereon (it being understood, however, that if Seller has
duly elected to pay such tax in installments, the amount so required to be paid
shall be the minimum installment of such tax then permitted to be paid), or
(iii) if applicable, a duly executed and acknowledged affidavit in form
permitted under the Gains Tax Law claiming exemption therefrom.

         (b) Seller agrees (i) to pay promptly any installment(s) or
additional tax due under the Gains Tax Law, and interest and penalties thereon,
if any, which may be assessed or due after the Closing, (ii) to indemnify and
save the Purchaser harmless from and against any of the foregoing and any
damage, liability, cost or expense (including reasonable attorneys' fees)
which may be suffered or incurred by Purchaser by reason of the non-payment
thereof, and (iii) to make any other payments and execute, acknowledge and
deliver such further documents as may be necessary to comply with the Gains Tax
Law.

         (c) If this contract is assignable by Purchaser, no assignment of any
rights hereunder shall be effective unless every assignor and assignee complies
in a timely manner with the requirements of the Gains Tax Law applicable to the

<PAGE>   7

ivers to Seller at or before the Closing the applicable items referred to in
subparagraph (a) of this Section, all as may be required as a prerequisite to
the recording of the deed. In addition to making the payments and delivering the
instruments and documents referred to above, Purchaser and any assignor or
assignee of this contract shall promptly (i) make any other payments and (ii)
execute, acknowledge and deliver such further documents and instruments as may
be necessary to comply with the Gains Tax Law.

         (d) Purchaser, if request is made within a reasonable time prior to
the Closing Date, shall provide at the Closing a separate certified or official
bank check drawn on any banking institution described in Section 2.02(a) in the
amount of the tax shown to be due on the official Tentative Assessment and
Return, which amount shall be credited against the balance of the Purchase Price
payable at the Closing.

         (e) The provisions of this Section 17.09 shall survive the delivery of
the deed.

IN WITNESS WHEREOF, the parties hereto have executed this contract as of the
date first above written.

                                Seller: MACQUESTEN REALTY COMPANY

                                        By:
                                           ------------------------------
                                           MICHAEL PAOLERCIO, PARTNER

                                Purchaser:

                                        MICHAEL ANTHONY JEWELERS, INC.

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

RECEIPT BY ESCROWEE

The undersigned Escrowee hereby acknowledges receipt of $ _______________, by
check subject to collection, to be held in escrow pursuant to Section 2.05.

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

                                   SCHEDULE A

                            DESCRIPTION OF PREMISES

         (to be attached separately and to include tax map designation)

                                   SCHEDULE B

                              PERMITTED EXCEPTIONS

         1. Zoning regulations and ordinances which are not violated by the
existing structures or present use thereof and which do not render title
uninsurable.

         2. Consents by the Seller or any former owner of the Premises for the
erection of any structure or structures on, under or above any street or streets
on which the Premises may abut.

         3. The Existing Mortgage(s) and financing statements, assignments of
leases and other collateral assignments ancillary thereto.

         4. Leases and Tenancies specified in the Rent Schedule and any new
leases or tenancies not prohibited by this contract.

         5. Unpaid installments of assessments not due and payable on or before
the Closing Date.

         6. Financing statements, chattel mortgages and liens on personalty
filed more than 5 years prior to the Closing Date and not renewed, or filed
against property or equipment no longer located on the Premises or owned by
Tenants.

         7. (a) Rights of utility companies to lay, maintain, install and repair
pipes, lines, poles, conduits, cable boxes and related equipment on, over and
under the Premises, provided that none of such rights imposes any monetary
obligation on the owner of the Premises.

            (b) Encroachments of stoops, areas, cellar steps, trim cornices,
lintels, window sills, awnings, canopies, ledges, fences, hedges, coping and
retaining walls projecting from the Premises over any street or highway or over
any adjoining property and encroachments of similar elements projecting from
adjoining property over the Premises.

            (c) Revocability or lack of right to maintain vaults, coal chutes,
excavations or sub-surface equipment beyond the line of the Premises.

            (d) Any state of facts that an accurate survey would disclose,
provided that such facts do not render title unmarketable. For the purposes of
this contract, none of the facts shown on the survey, if any, identified below
shall be deemed to render title unmarketable, and Purchaser shall accept title
subject thereto:

            (e) Covenants, restrictions and easements of record as set forth in
Schedule F, annexed hereto.

            (f) Leases and tenancies as set forth in Schedule E hereto annexed.

<PAGE>   8

                                   SCHEDULE C

                                 PURCHASE PRICE

The Purchase Price shall be paid as follows:

            (a) By check subject to collection, the receipt of which is
hereby acknowledged by Seller:

            (b) By check or checks delivered to Seller at the Closing in
accordance with the provisions of section 2.02:         $1,455,915.00

            (c) By acceptance of title subject to the following Existing
Mortgage(s):

          Mortgage dated August 16, 1993 between Michael Anthony Company as
          Mortgagor and First Fidelity Bank, N.A. as Mortgagee $944,085.00

            (d) By execution and delivery to Seller by Purchaser or its assignee
of a note secured by a Purchase Money Mortgage on the Premises, payable as
follows:

                                --------------
        PURCHASE PRICE          $ 2,450,000.00
                                ==============

                                   SCHEDULE D

                                 MISCELLANEOUS

1.   Title insurer designated by the parties (section 1.02):

2.   Last date for consent by Existing Mortgagee(s) (section 2.03(b)):

3.   Maximum Interest Rate of any Refinanced Mortgage (section 2.04(b)):

                                 N/A

4.   Prepayment Date on or after which Purchase Money Mortgage may be prepaid
     (section 2.04(c)):
                                N/A

5.   Seller's tax identification number (section 2.05):
                         13-3864592

6.   Purchaser's tax identification number (section 2.05):
                         13-2910285

7.   Scheduled time and date of Closing (section 3.01):

8.   Place of Closing (section 3.01):
        115 South MacQuesten Parkway,
        Mount Vernon, NY 10550

9.   Assessed valuation of Premises (section 4.10):
     Actual Assessment:  See Rider
     Transition Assessment:

10.  Fiscal year and annual real estate taxes on Premises (section 4.10):
                         See Rider

11.  Tax abatements or exemptions affecting Premises (section 4.10):
                         N/A

12.  Assessments on Premises (section 4.13):
                         NONE

13.  Maximum Amount which Seller must spend to cure violations, etc.
     (section 7.02):
                         N/A

14.  Maximum Expense of Seller to cure title defects, etc.
     (section 13.02):    NONE

15.  Broker, if any (section 14.01):
                         NONE

16.  Party to pay broker's commission (section 14.01):
                         N/A

17.  Address for notices (section 15.01):
     If to Seller:      Michael Paolercia
                        MacQuesten Realty Company
                        115 South MacQuesten Parkway
                        Mount Vernon, NY 10550

     with a copy to Seller's attorney:
         Bernard Segal, Esq.
         5 Waller Avenue
         White Plains, NY 10601

     If to Purchaser:   Allan Corn
                        Michael Anthony Jewelers, Inc.
                        115 South MacQuesten Pkwy
                        Mount Vernon, NY 10550

     with a copy to Purchaser's attorney:
                        Michael Mongelli, Esq.
                        41-07 162nd Street
                        Flushing, NY 11358

18.  Limitation Date for actions based on Seller's surviving representations and
     other obligations (section 16.01):

19.  Additional Schedules or Riders (section 17.08):

                                   SCHEDULE E

                                 RENT SCHEDULE

                          (to be attached separately)

<PAGE>   9

                                                                      rd6

                           RIDER TO CONTRACT OF SALE

BETWEEN: MACQUESTEN REALTY COMPANY, SELLERS, and MICHAEL ANTHONY JEWELERS, INC.,
PURCHASERS, of PREMISES: 60 South MacQuesten Parkway and 70 South MacQuesten
Parkway, Mount Vernon, New York 10550.

         1. This rider is part of the above captioned Contract of sale. If any
of the provisions of this rider shall conflict with or be inconsistent with any
printed provisions of this contract, then the provisions of this rider shall
control.

         2. In the event that the Seller shall be unable to convey marketable
title to the premises hereinabove described, subject to the liens, encumbrances
and defects herein specifically enumerated, the Purchaser shall, at his
election, have the right to accept such title as the Seller is able to convey,
without any claim on the part of the Purchaser for abatement for defects or
objections; or the Purchaser shall have the right to rescind this contract and
upon such rescission, pursuant to this paragraph, the Purchaser shall be
entitled to reimbursement for title company charges, if the Purchaser has
ordered title insurance, or the cost of an abstract of title, if ordered, and
upon such reimbursement, this contract shall be null, void and of no force and
effect and the Seller shall then be under no obligation or liability whatever to
the Purchaser for any damages that the Purchaser may have sustained by reason of
the Seller's failure to convey title hereunder.

         3. Violations filed in any County, City, State or Federal Department
shall not be an objection to title, and the Purchaser shall take title subject
to all such violations.

         4. Liens for unpaid franchise tax of any corporation in the chain of
title, and liens for transfer, inheritance, estate or other similar taxes,
whether fixed or undetermined, shall be no objection to title provided the
Seller, at closing of title, makes a deposit with Purchaser's title insurance
company

                                       1
<PAGE>   10

sufficient to induce them to omit any such exceptions from the policy they
deliver to the Purchaser and the Purchaser's Lending Institution and further
that the Purchaser's Lending Institution shall consent to same.

         5. The Purchaser had inspected the premises and agrees to take said
premises "AS IS" in its present physical condition, and the Seller has made no
representation or warranty other than any specifically set forth herein.

         6. Seller covenants that it shall exert its best efforts to obtain the
consent of the Mortgagee of the Existing Mortgage for the Purchaser to take the
Premises subject to the Existing Mortgage and that the Purchaser shall assume
and agree to pay such Mortgage and any fees payable to Mortgagee as a result of
this sale. It shall be a condition to the assumption of the Mortgage by
Purchaser that upon the execution and delivery of the deed provided for
hereunder, Seller, its predecessor entity, Michael Anthony Company, and Michael
Paolercio and Anthony Paolercio, as individual guarantors, be released from any
and all obligations arising under the provisions of the Existing Mortgage, Term
Loan Note and Individual Guaranty(s), all of which are dated April 16, 1993.

         7. Supplementing Section 2.03 of the form of the Contract of Sale, the
Seller also represents and warrants as follows:

         a. There are no defaults under the Existing Mortgage and there shall be
none at the time of the closing. Excluded from the representation and warrant
contained herein is the transfer of title of the Property from Michael Anthony
Company to MacQuesten Realty Company by deeds dated December 27, 1995.

         b. The Seller shall deliver a pay off letter to the Purchaser at least
five (5) days prior to the closing date which shall indicate the principal
balance outstanding and to be assumed and all other amounts necessary to bring
the loan current.

         8. Section 4.02 is amended by the addition of the following sentence at
the end thereof. "The copies of documents constituting the Existing Mortgage(s)
and note(s) secured thereby have been exhibited to Purchaser or its
representative and such

                                       2
<PAGE>   11

copies are true copies are true copies of the originals and the Existing
Mortgage(s) and note(s) secured thereby have not been modified or amended except
as shown in such documents".

         9. The Purchaser obligates itself to assume the existing mortgage on
the premises. The Term Loan Note provides for the payment of a premium to the
Lender in the event of prepayment of the mortgage. In the event that the
Purchaser shall fail to assume the existing mortgage on the premises, any
premium due to First Union Bank, the successor to FFB, as a result of the
prepayment of the mortgage shall be the obligation of Purchaser and the amount
of said premium shall be paid by the Purchaser to the Seller at the time of the
closing.

         10. Purchaser has conducted an environmental investigation of the
Premises and has taken such tests and/or samples, including without limitation,
soil and ground water samples which the Purchaser believes is necessary to
evaluate the environmental condition of the Premises. Seller makes no
representation regarding the present condition of the Premises, past uses of the
Premises by the Seller or by any previous owner or lessee of the Premises, or
compliance with any federal, state or local law, ordinance or regulation
relating to the protection of health or the environment ("Environmental Law").
It is the sole responsibility under this Agreement of the Purchaser to determine
the environmental condition of the Premises. Nothing in this paragraph shall be
construed as altering the common law or statutory rights or liabilities of
Seller or Purchaser as against the other or any third party provided, however,
that neither Seller or its principals, shall be liable to the Purchaser for (i)
the act of making material omissions or (ii) the act of failing to disclose with
the respect to (a) the present environmental condition of the Premises, (b) past
usages of the Premises by the Seller or by any previous owner or lessee of the
Premises, or (c) the Seller's compliance with any Environmental Law.

         "Adverse environmental condition" is defined as:

         (1) the actual or potential contamination of the soil, air or water
(whether surface water or ground water) on or about the Premises by hazardous,
toxic, dangerous, or restricted, substances, wastes, products or materials
("Hazardous Substances");

                                       3
<PAGE>   12

         (2) the presence of Hazardous Substances which are stored upon the
subject premises, except where such Hazardous Substances are used, produced,
and/or stored at the Property in the ordinary course of business at the Property
in full compliance with Environmental Law.

         11. Section 1.01(a) is amended by the insertion after the word "hereto"
on the fourth line of the words "and all air rights and other rights with
respect hereto to the extent owned by Seller".

         12. Sections 5.01 and 5.02 are amended by the insertion of the
following words at the beginning of each paragraph "Other than as set forth
herein and in the riders attached hereto,.."

         13. Section 11.04 is amended by the insertion of the following sentence
at the end thereof. "Purchaser shall at the closing pay the Mount Vernon
Transfer Tax".

         14. Schedule D, Item 9 - Assessed Valuation

                60 Building:                            $120,000

                70 Building:                             122,000

                70 Lot:                                   18,000

         15. Schedule D, Item 10 - Real Estate Taxes

                60 Building:
                     1999 City tax                       $20,025.
                     98/99 School tax was                $35,900.
                     1999 State, County, Sewer tax       $11,392.

                70 Building:
                     1999 City tax                       $20,880.
                     98/99 School tax was                $30,949.
                     1999 State, County, Sewer tax       $ 9,493.

                                       4
<PAGE>   13

                70 Lot:
                     1999 City tax                       $ 3,081.
                     98/99 School tax was                $ 5,571.
                     1999 State, County, Sewer tax       $ 1,709.

                                       5

<PAGE>   14

                                   SCHEDULE F

1.   Driveway Easement in Liber 5765 Page 259.

2.   Affects part of Parcel 1, Drainage Easement to City of Mount Vernon in
Liber 1923 Page 209

3.   78 inch Sewer Easement and Reservation to County in Liber 4726 Page 97.<PAGE>   1

                               Exhibit. No. 10.49
                               ------------------
                                    MORTGAGE
                                    --------

         THIS MORTGAGE (hereinafter referred to as the "Mortgage"), is made on
this 16th day of August, 1993 by and between
          MICHAEL ANTHONY COMPANY, a general partnership duly organized and
existing under the laws of the State of New York, having its principal office
located at 115 South Macquesten Parkway, Mount Vernon, New York 10550
(hereinafter referred to as the "Mortgagor"),

         AND

         FIRST FIDELITY BANK, NATIONAL ASSOCIATION, NEW JERSEY a national
banking association duly organized and validly existing under the laws of the
United States of America, having an administrative office located at 570 Broad
Street, Newark, New Jersey 07102 (hereinafter referred to as the "Mortgagee").

                              W I T N E S S E T H:

                  WHEREAS, pursuant to a certain Term Loan Note, dated the date
of this Mortgage (hereinafter referred to as the "Note"), the Mortgagee has
agreed to make a term loan to the Mortgagor in the aggregate principal amount of
One Million Eight Hundred Eighty Five Thousand ($1,885,000.00) Dollars lawful
money of the United States of America, or such lesser amount as is disbursed and
advanced by the Mortgagee to the Mortgagor in accordance with the provisions of
the Note (hereinafter referred to as the "Loan"); and

                  WHEREAS, the Mortgagee has made the Loan to the Mortgagor in
part in consideration of this Mortgage; and

                  WHEREAS, this Mortgage is given and made by the Mortgagor to
the Mortgagee as security for (i) the repayment of the indebtedness of the
Mortgagor to the Mortgagee evidenced by the Note and all other loan documents,
agreements and instruments executed by and between the Mortgagor and the
Mortgagee (hereinafter referred to as the "Loan Documents"), (ii) all future
sums, if any, advanced to the Mortgagor by the Mortgagee, (iii) the performance
of the terms, conditions and covenants of the Mortgagor set forth in the Loan
Documents, and (iv) the payment and performance by the Mortgagor of all its
obligations and liabilities to the Mortgagee, direct or indirect, primary,
secondary, contingent, joint and several which are due or to become due, now
existing or which in the future may be created (hereinafter the terms and
conditions set forth in subparagraphs (i) through (iv) above shall be
collectively referred to as the "Obligations).

                  NOW, THEREFORE, in order to induce the Mortgagee to make the
Loan to the Mortgagor and to secure the payment of the indebtedness of the
Mortgagor to the Mortgagee, as well as all future sums of money to be advanced
by the Mortgagee to the Mortgagor at any time before the release or cancellation
of this Mortgage and to secure the performance by the Mortgagor of all of its
other obligations, liabilities and covenants to the Mortgagee and to assure

<PAGE>   2

payment of all other indebtedness, monetary obligations, liabilities and duties
of any kind of the Mortgagor, direct or indirect, absolute or contingent, joint
or several, due or not due, liquidated or not liquidated, and in consideration
of the sum of one and 00/100 ($1.00) Dollar and other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
Mortgagor by these presents does hereby mortgage, give, grant, release, assign,
hypothecate, transfer and set over unto the Mortgagee, its successors and
assigns forever, the following described property and rights:

                  ALL that certain estate and interest of the Mortgagor in and
to those certain lots, pieces or parcels of land and premises situate, lying and
being in the City of Mount Vernon, County of Westchester and State of New York,
as more particularly described on Schedule "A",, attached hereto and made a part
hereof (hereinafter referred to as the "Premises"); and

                  TOGETHER with all modifications, extensions and renewals of
this Mortgage; and

                  TOGETHER with all and singular the tenements, hereditaments,
buildings, improvements, rights-of-way, privileges, liberties, easements,
riparian rights, woods, waters, watercourses, mineral, oil and gas rights and
appurtenances thereunto belonging, or in any wise appertaining, and the
reversion and reversions and remainder and remainders,, rents, income, issues
and profits thereof; and

                  TOGETHER with all right, title and interest of the Mortgagor,
now owned or hereafter acquired, in and to any streets, the land lying in the
bed of any streets, roads or avenues, opened or proposed, in front of, adjoining
or abutting the Premises to the center line thereof, and all strips and gores
within or adjoining the Premises, easements and rights-of-way, public or
private, all sidewalks and alleys, now or hereafter used in connection with the
Premises or abutting the Premises; and

                  TOGETHER with all furniture, fixtures, equipment and other
articles of personal property owned by the Mortgagor and now or hereafter
attached to or used in connection with, or with the operation of, any
improvements located on the Premises, as to which this Mortgage constitutes a
security agreement under the New York Uniform Commercial Code (in addition to
and not in lieu of any other security agreement between the parties), including,
without limitation, all building supplies and materials, furniture, fixtures and
equipment; all furnaces, motors, dynamos, incinerators,, machinery, generators,
partitions, elevators, steam and hot water boilers, heating, air conditioning
equipment, wall cabinets, lighting and power plants, coal and oil burning
apparatus, pipes, plumbing, radiators, sinks, bath tubs, water closets,
refrigerators, gas and electrical fixtures, stoves, ranges, shades, screens,
blinds, washing machines, clothes dryers, dishwashers, freezers, awnings, vacuum
cleaning systems, sprinkler systems or other fire prevention or extinguishing
apparatus and materials, including all accessories, additions, substitutions and
replacements thereof, and all cash and non-cash proceeds thereof, all of which
shall be deemed to be and remain and form a part of the Premises and are covered
by the lien of this Mortgage. If the lien of this Mortgage shall be subject to a
conditional bill of sale, chattel mortgage, or other security interest covering
any such property, then all the right, title and interest of the Mortgagor in
and to such property, together with the benefits of any deposits or

<PAGE>   3

payments now or hereafter made thereon, are and shall be covered by the lien of
this Mortgage; and

                  TOGETHER with a continuing first lien, pledge, assignment and
security interest in and to all of the Mortgagor's right, title and interest
with respect to any and all leases, easements, licenses and any other legal or
beneficial rights of or interests of the Mortgagor relating to the Premises
including, without limitation, all of the Mortgagor's right, title and interest
in and to any existing or future leases, easements., licenses and other rights
relating to the Premises, including, without limitation, any existing or future
rights relating to ingress and egress to the Premises, driveway areas, adjacent
parking, walkways, easements necessary for the installation and maintenance of
utilities for the Premises and pedestrian access to and from the Premises; and

                  TOGETHER with all of the Mortgagor's right, title and interest
in and to any and all awards, damages, payments and other compensation, and any
and all claims therefor and rights thereto, which may result from taking or
injury by virtue of the exercise of the power of eminent domain, or any damage,
improvements, injury or destruction in any manner caused to the Premises or
thereon, or any part thereof; and

                  TOGETHER with all insurance proceeds and any awards and
payments, including interest thereon, which may be made in respect of all or any
part of the Premises, the buildings and/or the building equipment, or any estate
or easement therein, as a result of damage to or destruction of all or any part
of the building or the building equipment, the exercise of the right of
condemnation or eminent domain, the closing of, or the alteration of the grade
of, any street on or adjoining the Premises, or any other injury to or decrease
in the value of all or any part of the Premises, which proceeds and awards are
hereby assigned to the Mortgagee, which is hereby authorized to collect and
receive the same and to give receipts and acquittances therefor and to apply the
same or any part thereof as provided in this Mortgage; and the Mortgagor hereby
agrees, upon request, to make, execute and deliver any and all assignments and
other instruments sufficient for the purposes of assigning said proceeds and
awards and payments to the Mortgagee free, clear and discharged of any
encumbrances of any kind or nature whatsoever (subject to Section 19); and

                  TOGETHER with all of the Mortgagor's right, title and interest
in and to any and all present and future leases of all or any part of the
Premises, and in and to the rents, issues and profits payable thereunder and
cash or securities deposited thereunder as lessees' security deposits; and

                  TOGETHER with all the estate, right, title, interest,
property, possession, claim and demand whatsoever of the Mortgagor, as well in
law as in equity, of, in and to the same and every part and parcel thereof with
the appurtenances in connection with the Premises; and

                  TO HAVE AND TO HOLD the above granted Premises unto the
Mortgagee, its successors and assigns, to its and their own proper use, benefit
and behoof forever.

<PAGE>   4

                  PROVIDED, ALWAYS THAT if the Mortgagor shall well and truly
pay or true shall otherwise be paid to the Mortgagee all of the Obligations and
the Mortgagor shall well and truly abide by and comply with each and every term,
covenant and condition of the Obligations at the time and times as required,
then these presents and the lien and interest hereby transferred and assigned
shall cease, terminate and be void.

                  ARTICLE I. THE MORTGAGOR REPRESENTS, WARRANTS, COVENANTS AND
AGREES WITH THE MORTGAGEE AS FOLLOWS:

                  Section 1. DEFINITIONS. In this Mortgage, all words and terms
not defined herein shall have the respective meanings and be construed herein as
provided in the Loan Documents. Any reference to a provision of the Loan
Documents shall be deemed to incorporate that provision as a part hereof in the
same manner and with the same effect as if the same were fully set forth herein.

                  Section 2. OBLIGATIONS SECURED. This Mortgage has been given
and is intended to secure the full and prompt payment and performance of the
Obligations. This Mortgage shall remain in full force and effect with respect to
the Premises until all the Obligations shall have been paid and performed in
full. If there shall be any default beyond the applicable grace period, if any,
on the part of the Mortgagor under the Loan Documents or this Mortgage, then the
Obligations shall become due and payable at the option of the Mortgagee.

                  Section 3. BENEFICIARIES. Nothing herein expressed or implied
is intended or shall be construed to confer upon, or to give to, any person
other than the Mortgagor and the Mortgagee any right, remedy or claim under or
by reason hereof. All covenants, stipulations and agreements herein contained by
and on behalf of the Mortgagor shall be for the sole and exclusive benefit of
the Mortgagee.

                  Section 4. PAYMENT AND PERFORMANCE OF OBLIGATIONS. The
Mortgagor shall pay and perform the Obligations when due in accordance with the
Note and the Loan Documents.

                  Section 5. SEISIN AND WARRANTY. The Mortgagor is seized of a
fee simple estate in the Premises, and the Mortgagor warrants the title to said
estate in the Premises. The Mortgagor hereby covenants and agrees that the
Mortgagor shall (i) preserve such estate and the validity and priority of the
lien of this Mortgage and shall forever warrant and defend the same to the
Mortgagee against all lawful claims whatsoever and the claims of all persons
whomsoever claiming or threatening to claim the same or any part thereof, and
(ii) to make, execute, acknowledge and deliver all such further or other deeds,
documents, instruments or assurances, and cause to be done all such further acts
and things as may at any time hereafter be reasonably required by the Mortgagee
to fully protect the lien of this Mortgage. Section 6. Insurance. (i) The
Mortgagor shall obtain, or cause to be obtained, and shall maintain or cause to
be maintained, at all times throughout the term of this Mortgage, insurance on
the Premises in such amounts and in such manner and against such loss, damage
and liability, including liability to third parties, as is customary with
persons in the same or similar business and located in the same or similar
areas. Such insurance shall include, without limitation, the following:

<PAGE>   5

                           (a) Comprehensive general public liability insurance
insuring against any and all liability of the Mortgagor or claims of liability
of the Mortgagor arising out of, occasioned by or resulting from any accident or
otherwise resulting in or about the Premises and the adjoining streets,
sidewalks and passageways, in a minimum amount of $1,000,00000 for death or
bodily injury to any one person in connection with one accident or occurrence in
or about the Premises, $3,000,000.00 for death or bodily injury to one or more
persons in connection with one accident or occurrence in or about the Premises,
and $500,000.00 property damage in connection with one accident or occurrence in
or about the Premises (including blanket contractual liability insurance, garage
liability, innkeeper's liability, products liability and elevator liability, if
applicable);

                           (b) "All-Risk" coverage policy of fire and hazard
insurance with respect to the Premises, which insurance policy shall contain an
agreed amount endorsement and be in an aggregate amount not less than one
hundred (100%) percent of the agreed upon full insurable replacement value of
the Premises without coinsurance;

                           (c) If the Premises are required to be insured
pursuant to the Flood Disaster Protection Act of 1973 or the National Flood
Insurance Act of 1968, and the regulations promulgated thereunder, because it is
located in an Urban Development as a Flood Hazard Area, then a flood insurance
policy covering the Premises in an amount not less than the outstanding
principal balance of the Note or the maximum limit of coverage available,
whichever amount is less;

                           (d) Title insurance coverage in the form of an ALTA
standard mortgagee title insurance policy insuring this Mortgage as a valid
first lien on the Premises in the aggregate principal amount of the Note;
subject, however, to certain "Permitted Encumbrances" as set forth in the
Commitment for Title Insurance issued to the Mortgagee by Old Republic National
Title Insurance Company in connection with this Mortgage, No. P 8419, dated May
14, 1993, as continued through the date hereof (hereinafter referred to as the
"Title Commitment");

                           (e) Business interruption and/or loss of rental
insurance coverage sufficient to pay, during the period of interruption or loss,
a substantial portion of normal operating profits of the Premises; and

                  (ii) Each insurance policy required under this Section 6 shall
be written by insurance companies authorized or licensed to do business in the
State of New York having an Alfred M. Best Company, Inc. rating of A or higher
and a financial size category of not less than VII, and shall be on such forms
and written by such companies as shall be reasonably approved by the Mortgagee
Such insurance coverage may be effected under overall blanket or excess coverage
policies of the Mortgagor, except as to public liability insurance which may be
effected under combined single limit.

                  (iii) Each insurance policy required under this Section 6
providing insurance against loss or damage to property shall be written or
endorsed so as to (a) contain a New York standard mortgagee and secured party
endorsement, as the case may be, or its equivalent in favor

<PAGE>   6

of the Mortgagee, (b) make all losses, if any, payable directly to the
Mortgagee, without contribution, and (c) provide for deductibles not to exceed
$10,000.00 per occurrence.

                  (iv) Each insurance policy required under this Section 6 and
providing public liability coverage shall be written and endorsed so to name the
Mortgagee as an additional insured, as its interest may appear.

                  (v) Each insurance policy required under this Section 6 shall
contain a provision to the effect that such policy shall not be canceled,
altered or in any way limited in coverage or reduced in amount unless the
Mortgagee is notified in writing at least thirty (30) days prior to such
cancellation, alteration, limitation or reduction. At least thirty (30) days
prior to the expiration of any such policy, the Mortgagor shall furnish evidence
satisfactory to the Mortgagee that such policy has been renewed or replaced or
is no longer required by this Section 6.

                  (vi) Each insurance policy required under this Section 6
(except flood insurance written under the federal flood insurance program) shall
contain an endorsement or agreement by the insurer that any loss shall be
payable to the Mortgagee, as its interest may appear,, in accordance with the
terms of such policy notwithstanding any act or negligence of the Mortgagor
which might otherwise result in forfeiture of said insurance and the further
agreement of the insurer waiving all rights of set-off, counter-claim, deduction
or subrogation against the Mortgagor (so as not to interfere with the
Mortgagee's rights) (subject to Section 19).

                  (vii) In the event of loss or damage to the collateral, the
proceeds of any insurance provided hereunder shall be applied as set forth in
Section 19 of this Article 1; in the event of a public liability claim, the
proceeds of any insurance provided hereunder shall be applied toward
extinguishing or satisfying the liability and expenses incurred in connection
therewith.

                  (viii) The Mortgagor shall not take out any separate or
additional insurance with respect to the Premises which is contributing in the
event of loss unless it is properly compatible with all of the requirements of
this Section 6.

                  Section 7. PRESERVATION, MAINTENANCE AND REPAIR. All
buildings, structures and other improvements which are presently erected and in
the future are to be erected upon the Premises, shall, at the Mortgagor's own
cost and expense, be kept in good and substantial repair, working order and
condition, and the Mortgagor shall, from time to time, make or cause to be made,
all necessary and proper repairs, replacements, improvements and betterments
thereto. The Mortgagor shall not remove, demolish, materially alter, discontinue
the use of, sell, transfer, assign, hypothecate or otherwise dispose of to any
Person (defined as an individual, corporation, partnership, trust,
unincorporated organization or government, or an agency or political subdivision
thereof, or any business or legal entity) any part of the Premises without the
prior express written consent of the Mortgagee, except that the Mortgagor shall
from time to time make such substitutions, additions, modifications and
improvements as may be necessary and as shall not impair the structural
integrity, operating efficiency and economic value of the Premises. All
alterations, replacements, renewals or additions made pursuant to this Section 7
shall automatically become and constitute a part of the Premises and shall be
covered by the lien of

<PAGE>   7

this Mortgage. The Mortgagor shall not do, and shall not permit to be done, any
act which may in any way impair or weaken the security under this Mortgage.

         Section 8. DECLARATION OF NO OF F SET. The Mortgagor represents to the
Mortgagee that the Mortgagor has no knowledge of any offsets, counterclaims or
defenses to the principal indebtedness secured hereby, or to any part thereof,
or the interest thereon, either at law or in equity. The Mortgagor shall, within
three (3) days upon request in person or within ten (10) days upon request by
mail, furnish a duly acknowledged written statement in form reasonably
satisfactory to the Mortgagee stating either that the Mortgagor knows of no
offsets or defenses existing against such indebtedness, or if such offsets or
defenses are alleged to exist, the nature and extent thereof, and in either
case, such statement shall set forth the amount due hereunder.

         Section 9. NO ADDITIONAL LIENS ON FIXTURES. The Mortgagor shall not
remove or suffer to be removed from the Premises any fixtures owned by the
Mortgagor as the term "fixtures" is defined by the law in New York presently, or
in the future to be incorporated into, installed in, annexed or affixed to the
Premises (unless such fixtures have been replaced with similar fixtures of equal
or greater utility and value) ; nor will the Mortgagor execute or cause to be
executed any security interest upon any such fixtures, additions to,
substitutions or replacements thereof, or upon any f ixtures in the future to be
installed in, annexed or affixed to the Premises, without the prior express
written consent of the Mortgagee.

         Section 10. PERFORMANCE. The Mortgagor shall perform and abide by the
terms and covenants herein and the terms and covenants in the Note and the Loan
Documents all of which are made a part hereof as though set forth herein at
length.

         Section 11. WAIVER. The acceptance by the Mortgagee of any payments
hereunder, after the occurrence of an Event of Default, or the failure of the
Mortgagee in any one or more instances to insist upon strict performance by the
Mortgagor of any terms and covenants of this Mortgage or to exercise any option
or election herein conferred, shall not be deemed to be a waiver or
relinquishment for the future of any such terms, covenants, elections or
options.

         Section 12. NO CREDIT FOR TAXES. The Mortgagor shall not claim or
demand or be entitled to any credit or credits on account of the obligations by
reason of the taxes or mpositions assessed against all or any part of the
Premises or for any payments made pursuant to this Mortgage hereof. No
deductions shall otherwise be made or claimed from the taxable value of all or
any part of the Premises by reason or this Mortgage or the obligations.

                  Section 13. TAXES. The Mortgagor shall prepare and timely file
all federal, state and local tax returns required to be filed by the Mortgagor
and promptly pay and discharge or cause to be promptly paid and discharged all
taxes, assessments, municipal or governmental rates, charges, impositions, liens
and water and sewer rents or any part thereof (hereinafter individually referred
to as an Imposition and collectively referred to as the "Impositions"),
heretofore or hereafter imposed upon the Mortgagor or in respect of any of the
Mortgagor's property and assets before the same shall become in default, as well
as all lawful claims which, if unpaid might become a lien or charge upon such
property and assets or any part thereof. The Mortgagor may, after prior express
written notice to the Mortgagee, contest by appropriate legal

<PAGE>   8

proceedings at the Mortgagor's sole cost and expense the validity or amount of
any Imposition; and the Mortgagor may defer payment thereof during the pendency
of such contest, provided and upon condition that (i) such contest and/or
non-payment shall not constitute a crime, misdemeanor or offense on the part of
the Mortgagor, the Mortgagee or any tenant or occupant of the Premises, (ii)
such contest and/or non-payment will not result in any lien, charge, penalty,
fine or other liability or any kind against all or any part of the Premises,
(iii) such contest and/or non-payment will not prevent, preclude or bar the use
of all or any part of the Premises for the use for which the same is intended or
was constructed, (iv) the Mortgagor shall prosecute such contest with due
diligence and in good faith to a final determination by a court, department or
governmental authority or body having final jurisdiction, (v) the Mortgagor
shall hold harmless, indemnify and defend the Mortgagee against any and all
claims, liabilities, losses, costs, expenses (including, without limitation,
reasonable attorneys' fees) and damages which the Mortgagee may sustain or incur
by reason of the Mortgagor's contest or failure or delay in payment, and (vi)
the Mortgagor shall maintain adequate insurance or accrued the estimated
liability on its balance sheets for payment thereof. The Mortgagor shall submit
to the Mortgagee, upon request, an affidavit signed by the Mortgagor certifying
that, to the best of the Mortgagor's knowledge, all current federal and state
information income tax returns have been filed to date and all real property
taxes, assessments, governmental charges or levies and other lawful claims with
respect to the Mortgagor's properties and assets have been paid to date. The
Mortgagor shall deliver to the Mortgagee, within thirty (30) days after each
fiscal quarter, the original or a photostatic copy of the official receipt
evidencing such payment or other proof of payment satisfactory to the Mortgagee.
From time to time, at the option of the Mortgagee, the Mortgagor shall, in
addition to the regular monthly principal and interest payment on the Note, pay
into a non-interest bearing account held by the Mortgagee, at the times when the
monthly installment of principal and interest is payable, an amount equal to
one-twelfth (1/12th) of the annual estimated real estate taxes levied with
respect to the Premises so that the funds are available to pay said real estate
taxes and assessments when due, and such sum shall be held by the Mortgagee for
the payment of such real estate taxes and assessments as they become due. If the
amount so estimated shall prove insufficient, then the Mortgagor shall pay the
required deficiency upon demand.

                  Section 14. MODIFICATIONS IN WRITING. The terms of this
Mortgage may not be changed orally but only by an agreement in writing signed by
the party against whom enforcement of any waiver, change, modification or
discharge is sought.

                  Section 15. SECURITY AGREEMENT. This Mortgage constitutes a
security agreement under the New York Uniform Commercial Code, and the Mortgagor
hereby grants to the Mortgagee, to further secure the Obligations, a security
interest in all furniture, fixtures and equipment and all other machinery,
appliances, furnishings, tools and buildings materials now owned or hereafter
acquired by the Mortgagor, and installed or to be installed in or on the
Premises and used or to be used in the management or operation of the Premises,
and all substitutions, replacements, additions and accessions thereto, together
with all cash and non-cash proceed thereof. The Mortgagor shall execute,
deliver, file and refile any financing statements, continuation statements, or
other security agreements that the Mortgagee may require from time to time to
confirm the lien of this Mortgage with respect to such property. Without
limiting the foregoing, the Mortgagor hereby irrevocably constitutes and
appoints the Mortgagee with full

<PAGE>   9

power of substitution, as its attorney-in-fact with full irrevocable power and
authority (coupled with and interest) in the place and stead of such Mortgagor
and in the name of such Mortgagor or in the Mortgagee's own name, for the
Mortgagee to execute, deliver and file such instruments for and on behalf of the
Mortgagor and the Mortgagor shall pay all filing fees in connection therewith.
Notwithstanding any release of any or all of that property included in the
Premises which is deemed "real property", and proceedings to foreclose this
Mortgage or its satisfaction of record, the terms hereof shall survive as a
security agreement with respect to the security interest created hereby and
referred to above until the repayment or satisfaction in full of the Obligations
as are now or hereafter secured hereby.

                  Section 16. NO ASSIGNMENT. This Mortgage shall not be assigned
by the Mortgagor without the prior express written consent of the Mortgagee.

                  Section 17. DATE OF MORTGAGE. The date of this Mortgage shall
be for identification purposes only and shall not be construed to imply that
this Mortgage was executed on any date other than the respective dates of the
acknowledgments of the parties hereto. This Mortgage shall become effective upon
its delivery.

                  Section 18. CHANGE IN LAWS. During the term of this Mortgage,
in the event of the passage after the date of this Mortgage of any law of the
State of New Jersey or the State of New York, or any other governmental entity,
changing in any way the laws now in force for the taxation of mortgages, or
debts secured thereby, for state or local purposes, or the manner of the
operation of any such taxes,, so as to affect the interest of the Mortgagee,
then and in such event, the Mortgagor shall bear and pay the full amount of such
taxes, provided that if for any reason payment by the Mortgagor of any such new
or additional taxes would be unlawful or if the payment thereof would constitute
usury or render the Loan or indebtedness secured hereby wholly or partially
usurious under any of the terms or provisions of the obligations secured
hereunder, or this Mortgage, or otherwise, the Mortgagee may, at the Mortgagee's
option, declare the whole sum secured by this Mortgage, with interest thereon,
to be immediately due and payable, or the Mortgagee may, at the Mortgagee's
option, pay that amount or portion of such taxes as renders the Loan or
indebtedness secured hereby unlawful or usurious, in which event the Mortgagor
shall concurrently therewith pay the remaining lawful and nonusurious portion of
balance of said taxes.

                  Section 19. DAMAGE, DESTRUCTION AND CONDEMNATION.

                  (i) If all or any part of the Premises shall be damaged or
destroyed, or if title to or the temporary use of the whole or any part of any
of the Premises shall be taken or condemned by a competent authority for any
public use or purpose, there shall be no abatement or reduction in the amounts
payable by the Mortgagor hereunder or under the Note and/or the Loan Documents,
and the Mortgagor shall continue to be obligated to make such payments.

                  (ii) If the Premises or any part thereof is partially or
totally damaged or destroyed by f ire or any other cause, the Mortgagor shall
give prompt express written notice thereof to the Mortgagee. The Mortgagor
hereby authorizes and directs any affected insurance company to make payment of
such proceeds directly to the Mortgagee. The Mortgagee is hereby authorized

<PAGE>   10

and empowered by the Mortgagor to settle, adjust or compromise, in consultation
with the Mortgagor. The Mortgagor shall pay all costs of collection of insurance
proceeds payable an account of such damage of destruction.

                  (iii) In the event of partial or --tal destruction of the
Premises by fire or in the event all or a part of the Premises is condemned by a
governmental agency, the proceeds of such insurance or condemnation will be
payable to the Mortgagee provided the loss to the Mortgagor is for more than ten
(10.0%) of the then aggregate principal balance of the Loan, at the time of said
casualty or condemncation, and the Mortgagee will have the option in its sole
discretion, of applying all or any part of the proceeds to (a) to reduce the
outstanding principal balance of the Note and the Loan Documents, (b) to the
repair, restoration, replacement and rebuilding of the Premises in accordance
with the Mortgagee's standard construction loan disbursement conditions and
requirements, or (c) to the Mortgagor.

                  (iv) Immediately upon obtaining knowledge of the institution
of any proceedings for the condemnation of the Premises, or any portion thereof,
the Mortgagor shall notify the Mortgagee of the pendency of such proceedings.
The Mortgagee may participate in any such proceedings and the Mortgagor shall,
at the sole cost and expense of the Mortgagor, diligently prosecute any such
proceeding and shall consult with the Mortgagee, its attorneys and experts and
cooperate with it in any defense of any such proceedings. The Mortgagor shall
not, without the Mortgagee's prior express written consent, enter into any
agreement for the taking or conveyance in lieu thereof of the Premises, or any
part thereof, with anyone authorized to acquire the same by eminent domain,
condemnation or like power or proceeding. All awards and proceeds of
condemnation shall be assigned to the Mortgagee, to be paid or applied by the
Mortgagee, in accordance with subparagraph (iii) of this Section.

                  (v) In the event any insurance proceeds or condemnation awards
are applied by the Mortgagor to reduce the outstanding principal balance of the
Note, said payments shall be applied against the outstanding principal balance
in the inverse order of maturity, without penalty or premium.

                  (vi) Nothing in this Section shall relieve the Mortgagor of
the Mortgagor's duty to repair, restore, rebuild or replace the Premises
following damage or destruction by fire or other casualty or partial
condemnation in the event that the Mortgagee elects to use the proceeds of
insurance or condemnation awards to restore, rebuild, repair or replace the
Premises and said proceeds of insurance or condemnation awards are inadequate to
defray the cost of such repairing, restoring, rebuilding or replacement.

                  Section 20. COMPLIANCE WITH LAWS. The Mortgagor agrees to
comply with all present and future laws, statutes, rules, regulations and
ordinances made or promulgated by lawful authority having jurisdiction of or
relating to all or any part of the Premises which are now or may hereafter be
applicable to the Premises within such time as may be required by law.

                  Section 21. INDEMNIFICATION. The Mortgagor hereby agrees to
and does hereby indemnify, protect, defend and save harmless the Mortgagee and
its trustees, officers, employees,

<PAGE>   11

agents, attorneys and shareholders from and against any and all losses, damages,
expenses or liabilities of any kind or nature and from any suits, claims or
demands, including reasonable counsel fees incurred in investigating or
defending such claim, suffered by any of them and caused by, relating to,
arising out of, resulting from, or in any way connected with this Mortgage and
the transactions contemplated herein (unless caused by the gross negligence or
willful misconduct of the Mortgagee), including, without limitation, (i)
disputes between any architect, general contractor, subcontractor, materialman
or supplier, or on account of any act or omission to act by the Mortgagee in
connection with this Mortgage, or (ii) losses, damages, expenses or liabilities
sustained by the Mortgagee in connection with any environmental sampling or
clean-up of the Premises required or mandated by any federal, state or local
law, ordinance, rule or regulation, including, without limitation, (a) the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended (42 U.S.C. S9601 ET SEQ.) ("CERCLA); (b) the Hazardous Material
Transportation Act, as amended (49 U.S.C. S180 ET SEQ.); (c) the Federal
insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S. C. S136 ET
SEQ.); (d) the Resource Conservation and Recovery Act, as amended (42 U.S.C.
S6901 ET SEQ.) ("RCRA); (e) the Toxic Substance Control Act, as amended (42
U.S.C. S7401 et sect.); (f) the Clean Air Act, as amended (42 U.S.C. S740 ET
SEQ.); (g) the Federal Pollution Control Act, as amended (33 U.S.C. S1251 ET
SEQ.); (h) the Occupational Safety and Health Act, as amended (29 U.S.C. S651 ET
SEQ.); (I) the Safe Drinking Water Act, as amended (42 U.S.C. S300f ET SEQ. (j)
the Food, Drug and Cosmetic Act, as amended (21 U.S.C. S301 et SEQ.); (k) the
Medical Waste Tracking Act of 1988, Pub. L. No. 100-582, 102 Stat. 2950 (1988);
or (1) any and all laws, regulations, and executive orders, both federal, state
and local pertaining to environmental matters, as the same may be amended or
supplemented from time to time (hereinafter collectively referred to as the
"Applicable Environmental Laws"). In case any action shall be brought against
the Mortgagee based upon any of the above and in respect to which indemnity may
be sought against the Mortgagor, the Mortgagee shall promptly notify the
Mortgagor in writing, and the Mortgagor shall assume the defense thereof,
including the employment of legal counsel selected by the Mortgagor and
reasonably satisfactory to the Mortgagee, the payment of all costs and expenses
and the right to negotiate and consent to settlement. Upon reasonable
determination made by the Mortgagee, the Mortgagee shall have the right to
employ separate counsel in any such action and to participate in the defense
thereof. The Mortgagor shall not be liable for any settlement of any such action
effected without the Mortgagor's consent, but if settled with the Mortgagor's
consent, or if there be a final judgment for the claimant in any such action,
the Mortgagor agrees to indemnify and save harmless the Mortgagee from and
against any loss or liability by reason of such settlement or judgment. The
provisions of this Section 21 shall survive the termination of this Mortgage and
the repayment of the Note.

                  Section 22. ASSIGNMENT OF RENTS. The Mortgagor hereby assigns
to the Mortgagee the rents, issues and profits arising out of or from the
Premises as further security for the obligations, and the Mortgagor grants to
the Mortgagee the right to enter upon and to take possession of the Premises for
the purpose of collecting the same and to let the Premises or any part thereof,
and to apply the rents, issues and profits, after payment of all necessary
charges and expenses, on account of said indebtedness. This assignment and grant
shall continue in effect until this Mortgage is paid in full and discharged of
record. The Mortgagee hereby waives the right to enter upon and to take
possession of the Premises for the purpose of collecting said rents, issues and
profits, and the Mortgagor shall be entitled to collect, receive, retain and use
said

<PAGE>   12

rents, issues and profits until the occurrence of an event of default under this
Mortgage or the Loan Documents, but such right of the Mortgagor may be revoked
by the Mortgagee upon the occurrence of an event of default on five (5) days
written notice. The Mortgagor shall not, without the written consent of the
Mortgagee, receive or collect rent from any tenant of the Premises or any part
thereof for a period of more than one month in advance, and in the event of the
occurrence of an event of default under this Mortgage or the Loan Documents, the
Mortgagor shall pay monthly in advance to the Mortgagee or to any receiver
appointed to collect said rents, issues and profits, the fair and reasonable
rental value for the use and occupation of the Premises or of such part thereof
as may be in the possession of the Mortgagor, and upon default in any such
payment the Mortgagor shall vacate and surrender the possession of the Premises
to the Mortgagee or to such receiver. If the Mortgagor does not so vacate and
surrender the Premises then the Mortgagor may be evicted by summary proceedings.

                  Section 23. ADVANCES. Upon the occurrence of an event of
default by the Mortgagor under this Mortgage, the Loan Documents and/or the
Note, the Mortgagee may at its option remedy such event of default, and all
payments made by the Mortgagee to remedy an event of default by the Mortgagor
(including reasonable attorney's fees) and the total of any payment or payments
due from the Mortgagor to the Mortgagee which are in default, together with
interest thereon at the Default Rate set forth in the Note (such interest to be
calculated from the date of such advance to the date of payment thereof by the
Mortgagor), shall be added to the debt secured by this Mortgage until paid, and
the Mortgagor covenants to repay the same to the Mortgagee on the next interest
payment date of the Note. Any such sums and the interest thereon shall be a lien
on the Premises prior to any other lien attaching to or accruing subsequent to
the lien of this Mortgage.

                  Section 24. PERMITTED ENCUMBRANCES. At no time throughout the
term of this Mortgage shall the Mortgagor create, incur, assume or suffer to
exist any mortgage, deed of trust, pledge, lien, security interest, encumbrance,
attachment, levy, distraint or other judicial process and burdens of any kind or
nature on or with respect to any of the Premises without the prior express
written consent of the Mortgagee, except the Permitted Encumbrances set forth in
the Title Commitment.

                  Section 25. ENVIRONMENT ISSUES. (i) None of the real property
owned and/or occupied by the Mortgagor and located in the State of New York,
including, without limitation, the Premises, has ever been used in violation of
any laws, by previous owners and/or operators to refine, produce, store, handle,
transfer, process or transport "Hazardous Substances" or "Hazardous Wastes", as
such terms are defined in the Applicable Environmental Laws, and the Mortgagor
has not used in the past, nor does the Mortgagor intend to use in the future,,
said real property, including without limitation, the Premises, for the purpose
of refining, producing, storing, handling, transferring, processing or
transporting said "Hazardous Substances" in violation of any laws.

                  (ii) Should the Mortgagor, any lessee of the Premises, or any
other person cause or permit any intentional or unintentional action or omission
resulting in the releasing, spilling, leaking, pumping, pouring, emitting,
emptying or dumping of "Hazardous Substances" or "Hazardous Wastes",, as such
terms are defined in the Applicable Environmental Laws, into the

<PAGE>   13

waters or onto the lands of the State of New York, or into the waters outside
the jurisdiction of the State of New York resulting in damage to the lands,
waters, fish, shellfish, wildlife, biota, air or other resources owned, managed
or held in trust or otherwise controlled by the State of New York, without
having obtained a permit issued by the appropriate governmental authorities, the
Mortgagor shall promptly clean up such spill, leak, etc., in accordance with the
provisions of the Applicable Environmental Laws.

                  (iii) No lien has been attached to any revenues or any real or
personal property owned by the Mortgagor and located in the State of New York,
including, without limitation, the Premises, as a result of any law of the State
of New York, arising from an intentional or unintentional action or omission of
the Mortgagor or any previous owner and/or operator of said real property,
including, without limitation, the Premises, resulting in the releasing,
spilling, pumping, pouring, emitting, emptying or dumping of "Hazardous
Substances" or "Hazardous Wastes", as such terms are defined in the Applicable
Environmental Laws, into the waters or onto the lands of the State of New York,
or into waters outside the jurisdiction of the State of New York where damage
may have resulted to the lands, waters, fish, shellfish, wildlife, biota, air
and other resources owned, managed, held in trust or otherwise controlled by the
State of New York.

                  (iv) The Mortgagor has not received a summons, citation,
directive, letter or other communication, written or oral, from the State of New
York concerning any intentional or unintentional action or omission on the
Mortgagor's part resulting in the releasing, spilling, leaking, pumping,
pouring, emitting, emptying or dumping of "Hazardous Substances" or "Hazardous
Wastes", as such terms are defined in the Applicable Environmental Laws, into
the waters or onto the lands of the State of New York, or into the waters
outside the jurisdiction of the State of New Jersey resulting in damage to the
land, waters, fish, shellfish, wildlife, biota, air and other resources owned,
managed, held in trust or otherwise controlled by the State of New York.

                  (v) None of the real property owned and/or occupied by the
Mortgagor and located in the State of New York, including, without limitation,
the Premises has ever been used in violation of any laws, by previous owners
and/or operators to generate, manufacture, refine, transport, heat, store,
handle or dispose of "Hazardous Substances" or "Hazardous Wastes" as such terms
are defined in the Applicable Environmental Laws, and the Mortgagor does not
intend to use any of the Mortgagor's real property including, without
limitation, the Premises, for such purpose, which will not comply with all laws.

                  (vi) The Mortgagor shall not cause or permit to exist, as a
result of an intentional or unintentional action or omission on the part of the
Mortgagor or any tenant, a releasing, spilling, leaking, pumping, emitting,
pouring, emptying or dumping of a "Hazardous Substance" or "Hazardous Wastes",
as such terms are defined in the Applicable Environmental Laws, into waters or
onto the lands of the State of New York, or into waters outside the jurisdiction
of the State of New York, where damage may result to the lands, waters, fish,
shellfish, wildlife, biota, air and other resources owned, managed, held in
trust or otherwise controlled by the State of New York, unless said release,
spill, leak, etc., is pursuant to and in compliance with the conditions of a
permit issued by the appropriate federal or state governmental authorities.

<PAGE>   14

                  (vii) In the event that there shall be filed a lien against
the Premises by any governmental agency, pursuant to and in accordance with the
said State or Federal statutes,, as a result of monies from said fund having
been expended to pay for "Damages", arising from an intentional or unintentional
action or omission of Mortgagor, resulting in the releasing, spilling, leaking,
pumping, pouring, emitting, emptying or dumping of "Hazardous Substances" as
such term is defined, into waters, of the State or agency of New York or onto
lands from which it might flow or drain into said waters then the Mortgagor
shall, within thirty (30) days from the date that the Mortgagor is given notice
that the lien has been placed against the Premises or within such shorter period
of time in the event that the State of New York or the United States has
commenced steps to cause the Premises to be sold pursuant to the lien, either
(1) pay the claim and remove the lien from the Premises, or (2) furnish (i) a
bond satisfactory to the Title Insurance Company and the Mortgagee in the amount
of the claim out of which the lien arises, (1) a cash deposit in the amount of
the claim out of which the lien arises, (ii) a cash deposit in the amount of the
claim out of which the lien arises, or (iii) other security reasonably
satisfactory to the Mortgagee in an amount sufficient to discharge the claim out
of which the lien arises.

                  (viii) The Mortgagor agrees that the Mortgagee shall have the
right to conduct or have conducted by its agents or contractors, such
environmental inspections as the Mortgagee shall reasonably deem necessary or
advisable from time to time at the sole cost and expense of the Mortgagor. The
Mortgagor shall, and shall cause each tenant of the Premises to, cooperate with
such inspection efforts; such cooperation shall include, without limitation,
supplying such information concerning the operations conducted, and "Hazardous
Substances" or "Hazardous Wastes", as such terms are defined in the Applicable
Environmental Laws, located at the Premises.

                  (ix) No lien has been attached to any real property owned by
the Mortgagor and located within the State of New Jersey, including, without
limitation, the Premises, as a result of the Administrator of the United States
Environmental Protection Agency expending monies from the Hazardous Substance
Superfund for "Damages" and/or "Response Action Costs" as such terms are
described in 42 U.S.C. S9607(a), arising from an intentional or unintentional
action or omission of the Mortgagor or any previous owner and/or operator of
said real property, including, without limitation, the Premises, resulting in
any spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping or disposing of any "Hazardous Substance"
or "Hazardous Wastes", as such terms are defined in the Applicable Environmental
Laws, into the navigable waters, the waters of the contiguous zone, or the ocean
waters of which the natural resources are under exclusive managing authority of
the United States under the Magnuson Fishery Conservation and Management Act (16
U.S.C. S1801 ET SEQ.), or any other surface water, ground water, drinking ;water
supply, land surface or subsurface strata, or ambient air within the United
States or under the jurisdiction of the United States when damage may have
resulted to the land, fish, wildlife, biota, air, water, ground water, drinking
water supplies, and other resources belonging to, managed by, held in trust by,
appertaining to or otherwise controlled by the United States and any state or
local government.

                  (x) In the event that there shall be filed a lien against the
Premises by the United States Environmental Protection Agency pursuant to and in
accordance with the provisions of 42

<PAGE>   15

U.S.C. S9607(l), as a result of the Administrator of the Hazardous Substance
Superfund having expended monies from said fund to pay for "Damages" and
"Response Action Costs", as such terms are described in 42 U.S.C. S9607(a),
arising from an intentional or unintentional action of the Mortgagor or any
previous owner and/or operator, resulting in any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing of any "Hazardous Substance" or "Hazardous Wastes", as such terms
are defined in the Applicable Environmental Laws, into the navigable waters, the
waters of the contiguous zone, or the ocean waters of which the natural
resources are under exclusive managing authority of the United States under the
Magnuson Fishery Conservation and Management Act (16 U.S.C. S1801 ET.SEQ.), or
any other surface water, ground water, drinking water supply, land surface or
subsurface strata, or ambient air within the United States or under the
jurisdiction of the United States when damage may have resulted to the lands,
waters, or natural resources of the United States, then the Mortgagor shall,
within thirty (30) days from the date that the Mortgagor is given notice that
the lien has been placed against the Premises, or within such shorter period of
time in the event that the United States Government has commenced steps to cause
the Premises to be sold pursuant to the lien, either (a) pay the claim and
remove the lien from the Premises, or (b) furnish (1) a bond satisfactory to the
Mortgagee in the amount of the claim out of which the lien arises, (2) a cash
deposit in the amount of the claim out of which the lien arises, or (3) other
security satisfactory to the Mortgagee in an amount sufficient to discharge the
claim out of which the lien arises.

                  (xi) The Mortgagor represents and warrants that neither the
Mortgagor nor the Premises are in violation of or subject to any existing,
pending or threatened investigation or inquiry by any governmental authority
pertaining to any Applicable Environmental Law. The Mortgagor shall not cause or
permit the Premises to be in violation of, or do anything which would subject
the Premises to any remedial obligations under, any Applicable Environmental
Law, and shall promptly notify the Mortgagee, in writing, of any existing,
pending or threatened investigation or inquiry by any governmental authority in
connection with any Applicable Environmental Law.

                  Section 26. CLAIMS NOT AGAINST MORTGAGEE. Nothing contained in
this Mortgage shall constitute any consent or request by the Mortgagee, express
or implied, for the performance of any labor or services or the furnishing of
any materials or other property in respect of the Premises or any part thereof,
or be construed to permit the making of any claim against the Mortgagee in
respect of labor or services or the furnishing of any materials or other
property or any claim that any lien based on the performance of such labor or
services or the furnishing of any such materials or other property is prior to
the lien of this Mortgage.

                  Section 27. REAPPRAISAL OF THE PREMISES. (a) The Mortgagor
shall permit, throughout the term of this Mortgage and at its own cost and
expense, the Mortgagee to appraise or reappraise the Premises provided the
Mortgagee is required to do so pursuant to and in connection with (i) The
Financial Institutions, Reform, Recovery and Enforcement Act of 1989 (Public Law
101-73, 103 Stat. 183 (1989), (ii) The Bank Holding Company Act, 12 U.S.C.
Section 1844 or (iii) any other law, regulation, internal regulation or policy,
statute or opinion to which the Mortgagee is subject or bound. The Mortgagor
shall reimburse the Mortgagee for all costs, fees and expenses incurred by the
Mortgagee in connection with this Section 27, and the

<PAGE>   16

total of said costs, fees and expenses shall be added to the Obligations secured
by this Mortgage until paid. The Mortgagor shall provide any information
requested by the Mortgagee to conduct such appraisal or reappraisal and permit
any appraiser designated by the Mortgagee to enter the property at any
reasonable time to conduct such appraisal or reappraisal. In the event that the
Bank requests an appraisal for internal purposes, which is not required per
paragraph (a) then the Mortgagor agrees to (i) provide any information as
reasonably requested by the Mortgagee in order to perform the appraisal or
reappraisal, and (ii) permit any appraiser designated by the Mortgagee to enter
the Premises at any reasonable time for the purpose of conducting the appraisal
or reappraisal; (iii) to pay the cost of said appraisal or reappraisal; and (iv)
the Mortgagee hereby agrees, that provided no Event of Default has occurred, it
shall only conduct such appraisals or re-appraisals for internal purposes, once
every two (2) years.

                  Section 28. WAIVER OF REDEMPTION. The Mortgagor, for itself
and its successors and/or assigns, hereby irrevocably waives and releases, to
the extent permitted by law, (a) any right of redemption after the date of any
sale of the Premises upon foreclosure, whether statutory or otherwise, in
respect of the Premises now or hereafter in force; (b) the benefit of any and
all valuation and appraisement laws now or hereafter in force; and (c) all
exemption laws whatsoever and all moratoriums, extensions or stay laws or rules,
or orders of court in the nature of either of them, now or hereafter in force.

                  Section 29. RELIEF FROM BANKRUPTCY STAY. The Mortgagor
covenants and agrees that, in the event that the Mortgagor, any guarantor or any
of the persons or parties constituting the Mortgagor or a guarantor shall (i)
file with any bankruptcy court of competent jurisdiction or be the subject of
any petition under Title 11 of the U.S. Code, as amended (the "Bankruptcy
Code"), (ii) be the subject of any order for relief issued under the Bankruptcy
Code, (iii) file or be the subject of any petition seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar
relief under any present or future federal or state act or law relating to
bankruptcy, insolvency, or other relief for debtors, (iv) have sought or
consented to or acquiesced in the appointment of any trustee, receiver,
conservator, or liquidator, or (v) be the subject of any order, judgment, or
decree entered by any court of competent jurisdiction approving a petition filed
against such party for any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any present or
future federal or state act or law relating to bankruptcy, insolvency or relief
for debtors, the Mortgagee shall thereupon be entitled and the Mortgagor
irrevocably consents to immediate and unconditional relief from any automatic
stay imposed by Section 362 of the Bankruptcy Code, or otherwise, on or against
the exercise of the rights and remedies otherwise available to the Mortgagee as
provided for herein, in the Note, the Loan Documents and as otherwise provided
by law, and the Mortgagor hereby irrevocably waives any right to object to such
relief and will not contest any motion by the Mortgagee seeking relief from the
automatic stay and the Mortgagor will cooperate with the Mortgagee, in any
manner requested by the Mortgagee, in its efforts to obtain relief from any such
stay or other prohibition.

                  ARTICLE II. THE MORTGAGOR SHALL BE IN DEFAULT OF THIS MORTGAGE
UPON THE OCCURRENCE OF ANY OF THE FOLLOWING EVENTS (ANY OF WHICH MAY BE REFERRED
TO AS AN "EVENT OF DEFAULT"):

<PAGE>   17

                  Section 1. DEFAULT OF OBLIGATION OR IMPOSITION. After default
in the payment or performance when due of any of the Obligations or any
Impositions.

                  Section 2. EVENT OF DEFAULT UNDER THE LOAN DOCUMENTS. The
occurrence of any event of default under the Loan Documents or the Note.

                  Section 3. FAILURE TO PAY INTEREST. In the event that the
Mortgagor shall have failed to make a payment of any installment of interest on
the Note on its due date.

                  Section 4. FAILURE TO PAY PRINCIPAL. In the event that the
Mortgagor shall have failed to make a payment of any installment of principal on
the Note on its due date.

                  Section 5. FAILURE TO PAY OTHER MONIES. In the event that the
Mortgagor shall have failed to duly observe or perform any covenant, condition
or agreement with respect to the payment of monies on the part of the Mortgagor,
to be observed or performed pursuant to the terms of this Mortgage, the Note or
any other loan document, other than the payment of interest and principal which
shall be governed by Sections 3 and 4 above.

                  Section 6. BREACH OF COVENANTS. The Mortgagor shall have
failed to observe or perform any of the terms, covenants, conditions or
undertakings on the part of the Mortgagor to be observed or performed pursuant
to the terms contained in this Mortgage and/or the Loan Documents, other than
the payment of interest, principal or other monies which shall be governed by
Sections 3, 4 and 5 above.

                  Section 7. REPRESENTATIONS AND WARRANTIES. In the event that
any representation or warranty made by the Mortgagor in this Mortgage, the Loan
Documents or the Note shall prove to be false or misleading in any substantial
and material respect on the date made.

                  Section 8. BANKRUPTCY. The Mortgagor shall have applied for or
consented to the appointment of a receiver, custodian, trustee or liquidator of
all or a substantial part of the Mortgagor's assets; or shall generally not be
paying the Mortgagor's debts as they become due; or shall have admitted in
writing the inability to pay the Mortgagor's debts as they mature; or shall have
made a general assignment for the benefit of creditors, or shall have filed a
petition or an answer seeking an arrangement with creditors; or shall have taken
advantage of any insolvency law; or shall have submitted an answer admitting the
material allegations of a petition in any bankruptcy or insolvency proceeding;
or an order, judgment or decree shall have been entered, without the
application, the approval or consent of the Mortgagor by any Court of competent
jurisdiction approving a petition seeking reorganization of the Mortgagor, or
appointing a receiver, custodian, trustee or liquidator of the Mortgagor, or a
substantial part of the Mortgagor's assets and such order, judgment or decree
shall have continued unstayed and in effect for any period for thirty (30)
consecutive days; or a petition in bankruptcy shall have been filed against the
Mortgagor and shall not have been dismissed for a period of thirty (30)
consecutive days; or if any order for Relief shall have been entered under the
Bankruptcy Code.

                  Section 9. ADDITIONAL LIENS. In the event that the Mortgagor
shall have encumbered, mortgaged or given a security interest in any fixture or
fixtures, except as permitted

<PAGE>   18

in this Mortgage, or shall have, without the consent of the Mortgagee, removed
or replaced any fixtures.

                  Section 10. OTHER DEFAULTS. In the event that default is made
in any of the terms, covenants and conditions contained in any mortgage
constituting a lien upon the Premises prior and superior to the lien hereof, or
should proceedings be instituted for the foreclosure or collection of any
mortgage, judgment or lien prior or subordinate to the lien of this Mortgage,
affecting the Premises.

                  Section 11. REFUSAL TO INSURE. In the event that no insurance
company authorized to do business in the State of New York shall insure said
Premises in the form of a title insurance and/or hazard insurance policy
approved by the Mortgagee for a sum equal to the full insurable value of the
Premises.

                  Section 12. ADDITIONAL FINANCINGS. In the event that the
Mortgagor shall have entered into any additional financing or shall have
consented to the placing of any lien on the Premises, whether such financing or
lien is prior to or subordinate to the lien of this Mortgage.
                  Section 13. TRANSFER OF PREMISES. In the event that the
Mortgagor shall have transferred or caused to have been transferred, title to or
possession of any interest in the Premises, or any part thereof, to any Person
without the prior express written consent of the Mortgagee (Except the Mortgagor
may transfer title to or possession of any interest in and to the Premises to
Michael Anthony Jewelers, Inc. provided: (a) no Event of Default has occurred
prior to said proposed transfer, (b) the Obligated Parties are not released from
and further reaffirm any liability attached to them under the Loan, (c) Michael
Anthony Jewelers, Inc. assumes all of the liabilities of the Obligated Parties
to the Mortgagee, and (d) said proposed transfer occurs with the prior express
written consent of the Mortgagee, which consent shall not be unreasonably
withheld or delayed.) (The Lessee may sublet up to 10,000 square feet of the
Premises without prior consent of the Mortgagee. The Mortgagor and Lessee may
also extend the Lease on the same terms and conditions as set forth in said
Lease without consent of the Mortgagee.)

                  Section 14. CHANGE OF BUSINESS. In the event of a material or
adverse change in the financial condition of the Mortgagor or any Guarantor.

                  ARTICLE III. IF ANY EVENT OF DEFAULT SHALL HAVE OCCURRED AND
IS CONTINUING ON THE PART OF THE MORTGAGOR, THE MORTGAGEE MAY TAKE ANY OR ALL OF
THE FOLLOWING ACTIONS, AT THE SAME OR AT DIFFERENT TIMES:

                  Section 1. ACCELERATION. The Mortgagee may declare the entire
amount of unpaid principal, together with all accrued and unpaid interest and
other moneys due under this Mortgage, the Loan Documents and/or the Note,
immediately due and payable, and accordingly accelerate payment thereof
notwithstanding contrary terms of payment stated therein, without presentment,
demand or notice of any kind, all of which are expressly waived, notwithstanding
anything to the contrary contained in the Mortgage, the Loan Documents and/or
the Note and interest on the aggregate principal sum shall thereafter be
computed at the Default Rate.

<PAGE>   19

                  Section 2. POSSESSION. The Mortgagee may enter upon and take
possession of the Premises; lease and let the said Premises; receive all the
rents, income, issues and profits thereof which are overdue, due or to become
due; and apply the same, after payment of all necessary charges and expenses, on
account of the amounts hereby secured. The Mortgagee is given and granted full
power and authority to do any act or thing which the Mortgagor or the successors
or assigns of the Mortgagor who may then own the Premises might or could do in
connection with the management and operation of the Premises. This covenant
becomes effective either with or without any action brought to foreclose this
Mortgage and without applying at any time for a receiver of such rents. Should
said rents or any part thereof be assigned without the consent of the holder of
this Mortgage, then this Mortgage shall at the option of the holder hereof
become due and payable immediately, anything herein contained to the contrary
notwithstanding.

                  Section 3. FORECLOSURE. The Mortgagee may institute an action
of mortgage foreclosure, or take other action as the law may allow, at law or in
equity, for the enforcement of this Mortgage, and proceed thereon to final
judgment and execution of the entire unpaid balance of the Note including costs
of suit interest and reasonable attorney's fees. In case of any sale of the
Premises may be sold in one parcel as an entirety or in such parcels, manner or
order as the Mortgagee in its sole discretion may elect. The failure to make any
tenants parties to a foreclosure proceeding and to foreclose their rights will
not be asserted by the Mortgagor as a defense in any proceeding instituted by
the Mortgagee to collect the obligations secured hereby or any deficiency
remaining unpaid after the foreclosure sale of the Premises.

                  Section 4. PARTIAL FORECLOSURE. The Mortgagee may from time to
time, if permitted by law, take action to recover any sums, whether interest,
principal or any other sums required to be paid under the Note and/or Loan
Documents, as the same becomes due, without prejudice to the right of the
Mortgagee thereafter to bring an action of foreclosure, or any other action, for
a default or defaults by the Mortgagor existing when such earlier action was
commenced. The Mortgagee may, at the Mortgagee's option, cause this Mortgage to
be foreclosed for any portion of the obligations or any other sums secured
hereby which are then due and payable, subject to the continuing lien of this
Mortgage for the balance of the obligations not then due.

                  Section 5. APPOINTMENT OF RECEIVER. The Mortgagee may have a
receiver of the rents, income, issues and profits of the Premises appointed
without the necessity of proving either the depreciation or the inadequacy of
the value of the security or the insolvency of the Mortgagor or any Person who
may be legally or equitably liable to pay moneys secured hereby, and the
Mortgagor and each such Person waive such proof and consent to the appointment
of a receiver.

                  Section 6. FAIR RENTAL PAYMENTS. If the Mortgagor or any
subsequent owner is occupying the Premises or any part thereof, it is hereby
agreed that the said occupants shall pay such reasonable rental monthly in
advance as the Mortgagee shall demand for the Property or the part so occupied,
and f or the use of personal property covered by this Mortgage or any chattel
mortgage.

<PAGE>   20

                  Section 7. EXCESS MONIES. The Mortgagee may apply on account
of the unpaid indebtedness evidenced by the Note (including any unpaid accrued
interest) owed to the Mortgagee after a foreclosure sale of the Premises,
whether or not a deficiency action shall have been instituted, any unexpended
monies still retained by the Mortgagee that were paid by the Mortgagor to the
Mortgagee (i) for the payment of, or as security for the payment of taxes,
assessments, municipal or governmental rates, charges, impositions, liens, water
or sewer rents, or insurance premiums, if any, or (ii) in order to secure the
performance of some act by the Mortgagor.

                  Section 8. RIGHT OF SET-OF F. The Mortgagee may exercise its
right of set-off as provided for in the Note.

                  Section 9. AGREEMENT OF GUARANTY. The Mortgagee may take any
of the remedies available to it under the Guaranty.

                  Section 10. REMEDIES AT LAW OR EQUITY. The Mortgagee may take
any of the remedies otherwise available to it as a matter of law or equity.

                  Section 11. EXPENSES. All reasonable sums (including
attorneys' fees) paid by the Mortgagee in connection with any litigation
(including a foreclosure of this Mortgage) to prosecute or defend the rights and
obligations created by this Mortgage, with interest at fifteen (15%) percent but
in no event to exceed the Default Rate, from the time of payment, shall, on
demand, be immediately due from the Mortgagor to the Mortgagee, the same shall
be added to and shall be secured by this Mortgage.

                  ARTICLE IV.  MISCELLANEOUS.

                  Section 1. INSPECTION. The Mortgagee and its authorized agents
and employees shall have the right, at the Mortgagee's option, to enter into the
Premises at all reasonable times, on not less than two days prior notice to the
Mortgagor, for the purpose of inspecting the same and complying with and
performing any of the Obligations.

                  Section 2. RELEASE OF COLLATERAL. The Mortgagee may release,
regardless of consideration, the obligation of anyone liable for payment of any
of the Obligations, or may release any part of the Premises or any other
collateral now or hereafter given to secure the payment of the obligations or
any part thereof, without impairing, reducing or affecting the Obligations of
the Mortgagor, the remainder of the security of this Mortgage or the priority of
the rights created by this Mortgage.

                  Section 3. MORTGAGEE'S RIGHT TO PERFORM MORTGAGOR'S COVENANTS.
If the Mortgagor or Undersigned or any Guarantor shall fail to fully and
promptly pay, perform or observe any of the Obligations, then, in any such
event, the Mortgagee may, at its option, but without any obligation so to do,
and without waiving or releasing the Mortgagor from any of the Obligations, pay
any Obligation or perform any act or take such action as the Mortgagee
reasonably deems necessary or desirable in order to cause such Obligation to be
paid, performed or observed, as the case may be. The Mortgagor hereby agrees to
pay to the Mortgagee, on demand, all such sums so

<PAGE>   21

paid or expended by the Mortgagee, together with interest thereon from the date
of each such payment or expenditure at the Default Rate. All sums so paid or
expended by the Mortgagee, and the interest thereon, shall be added to and shall
be secured by the lien of this Mortgage.

                  Section 4. NO RELEASE. The Mortgagor agrees that any agreement
between the Mortgagor and the Mortgagee extending the time or modifying the
terms of payment, or any agreement altering any of the Loan Documents in any
manner, shall in no way release the Mortgagor or affect the lien of this
Mortgage until the Obligations are satisfied. The Mortgagor further agrees to
continue to be liable under this Mortgage until the Obligations are satisfied
and paid in full and/or the Mortgagor is expressly released and discharged in
writing by the Mortgagee.

                  Section 5. SEVERABILITY. If any term or provision of this
Mortgage or the application thereof to any person or circumstance shall to any
extent be invalid or unenforceable, the remainder of this Mortgage, or the
application of such term or provision to persons or circumstances other than
those as to which it is invalid or unenforceable, shall not be affected thereby,
and each term and provision of this Mortgage shall be valid and enforceable to
the fullest extent permitted by law. If any payments required to be made under
the Loan Documents shall be in excess of the amounts allowed by law, the amounts
of such payments shall be reduced to the maximum amounts allowed by law.

                  Section 6. CUMULATIVE RIGHTS. The rights and remedies herein
expressed to be vested in or conferred upon the Mortgagee shall be cumulative
and shall be in addition to and not in substitution for or in derogation of the
rights and remedies conferred by any applicable law. The failure, at any one or
more times, of the Mortgagee to assert the right to declare the principal
indebtedness due or the granting of any extension or extensions of time of
payment of the Note and the Loan Documents either to the maker or to any other
person, or taking of other or additional security for the payment thereof, or
releasing any security, or changing any of the terms of this Mortgage, the Note,
the Loan Documents or any other obligation accompanying this Mortgage, or waiver
of or failure to exercise any right under any covenant or stipulation herein
contained shall not in any way affect this Mortgage nor the rights of the
Mortgagee hereunder nor operate as a release from any personal liability upon
the Note and the Loan Documents or other obligation accompanying this Mortgage,
nor under any covenant or stipulation therein contained, nor under any agreement
assuming the payment of the Note or the Obligations.

                  Section 7. APPLICATION OF PROCEEDS. If the amount of proceeds
received from the sale or other disposition of the Premises shall be
insufficient to satisfy in full (a) the payment of all fees, costs and expenses,
(including attorneys' fees and expenses) incurred by the Mortgagee and/or its
agents or representatives in connection with the realization of such payments or
proceeds or (b) the payment in full of all the Obligations of the Mortgagor to
the Mortgagee, then the Mortgagor shall remain and be liable for any such
deficiency.

                  Section 8. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER. In the
event any agreement contained in this Mortgage should be breached by the
Mortgagor and thereafter

<PAGE>   22

waived by the Mortgagee, such waiver shall be limited to the particular breach
so waived and shall not be deemed to waive any other breach hereunder.

                  Section 9. NOTICES. Unless otherwise indicated differently,
all notices, payments, requests, reports, information or demands which any party
hereto may desire or may be required to give to any other party hereunder, shall
be in writing and shall be personally delivered or sent by telex (answer back
received), courier, or first-class certified or registered United States mail,
postage prepaid, return receipt requested, and sent to the party at its address
appearing below or such other address as any party shall hereafter inform the
other party hereto by written notice given as aforesaid; provided, however,
notices to the Mortgagee requesting disbursements need not be sent by certified
United States mail:

                  If to the Mortgagor:     Michael Anthony Company
                                           115 South MacQuesten Parkway
                                           Mount Vernon, New York [zip]
                                           Attn:    Michael Paolercio
                                                    President

                  with a copy to:          Michael F. Mongelli, II, Esq.
                                           41-07 162nd Street
                                           Flushing, New York 11358

         If to the Mortgagee:              First Fidelity Bank, N.A., New Jersey
                                           570 Broad Street
                                           Newark, New Jersey 07102
                                           Attn:    Joseph C. Tkac
                                                    Vice President

                  with a copy to:          GALLO GEFFNER FENSTER
                                           235 Main Street
                                           Hackensack, New Jersey 07601
                                           Attn: Michael A. Gallo, Esq.

All notices, payments, requests, reports, information or demands so given shall
be deemed effective upon receipt or, if mailed, upon receipt or the expiration
of the third day following the date of mailing, which ever occurs first, except
that any notice of change in address shall be effective only upon receipt by the
party to whom said notice is addressed. A failure to send the requisite copies
does not invalidate an otherwise properly sent notice to the Mortgagor and/or
the Mortgagee.

                  Section 10. PARTNERSHIP AUTHORITY. The Mortgagor represents
and warrants that the partners of the Mortgagor, by proper partnership action,
which has not been modified or revoked, have duly authorized the execution and
delivery of this Mortgage.

                  Section 11. ALTERATIONS. This Mortgage cannot be changed or
terminated except by an agreement in writing, signed by the party against whom
enforcement of the change is

<PAGE>   23

sought. This Mortgage shall be governed and construed in accordance with the
laws of the State of New York applicable to agreement made and to be performed
in said State. This Mortgage shall be construed without regard to any
presumption or rule requiring construction against the party causing such
instrument or any portion thereof to be drafted. All terms and words used in
this Mortgage, regardless of the number or gender in which they are used, shall
be deemed to include any other number and any other gender as the context may
require. The headings in this Mortgage are f or convenience of reference only
and shall not limit or otherwise affect any of the terms hereof.

                  Section 12. FIRST LIEN. This Mortgage shall constitute a valid
mortgage lien upon the Premises.

                  Section 13. Successors and Assigns. All of the terms,
covenants, provisions and conditions herein contained shall be for the benefit
of, apply to, and bind the successors and assigns of the Mortgagor and the
Mortgagee, and are intended and shall be held to be real covenants running with
the land, and the term "Mortgagor" shall also include any and all subsequent
owners and successors in title of the Premises.

                  Section 14. GENDER. When such interpretation is appropriate,
any word denoting gender used herein shall include all persons, natural or
artificial, and words used in the singular shall include the plural.

                  Section 15. REFERENCE TO THE LOAN DOCUMENTS. This Mortgage is
the Mortgage referred to in the Loan Documents, executed by and between the
Mortgagor and the Mortgagee and is subject to all the terms and provisions of
the Loan Documents. Should any provisions of the Loan Documents be inconsistent
or contrary to the provisions of this Mortgage, the provisions of the Loan
Documents shall control.

                  Section 16. CHANGES IN MORTGAGE. The Mortgagor and the
Mortgagee may agree to change the interest rate and/or the maturity date of the
Note or other term or terms of this Mortgage or of the Obligations secured by
this Mortgage. If the Mortgagor and the Mortgagee agree to any such change,
which change shall be deemed a "modification" and shall continue to be a first
mortgage lien on the Premises.

                  Section 17. GOVERNING LAW, SEVERABILITY. THIS MORTGAGE AND THE
NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OR LAWS THEREUNDER. WHEREVER
POSSIBLE, EACH PROVISION OF THIS MORTGAGE SHALL BE INTERPRETED IN SUCH MANNER AS
TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION OF THIS
MORTGAGE SHALL BE PROHIBITED BY OR INVALID UNDER APPLICABLE LAW, SUCH PROVISION
SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT
INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS
MORTGAGE.

<PAGE>   24

                  Section 18. WAIVER OF JURY TRIAL. THE MORTGAGOR HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY AND ALL RIGHTS THAT IT MAY
NOW OR HEREAFTER HAVE UNDER THE LAWS OF THE UNITED STATES OF AMERICA OR ANY
STATE, TO A TRIAL BY JURY OF ANY AND ALL ISSUES ARISING EITHER DIRECTLY OR
INDIRECTLY IN ANY ACTION OR PROCEEDING BETWEEN THE MORTGAGOR, THE MORTGAGEE OR
THEIR SUCCESSORS AD ASSIGNS, OUT OF OR IN ANY WAY CONNECTED WITH THIS MORTGAGE,
THE NOTE, THE LOAN DOCUMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE MORTGAGOR AND THE
MORTGAGEE. IT IS INTENDED THAT SAID WAIVER SHALL APPLY TO ANY AND ALL DEFENSES,
RIGHTS, AND/OR COUNTERCLAIMS IN ANY ACTION OR PROCEEDING. THIS SECTION 18 IS A
MATERIAL INDUCEMENT FOR THE MORTGAGEE ENTERING INTO THE LOAN.

                  THE MORTGAGOR HEREBY DECLARES THAT THE MORTGAGOR HAS READ THIS
MORTGAGE, HAS RECEIVED A COMPLETELY FILLED IN COPY OF IT WITHOUT CHARGE THEREFOR
AND HAS SIGNED THIS MORTGAGE AS OF THE DATE AT THE TOP OF THE FIRST PAGE.

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

WITNESS:                                    MICHAEL ANTHONY COMPANY

                                            By:
                                               ---------------------------------
                                                  Michael Paolercio
                                                  General Partner

                                            By:
                                               ---------------------------------
                                                  Anthony Paolercio
                                                  General Partner

<PAGE>   25

                                  SCHEDULE "A"
                                  ------------

ATTACHED TO AND MADE A PART OF THAT CERTAIN MORTGAGE BY AND BETWEEN MICHAEL
ANTHONY COMPANY, AS THE MORTGAGOR, AND FIRST FIDELITY BANK, NATIONAL
ASSOCIATION,, NEW JERSEY, AS THE MORTGAGEE, DATED _________________, 1993.

                             DESCRIPTION OF PREMISES
                             -----------------------

<PAGE>   26

                                                                 Title No. P8419
                                                                 File No. M.
                                   SCHEDULE A

PARCEL I
--------

ALL that certain plot, piece of land, with the buildings and improvements
thereon erected, situate. lying and being in the City of Mount Vernon, County of
Westchester and State of New York. consisting of portions of lots Nos. 290, 291,
292, and 293 on a certain map entitled, "Map of West Mount Vernon, lying in the
Town of Eastchester, County of Westchester and State of New York, made for the
Teutonia Homestead Association," by Gustavus A. Sacchi, and filed in the County
Clerk's Office, Division of Land Records. Westchester County, New York, on May
1, 1852 as Map No. 151, said portions of said lots when taken together as one
parcel being bounded and described as follows:

BEGINNING at a point on the northwesterly side of MacQuesten Parkway South where
the same is intersected by the northeasterly boundary line of land now or
formerly belonging to David Schwartz as acquired by a deed from Bianco & Pepe,
Inc., dated December 9, 1957 and recorded in said County Clerk's Office on
December 10, 1957, in Liber 5765 of deeds, page 259, said point of beginning
being distant southwesterly as measured along said side of MacQuesten Parkway
South 293-00 feet from the southwesterly side of South West Street;

RUNNING THENCE along said northeasterly boundary line of said David Schwartz,
North 57 degrees 33 minutes 08 seconds West 218.67 feet to a point in the
easterly boundary line of land now or formerly belonging to the New York Central
Railroad Company;

THENCE along said last mentioned boundary line, North 32 degrees 26 minutes 31
seconds East 115-00 feet to a point;

THENCE through Lot No. 290 on said map on a course of, South 57 degrees 33
minutes 08 seconds East, 218.6 8 feet to a point in the northwesterly side of
Macquesten Parkway;

                                                                     -Continued-

For Conveyancing Only, if intended to be conveyed.
Together with all right, title and interest of, in and to any streets and roads
abutting the above described premises, to the center line thereof

<PAGE>   27

                                                                 Title No. P8419
                                                                 File No. M
                             SCHEDULE "A" CONTINUED
                                   - Page 2 -

THENCE along said side of MacQuesten Parkway, South 32 degrees 26 minutes 52
seconds West 115.00 feet to the point or place of BEGINNING.

TOGETHER with and subject to the easement for common driveway purposes reserved
in deed from Bianco & Pepe, Inc. to David Schwartz, dated December 9, 1957 and
recorded in said County Clerk's Office on December 10, 1957 in Liber 5765 of
Deeds page 259.

PARCEL II
ALL that certain plot, piece or parcel of land, with the buildings and
improvements thereon erected, situate, lying and being in the City of Mount
Vernon, County of Westchester and State of New York, being portions of Lot Nos.
297, 298 and 299 on a certain map entitled, "Map of West Mount Vernon. lying in
the Town of Eastchester, County of Westchester and State of New York", filed in
the Office of the Clerk of the County of Westchester, Division of Land Records
(formerly Register's Office) on May 1. 1852. as Map No. 151, said portions of
Lot Nos. 297, 298 and 299 being bounded and described as follows:

BEGINNING at a point on the northwesterly side of MacQuesten Parkway South
distant 408 feet southwesterly as measured along said northwesterly side of
MacQuesten Parkway South with the southwesterly side of West Street South, said
point also being where the dividing line between Lots 296 and 297 intersects the
northwesterly side of MacQuesten Parkway South;

RUNNING THENCE along said dividing line, North 57 degrees 33 minutes 08 seconds
West 176.46 feet to land now or formerly of New York Central & Hudson River
Railroad;

                                                                     -Continued-

For Conveyancing Only, if intended to be conveyed.
Together with all right, title and interest of, in and to any streets and roads
abutting the above described premises, to the center line thereof

<PAGE>   28

                                                                 Title No. P8419
                                                                 File No. M
                             SCHEDULE "A" CONTINUED
                                   - Page 3 -

THENCE Southwesterly along the railroad property and along the arc of a curve to
the left. having a radius of 2784-93 feet and a central angle of 2 degrees 35
minutes 28 seconds a distance of 121.94 feet;

THENCE South 59 degrees 48 minutes 08 seconds East 150.67 feet to a point on the
northwesterly side of MacQuesten Parkway South;

THENCE along said northwesterly side of MacQuesten Parkway South. North 32
degrees 26 minutes 52 seconds East 117-33 feet to the point or place of
BEGINNING.

PARCEL III

ALL that certain plot, piece or parcel of land, with the buildings and
improvements thereon erected, situate, lying and being in the City of Mount
Vernon, being parts of Lots Nos. 296, 295, 294 and portion of Lot 293, on a
certain map entitled, "Map of West Mount Vernon, lying in the Town of
Eastchester, County of Westchester and State of New York", made by the Teutonia
Homestead Association, by Gustavus A. Sacchi, and filed in the Office of the
County Clerk, Division of Land Records, formerly Register's Office of
Westchester County. New York, on May 1, 1852 as Map No. 151, bounded and
described as follows:

BEGINNING at a point on the northwesterly side of MacQueston Parkway South
(formerly South Railroad Avenue) where the same is intersected by the northerly
line of Lot 297, property now or formerly of Ward Leonard Electric Co., said
point of beginning being distant as measured along said northwesterly side of
MacQueston Parkway, South 408.00 feet southwesterly from the southwesterly side
of South West Street;

RUNNING THENCE along the northerly line of Lot 297, which land now or formerly
of Ward Leonard Electric Co., and along the land of the New York Central
Railroad Company, formerly land of New York State Realty and Terminal Company on
a course North 57 degrees 33 minutes 08 seconds West, 218.66 feet to the
westerly line of land of New York Central Railroad Company;

                                                                     -Continued-

For Conveyancing Only, if intended to be conveyed.
Together with all right, title and interest of, in and to any streets and roads
abutting the above described premises, to the center line thereof

<PAGE>   29

                                                                 Title No. P8419
                                                                 File No. M

                             SCHEDULE "A" CONTINUED
                                   - Page 4 -

THENCE along the last mentioned land on a course, North 32 degrees 26 minutes 31
seconds East 115-00 feet;

THENCE South 57 degrees 33 minutes 08 seconds East 218.67 feet through Lot 293
to the northwesterly side of MacQuesten Parkway South, formerly South Railroad
Avenue;

THENCE along the same South 32 degrees 26 minutes 52 seconds West 115 feet to
the point and place of BEGINNING.

TOGETHER with the benefits and subject to the burdens of a driveway easement
recorded in Liber 5765, Page 259.

For Conveyancing Only, if intended to be conveyed.
Together with all right, title and interest of. in and to any streets and roads
abutting the above described premises, to the center line thereof

<PAGE>   30

STATE OF NEW               )
                           )  ss.:
COUNTY OF                  )

                  BE IT REMEMBERED, that on this _________day of
_________________, 1993, before me, the subscriber, an officer duly authorized
to take acknowledgments for use in the State of New York, personally appeared
Michael Paolercio and Anthony Paolercio, who, I am satisfied are the persons who
executed the within Instrument as the general partners of Michael Anthony
Company, the partnership named therein, and I having first made known to them
the contents thereof, they did thereupon acknowledge that the said Instrument
made by the said partnership and delivered by them as such partners, is the
voluntary act and deed of said partnership, made by virtue of authority from
said partnership's partnership agreement, for the uses and purposes therein
expressed.

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

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