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                                                                  Exhibit 10.6

                                     FORM OF
                         MORTGAGE, ASSIGNMENT OF LEASES
                          AND RENTS AND FIXTURE FILING

               MAXIMUM PRINCIPAL AMOUNT NOT TO EXCEED $53,000,000

         THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING (as
the same may from time to time be amended, restated or otherwise modified, this
"Agreement") is made as of the ___ day of October, 2002, by _______________, a
____________ corporation ("Mortgagor") in favor of JPMORGAN CHASE BANK, a
national banking association, as Agent for the Lenders, as hereinafter defined
(in its capacity as agent, for the benefit of and on behalf of the Lenders,
"Agent").

         WHEREAS, HAWK CORPORATION, a Delaware corporation, and each of the
other Borrowers from time to time party to the Credit Agreement (collectively,
together with their respective successors and assigns, "Borrowers"), Agent, PNC
BANK, NATIONAL ASSOCIATION, as a documentation agent, FLEET CAPITAL CORP., as a
documentation agent, and the other entities identified on SCHEDULE 2.01 to the
Credit Agreement, as hereinafter defined (collectively, together with their
respective successors and assigns, "Lenders" and, individually, "Lender"), are
parties to that certain Credit Agreement, dated as of October __, 2002 (as the
same may from time to time be amended, restated, supplemented or otherwise
modified, the "Credit Agreement"; the capitalized terms defined therein and not
otherwise defined in this Agreement being used herein as therein defined),
pursuant to which the Lenders will, among other things, grant to Borrowers the
Loans, Letters of Credit, and other extensions of credit pursuant to the Credit
Agreement;

         WHEREAS, Mortgagor understands that the Lenders are willing to grant
such financial accommodations to the Borrowers, including the Mortgagor, only
upon certain terms and conditions, one of which is that Mortgagor execute and
deliver this Agreement and this Agreement is being executed and delivered in
consideration of each financial accommodation, granted to the Borrowers by Agent
and the Lenders and for other valuable considerations.

         NOW, THEREFORE, TO SECURE TO AGENT, for the benefit of the Lenders, all
of the following (collectively, the "Obligations"): (a) all obligations of the
Borrowers and the Guarantors to the Lenders and the Agent under the Credit
Agreement or any of the other Facility Documents, including, without limitation,
all indebtedness evidenced by the Notes; (b) all obligations under, or in
respect of the Letters of Credit and all Reimbursement Obligations, and all
Foreign Exchange Obligations and Interest Rate Protection Obligations of the
Borrowers to the Lenders or the Agent, together with all accrued and unpaid
interest (including, without limitation, all interest that, but for the filing
of a petition in, or commencement of a case, proceeding or other action relating
to, bankruptcy, insolvency or reorganization of any Borrowers or any of its
Subsidiaries, would have accrued, whether or not a claim is allowed against such
Borrowers or Subsidiary for such interest in the related bankruptcy proceeding),
fees, expenses and charges payable by the Borrowers or the Guarantors under the
Credit Agreement or under any of the other Facility Documents; and (c) the
performance of the covenants and agreements of Mortgagor contained in this
Agreement,

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         Mortgagor does hereby MORTGAGE, GRANT, CONVEY AND ASSIGN to Agent, for
the benefit of the Lenders, the real property described in EXHIBIT A attached
hereto and made a part hereof, together with all present and future right, title
and interest of Mortgagor therein or in any way appertaining thereto, and all
buildings, improvements and tenements now or hereafter erected on the property,
and all heretofore or hereafter vacated alleys and streets abutting the
property, and all easements, rights, appurtenances, rents, royalties, mineral,
oil and gas rights and profits, water, water rights, and water stock appurtenant
to the property, and all fixtures, machinery, equipment, engines, boilers,
incinerators, building materials, appliances and goods of every nature
whatsoever now or hereafter owned by Mortgagor and located in, or on, or used,
or intended to be used in connection with the property, including, but not
limited to, those for the purposes of supplying or distributing heating,
cooling, electricity, gas, water, air and light; all cranes and materials
handling equipment; and all elevators, and related machinery and equipment, fire
prevention and extinguishing apparatus, security and access control apparatus,
plumbing, bath tubs, water heaters, water closets, stoves, refrigerators,
dishwashers, disposals, washers, dryers, awnings, storm windows, storm doors,
screens, blinds, shades, curtains and curtain rods, mirrors, cabinets, paneling,
rugs, attached floor coverings, furniture, fixtures, equipment; and all rentals,
revenues, payments, repayments, deposits, income, charges and moneys derived
from the use, lease, sublease, rental or other disposition of the property and
the proceeds from any insurance or condemnation award pertaining thereto; and
all other property (tangible and intangible) now owned or hereafter acquired by
Mortgagor and used in, on or about the subject real estate or arising from the
operation of the property, all of which, including replacements and additions
thereto and proceeds therefrom, shall be deemed to be and remain a part of the
real property covered by this Agreement; and all of the foregoing, including
said real property, are herein referred to as the "Property".

         TO HAVE AND TO HOLD, Mortgagor represents and warrants that (i)
Mortgagor is lawfully seized of the estate hereby conveyed and has the right to
mortgage, grant, convey and assign the Property, (ii) the Property is
unencumbered except for the matters approved by Agent and the Lenders and
described on EXHIBIT B attached hereto and made a part hereof ("Permitted
Encumbrances"), and (iii) Mortgagor will warrant and defend generally the title
to the Property against all claims and demands whatsoever, except as aforesaid.

         Mortgagor and Agent, on behalf of the Lenders, covenant and agree as
follows:

         1. PAYMENT OF OBLIGATIONS. Mortgagor shall promptly pay and perform all
of the Obligations when due.

         2. MORTGAGE. This Agreement is intended to secure all of the
Obligations, including such Obligations that may be advanced to or payable by
Mortgagor after the date of this Agreement. This Agreement shall secure the
maximum principal amount of up to Fifty-Three Million Dollars ($53,000,000),
together with interest thereon and such other amounts as shall become due and
owing to Agent and the Lenders from Mortgagor pursuant this Agreement.

         3. INSURANCE. Mortgagor shall keep all improvements now existing or
hereafter erected on the Property insured against loss by fire and such other
hazards, casualties, and contingencies in such form, written by Mortgagor, in
such amounts, for such period, and against such risks as may be acceptable to
Agent, with provisions satisfactory to Agent, for payment of

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all losses thereunder to Agent, for the benefit of the Lenders, and Mortgagor as
its interest may appear (loss payable endorsement in favor of Agent, for the
benefit of Lenders), and, if required by Agent, Mortgagor shall deposit the
policies with Agent. Any such policies of insurance shall provide for no fewer
than thirty (30) days prior written notice of cancellation to Agent. In the
event of foreclosure of this Agreement, all right, title, and interest of
Mortgagor in and to any insurance policies then in force shall pass to the
purchaser at foreclosure sale, and Agent is hereby appointed attorney in fact
for Mortgagor for the purpose of assigning and transferring such policies and
receiving all or any part of the proceeds therefrom. The insurance proceeds or
any part thereof may be applied by Agent, at Agent's option, either to the
reduction of the Obligations or to restoration or repair of the property
damaged.

         4. FUNDS FOR TAXES, INSURANCE AND OTHER CHARGES. Upon default in
payment by Mortgagor of any of the following described items, or upon the
occurrence of an Event of Default, as hereinafter defined, Agent shall have the
right, at Agent's option, to require Mortgagor to pay to Agent on the first day
of each month, until the Obligations have been paid in full, a sum (herein
"Funds") equal to one-twelfth of (a) the yearly water and sewer rates and taxes
and assessments that may be levied on the Property and (b) the yearly premium
installments for fire and other hazard insurance, rent loss insurance (if
applicable) and such other insurance covering the Property as Agent may require
pursuant to the Credit Agreement, all as reasonably estimated initially and from
time to time by Agent on the basis of assessments and bills and reasonable
estimates thereof. Any waiver by Agent of a requirement that Mortgagor pay such
Funds may be revoked by Agent, in Agent's sole discretion, at any time upon
notice in writing to Mortgagor. Agent may require Mortgagor to pay to Agent, in
advance, such other Funds for other taxes, charges, premiums, assessments and
impositions in connection with Mortgagor or the Property that Agent shall
reasonably deem necessary to protect Agent's interests (herein "Other
Impositions"). Unless otherwise provided by applicable law, Agent, at Agent's
option, may require Funds for Other Impositions to be paid by Mortgagor in a
lump sum (not exceeding Other Impositions due for a one-year period) or in
periodic installments.

                  The Funds shall be held by Agent and shall be applied to pay
such rates, rents, taxes, assessments, insurance premiums and Other Impositions
so long as no Event of Default has occurred. Agent shall make no charge for so
holding and applying the Funds, analyzing such account or for verifying and
compiling said assessments and bills, unless Agent pays Mortgagor interest,
earnings or profits on the Funds and applicable law permits Agent to make such a
charge. Unless applicable law requires interest, earnings or profits on the
Funds to be paid, Agent shall not be required to pay Mortgagor any interest,
earnings or profits on the Funds. Agent shall give to Mortgagor, without charge,
an annual accounting of the Funds showing credits and debits to the Funds and
the purpose for which each debit to such Funds was made. The Funds are pledged
as additional security for the Obligations and shall be subject to the right of
set off.

                  If the amount of the Funds held by Agent at the time of the
annual accounting thereof shall exceed the amount deemed necessary by Agent to
provide for the payment of water and sewer rates, taxes, assessments, insurance
premiums, rents and Other Impositions, as such payments become due, Agent (in
its sole discretion) may either (i) return the amount of the excess to Mortgagor
or (ii) apply a part or all of such excess at such time or times as Agent may
elect to the Obligations. If, at any time, the amount of the Funds held by Agent
shall be less than

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the amount deemed necessary by Agent to pay water and sewer rates, taxes,
assessments, insurance premiums, rents and Other Impositions, as such payments
become due, Mortgagor shall, on demand, pay such deficiency. Upon the occurrence
of an Event of Default, Agent may apply, in any amount and in any order as Agent
shall determine, in Agent's sole discretion, any Funds held by Agent at the time
of application (A) to pay rates, rents, taxes, assessments, insurance premiums
and Other Impositions that are now or shall hereafter become due; or (B) as a
credit against sums secured by this Agreement. Upon release of this Agreement
and payment in full of the Obligations, Agent shall promptly refund to Mortgagor
any Funds held by Agent.

         5. CHARGES; MECHANICS LIENS. Mortgagor shall pay all water and sewer
rates, rents, taxes assessments, premiums, and Other Impositions (not being
diligently contested by Mortgagor (a) in a timely manner and (b) with the
support of adequate financial reserves), attributable to the Property. Mortgagor
shall promptly discharge any lien that has, or may have, priority over or
equality with, the lien of this Agreement, other than Permitted Encumbrances.

                  If a mechanic's lien is filed against the Property, Mortgagor
shall promptly notify Agent and, at Agent's request, shall deliver to Agent,
either of the following, at Mortgagor's option, (i) a cash deposit or (ii) an
indemnity bond satisfactory to Agent issued by a surety satisfactory to Agent,
in the amount claimed by any such lien, together with an additional sum
necessary to pay all costs, interest and penalties that may be payable in
connection therewith. Without Agent's prior written consent, Mortgagor shall not
allow any lien, encumbrance, or other interest in the Property to be perfected
against the Property, other than Permitted Encumbrances, unless Mortgagor is
then diligently contesting same and has, as to the lien, encumbrance or interest
being contested, complied with (i) or (ii) of the preceding sentence.

         6. PRESERVATION AND MAINTENANCE OF PROPERTY. Mortgagor (a) shall not
commit waste or permit impairment or deterioration of the Property; (b) shall
not abandon the Property; (c) shall, unless Agent withholds insurance proceeds
as security for or application to the Obligations as provided in the Credit
Agreement, restore or repair promptly and in a good and workmanlike manner all
or any part of the Property to the equivalent of its original condition, or such
other condition as Agent may approve in writing, in the event of any damage,
injury or loss thereto, whether or not insurance proceeds are available to cover
in whole or in part the costs of such restoration or repair unless the
improvements constituting the Property are (i) totally destroyed, (ii) insurance
has been maintained thereon as required by this Agreement, and (iii) Agent
applies the proceeds of such insurance to payment of the Obligations; (d) shall
keep the Property, including improvements, fixtures, equipment, machinery and
appliances, in good repair and shall replace improvements, fixtures, equipment,
machinery and appliances on the Property owned by Mortgagor when necessary to
keep such items in good repair; (e) shall comply in all material respects with
all laws, ordinances, regulations and requirements of any governmental body
applicable to the Property, including, without limitation, the American with
Disabilities Act, as it may be amended from time to time; and (f) shall give
notice in writing to Agent of, appear in and defend, any action or proceeding
purporting to affect the Property, the security of this Agreement or the rights
or powers of Agent, except for any such action or proceeding caused by the gross
negligence or intentional misconduct of Agent. Unless required by applicable law
or unless Agent has otherwise consented in writing, neither Mortgagor nor any
tenant or other Person shall remove, demolish or alter any improvement now
existing or hereafter erected on the Property or any fixture (other than trade
fixtures), equipment, machinery or appliance in or on the Property

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owned by Mortgagor and used or intended to be used in connection with the
Property, except as permitted pursuant to the Credit Agreement.

         7. USE OF PROPERTY. Unless required by applicable law or unless Agent
has otherwise agreed in writing, Mortgagor shall not allow changes in the use
for which all or any part of the Property was intended at the time this
Agreement was executed. Mortgagor shall not initiate or acquiesce in a change in
the zoning classification of the Property without Agent's prior written consent.

         8. PROTECTION OF AGENT'S SECURITY. If Mortgagor fails to perform the
covenants and agreements contained in this Agreement, or if any action or
proceeding is commenced that affects the Property or title thereto or the
interest of Agent therein, including, but not limited to, eminent domain,
insolvency, enforcement of local laws, or arrangements or proceedings involving
a bankrupt or decedent, then Agent, at Agent's option, may make such
appearances, disburse such sums and take such action as Agent deems necessary,
in its sole discretion, to protect the interests of Agent and the Lenders,
including, but not limited to, (a) disbursement of attorneys' fees; (b) entry
upon the Property to remedy any failure of Mortgagor to perform hereunder; and
(c) procurement of satisfactory insurance.

                  Any amounts disbursed by Agent pursuant to this Section 8,
with interest thereon, shall become part of the Obligations and shall be secured
by this Agreement. Unless Mortgagor and Agent agree in writing to other terms of
payment, such amounts shall be immediately due and payable and shall bear
interest from the date of disbursement, unless collection from Mortgagor of
interest at such rate would be contrary to applicable law, in which event such
amounts shall bear interest at the highest rate that may be collected from
Mortgagor under applicable law. Mortgagor hereby covenants and agrees that Agent
shall be subrogated to the lien of any mortgage or other lien discharged, in
whole or in part, by the Obligations. Nothing contained in this Section 8 shall
require Agent to incur any expense or take any action hereunder.

                  The procurement of insurance of the payment of taxes or other
liens or charges by Agent shall not be a waiver of the right of Agent or the
Lenders to accelerate the maturity of any of the Obligations secured by this
Agreement. Agent's receipt of any awards, proceeds or damages under the
insurance or condemnation provisions of the Credit Agreement or this Agreement
shall not operate to cure or waive any default in payment of sums secured by
this Agreement.

         9. CONDEMNATION. Mortgagor shall promptly notify Agent of any action or
proceeding relating to any condemnation or other taking, whether direct or
indirect, of the Property, or part thereof, and Mortgagor shall appear in and
prosecute any such action or proceeding unless otherwise directed by Agent in
writing. Mortgagor authorizes Agent, at Agent's option, as attorney-in-fact for
Mortgagor, to commence, appear in and prosecute, after the occurrence of an
Event of Default, in Agent's or Mortgagor's name, any action or proceeding
relating to any condemnation or other taking of the Property, whether direct or
indirect, and to settle or compromise any claim in connection with such
condemnation or other taking. The proceeds of any award, payment or claim for
damages, direct or consequential, in connection with any condemnation or other
taking, whether direct or indirect, of the Property, or part

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thereof, or for conveyances in lieu of condemnation, are hereby assigned to and
shall be paid to Agent.

         With the consent of Agent, which consent may be withheld in Agent's
sole discretion, Mortgagor may apply such awards, payments, proceeds or damages,
after the deduction of Agent's expenses incurred in the collection of such
amounts, to restoration or repair of the Property. Otherwise, such sums so
received shall be applied to payment of the Obligations. Mortgagor agrees to
execute such further evidence of assignment of any awards, proceeds, damages or
claims arising in connection with such condemnation or taking as Agent may
reasonably require.

         10. ESTOPPEL CERTIFICATE. Mortgagor shall, within ten (10) days of a
written request from Agent, furnish Agent with a written statement, duly
acknowledged, setting forth the sums secured by this Agreement and any right of
set-off, counterclaim or other defense that exists against such sums and any
Obligations.

         11. UNIFORM COMMERCIAL CODE AND FIXTURE FILING. This Agreement shall
also constitute a "fixture filing" under the Uniform Commercial Code, as adopted
in Indiana for the purpose of perfecting Agent's security interest in all of
Mortgagor's property now owned or hereafter acquired which is or becomes a
"fixture" to the Property under the Uniform Commercial Code, as in effect from
time to time in Indiana, with the names and addresses of the "debtor" and
"secured party" for such purpose being:

                  Debtor:              __________________________
                                       __________________________
                                       __________________________
                                       Attn:  President

                  Secured Party:       JPMorgan Chase Bank, as Agent
                                       One Chase Square CS-5
                                       Rochester, New York 14643

         12. LEASES OF THE PROPERTY. Mortgagor shall comply with and observe
Mortgagor's obligations as landlord or as tenant, as the case may be, under any
leases of the Property or any part thereof. Mortgagor shall furnish Agent with
executed copies of the leases now existing or hereafter made of all or any part
of the Property, and all future leases and amendments or modifications thereto
shall be subject to Agent's prior written approval. Unless otherwise directed by
Agent, all leases of the Property made after the date hereof shall specifically
provide that such leases are subordinate to this Agreement; that the tenant
attorns to Agent, such attornment to be effective upon Agent's acquisition of
title to the Property; that the tenant agrees to execute such further evidences
of attornment as Agent may from time to time request; and that the attornment of
the tenant shall not be terminated by foreclosure. Mortgagor shall not, without
Agent's written consent, execute, modify, surrender or terminate, either orally
or in writing, any lease hereafter made of all or any part of the Property,
permit an assignment or sublease of such a lease, or request or consent to the
subordination of any lease of all or any part of the Property to any lien
subordinate to this Agreement, provided that such leases are on commercially
reasonable terms. If Mortgagor becomes aware that any tenant proposes to do, or
is doing, any

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act or thing that may give rise to any right to set-off against rent, Mortgagor
shall (a) take such steps as shall be reasonably calculated to prevent the
accrual of any right to a set-off against rent, (b) notify Agent thereof and of
the amount of said set-offs, and (c) within twenty (20) days after such accrual,
reimburse the tenant who shall have acquired such right to set-off or take such
other steps as shall effectively discharge such set-off and as shall assure that
rents thereafter due shall continue to be payable without set-off or deduction.

         13. REMEDIES CUMULATIVE. Each remedy provided in this Agreement is
distinct and cumulative to all other rights or remedies under this Agreement or
the Credit Agreement or afforded by law or in equity, and may be exercised
concurrently, independently, or successively, in any order whatsoever.

         14. TRANSFERS OF THE PROPERTY; CHANGES IN CONTROL OR OWNERSHIP OF
MORTGAGOR. Except as expressly permitted pursuant to the Credit Agreement,
Mortgagor shall not (a) voluntary or involuntary sell, lease, exchange, assign,
convey, transfer or otherwise dispose of all or any portion of the Property (or
any interest therein), or all or any of the beneficial ownership interest in
Mortgagor, or (b) convey to any Person, other than Agent, a security interest in
the Property or any part thereof or voluntarily or involuntarily permit or
suffer the Property to be further encumbered.

         15. CREDIT AGREEMENT PROVISIONS. Mortgagor agrees to comply with the
covenants and conditions of the Credit Agreement that is hereby incorporated by
reference in and made a part of this Agreement. All sums disbursed by Agent to
protect the security of this Agreement shall be treated as Related Expenses. All
such sums shall bear interest from the date of disbursement. In the event of any
conflict or inconsistency between this Agreement and the Credit Agreement, the
terms of the Credit Agreement shall control. As used herein, "Related Expenses"
shall mean any and all reasonable costs, liabilities and expenses (including,
without limitation, losses, damages, penalties, claims, actions, reasonable
attorneys' fees, legal expenses, judgments, suits and disbursements) (a)
incurred by Agent, or imposed upon or asserted against Agent or any Lender, in
any attempt by Agent and the Lenders to (i) obtain, preserve, perfect, or
enforce any security interest evidenced by this Agreement, the Credit Agreement,
any Credit Document, or any other document, instrument or agreement executed in
connection with any of the foregoing; (ii) obtain payment, performance or
observance of any and all of the Obligations; or (iii) maintain, insure, audit,
collect, preserve, repossess or dispose of any of the Property or any other
collateral securing the Obligations, including, without limitation, costs and
expenses for appraisals, assessments and audits of the Borrowers or any such
collateral; or (b) incidental or related to (a) above, including, without
limitation, interest thereupon from the date incurred, imposed or asserted until
paid.

         16. NOTICE. Except as otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
telegraphic, telex, facsimile transmission or cable communication) and mailed,
telegraphed, telexed, transmitted, cabled or delivered, if to Mortgagor, at
____________________, Attn: Vice President-Finance, if to any Lender, at its
address specified for such Lender on SCHEDULE 2.01 to the Credit Agreement, and
if to Agent, at the JPMorgan Chase Office, as defined in the Credit Agreement;
or at such other address as shall be designated by any party in a written notice
to the other parties

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hereto. All such notices and communications shall be mailed, telegraphed,
telexed, telecopied, or cabled or sent by overnight courier, and shall be
effective when received.

         17. SUCCESSORS AND ASSIGNS BOUND; AGENTS; CAPTIONS. The covenants and
agreements herein contained shall bind, and the rights hereunder shall inure to,
the respective successors and permitted assigns of Agent, the Lenders and
Mortgagor. In exercising any rights hereunder or taking any actions provided for
herein, Agent may act through its employees, agents or independent contractors
as authorized by Agent. The captions and headings of the Sections of this
Agreement are for convenience only and are not to be used to interpret or define
the provisions hereof.

         18. GOVERNING LAW; SEVERABILITY. This Agreement shall be governed by
the laws of the State of Indiana, without regard to principles of conflicts of
laws. In the event that any provision of this Agreement conflicts with
applicable law, such conflict shall not affect other provisions of this
Agreement that can be given effect without the conflicting provisions, and to
this end the provisions of this Agreement are declared to be severable.

         19. WAIVER OF MARSHALING. In the event of foreclosure of the lien of
this Agreement, the Property may be sold in one or more parcels or as an
entirety as Agent may elect.

                  Notwithstanding the existence of any other security interests
in the Property held by Agent, or by any other Person, Agent shall have the
right to determine the order in which any or all of the Property shall be
subjected to the remedies provided herein. Agent shall have the right to
determine the order in which any or all of the Obligations are satisfied from
the proceeds realized upon the exercise of the remedies provided herein.
Mortgagor, any Person that consents to this Agreement, and any Person that now
or hereafter acquires a security interest in the Property and that has actual or
constructive notice hereof, hereby waives any and all right to require the
marshaling of assets in connection with the exercise of any of the remedies
permitted by applicable law or provided herein.

         20. ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; AGENT IN POSSESSION.
Mortgagor hereby absolutely and unconditionally assigns and transfers to Agent
all of the leases, rents and revenues of the Property, including those now due,
past due, or to become due by virtue of any lease or other agreement for the
occupancy or use of all or any part of the Property, regardless to whom the
rents and revenues of the Property are payable. Although this Agreement is a
present assignment, Agent shall not exercise any of the rights or powers herein
conferred upon it until an Event of Default shall have occurred. Mortgagor
hereby authorizes Agent or Agent's agents to collect the aforesaid rents and
revenues and hereby directs each tenant of the Property to pay such rents to
Agent or Agent's agents. Upon the occurrence of an Event of Default, and without
the necessity of Agent entering upon and taking and maintaining full control of
the Property in person, by agent or by a court appointed receiver, Agent shall
immediately be entitled to possession of all rents and revenues of the Property
as specified in this Section 20 as the same become due and payable (including
but not limited to rents then due and unpaid) and all such rents received by
Mortgagor shall immediately, upon delivery of such notice, be held by Mortgagor,
as trustee for the benefit of Agent only. This Section 20 may be supplemented by
a separate assignment of leases and rents agreement entered into by and between
Agent and

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Mortgagor, which instrument shall set forth more fully Agent's rights with
respect to the leases, rents and revenue of the Property.

         21. ASSIGNMENT OF CONSTRUCTION RIGHTS. From time to time, as Agent
deems necessary to protect its interests, Mortgagor shall, upon request of
Agent, execute and deliver to Agent, in such form as Agent shall direct,
assignments of any and all rights or claims that relate to the construction of
improvements on the Property and which Mortgagor may have against any Person
supplying or who has supplied labor, materials or services in connection with
construction of the Property.

         22. EVENT OF DEFAULT; ACCELERATION; REMEDIES. Each of the following
shall constitute an Event of Default hereunder, (a) if any Event of Default, as
defined in the Credit Agreement, occurs under the Credit Agreement, or (b) if
Mortgagor defaults in the performance or observance of any of the covenants or
agreements of Mortgagor contained in this Agreement . In addition to any other
right or remedy that Agent may now or hereafter have at law or in equity, upon
the occurrence of an Event of Default, Agent shall have the right and power (i)
to foreclose upon this Agreement and the lien hereof; (ii) to sell the Property
according to law at one or more sales as an entirety or in parcels, if
applicable, and at such time and place upon such terms and conditions and after
such notices thereof as may be required by law; (iii) to enter upon and take
possession of the Property; and (iv) apply for the appointment of a receiver,
trustee, liquidator or conservator of the Property, without notice and without
regard for the adequacy of the security for the Obligations and without regard
for the solvency of Mortgagor or the Borrowers or any other Person liable for
the payment of the Obligations, or any thereof. If all sums secured by this
Agreement become immediately due and payable in accordance with this Section,
Agent, at Agent's option, may foreclose this Agreement by judicial proceeding
and may invoke any other remedies permitted by applicable law or as provided
herein. Agent shall be entitled to collect all costs and expenses incurred in
pursuing such remedies, including, but not limited to, costs of documentary
evidence abstracts, title reports and attorneys' fees.

         23. INDEMNIFICATION. Mortgagor shall protect, indemnify and save
harmless Agent and the Lenders from and against all liabilities and expenses
(including, without limitation, reasonable attorneys' fees and expenses,
including those incurred in connection with appellate, bankruptcy and
post-judgment proceedings) imposed upon or incurred by or asserted against Agent
or any Lender, and not caused by the gross negligence or intentional misconduct
of Agent or such Lender, by reason of (a) ownership of this Agreement, the
Property or any interest therein or receipt of any rents, (b) any accident,
injury to or death of persons or loss of or damage to property occurring in, on
or about the Property or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas or streets, (c) any use, non-use or
condition in, on or about the Property, or any part thereof, or on the adjoining
sidewalks, curbs, adjacent property, parking areas or streets, (d) any failure
on the part of Mortgagor to perform or comply with any of the terms of this
Agreement, or (e) the performance of any labor or services or the furnishing of
any materials or other property in respect of the Property or any part thereof.
The obligations of Mortgagor under this Section 23 shall survive any termination
or satisfaction of this Agreement.

         24. HAZARDOUS WASTE COVENANTS AND INDEMNIFICATION.

                                       9
<PAGE>

                  (a) Mortgagor covenants and warrants that Mortgagor's use of
the Property shall at all times comply with and conform, in all material
respects, to all laws, statutes, ordinances, rules and regulations of any
governmental, quasi-governmental or regulatory authority now or hereafter in
effect ("Laws") which relate to the transportation, storage, placement,
handling, treatment, discharge, release, generation, production or disposal
(collectively "Treatment") of any waste, waste products, petroleum or petroleum
based products, radioactive materials, poly-chlorinated biphenyls, asbestos,
hazardous materials or substances of any kind, pollutants, contaminants and any
substance which is regulated by any law, statute, ordinance, rule or regulation
(collectively "Waste"). Mortgagor further covenants that it shall not engage in
or permit any Person to engage in any Treatment of any Waste on or that affects
the Property except for activities which comply with all Laws in all material
respects.

                  (b) Except as specifically disclosed to Agent in writing in
any schedule to the Credit Agreement, Mortgagor has no actual knowledge that the
Property is the subject of any Notice, as hereinafter defined, from any
governmental authority or Person.

                  (c) Promptly upon receipt of any Notice from any Person,
Mortgagor shall deliver to Agent a true, correct and complete copy of any
written Notice or a true, correct and complete report of any non-written Notice.
Additionally, Mortgagor shall notify Agent immediately after having knowledge or
Notice of any Waste in or affecting the Property. "Notice" shall mean any note,
notice, information, or report of any of the following:

                           (i) any suit, proceeding, investigation, order,
         consent order, injunction, writ, award or action related to or
         affecting or indicating the Treatment of any Waste in or affecting the
         Property;

                           (ii) any spill, contamination, discharge, leakage,
         release, threatened release, or escape of any Waste in or affecting the
         Property, whether sudden or gradual, accidental or anticipated, or of
         any other nature ("Spill");

                           (iii) any dispute relating to Mortgagor's or any
         other Person's Treatment of any Waste or any Spill in or affecting the
         Property;

                           (iv) any claims by or against any insurer related to
         or arising out of any Waste or Spill in or affecting the Property;

                           (v) any recommendations or requirements of any
         governmental or regulatory authority, insurer or board of underwriters
         relating to any Treatment of Waste or a Spill in or affecting the
         Property;

                           (vi) any legal requirement or deficiency related to
         the Treatment of Waste or any Spill in or affecting the Property; or

                           (vii) any tenant, licensee, concessionaire, manager,
         or other Person occupying or using the Property or any part thereof
         which has engaged in or engages in the Treatment of any Waste in or
         affecting the Property in violation of applicable Laws.

                                       10
<PAGE>

                  (d) In the event that (i) Mortgagor has caused, suffered or
permitted, directly or indirectly, any Spill in or affecting the Property during
the term of this Agreement, or (ii) any Spill of any Waste has occurred on the
Property during the term of this Agreement, then Mortgagor shall immediately
take all of the following actions:

                           (A)      notify Agent, as provided herein;

                           (B) take all steps necessary or appropriate to clean
         up such Spill and any contamination related to the Spill, all in
         accordance with the requirements, rules or regulations of any local,
         state or federal governmental or regulatory authority or agency having
         jurisdiction over the Spill; provided that Mortgagor may contest any
         such requirement, rule or regulation by appropriate proceedings
         diligently and in good faith, so long as (1) Mortgagor provides Agent,
         at Mortgagor's cost, such sureties, performance bonds and other
         assurances as Agent may from time to time request in respect of such
         Spill and contamination and the cleanup thereof, (2) any governmental
         or other action against Mortgagor and the Property is effectively
         stayed during Mortgagor's efforts so to contest, and (3) in Agent's
         determination, a delay in such clean-up will not result in or increase
         any loss or liability to Agent;

                           (C) restore the Property, provided that such
         restoration shall be no less than, but need not be more than, what is
         otherwise required by applicable federal, state or local law or
         authorities;

                           (D) allow any local, state or federal governmental or
         regulatory authority or agency having jurisdiction thereof to monitor
         and inspect all cleanup and restoration related to such Spill; and

                           (E) at the written request of Agent, post a bond or
         obtain a letter of credit for the benefit of Agent (drawn upon a
         company or bank satisfactory to Agent) or deposit an amount of money in
         an escrow account under Agent's name upon which bond, letter of credit
         or escrow Mortgagor may draw, and which bond, letter of credit or
         escrow shall be in an amount sufficient to meet all of Mortgagor's
         obligations under this Section 24; and Agent shall have the unfettered
         right to draw against the bond, letter of credit or escrow in its
         discretion in the event that Mortgagor is unable or unwilling to meet
         its obligation under this Section 24 or, if Mortgagor fails to post a
         bond or obtain a letter of credit or deposit such cash as is required
         herein, then Agent, at Mortgagor's cost and expense, may, but shall
         have no obligation to do so for the benefit of Mortgagor and do those
         things that Mortgagor is required to do under clauses (B), (C) and (D)
         of this subsection (d).

                  (e) Mortgagor hereby agrees that it shall indemnify, defend,
save and hold harmless Agent and the Lenders and their respective officers,
directors employees, agents, successors, assigns and affiliates (collectively,
"Indemnified Parties") against and from, and to reimburse the Indemnified
Parties with respect to, any and all damages, claims, liabilities, losses, costs
and expenses (including, without limitation, reasonable attorneys', engineers'
and consultants' fees and expenses, court costs, administrative costs, costs of
appeals and all clean up, administrative, fines, penalties and enforcement costs
of applicable governmental agencies)

                                       11
<PAGE>

that are incurred by or asserted against the Indemnified Parties by reason or
arising out of: (i) the breach of any representation, warranty or undertaking of
Mortgagor under this Section 24, or (ii) the Treatment of any Waste by Mortgagor
or any tenant, licensee, concessionaire, manager, or other Person occupying or
using the Property, in or affecting the Property, or (iii) any Spill governed by
the terms of this Section 24.

                  (f) The obligations of Mortgagor under this Section 24 shall
survive any termination or satisfaction of this Agreement.

         25. PRIORITY OF MORTGAGE LIEN. Agent, at Agent's option, is authorized
and empowered to do all things provided to be done by a mortgagee under Indiana
law, as in effect from time to time, for the protection of Agent's interests in
the Property.

         26. ADJUSTMENTS TO MAXIMUM LIABILITY. Anything in this Agreement to the
contrary notwithstanding, in no event shall the amount of the Obligations
secured by this Agreement exceed the maximum amount that (after giving effect to
the incurring of the obligations hereunder and to any rights to contribution of
Mortgagor from other affiliates of the Borrowers) would not render the rights to
payment of Agent and the Lenders hereunder void, voidable or avoidable under any
applicable fraudulent transfer law.

                  [Remainder of page intentionally left blank]

                                       12
<PAGE>

         27. JURY TRIAL WAIVER. MORTGAGOR, AGENT AND THE LENDERS WAIVE ANY RIGHT
TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE, AMONG THEM ARISING OUT OF, IN CONNECTION WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS
RELATED THERETO.

         IN WITNESS WHEREOF, Mortgagor has executed this Agreement as of the day
and year first set forth above.

Signed and acknowledged                      MORTGAGOR:
in the presence of:
                                             __________________________________

________________________________             By: ______________________________
Print __________________________             Name: ____________________________
                                             Title: ___________________________

________________________________
Print __________________________

                                       13
<PAGE>

STATE OF OHIO             )
                          ) SS:
COUNTY OF CUYAHOGA        )

         On this ____ day of _________, 2002, before me, a Notary Public in and
for said County and State, personally appeared _______________________________,
the ____________________________ of _____________, a ____________ corporation,
who acknowledged the signing of the foregoing instrument on behalf of said
corporation to be her/his free act and deed and the free act and deed of said
corporation for the uses and purposes set forth therein.

         IN WITNESS WHEREOF, I have hereunto set my hand and official seal at
_____________________.

                                          ______________________________________
                                          Notary Public
                                          Printed Name:
                                          County, State of Residence:

This instrument was prepared by:

                                       14
<PAGE>
                                    EXHIBIT A

                                LEGAL DESCRIPTION

                                       15
<PAGE>

                                    EXHIBIT B

                             PERMITTED ENCUMBRANCES

                                       16<PAGE>
                                                                   EXHIBIT 10(a)

                           REGENT COMMUNICATIONS, INC.

                          EMPLOYEE STOCK PURCHASE PLAN

         (AS AMENDED ON OCTOBER 24, 2002 AND EFFECTIVE JANUARY 1, 2003)

                               ARTICLE 1. PURPOSE

         The Regent Communications, Inc. Employee Stock Purchase Plan is
intended to provide an incentive to eligible employees of Regent Communications,
Inc. (the "Company") and affiliated companies to have a greater interest in the
company's growth by providing them with the opportunity to purchase shares of
the Company's common stock at a favorable price by means of payroll deductions.
The Plan is intended to qualify as an employee stock purchase plan under Section
423 of the Internal Revenue Code of 1986, as amended.

                             ARTICLE 2. DEFINITIONS

         Whenever used in the Plan, the following words and phrases shall have
the meanings set forth below, unless a different meaning is plainly required by
the context:

         ADMINISTRATOR means the person or persons appointed by the Committee to
administer the Plan in accordance with Article 3.

         BASE PAY means regular straight time earnings or draw, but excludes
compensation for overtime, commissions, bonuses, amounts paid as reimbursements
of expenses and other additional compensation; provided, however, Base Pay for
employees who only receive sales commissions means sales commissions for the
previous most recent period.

         BOARD OR BOARD OF DIRECTORS means the Board of Directors of the
Company.

         CODE means the Internal Revenue Code of 1986, as amended.

         COMMITTEE means the Compensation Committee of the Board or any other
committee designated by the Board to administer the Plan.

         COMPANY means Regent Communications, Inc., or any successor
corporation.

         COMPENSATION means a Participant's wages as defined in Section 3401(a)
of the Code (for purposes of income tax withholding) determined without regard
to any rules that limit remuneration included in wages based on the nature or
location of the employment or the services performed, subject to the following
inclusions and exclusions:
<PAGE>
(a)      including employer contributions made pursuant to a compensation
         reduction agreement which are not includible in the gross income of a
         Participant under Sections 125, 402(a)(8), 402(h) or 403(b) of the
         Code; and

(b)      excluding reimbursements or other expense allowances, severance pay,
         and welfare benefits.

         CUMULATIVE SHARE VALUE shall mean, for any Offering period, the
aggregate Fair Market Value of the shares of Stock purchased by a Participant in
all prior Offering periods occurring in the same calendar year as the Offering
period in question, with the Fair Market Value of shares of Stock purchased by
such Participant in each prior Offering period in the calendar year being
calculated as of the first day of the Offering period in which such shares of
Stock were purchased.

         DISCOUNT VALUE means that value, expressed as a percentage of Fair
Market Value, as is determined from time to time by the Committee for a
particular Offering which shall be set in advance of such Offering and shall be
communicated to the Employees of Employer sufficiently before such Offering in
order to allow Participants and other Employees to file payroll deduction
authorizations for such Offering with the Employer as set forth in Section 5.01;
provided, however, that the Discount Value shall initially be set at ninety
percent (90%) and shall not be subsequently set below eighty-five percent (85%)
or above ninety percent (90%).

         EMPLOYEE means any individual employed by an Employer.

         EMPLOYER means the Company and each Subsidiary designated by the Board
of Directors as a participating employer in the Plan.

         FAIR MARKET VALUE means the fair market value of the Stock as
determined pursuant to Section 3.03 of the Plan.

         OFFERING means an offering of Stock for purchase under the Plan
pursuant to Article 6 of the Plan.

         PARTICIPANT means any eligible employee who has elected to participate
in an Offering under the Plan.

         PAYROLL PERIOD means the period for which Compensation is paid to an
Employee in accordance with an Employer's customary payroll practices.

         PLAN means the Regent Communications, Inc. Employee Stock Purchase
Plan, as hereinafter amended from time to time.

         STOCK means the Common Stock of the Company, par value $.01 per share.

         SUBSIDIARY means any corporation, limited liability company or other
entity which has elected under the Code to be taxed as a corporation and in
which the Company owns, directly or indirectly, stock or other equity interests
possessing 50 percent or more of the total combined voting power of all classes
of stock or other equity interests of such entity. For this purpose, the rules
of Section 424(d) of the Code shall apply in determining the stock ownership of
the Company.

                                       2
<PAGE>
                            ARTICLE 3. GENERAL RULES

3.01 COMMITTEE

(a)      The Plan shall be administered by the Committee. The Committee shall
         consist of at least two directors of the Company appointed by the
         Board, none of whom shall be eligible to participate in the Plan.

(b)      All members of the Committee shall be (i) "non-employee directors"
         within the meaning of Rule 16b-3 adopted by the Securities and Exchange
         Commission under the Securities Exchange Act of 1934, as amended (the
         "Exchange Act"), if and as such Rule is in effect, and (ii) "outside
         directors" within the meaning of Section 162(m) of the Code and any
         applicable regulations. The Board may, from time to time, remove
         members from, or add members to, the Committee. Vacancies on the
         Committee will be filled by the Board.

(c)      The Committee shall have full authority and power, in its absolute
         discretion, to administer and construe the Plan, subject to applicable
         requirements of law. Without limiting the generality of the foregoing,
         the Committee shall have the following powers and duties:

         (i)    to interpret the terms and provisions of the Plan, including but
                not limited to the power to construe ambiguities and omissions;

         (ii)   to adopt, amend and repeal such rules, regulations, agreements
                and instruments for implementing and administering the Plan as
                the Committee shall deem necessary or advisable; and

         (iii)  to make all other determinations, including factual
                determinations, and take all other action necessary or advisable
                for the implementation and administration of the Plan, including
                but not limited to setting the Discount Value.

(d)      The Committee may delegate such of its administrative duties to such
         other persons as it deems appropriate in connection with administering
         the Plan.

(e)      All decisions made by the Committee pursuant to the provisions of the
         Plan shall be made in the Committee's sole discretion and shall be
         final and binding on all persons who have an interest under the Plan.

(f)      The Committee may act by a majority vote at a meeting of the Committee
         or by a document signed by all of the members of the Committee. The
         Committee may adopt such rules for the conduct of its affairs as it
         deems appropriate.

(g)      The members of the Committee shall be indemnified by the Company
         against all costs and expenses reasonably incurred by them in
         connection with any action, suit or proceeding to which they or any of
         them may be a party by reason of any action taken or failure to act
         under or in connection with the Plan and against all amounts paid by
         them in settlement thereof (provided such settlement shall be approved
         by independent legal counsel) or paid by them in satisfaction of a
         judgement in any such action, suit or proceeding, except a judgment
         based upon a finding of bad

                                       3
<PAGE>
         faith. Upon the institution of any such action, suit or proceeding, a
         member shall notify the Company in writing, giving the Company an
         opportunity, at its own expense, to handle and defend the same before
         such member undertakes to handle it on his or her own behalf.

3.02 NUMBER OF SHARES SUBJECT TO PLAN

(a)      The total number of shares of Stock that may be purchased in Offerings
         under the Plan shall not exceed, in the aggregate, 500,000 shares of
         Stock (subject to adjustment as set forth below).

(b)      Stock available for Offerings may be authorized and unissued shares,
         treasury shares, or shares previously issued and reacquired by the
         Company through purchases on the open market or otherwise. Any shares
         for which an Offering to purchase expires or is terminated or canceled
         may again be made subject to Offerings under the Plan.

(c)      If the number of shares of Stock outstanding is hereafter increased or
         decreased or changed into or exchanged for a different number or kind
         of shares or other securities of the Company or of another corporation
         by reason of reorganization, merger, consolidation, recapitalization,
         reclassification, stock split, reverse stock split, combination of
         shares, or dividend payable in shares of Stock, or if any other similar
         corporate transaction or event affects the Stock such that an
         adjustment is determined, by the Committee in its sole discretion, to
         be appropriate to prevent dilution or enlargement of the benefits or
         potential benefits intended to be made available under the Plan, the
         number of shares that may be purchased in Offerings under this Plan, or
         any potential increase thereto, shall be increased or decreased
         proportionately, as the case may be, and the Committee shall make the
         appropriate adjustment in the number and kind and price of shares
         subject to Offerings then outstanding and unexercised.

3.03 DETERMINATION OF FAIR MARKET VALUE

         For purposes of this Plan, the Fair Market Value of the Stock as of any
given date, shall be equal to the last quoted sales price of the Stock on such
date, or if no sales price is available for such date, the average of the
reported high bid and low asked prices regular way for such date, on the Nasdaq
National Market and if the Stock is not then listed on the Nasdaq National
Market, then on (a) the New York Stock Exchange, or (b) if the Stock is not
listed or admitted to trading on such exchange, on the principal national stock
exchange on which the stock is then listed or admitted to trading, or (c) if not
listed or admitted to trading on any national stock exchange, as reported by the
National Association of Securities Dealers Automated Quotation System
("NASDAQ"). If the Stock is not then listed on any national stock exchange or
reported by NASDAQ (or if no current bid and asked price is available), then the
Fair Market Value shall be determined in any reasonable manner approved by the
Committee.

3.04 EFFECTIVE DATE

         The Plan, as amended, shall be effective on or after January 1, 2003.

                                       4
<PAGE>
                    ARTICLE 4. ELIGIBILITY AND PARTICIPATION

4.01 ELIGIBLE EMPLOYEES

         Subject to Section 4.02, each Employee whose customary employment is
expected to be more than twenty (20) hours per week and more than five (5)
months per calendar year will be eligible to participate in Offerings which
commence after the date on which he or she meets these requirements, provided
that such Employee submits the payroll deduction authorization required under
Section 5.01 on or prior to the election deadline applicable to such Offering.

4.02 RESTRICTIONS ON PARTICIPATION

         Notwithstanding any provisions of this Plan to the contrary, an
Employee shall not participate in an Offering if either:

(a)      prior to the Offering, the employee owns stock, and/or holds
         outstanding options to purchase stock, possessing 5 percent (5%) or
         more of the total combined voting power or value of all classes of
         stock of the Company or any of its Subsidiaries; or

(b)      immediately after purchasing Stock in such Offering, the employee would
         own stock, and/or hold outstanding options to purchase stock,
         possessing 5 percent (5%) or more of the total combined voting power or
         value of all classes of stock of the Company or any of its
         Subsidiaries.

         For purposes of this section, the rules of Section 424(d) of the Code
shall apply in determining the stock ownership of the Employee.

4.03 PARTICIPATION IN OFFERING

         An Employee may elect to participate in an Offering only by filing a
completed payroll deduction election prior to the Offering commencement date.
Such election shall be made in accordance with the requirements of Article 5.

4.04 TERMINATION OF PARTICIPATION

(a)      An individual will cease to be a Participant in an Offering on the
         earliest to occur of the following events:

         (i)    the date on which he or she ceases to be eligible to participate
                under Section 4.01;

         (ii)   the date on which the individual terminates employment with an
                Employer for any reason other than death;

         (iii)  the date on which the Employee withdraws his or her payroll
                deductions as provided in Article 7.

(b)      In the event that an individual ceases to be a Participant, the
         withdrawal provisions described in Article 7 shall apply.

                                       5
<PAGE>
                          ARTICLE 5. PAYROLL DEDUCTIONS

5.01 AUTHORIZATION TO MAKE PAYROLL DEDUCTIONS

(a)      Each Employee who elects to participate in an Offering shall agree to
         have deductions made by the Employer from his or her Compensation by
         filing a payroll deduction authorization with the Employer on or before
         the election date specified by the Administrator for the Offering.

(b)      A Participant's payroll deduction authorization with respect to an
         Offering shall be effective from the first day of the first Payroll
         Period ending during an Offering period until the last day of the last
         Payroll Period ending during the Offering period unless the Participant
         withdraws from the Offering in accordance with Article 7.

(c)      Unless and until a Participant elects otherwise by filing a new payroll
         deduction authorization with the Employer on or before the election
         date specified by the Administrator for such subsequent Offering
         period, a Participant's payroll deduction election for an Offering
         period will remain in effect for each subsequent Offering period unless
         the Committee has set a Discount Value for such subsequent Offering
         period that is different from the Discount Value set for the most
         recent Offering period, in which case each Participant must file a new
         payroll deduction authorization with the Employer on or before the
         election date specified by the Administrator for such subsequent
         Offering period. If a Participant does not file a new payroll deduction
         authorization with the Employer on or before the election date
         specified by the Administrator for a subsequent Offering which has a
         different Discount Value than that set for the most recent Offering,
         such Participant shall be deemed, for purposes of Section 6.05, to have
         elected to not participate in such subsequent Offering.

5.02 AMOUNT OF PAYROLL DEDUCTION

         A Participant may elect to have deductions made from his or her
Compensation in an amount equal to a whole percentage of his or her Compensation
from 1 percent (1%) to 10 percent (10%), or such other percentage as may be
established by the Administrator.

5.03 CHANGE OF PAYROLL DEDUCTIONS DURING OFFERING PERIOD

(a)      Subject to paragraphs (b) and (c) below, a Participant may not increase
         or decrease his or her payroll deductions during an Offering period.

(b)      A Participant may elect to discontinue his or her payroll deductions
         and withdraw from an Offering by following the procedures set forth in
         Section 7.01.

(c)      The Administrator in its sole discretion may, at any time and with or
         without notice, permit a Participant to change his or her election if
         it determines that such change or revocation is justified by individual
         circumstances.

                                       6
<PAGE>
5.04 DEDUCTIONS DURING APPROVED LEAVE OF ABSENCE

         An Employee who continues to be a Participant during an approved leave
of absence may elect to authorize the Employer to make deductions from payments
to be made by the Employer to the Participant during such leave of absence, if
any.

5.05 PARTICIPANT'S ACCOUNT

(a)      Amounts equal to payroll deductions made pursuant to a Participant's
         election under this Article 5 for an Offering period shall be credited,
         on the last day of a Payroll Period, to a bookkeeping account
         established by the Administrator under the Plan.

(b)      The bookkeeping account shall be debited with:

         (i)    amounts used to purchase Stock pursuant to Section 6.04; and

         (ii)   payments made pursuant to Article 7.

                    ARTICLE 6. OFFERING AND PURCHASE OF STOCK

6.01 OFFERING PERIOD

         Offerings to purchase Stock under the Plan will be made during each of
the following periods:

(a)      The first Offering period after the Effective Date of the Plan as
         amended will commence on January 1, 2003 and will end on March 31,
         2003.

(b)      Thereafter, an Offering period will commence each April 1, July 1,
         October 1 and January 1; and end on the next following June 30,
         September 30, December 31 and March 31, respectively.

6.02 PURCHASE PRICE

         The purchase price of Stock for an Offering shall be equal to the
Discount Value multiplied by the lesser of: (a) the Fair Market Value on the
last day of the Offering period; and (b) the Fair Market Value on the first day
of the Offering period.

6.03 AUTOMATIC EXERCISE

         Unless a Participant elects to withdraw from an Offering prior to the
close of an Offering period in accordance with the provisions of Article 7, a
Participant's election to purchase Stock shall be exercised automatically on the
last day of the Offering period.

6.04 NUMBER OF SHARES PURCHASED UPON EXERCISE

(a)      Subject to paragraphs (b), (c) and (d) below, the number of whole
         shares of Stock purchased by a Participant upon exercise shall be equal
         to: (i) the balance of the Participant's account as of the

                                       7
<PAGE>
         last day of the Offering period (ii) divided by the purchase price per
         share of Stock determined pursuant to Section 6.02.

(b)      Notwithstanding any provision of the Plan to the contrary, a
         Participant shall not have the right to purchase stock under this Plan
         and all other employee stock purchase plans of the Company and any of
         its Subsidiaries in excess of $25,000 of Fair Market Value of the Stock
         (determined at the time such Offering) for each calendar year in which
         such right to purchase Stock is outstanding. Any right to purchase
         Stock under this Plan shall be deemed to be modified to the extent
         necessary to satisfy the limitations of this paragraph.

(c)      In the event that the total number of shares which are exercised for
         purchase for an Offering exceeds the maximum number of shares available
         under the Plan for such Offering, the Administrator shall make a pro
         rata allocation of the shares available for delivery and distribution
         in as uniform a manner as shall be practicable and as it shall
         determine to be equitable.

(d)      Notwithstanding any provision of the Plan to the contrary, the maximum
         number of shares of Stock that a Participant may purchase in an
         Offering shall be that number of shares of Stock determined by dividing
         (i) $25,000 minus the Cumulative Share Value for that Offering period
         by (ii) the Fair Market Value on the first day of such Offering period.

6.05 CARRY FORWARD OF UNUSED BALANCE OF PARTICIPANT'S ACCOUNT

         Any balance remaining in a Participant's account after the purchase of
Stock at the end of any Offering period shall be carried forward and applied to
the next Offering, unless such Participant elects to not participate in such
Offering in which case the balance remaining in such Participant's account shall
be paid to such Participant.

6.06 DELIVERY OF STOCK

         The Company shall cause the Stock purchased in an Offering to be
delivered to a Participant by the electronic crediting of ownership of such
Stock to a brokerage account held in the Participant's name. Such delivery shall
be made as soon as administratively practicable following the close of each
Offering period. Participants will be able to obtain and hold certificates
evidencing ownership of their Stock by contacting the administrator of their
brokerage account.

6.07 RESTRICTIONS ON STOCK

         All shares of Stock or other securities delivered under the Plan may be
subject to such stock transfer orders and other restrictions as the
Administrator may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Stock is then listed, and any applicable Federal or state securities
law, and the Administrator may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.

                                       8
<PAGE>
                       ARTICLE 7. WITHDRAWAL FROM OFFERING

7.01 VOLUNTARY WITHDRAWAL PRIOR TO CLOSE OF OFFERING

(a)      A Participant may withdraw from an Offering by providing notice of
         withdrawal to the Administrator in the form and manner and within the
         time period determined by the Administrator. A Participant who has not
         terminated their employment but ceases for any reason to receive a
         regular payroll check from the Employer (including during an approved
         leave of absence), shall be deemed, for purposes of the Plan, to have
         withdrawn from the Offering as of the first day immediately following
         the last day of the last Payroll Period for which such Participant will
         receive a regular payroll check.

(b)      Upon receipt of a notice of withdrawal, the Employer shall cease making
         payroll deductions from the Participant's Compensation and shall pay
         the Participant the amount credited to his or her account as soon as
         administratively practicable.

(c)      A Participant who withdraws from an Offering may not again participate
         in that Offering.

(d)      A Participant's withdrawal from any Offering will not have any effect
         upon his eligibility to participate in any succeeding Offering or in
         any similar plan adopted by the Company or any of its Subsidiaries.

7.02 TERMINATION OF EMPLOYMENT

         In the event that a Participant's employment is terminated for any
reason other than death prior to the close of an Offering, the Participant will
be deemed to have withdrawn from the Offering and the Employer shall pay the
Participant the amount credited to his or her account as soon as
administratively practicable.

7.03 TERMINATION OF EMPLOYMENT DUE TO DEATH

(a)      In the event that Participant's employment is terminated because of his
         or her death prior to the close of an Offering, his beneficiary shall
         have the right to elect:

         (i)    to withdraw from the Offering and receive payment of the amount
                credited to the Participant's accounts, or

         (ii)   to continue to participate in the Offering and purchase shares
                with the amount credited to the Participant's account as of the
                date of the death.

(b)      Such election shall be made by filing written notice in the form and
         manner determined by the Administrator prior to the earlier of the
         applicable deadline for withdrawal set forth in Section 7.01 or the
         expiration of a period of sixty (60) days commencing with the
         Participant's date of death.

(c)      In the event that proper notice is not timely received, the beneficiary
         shall automatically be deemed to have elected to continue to
         participate in the Offering.

                                       9
<PAGE>
7.04 PAYMENT OF INTEREST

         No interest shall be paid on any and all amounts which are paid to or
for the benefit of a Participant pursuant to the provisions of this Article 7.

                      ARTICLE 8. AMENDMENT AND TERMINATION

         The Board of Directors or the Committee may amend, modify, or terminate
the Plan; provided, however, that no such action of the Board or the Committee,
without approval of the stockholders of the Company, may (a) increase the total
amount of Stock which may be offered under the Plan (except for adjustments
resulting from a change in capitalization of the Company as described above),
(b) withdraw the administration of the Plan from the Committee, (c) permit any
person, while a member of the Committee, to be eligible to participate in the
Plan, (d) change the class of persons eligible to participate in the Plan, or
(e) modify the Plan in such a way as would require shareholder approval under
any applicable law, the Code, the insider trading rules of Section 16 of the
Exchange Act, the rules or regulations of any national securities exchange or
system on which the Stock is then listed or reported, or by any regulatory body
having jurisdiction with respect hereto. Upon termination of the Plan, the
balance of each Participant's account shall be promptly paid to such
Participant.

                       ARTICLE 9. MISCELLANEOUS PROVISIONS

9.01 DESIGNATION OF BENEFICIARY

         A Participant may file a written designation of a beneficiary who is to
receive any stock and/or cash in the event of the Participant's death. Such
designation of beneficiary may be changed by the Participant at any time by
written notice to the Administrator. Upon the death of a Participant and upon
receipt by the company of proof of identity and existence at the Participant's
death of a beneficiary validly designated by him or her under the Plan, the
Administrator shall deliver such Stock and/or cash to such beneficiary. In the
event of the death of a Participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such Participant's death,
the Administrator shall deliver such Stock and/or cash to the executor or
administrator of the estate of the Participant, or if no such executor or
administrator has been appointed (to the knowledge of the Administrator), the
Administrator, in his or its discretion, may deliver such Stock and/or cash to
the spouse or to any one or more dependents of the Participant as the
Administrator may designate. No beneficiary shall, prior to the death of the
participant by whom he has been designated, acquire any interest in the Stock or
cash credited to the Participant under the Plan.

9.02 NON-TRANSFERABILITY

         Neither payroll deductions credited to a participant's account nor any
rights with regard to the exercise of an election to purchase stock under the
Plan may be assigned, transferred, pledge, or otherwise disposed of in any way
by the Participant other than by will or the laws of descent and distribution.
Any such attempted assignment, transfer, pledge or other disposition shall be
without effect, except that the Company may treat such as an election to
withdraw from an Offering in accordance with Section 7.01

                                       10
<PAGE>
         Any rights with respect to a Participant's account and any election
rights granted under the Plan existing after the Participant dies are
exercisable by the Participant's designated beneficiary or , if there is no
designated beneficiary, by the Participant's legal representative.

9.03 USE OF FUNDS

         All such deductions received or held by the Employer under this Plan
may be used by the Employer for any corporate purpose and the Employer shall not
be obligated to segregate such payroll deductions.

9.04 PARTICIPANT'S INTEREST IN STOCK

         A Participant will have no right as a holder of and no interest in
Stock covered by his or her election until such purchase has been completed in
accordance with Article 6 hereof.

9.05 NO INTEREST PAYABLE

         No interest will be paid on any money paid in to the Plan or credited
to any Participant's account.

9.06 NO EFFECT ON EMPLOYMENT RIGHTS

         Nothing in this Plan or in any election made under it shall confer on
any employee any right to continue in the employ of the Company or its
Subsidiaries or limit in any manner or to any extent the right of the Company or
its Subsidiaries to terminate the employment of any employee at any time.

9.07 GOVERNING LAW

         The provisions of the Plan shall be construed, administered and
enforced according to the laws of the State of Delaware, without regard to the
conflicts of law provisions thereof.

9.08 WITHHOLDING TAXES

         The Company shall have the right to require Participants to satisfy any
liability for any federal, state or local income, or other withholding taxes as
a prerequisite to the Company's obligation to deliver shares or securities of
the Company.

                                       11

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