Document:

Execution Copy

                COPYRIGHT, PATENT, TRADEMARK AND LICENSE MORTGAGE

     THIS COPYRIGHT, PATENT, TRADEMARK AND LICENSE MORTGAGE (as amended,
modified or supplemented from time to time, this "Mortgage") made as of April
12, by KINETEK, INC., a Delaware corporation, having an office at ArborLake
Centre, Suite 550, 1751 Lake Cook Road, Deerfield, Illinois 60015
("Mortgagor") in favor of U.S. BANK NATIONAL ASSOCIATION, as Trustee under
that certain Indenture identified below, a national banking association with
an office at 180 East Fifth Street, Saint Paul, Minnesota ("Mortgagee").

                             W I T N E S S E T H:
                             - - - - - - - - - -

     WHEREAS, as of the date hereof Kinetek Industries, Inc. ("Kinetek"), has
issued (i) those certain 5% Senior Secured Notes due 2007, in the original
principal amount of $15,000,000 and (ii) those certain 10% Senior Secured
Notes due 2007, in the original principal amount of $11,000,000 (collectively,
the "Notes" and each, a "Note") pursuant to the terms of those two certain
Indentures dated as of even date herewith by and among U.S. Bank National
Association, as Trustee (the "Trustee"), and Kinetek Industries, Inc. as
Issuer (the "Issuer") and the Guarantors identified below (as amended,
modified or supplemented from time to time, the "Indentures");

     WHEREAS, Advanced D.C. Motors, Inc., a New York corporation, Electrical
Design and Control Company, a Delaware corporation, The Imperial Electric
Corporation, a Delaware corporation, Merkle-Korff Industries, Inc., an
Illinois corporation, Motion Control Engineering, Inc., a California
corporation, Gear Research, Inc., a Delaware corporation, Kinetek, Inc., a
Delaware corporation, Motion Holdings, Inc., a Delaware corporation, Advanced
D.C. Holdings, a Delaware corporation, and FIR Group Holdings, Inc., a
Delaware corporation (collectively, the "Guarantors") have each guaranteed
payment and performance of the Indenture and the Notes pursuant to certain
guarantees contained in the Indenture (collectively, the "Guarantees"); and

     WHEREAS, Pursuant to a Security Agreement (as amended, modified or
supplemented from time to time, the "Security Agreement") dated as of the date
hereof, the Issuer has secured its obligations under the Indenture and the
Notes, and pursuant to other security agreements (collectively, the "Guarantor
Security Agreements"), the Guarantors have secured their obligations under the
Guarantees, and the other obligations identified in the Security Agreement, by
liens and security interests granted therein, that in each case are
subordinate to the liens and security interests in favor of Senior Agent and
Senior Lenders under the Senior Loan Agreement;

     NOW, THEREFORE, in consideration of the premises set forth herein and for
other good and valuable consideration, the receipt, sufficiency and adequacy
of which are hereby acknowledged, Mortgagor agrees as follows:

     1.  Incorporation of Indenture and Security Agreement. The Security
Agreement and Other Agreements and the terms and provisions thereof are hereby
<PAGE>

incorporated herein in their entirety by this reference. All terms capitalized
but not otherwise defined herein shall have the same meanings herein as in the
Indentures or the Security Agreement.

     2.  Mortgage of Copyrights, Patents, Trademarks and Licenses. To secure
the complete and timely payment and satisfaction of all of the "Obligations"
(as defined in the Guarantor Security Agreement executed by Mortgagor),
Mortgagor hereby grants to Mortgagee for its own benefit and the benefit of
Holders, and hereby reaffirms its prior grant pursuant to the Guarantor
Security Agreement executed by Mortgagor of, a continuing security interest in
all of its now existing and hereafter created or acquired assets, interests
and property ("Collateral") consisting of:

          (i) copyrights, rights and interests in copyrights, works
     protectable by copyrights, copyright registrations and copyright
     applications, including, without limitation, the copyright registrations
     and applications listed on Exhibit A attached hereto and hereby made a
     part hereof, and all renewals, extensions and continuations of any of the
     foregoing, all income, royalties, damages and payments now and hereafter
     due and/or payable under or with respect to any of the foregoing,
     including, without limitation, damages and payments for past, present or
     future infringements of any of the foregoing and the right to sue for
     past, present and future infringements of any of the foregoing (all of
     the foregoing are sometimes hereinafter individually and/or collectively
     referred to as the "Copyrights");

          (ii) patents and patent applications, including, without limitation,
     the inventions and improvements described and claimed therein, all
     patentable inventions and those patents and patent applications listed on
     Exhibit B attached hereto and made a part hereof, and all reissues,
     divisions, continuations, renewals, extensions and continuations-in-part
     of any of the foregoing, and all income, royalties, damages and payments
     now and hereafter due and/or payable under or with respect to any of the
     foregoing, including, without limitation, damages and payments for past,
     present or future infringements of any of the foregoing and the right to
     sue for past, present and future infringements of any of the foregoing
     (all of the foregoing are sometimes hereinafter individually and/or
     collectively referred to as the "Patents");

          (iii) trademarks, trademark registrations, trademark applications,
     trade names, corporate names, company names, business names, fictitious
     business names, trade styles, service marks, other business identifiers,
     prints and labels on which any of the foregoing have appeared or appear,
     all registrations and recordings thereof, and all applications in
     connection therewith (other than "intent to use" applications until a
     verified statement of use is filed with respect to such applications),
     including, without limitation, the trademarks, trade names, service
     marks, registrations and applications listed on Exhibit C attached hereto
     and hereby made a part hereof, and all renewals, extensions and
     continuations of any of the foregoing, and all income, royalties, damages
     and payments now and hereafter due and/or payable under or with respect
     to any of the foregoing, including, without limitation, damages and
     payments for past, present or future infringements of any of the
     foregoing and the right to sue for past, present and future infringements
     of any of the foregoing (all of the foregoing are sometimes hereinafter
     individually and/or collectively referred to as the "Trademarks");

                                      2
<PAGE>

          (iv) all license agreements between Mortgagor and any other party
     with respect to any of the Copyrights or any of the Patents or any of the
     Trademarks or any other copyright, patent, trademark, service mark or any
     registration or application for registration or any other trade name or
     tradestyle, whether Mortgagor is a licensor or licensee under any such
     license agreement, including, without limitation, the licenses listed on
     Exhibit D attached hereto and hereby made a part hereof, other than
     license agreements which, according to their terms, may not be assigned
     without the prior consent of the other Person party thereto (unless such
     consent has been obtained) (all of the foregoing license agreements and
     Mortgagor's rights thereunder are referred to collectively as the
     "Licenses"); and

          (v) all rights corresponding to any of the foregoing throughout the
     world and the goodwill of Mortgagor's business connected with and
     symbolized by the Trademarks.

     Subject to the terms of the Intercreditor Agreement, upon the occurrence
of an Event of Default (as such term is defined in either Indenture),
Mortgagee, on behalf of itself and Holders, but subject to the next following
paragraph, shall have the power, to the extent permitted by law, to exercise
the rights and remedies of a secured party provided under the Security
Agreement and the Guarantor Security Agreement executed by Mortgagor,
including without limitation the right to sell the Copyrights, Patents,
Trademarks and Licenses.

     Notwithstanding any other provision contained herein, the security
interest granted by the Mortgagor to the Mortgagee, and any other rights of
Mortgagee with respect to the Collateral described herein, pursuant to this
Mortgage, to secure the Obligations shall be (i) subordinate and junior in
priority to the Liens granted to the Senior Agent and the Senior Lenders
pursuant to the Senior Loan Agreement or any other Senior Security Documents
(the "Senior Lender Liens"), and (ii) subject to the terms and conditions of
the Intercreditor Agreement. Any provisions contained herein that purport to
give the Mortgagee the right to exercise its judgment, the right to be
satisfied or other similar rights or decision making abilities shall only be
operative after such time as all indebtedness under the Senior Loan Agreement
has been fully and indefeasibly paid in cash and satisfied and all lending
commitments under the Senior Loan Agreement have been terminated. In addition,
the Mortgagor and the Mortgagee acknowledge and agree that, to the extent that
any provision hereunder imposes an obligation upon the Mortgagor that the
Mortgagor is unable to satisfy due to the satisfaction of its obligations
under the Senior Loan Agreement and the Senior Security Documents, such
provision shall not become operative until all indebtedness under the Senior
Loan Agreement has been fully and indefeasibly paid in cash and satisfied and
all lending commitments under the Senior Loan Agreement have been terminated.

     3.  Warranties, Representations and Covenants. For purposes of this
Mortgage, (a) the Copyrights listed on Exhibit A hereto, any other registered
Copyrights and any other Copyrights material to Mortgagor's business are
collectively referred to as the "Material Copyrights", (b) the Patents listed
on Exhibit B hereto, any other registered Patents and any other Patents
material to Mortgagor's business are collectively referred to as the "Material
Patents", (c) the Trademarks listed on Exhibit C hereto, any other registered
Trademarks and any other Trademarks material to Mortgagor's business are
collectively referred to as the "Material Trademarks") and (d) the Licenses

                                      3
<PAGE>

listed on Exhibit D hereto and any other Licenses material to Mortgagor's
business are collectively referred to as the "Material Licenses". Mortgagor
warrants and represents to Mortgagee that:

          (i) No Material Copyright, Material Patent, Material Trademark or
     Material License has been adjudged invalid or unenforceable or, has been
     cancelled, in whole or in part;

          (ii) Each Material Copyright, Material Patent, Material Trademark
     and Material License is valid and enforceable;

          (iii) Mortgagor is the sole and exclusive owner of the entire
     unencumbered right, title and interest in and to each Material Copyright,
     Material Patent, Material Trademark and Material License, free and clear
     of any liens, charges and encumbrances, including, without limitation,
     licenses, shoprights and covenants by Mortgagor not to sue third parties,
     other than the Senior Lender Liens;

          (iv) Mortgagor has no notice of any suits or actions commenced or
     threatened in writing with respect to any of the Material Copyrights,
     Material Patents, Material Trademarks or Material Licenses;

          (v) Mortgagor has the unqualified right to execute and deliver this
     Mortgage and perform its terms;

          (vi) No Material License restricts the ability of Mortgagor to
     pledge, mortgage and assign such Material License as contemplated by this
     Mortgage, except as disclosed on Schedule 1 hereto;

          (vii) Mortgagor has no notice of any infringement or unauthorized
     use presently being made of any of the Material Copyrights, Material
     Patents, Material Trademarks or Material Licenses which would reasonably
     be expected to materially adversely affect the fair market value of the
     Material Copyrights, Material Patents, Material Trademarks or Material
     Licenses or the benefits to Mortgagee of this Mortgage, including,
     without limitation, the priority or perfection of the security interest
     granted herein or the remedies of Mortgagee hereunder, other than the
     Senior Lender Liens; and

          (viii) Mortgagor has no notice of any suits or actions commenced or
     threatened in writing with respect to any Material Copyright, Material
     Patent, Material Trademark or Material License.

     4.  Restrictions on Future Agreements. Mortgagor agrees that until the
Mortgagor's Obligations (as that term is defined in the Guarantor Security
Agreement executed by Mortgagor) shall have been satisfied in full and the
Indentures and Guarantor Security Agreement executed by Mortgagor shall have
been terminated (the "Indenture and Security Agreement Termination"),
Mortgagor shall not, without the prior written consent of Mortgagee, sell or
assign its interest in, or grant any license under, any Material Copyright,
Material Patent, Material Trademark or Material License, or enter into any
other agreement with respect to any Material Copyright, Material Patent,
Material Trademark or Material License which is inconsistent with the
obligations under this Mortgage. Mortgagor further agrees that it shall not
take any action, or permit any action to be taken by others subject to its

                                      4
<PAGE>

control, including licensees, or fail to take any action, which would
adversely affect the validity or enforcement of the rights transferred to
Mortgagee under this Mortgage.

     5.  New Copyrights, Patents, Trademarks and Licenses. Mortgagor represents
and warrants to Mortgagee that the Copyrights, Patents, Trademarks and
Licenses listed on Exhibits A, B, C and D, respectively, constitute all of the
registered Copyrights, registered Patents and registered Trademarks now owned
by, and Licenses granted by or to, Mortgagor. If, before the Indenture and
Security Agreement Termination, Mortgagor shall (i) become aware of any
existing Copyrights, Patents, Trademarks or Licenses of which Mortgagor has
not previously informed Mortgagee; (ii) obtain rights to any new Copyrights,
patentable inventions, Patents, Trademarks or Licenses, or (iii) become
entitled to the benefit of any Copyrights, Patents, Trademarks or Licenses or
any improvement on any Patent, the provisions of this Mortgage above shall
automatically apply thereto. Mortgagor hereby authorizes Mortgagee to modify
this Mortgage by amending Exhibits A, B, C and D, as applicable, to include
any such (registered or unregistered) Copyrights, Patents, Trademarks and
Licenses.

     6.  Royalties; Term. The term of the security interests/mortgages granted
herein shall extend until the earlier of (i) the expiration of each of the
respective Copyrights, Patents, Trademarks and Licenses encumbered hereunder,
and (ii) the Indenture and Security Agreement Termination. Subject to the
terms of the Intercreditor Agreement and the last paragraph of Section 2
hereto, upon the occurrence of an Event of Default, Mortgagor agrees that the
use by Mortgagee of all Copyrights, Patents, Trademarks and Licenses shall be
worldwide and without any liability for royalties or other related charges
from Mortgagee to Mortgagor.

     7.  Release of Mortgage. This Mortgage is made for collateral purposes
only. Upon the Indenture and Security Agreement Termination, Mortgagee, at
Mortgagor's expense, shall take such actions as may be necessary or proper to
terminate and release its security interest in the Copyrights, Patents,
Trademarks, and Licenses created hereby and pursuant to the Security
Documents, subject to any disposition thereof which may have been made by
Mortgagee pursuant hereto or pursuant to the applicable Guarantor Security
Agreement.

     8.  Expenses. All expenses incurred in connection with the performance of
any of the agreements set forth herein shall be borne by Mortgagor. All fees,
costs and expenses, of whatever kind or nature, including reasonable
attorneys' fees and legal expenses, incurred by Mortgagee in connection with
the filing or recording of any documents (including all taxes in connection
therewith) in public offices, the payment or discharge of any taxes,
maintenance fees, encumbrances or otherwise in protecting, maintaining or
preserving the Copyrights, Patents, Trademarks and Licenses, or in defending
or prosecuting any actions or proceedings arising out of or related to the
Copyrights, Patents, Trademarks and Licenses, shall be borne by and paid by
Mortgagor on written demand by Mortgagee and until so paid shall be added to
the principal amount of the Issuer's Obligations and shall bear interest at
the then applicable rate as set forth in the Security Agreement.

     9.  Duties of Mortgagor. Mortgagor shall have the duty, in each case as
commercially reasonable (i) to file and prosecute diligently any copyright,
patent, trademark or service mark applications material to Mortgagor's business
and pending as of the date hereof or thereafter until the Indenture and Security

                                      5
<PAGE>

Agreement Termination, (ii) to make application on uncopyrighted but
copyrightable works, on unpatented but patentable inventions and on trademarks
and service marks, as appropriate, material to Mortgagor's business, (iii) to
preserve and maintain all rights in the Material Copyrights, Material Patents,
Material Trademarks and Material Licenses and (iv) to ensure that the Material
Copyrights, Material Patents, Material Trademarks and Material Licenses are and
remain enforceable. Any expenses incurred in connection with Mortgagor's
obligations under this Section 9 shall be borne by Mortgagor. Mortgagor shall
not abandon any right to file an application with respect to a copyright,
patent, trademark or service mark that is material to Mortgagor's business, or
abandon any Material Copyright, Material Patent, Material Trademark or Material
License, without the written consent of Mortgagee. Subject to the terms of the
Intercreditor Agreement and the last paragraph of Section 2 hereof, if Mortgagor
fails to comply with any of the foregoing duties, Mortgagee may perform said
duties in Mortgagor's name, to the extent permitted by law. Mortgagor agrees to
maintain the quality of any and all products in connection with which the
Material Trademarks are used, consistent with the quality of said products as of
the date hereof, except to the extent that the failure to perform any of the
following would not reasonably be expected to have a Material Adverse Effect.
Subject to the terms of the Intercreditor Agreement and the last paragraph of
Section 2 hereof, upon the occurrence and during the continuation of an Event of
Default, Mortgagor agrees that Mortgagee, or a conservator appointed by
Mortgagee, shall have the right to establish such additional product quality
controls as Mortgagee, or said conservator, in its sole judgment exercised in a
commercially reasonable manner, may deem necessary to assure maintenance of the
quality of products sold by Mortgagor under the Trademarks. Mortgagor shall
promptly, upon demand, reimburse and indemnify Mortgagee for all costs and
expenses of Mortgagee, including attorney's fees and expenses so incurred by
Mortgagee, in the exercise of its rights under this Section 9.

     10. Mortgagee's Right to Sue. Subject to the terms of the Intercreditor
Agreement and the last paragraph of Section 2 hereof, after the occurrence
of an Event of Default, Mortgagee shall have the right, but shall in no way
be obligated, to bring suit in its own name to enforce the Copyrights,
Patents, Trademarks and Licenses, and, if Mortgagee shall commence any such
suit, Mortgagor shall, at the request of Mortgagee, do any and all lawful
acts and execute any and all proper documents required by Mortgagee in aid
of such enforcement and Mortgagor shall promptly, upon demand, reimburse
and indemnify Mortgagee for all costs and expenses incurred by Mortgagee,
including attorneys' fees and expenses so incurred by Mortgagee, in the
exercise of its rights under this Section 10 other than costs and expenses
incurred by Mortgagee as a result of its gross negligence or willful
misconduct.

     11.  Waivers. No course of dealing among Mortgagor, Mortgagee and the
Holders, nor any failure to exercise, nor any delay in exercising, on the part
of Mortgagee or Holders, any right, power or privilege hereunder or under the
Indentures or the Guarantor Security Agreement executed by the Mortgagor shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or thereunder preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege.

     12.  Severability. The provisions of this Mortgage are severable, and if
any clause or provision shall be held invalid and unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall

                                      6
<PAGE>

affect only such clause or provision, or part thereof, in such jurisdiction,
and shall not in any manner affect such clause or provision in any other
jurisdiction, or any other clause or provision of this Mortgage in any
jurisdiction.

     13. Modification. No amendment, modification or supplement or waiver of
any provision of this Mortgage nor consent to any departure by Mortgagee
therefrom, shall in any event be effective unless the same shall be in writing
and signed by Mortgagee and the Mortgagor, and approved or consented to by the
Majority Holders and then such amendment, modification or supplement or waiver
or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, that no amendment, modification,
supplement, waiver or consent shall be effective, unless in writing and signed
by each Holder, do any of the following: (1) amend any provision of this
Mortgage that requires the consent of all Holders or consent to or waive any
breach thereof, (2) amend the definition of the term "Majority Holders", (3)
amend this Section 13 or (4) release any substantial portion of the
Collateral. If a fee is to be paid by Mortgagor in connection with any waiver
or amendment hereunder, the agreement evidencing such amendment or waiver may
provide that only Holders executing such agreement by a specified date may
share in such fee (and in such case, such fee shall be divided among the
applicable Holders on a pro rata basis without including the interests of any
Holders who have not timely executed such agreement).

     14.  Cumulative Remedies; Power of Attorney; Effect on Loan Agreement. All
of Mortgagee's rights and remedies with respect to the Copyrights, Patents,
Trademarks and Licenses, whether established hereby or by the Security
Agreement or by the Guarantor Security Agreement executed by Mortgagor, or by
any other agreements or by law shall be cumulative and may be exercised
singularly or concurrently. Subject to the terms of the Intercreditor
Agreement and the last paragraph of Section 2 hereof, upon the occurrence and
during the continuation of an Event of Default, Mortgagor hereby authorizes
Mortgagee to make, constitute and appoint any officer or agent of Mortgagee as
Mortgagee may select, in its sole discretion, as Mortgagor's true and lawful
attorney-in-fact, with power to (i) endorse Mortgagor's name on all
applications, documents, papers and instruments necessary or desirable for
Mortgagee in the use of any or all of the Copyrights, Patents, Trademarks and
Licenses, or (ii) take any other actions with respect to any or all of the
Copyrights, Patents, Trademarks and Licenses as Mortgagee deems to be in its
best interest, or (iii) grant or issue any exclusive or non-exclusive license
under any or all of the Copyrights, Patents, Trademarks or Licenses to any
Person, or (iv) assign, pledge, convey or otherwise transfer title in or
dispose of any or all of the Copyrights, Patents, Trademarks or Licenses to
any Person, or (v) take any other actions with respect to any or all of the
Copyrights, Patents, Trademarks and Licenses as Mortgagee deems to be in its
best interests. Mortgagor hereby ratifies all that such attorney-in-fact shall
lawfully do or cause to be done by virtue hereof. This power of attorney,
being coupled with an interest, shall be irrevocable until the Indenture and
Security Agreement Termination. Mortgagor acknowledges and agrees that this
Mortgage is not intended to limit or restrict in any way the rights and
remedies of Mortgagee or Holders or their respective successors transferees
and assigns under the Other Agreements but rather is intended to facilitate
the exercise of such rights and remedies. Mortgagee and such other parties
shall have, in addition to all other rights and remedies given it or them by
the terms of this Mortgage and the Other Agreements, all rights and remedies
allowed by law and the rights and remedies of a secured party under the
Uniform Commercial Code (or such other applicable law) as enacted in any
jurisdiction in which the Copyrights, Patents, Trademarks or Licenses may be
located.

                                      7
<PAGE>

     15.  Binding Effect; Benefits. This Mortgage, shall be binding upon
Mortgagor and its respective successors and permitted assigns, and shall inure
to the benefit of Mortgagee and Holders, their successors, nominees and
assigns.

     16.  GOVERNING LAW. THIS MORTGAGE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.

     17.  JURY TRIAL WAIVER. MORTGAGOR AND MORTGAGEE HEREBY WAIVE, TO THE EXTENT
PERMITTED BY LAW, TRIAL BY JURY. MORTGAGOR FURTHER WAIVES ANY BOND OR SURETY
OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF
MORTGAGEE.

     18.  Headings. Paragraph headings used herein are for convenience only and
shall not modify the provisions which they precede.

     19.  Further Assurances. Mortgagor agrees to execute and deliver such
further agreements, instruments and documents, and to perform such further
acts, as Mortgagee shall request from time to time in order to carry out the
purpose of this Mortgage and agreements set forth herein.

     20.  Reinstatement. This Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any amount received by Trustee
in respect of the Mortgagor's Obligations (as that term is defined in the
Guarantor Security Agreement executed by the Mortgagor) is rescinded or must
otherwise be restored or returned by Trustee upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Mortgagor or upon the
appointment of any intervenor or conservator of, or trustee or similar
official for, Mortgagor or any substantial part of its assets; or otherwise,
all of though such payments had not been made.

     21.  Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which counterparts taken together shall constitute but
one and the same instruments.

     22.  Notice. Except as otherwise provided herein, all notices, requests
and demands to or upon a party hereto, to be effective, shall be in writing,
return receipt requested, by personal delivery against receipt, by overnight
courier or by facsimile and, unless otherwise expressly provided herein, shall
be deemed to have been validly served, given, delivered or received
immediately when delivered against receipt, one Business Day after deposit
with an overnight courier or, in the case of facsimile notice, when sent,
addressed as set forth in the Indentures.

     23.  Consent. Whenever Trustee's, Majority Holders' or all Holders'
consent is required to be obtained under this Agreement, any of the Other
Agreements or any of the Security Documents as a condition to any action,
inaction, condition or event, except as otherwise specifically provided
herein, Trustee, Majority Holders or all Holders, as applicable, shall be
authorized to give or withhold such consent in their sole and absolute
discretion and to condition its consent upon the giving of additional
Collateral security for the Obligations, the payment of money or any other
matter.

                                      8
<PAGE>

     IN WITNESS WHEREOF, Mortgagor has duly executed this Mortgage in favor of
Mortgagee as of the date first written above.

                                         MERKLE-KORFF INDUSTRIES, INC.

                                         By  /s/ Gordon L. Nelson, Jr.
                                            ------------------------------
                                         Its  Vice President

AGREED AND ACCEPTED THIS
12th day of April, 2002.

U.S. BANK NATIONAL ASSOCIATION,
as Trustee

By   /s/ Richard H. Prokosch
   ----------------------------------
Its   Vice President

                                      9
<PAGE>

STATE OF                                    )
         -----------------------------------
                                            ) SS
COUNTY OF                                   )
          ----------------------------------

         The foregoing Copyright, Patent, Trademark and License Mortgage was
executed and acknowledged before me this ______ day of April, 2002 by
__________________________, personally known to me to be the
______________________ of Kinetek, Inc., a Delaware corporation, on behalf of
such corporation.

                              --------------------------------------
                              Notary Public

                              My Commission expires:

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

                                      10
<PAGE>

STATE OF                                    )
         -----------------------------------
                                            ) SS
COUNTY OF                                   )
          ----------------------------------

     The foregoing Copyright, Patent, Trademark and License Mortgage was
executed and acknowledged before me this ) _____ day of April, 2002, by
________________________, personally known to me to be the
_________________________ U.S. Bank National Association, as Trustee, a
national banking association, on behalf of such association.

                               Notary Public

                               My Commission expires:

                    AFTER FILING RETURN THIS INSTRUMENT T0:
                             Craig A. Currie, Esq.
                             Dorsey & Whitney LLP
                             50 South Sixth Street
                         Minneapolis, Minnesota 55402

                                      11
<PAGE>

                                                                 KINETEK, INC.

                                    EXHIBIT A

                                   Copyrights

                                      None

                                      12
<PAGE>

                                                                 KINETEK, INC.

                                    EXHIBIT B

                                     Patents

                                      None

                                      13
<PAGE>

                                                           KINETEK, INC.

                                    EXHIBIT C

                                   Trademarks

       -------------------------------------------------------------------------
                            TRADEMARKS & TRADENAMES
       -------------------------------------------------------------------------
                         Trademark                   Reg. No. or         Status
                                                     Serial No.
       -------------------------------------------------------------------------
            Kinetek, Inc.     a.   KINETEK           (U.S.) S/N        Pending
                                                     76/184,714
       -------------------------------------------------------------------------
                              b.   KINETEK           (U.S.) S/N        Pending
                                                     76/184,711
       -------------------------------------------------------------------------
                              c.   KINETEK           (U.S.) S/N        Pending
                                                     76/184,717
       -------------------------------------------------------------------------
                              d.   KINETEK
                                   TECHNOLOGY IN
                                   MOTION            (U.S.) S/N        Pending
                                                     76/184,713
      --------------------------------------------------------------------------
                              e.   KINETEK
                                   TECHNOLOGY
                                   IN MOTION         (U.S.) S/N        Pending
                                                     76/184,710
       -------------------------------------------------------------------------
                              f.   KINETEK
                                   TECHNOLOGY
                                   IN MOTION         (U.S.) S/N        Pending
                                                     761184,716
       -------------------------------------------------------------------------
                              g.   KINETEK
                                   TECHNOLOGY
                                   IN MOTION         (U.S.) S/N        Pending
                                   (& DESIGN)        76/184,712
       -------------------------------------------------------------------------
                              h.   KINETEK
                                   TECHNOLOGY
                                   IN MOTION         (U.S.) S/N        Pending
                                   (& DESIGN)        76/184,709
       -------------------------------------------------------------------------
                              i.   KINETEK
                                   TECHNOLOGY
                                   IN MOTION         (U.S.) S/N        Pending
                                   (& DESIGN)        76/184,715
       -------------------------------------------------------------------------

                                      14
<PAGE>

                                                            KINETEK, INC.

                                    EXHIBIT D

                                    Licenses

FreeMarkets Access and Services Agreement between FreeMarkets, Inc. and
Kinetek, Inc., dated April 6, 2001.

                                      15
<PAGE>

                                                                 KINETEK, INC.

                                  SCHEDULE 1

                            Non-Assignable Licenses

FreeMarkets Access and Services Agreement between FreeMarkets, Inc. and
Kinetek, Inc., dated April 6, 2001. The agreement states that Kinetek may not
assign without prior written consent.

                                      16Execution Copy

                 THE MAXIMUM PRINCIPAL AMOUNT OF INDEBTEDNESS
        SECURED BY THIS MORTGAGE IS $1,500,000. SEE SECTION 4.16 HEREIN

================================================================================

                            REAL PROPERTY MORTGAGE,
                    ASSIGNMENT OF RENTS AND FIXTURE FILING

                                      BY
                          ADVANCED D.C. MOTORS, INC.
                                  Mortgagor,

                                      TO
                  U.S. BANK NATIONAL ASSOCIATION, as Trustee,
                                 as Mortgagee

                           Relating to Premises in:
                           Onondaga County, New York

                          Dated as of April 12, 2002

   THIS MORTGAGE DOES NOT COVER REAL PROPERTY PRINCIPALLY IMPROVED OR TO BE
 IMPROVED BY ONE OR MORE STRUCTURES CONTAINING IN THE AGGREGATE NOT MORE THAN
     SIX RESIDENTIAL DWELLING UNITS, EACH HAVING ITS OWN SEPARATE COOKING
                                  FACILITIES.

================================================================================

                        THIS INSTRUMENT PREPARED BY,
                       AND AFTER RECORDING RETURN TO:

                           Craig A. Currie, Esq.
                            Dorsey & Whitney LLP
                           50 South Sixth Street
                        Minneapolis, Minnesota 55402
                               (612) 340-2600

ONONDAGA COUNTY:

SECTION/BLOCK/LOT:

<PAGE>

                            REAL PROPERTY MORTGAGE,
                    ASSIGNMENT OF RENTS AND FIXTURE FILING
                          (Onondaga County, New York)

     THIS REAL PROPERTY MORTGAGE, ASSIGNMENT OF RENTS AND FIXTURE FILING
("Mortgage"), made as of April 12, 2002, is made and executed by ADVANCED D.C.
MOTORS, INC., a New York corporation ("ADC" or "Mortgagor"), being the
successor by merger to DCM Holding Corp., having its principal offices at 6268
East Molloy Road, East Syracuse, New York 13057, in favor of U.S. BANK
NATIONAL ASSOCIATION, as Trustee under those certain Indentures, identified
below, a national banking association with an office at 180 East Fifth Street,
Saint Paul, Minnesota (hereinafter referred to as "Mortgagee") for Holders (as
"Holders" is defined in the Security Agreement referred to below).

                                   RECITALS

     I.  WHEREAS, as of the date hereof Kinetek Industries, Inc. ("Kinetek"),
has issued (i) those certain 5% Senior Notes due 2007 dated as of May 1, 2007,
in the original principal amount of $15,000,000 pursuant to the terms of that
certain Indenture dated as of even date herewith by and among U.S. Bank
National Association, as Trustee, Kinetek Industries, Inc. as Issuer and the
Guarantors identified below (the "5% Indenture") and (ii) those certain 10%
Notes due May 1, 2007, in the original principal amount of $ 11,000,000
(collectively with the 5% Notes, the "Notes" and each, a "Note") pursuant to
the terms of that certain Indenture dated as of even date herewith by and
among U.S. Bank National Association, as Trustee, Kinetek Industries, Inc. as
Issuer and the Guarantors identified below (collectively, with the 5%
Indenture, the "Indentures"); and

     WHEREAS, Kinetek, Inc., a Delaware corporation, Advanced D.C. Holdings,
Inc., a Delaware corporation, Advanced D.C. Motors, Inc., a New York
corporation, Electrical Design and Control Company, a Delaware corporation,
The Imperial Electric Corporation, a Delaware corporation, Merkle-Korff
Industries, Inc., an Illinois corporation, Motion Holdings, Inc., a Delaware
corporation, Motion Control Engineering, Inc., a California corporation. FIR
Group Holdings, Inc., a Delaware corporation and Gear Research, Inc., a
Delaware corporation (collectively, the "Guarantors") have each guaranteed
payment and performance of the Indentures and the Notes pursuant to certain
guarantees contained in the Indentures (collectively, the "Guaranties"); and

     WHEREAS, pursuant to a Security Agreement (the "Security Agreement")
dated as of the date hereof, the parties to the Indentures have secured the
obligations of the Issuer under the Indenture and the Notes, and the
obligations of the Guarantors under the Guarantees, and the other obligations
identified in the Security Agreement, by liens and security interests granted
therein, that are subordinate to the liens and security interests in favor of
Agent and Senior Lenders under the Senior Loan Agreement;

     II.  NOTWITHSTANDING THAT THE AGGREGATE PRINCIPAL AMOUNT OF OBLIGATIONS
(HEREINAFTER DEFINED) MAY BE IN AN AMOUNT IN EXCESS OF $1,500,000, THE MAXIMUM

<PAGE>

PRINCIPAL AMOUNT OF OBLIGATIONS THAT IS OR UNDER ANY CONTINGENCY MAY BE
SECURED BY THE LIEN OF THIS MORTGAGE IS $1,500,000 (HEREINAFTER REFERRED TO AS
THE "MAXIMUM MORTGAGE INDEBTEDNESS"), PLUS THE OTHER AMOUNTS SET FORTH IN, AND
INCURRED BY MORTGAGEE IN ACCORDANCE WITH, SECTION 4.16 HEREOF, INCLUDING
WITHOUT LIMITATION, INTEREST, COSTS AND EXPENSES (INCLUDING REASONABLE
ATTORNEYS' FEES AND DISBURSEMENTS) AND OTHER CHARGES, FEES AND AMOUNTS
INCURRED BY OR ON BEHALF OF MORTGAGEE IN ORDER TO PRESERVE AND MAINTAIN THIS
MORTGAGE (AND THE LIEN THEREOF) AND THE MORTGAGED PROPERTY, INCLUDING PAYMENTS
BY MORTGAGEE AND/OR HOLDERS OF TAXES, ASSESSMENTS AND INSURANCE PREMIUMS AS
PROVIDED HEREIN AND THEREIN.

     III.  Terms used and not otherwise defined herein shall have the meanings
ascribed to them in the Security Agreement.

                               GRANTING CLAUSES

     To partially secure the payment of the indebtedness evidenced by the
Notes and the payment of all amounts due under and the performance and
observance of all covenants and conditions contained in this Mortgage, the
Notes, the Indentures, the Security Agreement and any other documents and
instruments now or hereafter executed by Mortgagor or any party related
thereto or affiliated therewith to evidence, secure or guarantee the payment
of all or any portion of the indebtedness under the Notes, the Indentures, the
Security Agreement and any and all renewals, extensions, amendments and
replacements of this Mortgage, the Notes, the Indentures, the Security
Agreement and any such other documents and instruments (the Notes, the
Indentures, the Security Agreement, this Mortgage, such other documents and
instruments now or hereafter executed and delivered in connection with the
Notes, and any and all amendments, renewals, extensions, substitutions,
splitters, severances, and replacements hereof and thereof, being sometimes
referred to collectively as the "Note Instruments") (all indebtedness and
liabilities secured hereby being hereinafter sometimes referred to as
"Obligations"), Mortgagor does hereby convey, mortgage, warrant, assign,
transfer, pledge and deliver to Mortgagee and grant to Mortgagee a security
interest in the following described property subject to the terms and
conditions herein:

          (A) The land located in Onondaga County, New York, legally described
     in attached Exhibit A ("Land");

          (B) All the buildings, structures, improvements and fixtures of
     every kind or nature now or hereafter situated on the Land and all
     machinery, appliances, equipment, furniture and all other personal
     property of every kind or nature which constitute fixtures with respect
     to the Land, together with all extensions, additions, improvements,
     substitutions and replacements of the foregoing ("Improvements");

          (C) All easements, tenements, rights-of-way, vaults, gores of land,
     streets, ways, alleys, passages, sewer rights, water courses, water
     rights and powers and appurtenances in any way belonging, relating or

                                      2
<PAGE>

     appertaining to any of the Land or Improvements, or which hereafter shall
     in any way belong, relate or be appurtenant thereto, whether now owned or
     hereafter acquired ("Appurtenances");

          (D)(i) All judgments, insurance proceeds, awards of damages and
     settlements which may result from any damage to all or any portion of the
     Land, Improvements or Appurtenances or any part thereof or to any rights
     appurtenant thereto;

          (ii) All compensation, awards, damages, claims, rights of action and
     proceeds of or on account of (a) any damage or taking, pursuant to the
     power of eminent domain, of the Land, Improvements or Appurtenances or
     any part thereof, (b) damage to all or any portion of the Land,
     Improvements or Appurtenances by reason of the taking, pursuant to the
     power of eminent domain, of all or any portion of the Land, Improvements,
     Appurtenances or of other property, or (c) the alteration of the grade of
     any street or highway on or about the Land, Improvements, Appurtenances
     or any part thereof; and, except as otherwise provided herein, Mortgagee
     is hereby authorized to collect and receive said awards and proceeds and
     to give proper receipts and acquittances therefor and, except as
     otherwise provided herein, to apply the same toward the payment of the
     indebtedness and other sums secured hereby; and

          (iii) All proceeds, products, replacements, additions,
     substitutions, renewals and accessions of and to the Land, Improvements
     or Appurtenances;

          (E) All rents, issues, profits, income and other benefits now or
     hereafter arising from or in respect of the Land, Improvements or
     Appurtenances (the "Rents"); it being intended that this Granting Clause
     shall constitute an absolute and present assignment of the Rents,
     subject, however, to the conditional permission given to Mortgagor to
     collect and use the Rents as provided in this Mortgage;

          (F) Any and all leases, licenses and other occupancy agreements now
     or hereafter affecting the Land, Improvements or Appurtenances, together
     with all security therefor and guaranties thereof and all monies payable
     thereunder, and all books and records owned by Mortgagor which contain
     evidence of payments made under the leases and all security given
     therefor (collectively, the "Leases"), subject, however, to the
     conditional permission given in this Mortgage to Mortgagor to collect the
     Rents arising under the Leases as provided in this Mortgage;

          (G) Any and all after-acquired right, title or interest of Mortgagor
     in and to any of the property described in the preceding Paragraphs A-F;
     and

          (H) The proceeds from the sale, transfer, pledge or other
     disposition of any or all of the property described in the preceding
     Paragraphs A-G;

     All of the mortgaged property described in the preceding Paragraphs A-H
is hereinafter referred to as the "Mortgaged Property."

     Notwithstanding any other provision contained herein, the security
interest granted by the Mortgagor to the Mortgagee, and any other rights of

                                      3
<PAGE>

the Mortgagee with respect to the Collateral described herein, pursuant to
this Mortgage, to secure the Obligations shall be (i) subordinate and junior
in priority to the Liens granted to the Senior Agent and the Senior Lenders
pursuant to the Senior Loan Agreement or any other Senior Security Documents
(the "Senior Lender Liens"), and (ii) subject to the terms and conditions of
the Intercreditor Agreement. `

                                 ARTICLE ONE

                            COVENANTS OF MORTGAGOR

           Mortgagor covenants and agrees with Mortgagee as follows:

     1.1.  Performance under Security Agreement, Notes, Mortgage and Other Note
Instruments. Mortgagor shall perform, observe and comply with or cause to be
performed, observed and complied with in a complete and timely manner all
provisions hereof, of the Indentures, the Security Agreement and of the Notes,
every other Note Instrument and every instrument evidencing or securing
Obligations.

     1.2.  General Covenants and Representations. Mortgagor covenants,
represents and warrants that as of the date hereof and at all times thereafter
during the term hereof: (a) Mortgagor is seized of an indefeasible estate in
fee simple in that portion of the Mortgaged Property which is real property,
and has good and absolute title to it and the balance of the Mortgaged
Property free and clear of all liens, security interests, charges and
encumbrances whatsoever, except those set forth on Schedule B of the loan
policy of title insurance accepted by Mortgagee insuring the lien of this
Mortgage (such liens, security interests, charges and encumbrances being
hereinafter referred to as the "Permitted Encumbrances"); and (b) Mortgagor
will maintain and preserve the lien of this Mortgage as a second priority lien
on the Mortgaged Property, subject only to the Senior Lender Liens and the
Permitted Encumbrances until Obligations have been paid in full and the
Indentures, and the Security Agreement have been terminated.

     1.3.  Compliance with Laws and Other Restrictions. Mortgagor covenants and
represents that the Land and the Improvements and the use thereof presently
comply with, and, to the extent required by the Security Agreement, will
continue to comply with, all applicable restrictive covenants, zoning and
subdivision ordinances and building codes, licenses, health and environmental
laws and regulations and all other applicable laws, ordinances, rules and
regulations.

     1.4.  Taxes and Other Charges.

          1.4.1. Taxes and Assessments. Mortgagor shall pay promptly when due
     all taxes, assessments, rates, dues, charges, fees, levies, fines,
     impositions, liabilities, obligations, liens and encumbrances of every
     kind and nature whatsoever now or hereafter imposed, levied or assessed
     upon or against the Mortgaged Property or any part thereof, or upon or
     against this Mortgage or Obligations; provided, however, that Mortgagor
     may in good faith contest the validity, applicability or amount of any
     tax, assessment or other charge, if, on or before the due date of the
     asserted tax, assessment, or other charge, Mortgagor shall obtain an
     endorsement, in form and substance satisfactory to Mortgagee, to the

                                      4
<PAGE>

     policy of title insurance issued to Mortgagee insuring the lien of this
     Mortgage, insuring over such tax, assessment or other charge and if
     Mortgagor otherwise complies with any provisions which may be set forth
     in the Security Agreement regarding the contest of taxes.

          1.4.2. Taxes Affecting Interest of Mortgagee and Holders. If any
     state, federal, municipal or other governmental law, order, rule or
     regulation, which becomes effective subsequent to the date hereof, in any
     manner changes or modifies existing laws governing the taxation of
     mortgages or debts secured by mortgages, or the manner of collecting
     taxes, so as to impose on the Mortgagee or Holders a tax by reason of its
     ownership of any or all of the Note Instruments or measured by the
     principal amount of Obligations, requires or has the practical effect of
     requiring Mortgagee or Holders to pay any portion of the real estate
     taxes levied in respect of the Mortgaged Property or to pay any tax
     levied in whole or in part in substitution for real estate taxes or
     otherwise affects materially and adversely the rights of Mortgagee or
     Holders in respect of Obligations, this Mortgage, Obligations and all
     interest accrued thereon shall, upon sixty (60) days' notice, become due
     and payable forthwith at the option of Mortgagee, whether or not there
     shall have occurred an Event of Default, provided, however, that, if
     Mortgagor may, without violating or causing a violation of such law,
     order, rule or regulation, pay such taxes or other sums as are necessary
     to eliminate such adverse effect upon the rights of the Mortgagee and
     Holders and does pay such taxes or other sums when due and payable,
     Mortgagee may not elect to declare due Obligations by reason of the
     provisions of this Section 1.4.2.

     1.5.  Mechanic's and Other Liens. Mortgagor shall not permit or suffer any
mechanic's, laborer's, materialman's, statutory or other lien or encumbrance
(other than any lien for taxes and assessments not yet due and payable) to be
created upon or against the Mortgaged Property; provided, however, that
Mortgagor may in good faith, by appropriate proceedings, contest the validity,
applicability or amount of any asserted lien, if Mortgagor shall first obtain
an endorsement, in form and substance satisfactory to Mortgagee, to the loan
policy of title insurance issued to Mortgagee insuring the lien of this
Mortgage, insuring over such asserted lien and if Mortgagor otherwise complies
with any provisions which may be set forth in the Security Agreement regarding
the contest of liens.

     1.6.  Insurance and Condemnation.

          1.6.1. Insurance Policies. Mortgagor shall, at its sole expense,
     obtain for, deliver to, - assign to and maintain for the benefit of
     Mortgagee, until Obligations are paid in full, such policies of insurance
     as are required by the Security Agreement.

          1.6.2. Adjustment of Loss; Application of Proceeds. Subject to the
     terms of the last paragraph of the Granting Clauses herein, the Security
     Agreement or the Intercreditor Agreement, Mortgagee is hereby authorized
     and empowered, at its option, to adjust or compromise any loss under any
     insurance policies covering the Mortgaged Property and to collect and
     receive the proceeds from any such policy or policies. Mortgagor hereby
     irrevocably appoints Mortgagee as its attorney-in-fact for the purposes

                                      5
<PAGE>

     set forth in the preceding sentence. The entire amount of such proceeds,
     awards or compensation shall be applied as provided in the Security
     Agreement.

          1.6.3. Condemnation Awards. Subject to the terms of the last
     paragraph of the Granting Clauses herein, the Security Agreement and the
     Intercreditor Agreement, Mortgagee shall be entitled to all compensation,
     awards, damages, claims, rights of action and proceeds of, or on account
     of, (i) any damage or taking, pursuant to the power of eminent domain, of
     the Mortgaged Property or any part thereof, (ii) damage to the Mortgaged
     Property by reason of the taking, pursuant to the power of eminent
     domain, of other property, or (iii) the alteration of the grade of any
     street or highway on or about the Mortgaged Property. Mortgagee is hereby
     authorized, at its option, to commence, appear in and prosecute in its
     own or Mortgagor's name any action or proceeding relating to any such
     compensation, awards, damages, claims, rights of action and proceeds and
     to settle or compromise any claim in connection therewith. Mortgagor
     hereby irrevocably appoints Mortgagee as its attorney-in-fact for the
     purposes set forth in the preceding sentence. In the event that Mortgagor
     acquires any real estate to replace all or any portion of the Mortgaged
     Property which became subject to any such action or proceeding, Mortgagor
     shall execute and deliver to Mortgagee a mortgage of such replacement
     property, which mortgage shall be in substantially the same form as this
     Mortgage, and Mortgagor shall deliver to Mortgagee a survey and a title
     insurance policy and such other items in connection with such replacement
     property as Mortgagee may reasonably require, all in form and substance
     satisfactory to Mortgagee.

          1.6.4. Obligation to Repair. If all or any part of the Mortgaged
     Property shall be damaged or destroyed by fire or other casualty or shall
     be damaged or taken through the exercise of the power of eminent domain
     or other cause described in Section 1.6.3, Mortgagor shall promptly and
     with all due diligence restore and repair the Mortgaged Property to the
     extent that the proceeds, award or other compensation, are made available
     to Mortgagor and are sufficient to pay the cost of such restoration or
     repair.

     1.7.  Mortgagee May Pay; Default Rate. Subject to the terms of the last
paragraph of the Granting Clauses herein, the Security Agreement and the
Intercreditor Agreement, upon Mortgagor's failure to pay any amount required
to be paid by Mortgagor under any provision of this Mortgage, Mortgagee may
pay the same. Mortgagor shall pay to Mortgagee, within five (5) days after
demand, the amount so paid by Mortgagee together with interest at a rate equal
to the highest rate payable under the Security Agreement after the occurrence
of an "Event of Default" as such term is defined in the Security Agreement
(the "Default Rate") and the amount so paid by Mortgagee, together with
interest, shall be added to Obligations.

     1.8.  Care of the Mortgaged Property. Mortgagor shall preserve and
maintain the Mortgaged Property in good operating condition. Mortgagor shall
not, without the prior written consent of Mortgagee, permit, commit or suffer
any waste, impairment or deterioration of the Mortgaged Property or of any
part thereof.

     1.9.  Transfer or Encumbrance of the Mortgaged Property. Subject to the
terms of the last paragraph of the Granting Clauses herein, the Security
Agreement and the Intercreditor Agreement, Mortgagor shall not permit or

                                      6
<PAGE>

suffer to occur any sale, assignment, conveyance, transfer, mortgage, lease or
encumbrance of the Mortgaged Property, any part thereof, or any interest
therein, without the prior written consent of Mortgagee having been obtained.

     1.10.  Further Assurances. At anytime and from time to time, upon
Mortgagee's request, Mortgagor shall make, execute and deliver, or cause to be
made, executed and delivered, to Mortgagee, and where appropriate shall cause
to be recorded, registered or filed, and from time to time thereafter to be
re-recorded, re-registered and refiled at such time and in such offices and
places as shall be deemed desirable by Mortgagee, any and all such further
mortgages, security agreements, financing statements, instruments of further
assurance, certificates and other documents as Mortgagee may consider
reasonably necessary in order to effectuate or perfect, or to continue and
preserve the obligations under, this Mortgage.

     1.11.  Assignment of Rents. The assignment of rents, income and other
benefits contained in Section (E) of the Granting Clauses of this Mortgage
shall be fully operative without any further action on the part of either
party, and, specifically, Mortgagee shall be entitled, at its option, subject
to the terms of the last paragraph of the Granting Clauses herein, the
Security Agreement and the Intercreditor Agreement, and upon the occurrence of
an Event of Default hereunder, to all rents, income and other benefits from
the Mortgaged Property, whether or not Mortgagee takes possession of such
property. Such assignment and grant shall continue in effect until Obligations
are paid in full and the Indentures and Security Agreement have been
terminated. The execution of this Mortgage constitutes and evidencing the
irrevocable consent of Mortgagor to the entry upon and taking possession of
the Mortgaged Property by Mortgagee pursuant to such grant, whether or not
foreclosure proceedings have been instituted. Notwithstanding the foregoing,
so long as no Event of Default has occurred, Mortgagor shall have the right
and authority to continue to collect the rents, income and other benefits from
the Mortgaged Property as they become due and payable but not more than thirty
(30) days prior to the due date thereof.

     1.12.  After-Acquired Property. To the extent permitted by, and subject
to, applicable law, the lien of this Mortgage shall automatically attach,
without further act, to all property hereafter acquired by Mortgagor located
in or on, or attached to, the Mortgaged Property or any part thereof.

     1.13.  Leases Affecting Mortgaged Property. Mortgagor shall comply with
and perform in a complete and timely manner all of its obligations as landlord
under all leases affecting the Mortgaged Property or any part thereof. The
assignment contained in Sections (E) and (F) of the Granting Clauses shall not
be deemed to impose upon Mortgagee any of the obligations or duties of the
landlord or Mortgagor provided in any lease.

     1.14.  Management of Mortgaged Property. Mortgagor shall cause the
Mortgaged Property to be managed at all times in accordance with sound
business practice.

     1.15.  Execution of Leases. Subject to the terms of the last paragraph of
the Granting Clauses herein, the Security Agreement and the Intercreditor
Agreement, Mortgagor shall not permit any leases to be made of the Mortgaged
Property, or to be modified, terminated, extended or renewed, without the
prior written consent of Mortgagee.

                                      7
<PAGE>

     1.16.  Expenses. To the extent permitted by applicable law, in the event
of foreclosure hereof, Mortgagee shall be entitled to add to the indebtedness
found to be due by the court a reasonable estimate of expenses to be incurred
after entry of the decree of foreclosure.

     1.17.  Environmental Conditions.

          (a) Mortgagor covenants, warrants and represents that, except as
     disclosed by the environmental assessments identified in Schedule 1
     attached hereto, there are no, nor will there, for so long as any of
     Obligations remain outstanding, be, any Hazardous Materials (as
     hereinafter defined) generated, released, stored, buried or deposited
     over, beneath, in or upon the Mortgaged Property except as such Hazardous
     Materials may be required to be used, stored or transported in connection
     with the permitted uses of the Mortgaged Property and then only to the
     extent permitted by law after obtaining all necessary permits and
     licenses therefor. For purposes of this Mortgage, "Hazardous Materials"
     shall mean and include any pollutants, flammables, explosives, petroleum
     (including crude oil) or any fraction thereof, radioactive materials,
     hazardous wastes, toxic substances or related materials, including,
     without limitation, any substances defined as or included in the
     definition of toxic or hazardous substances, wastes, or materials under
     any federal, state or local laws, ordinances, regulations or guidances
     which regulate, govern, prohibit or pertain to the generation,
     manufacture, use, transportation, disposal, release, storage, treatment
     of, or response or exposure to, toxic or hazardous substances, wastes or
     materials. Such laws, ordinances and regulations are hereinafter
     collectively referred to as the "Hazardous Materials Laws."

          (b) Mortgagor shall, and Mortgagor shall cause all employees,
     Mortgagees, contractors and subcontractors of Mortgagor and any other
     persons from time to time present on or occupying the Mortgaged Property
     to, keep and maintain the Mortgaged Property in all material respects in
     compliance with, and not cause or knowingly permit the Mortgaged Property
     to be in violation of, any applicable Hazardous Materials Laws. Neither
     Mortgagor nor any employees, Mortgagees, contractors or subcontractors of
     Mortgagor or any other persons occupying or present on the Mortgaged
     Property shall use, generate, manufacture, store or dispose of on, under
     or about the Mortgaged Property or transport to or from the Mortgaged
     Property any Hazardous Materials, except as such Hazardous Materials may
     be required to be used, stored or transported in connection with the
     permitted uses of the Mortgaged Property and then only to the extent
     permitted by law after obtaining all necessary permits and licenses
     therefor.

          (c) Mortgagor shall promptly advise Mortgagee in writing of: (i) any
     notices received by Mortgagor (whether such notices are from the
     Environmental Protection Agency, or any other federal, state or local
     governmental agency or regional office thereof) of the violation or
     potential violation occurring on or about the Mortgaged Property of any
     applicable Hazardous Materials Laws; (ii) any and all enforcement,
     cleanup, removal or other governmental or regulatory actions instituted,
     completed or threatened pursuant to any Hazardous Materials Laws; (iii)
     all claims made or threatened by any third party against Mortgagor or the
     Mortgaged Property relating to damage, contribution, cost recovery
     compensation, loss or injury resulting from any Hazardous Materials (the
     matters set forth in clauses (i), (ii) and (iii) above are hereinafter
     referred to as "Hazardous Materials Claims"); and (iv) Mortgagor's

                                      8
<PAGE>

     discovery of any occurrence or condition on any real property adjoining
     or in the vicinity of the Mortgaged Property that could cause the
     Mortgaged Property or any part thereof to be subject to any Hazardous
     Materials Claims, except for the occurrences and conditions disclosed by
     the environmental assessments identified in Schedule 1. Mortgagee shall
     have the right but not the obligation to join and participate in, as a
     party if it so elects, any legal proceedings or actions initiated in
     connection with any Hazardous Materials Claims and Mortgagor shall pay to
     Mortgagee, upon demand, all attorneys' and consultants' fees incurred by
     Mortgagee in connection therewith.

          (d) Mortgagor shall be solely responsible for, and shall indemnify,
     defend and hold harmless Mortgagee and Holders, and the directors,
     officers, employees, Mortgagees, successors and assigns of each of them,
     from and against any loss, damage, cost, expense or liability directly or
     indirectly arising out of or attributable to the use, generation,
     storage, release, threatened release, discharge, disposal or presence
     (whether prior to or during the term of the Notes or otherwise and
     regardless of by whom caused, whether by Mortgagor or any predecessor in
     title or any owner of land adjacent to the Mortgaged Property or any
     other third party, or any employee, Mortgagee, contractor or
     subcontractor of Mortgagor or any predecessor in title or any such
     adjacent land owner or any third person) of Hazardous Materials on, under
     or about the Mortgaged Property; including, without limitation: (i)
     claims of third parties (including governmental agencies) for damages,
     penalties, losses, costs, fees, expenses, damages, injunctive or other
     relief; (ii) third party response costs, clean-up costs, costs and
     expenses of removal and restoration, including fees of attorneys and
     experts, and costs of determining the existence of Hazardous Materials
     and reporting same to any governmental agency; and (iii) any and all
     expenses or obligations, including attorneys' fees, incurred by Mortgagee
     at, before or after any trial or appeal therefrom whether or not taxable
     as costs, including, without limitation, attorneys' fees, witness fees,
     deposition costs, copying and telephone charges and other expenses. The
     obligations of Mortgagor under this subsection shall survive any of the
     foreclosure of this Mortgage, the repayment of Obligations, or other
     satisfaction of the indebtedness, secured by this Mortgage, whether by
     deed in lieu of foreclosure or otherwise.

          (e) Any loss, damage, cost, expense or liability incurred by
     Mortgagee or Holders as a result of a breach or misrepresentation under
     this Section 1.17 by Mortgagor or for which Mortgagor is responsible or
     for which Mortgagor has indemnified Mortgagee and Holders under this
     Section 1.17 shall be paid to Mortgagee or Holders, as the case may be,
     on demand, and, failing prompt reimbursement, such amounts shall,
     together with interest thereon at the Default Rate from the date incurred
     by Mortgagee or Holders, as the case may be, until paid by Mortgagor, be
     added to Obligations, be immediately due and payable and be secured by
     the lien of this Mortgage and the other Note Instruments.

                                      9
<PAGE>

                                 ARTICLE TWO

                                   DEFAULTS

     2.1.  Event of Default. The term "Event of Default," wherever used in this
Mortgage, shall mean any one or more of the following events:

          (a) A failure to keep, perform or observe any covenant, condition or
     agreement on the part of Mortgagor in this Mortgage and such failure is
     not cured to Mortgagee's satisfaction within thirty (30) days after the
     sooner to occur of Mortgagor's receipt of notice of such failure from
     Mortgagee or the date on which such breach first becomes known to any
     officer of Mortgagor.

          (b) The occurrence of an "Event of Default" under and as defined in
     the Security Agreement.

                                ARTICLE THREE

                                   REMEDIES

     3.1.  Acceleration of Maturity. Subject to the terms of the last paragraph
of the Granting Clauses herein, the Security Agreement and the Intercreditor
Agreement, if an Event of Default shall have occurred, Mortgagee may declare
Obligations to be immediately due and payable, and upon such declaration
Obligations shall immediately become and be due and payable without further
demand or notice. The foregoing shall not be in limitation of any provision
contained in any other Loan Instrument, including without limitation any such
provision pursuant to which Obligations become immediately due and payable
without action or election by Mortgagee.

     3.2.  Mortgagee's Power of Enforcement. Subject to the terms of the last
paragraph of the Granting Clauses herein, the Security Agreement and the
Intercreditor Agreement, if an Event of Default shall have occurred, Mortgagee
may, either with or without entry or taking possession as provided in this
Mortgage or otherwise, and without regard to whether or not Obligations shall
have been accelerated, and without prejudice to the right of Mortgagee
thereafter to bring an action of foreclosure or any other action for any
default existing at the time such earlier action was commenced or arising
thereafter, proceed by any appropriate action or proceeding which may be
pursued concurrently or at such time and in such manner as Mortgagee may
determine without impairing or otherwise affecting the other rights and
remedies of Mortgagee: (a) to enforce payment of Obligations or the
performance of any term hereof or any of the other Note Instruments; (b) to
institute appropriate proceedings for foreclosure, either complete or partial
(to the extent permitted by applicable law), whether through judicial action
pursuant to Article 13 of the Real Property Actions and Proceedings Law
("RPAPL") or pursuant to non judicial power of sale pursuant to Article 14 of
the RPAPL and in accordance with Section 3.11 below; (c) to cure such Event of
Default without relieving Mortgagor of any liability in connection therewith,
and as otherwise provided herein and in the Note Instruments; (d) to institute
an action, suit or other proceeding in equity for the specific performance of
any covenant, condition or agreement contained herein or in any Note

                                      10
<PAGE>

Instrument; and (e) to pursue any other remedy available to it elsewhere
hereunder, under any other Note Instrument and as may be required or permitted
by law. Mortgagee may take action either by such proceedings or by the
exercise of its powers with respect to entry or taking possession, or both, as
Mortgagee may determine.

     3.3.  Mortgagee's Right to Enter and Take Possession, Operate and Apply
Income.

          (a) Subject to the terms of the last paragraph of the Granting
     Clauses herein, the Security Agreement and the Intercreditor Agreement,
     if an Event of Default shall have occurred, Mortgagor, upon demand of
     Mortgagee, shall forthwith surrender to Mortgagee (or its Mortgagees,
     nominees or attorneys) the actual possession of the Mortgaged Property,
     and to the extent permitted by law, Mortgagee itself, or by such officers
     or Mortgagees as it may appoint, is hereby expressly authorized to enter
     and take possession of all or any portion of the Mortgaged Property (and
     all books, records and accounts relating thereto), all without incurring
     liability for trespass, damages or otherwise, and may exclude Mortgagor
     and its Mortgagees and employees wholly therefrom.

          (b) If Mortgagor shall for any reason fail to surrender or deliver
     the Mortgaged Property or any part thereof after Mortgagee's demand made
     under Section 3.3(a) above, Mortgagee may obtain a judgment or decree
     conferring on Mortgagee the right to immediate possession or requiring
     Mortgagor to deliver immediate possession of all or part of the Mortgaged
     Property to Mortgagee, to the entry of which judgment or decree Mortgagor
     hereby specifically consents. Mortgagor shall pay to Mortgagee, upon
     demand, all costs and expenses of obtaining such judgment or decree and
     reasonable compensation to Mortgagee, its attorneys and Mortgagees, and
     all such costs, expenses and compensation shall, until paid, be secured
     by the lien of this Mortgage.

          (c) Upon every such entering upon or taking of possession,
     Mortgagee, to the extent permitted by law, may (i) hold, store, use,
     operate, manage and control the Mortgaged Property and conduct the
     business thereof; (ii) complete any construction on the Mortgaged
     Property in such manner and form as Mortgagee deems advisable; (iii) make
     alterations, additions, renewals, replacements and improvements to or on
     the Mortgaged Property; (iv) exercise all rights and powers of the
     Mortgagor with respect to the Mortgaged Property, whether in the name of
     the Mortgagor or otherwise, including, without limitation, the right to
     make, cancel, enforce or modify any Leases, obtain and evict tenants, and
     demand, sue for, collect and receive all earnings, revenues, Rents and
     other income of the Mortgaged Property and every part thereof, including
     those past due and unpaid; and (v) apply the receipts from the Mortgaged
     Property to the payment of Obligations, after deducting therefrom, in
     such order and proportion as Mortgagee in its sole discretion shall
     determine, any law, custom or use to the contrary notwithstanding, all
     expenses of managing, operating and securing the Mortgaged Property
     (including reasonable attorneys' fees and disbursements incurred in
     connection with the aforesaid and all amounts necessary to pay all
     salaries, fees and wages, taxes, charges, claims, assessments, liens,
     insurance and other charges in connection with the operation, maintenance
     and improvement of the Mortgaged Property, as well as just and reasonable

                                      11
<PAGE>

     compensation for the services of Mortgagee, its counsel, Mortgagees and
     employees).

     3.4.  Leases. Subject to the terms of the last paragraph of the Granting
Clauses herein, the Security Agreement and the Intercreditor Agreement,
Mortgagee is authorized to foreclose this Mortgage subject to or prior to the
rights, if any, of the Senior Agent and any or all tenants or other occupants
of the Mortgaged Property. Mortgagee may elect to foreclose the rights of some
subordinate tenants or other occupants while foreclosing subject to the rights
of other subordinate tenants.

     3.5.  Purchase by Mortgagee. Upon any foreclosure sale, Mortgagee may bid
for and purchase all or any portion of the Mortgaged Property and, upon
compliance with the terms of the sale, may hold, retain and possess and
dispose of such property in its own absolute right without further
accountability.

     3.6.  Application of Foreclosure Sale Proceeds. The proceeds of any
foreclosure sale of the Mortgaged Property or any part thereof received by
Mortgagee shall, to the extent permitted by law, be applied by Mortgagee to
the Obligations secured hereby in such order and manner as Mortgagee may elect
in a written notice to Mortgagor given on or before sixty (60) days following
confirmation of the sale and, in the absence of such election, first to the
expenses of sale, then to expenses including attorneys' fees of the
foreclosure proceeding, and then to Obligations.

     3.7.  Application of Indebtedness Toward Purchase Price. Upon any
foreclosure sale, Mortgagee may, to the extent permitted by law, apply any or
all of Obligations to the price paid by Mortgagee at the foreclosure sale or
receive a credit against such price for any or all of Obligations.

     3.8.  Waiver of Appraisement, Valuation, Stay, Extension and Redemption
Laws. Mortgagor hereby waives any and all rights of redemption. Mortgagor
further agrees, to the full extent permitted by law, that in case of an Event
of Default, neither Mortgagor nor anyone claiming through or under it will set
up, claim or seek to take advantage of any reinstatement, appraisement,
valuation, stay or extension laws now or hereafter in force, or take any other
action which would prevent or hinder the enforcement or foreclosure of this
Mortgage or the absolute sale of the Mortgaged Property or the final and
absolute putting into possession thereof, immediately after such sale, of the
purchaser thereat. Mortgagor, for itself and all who may at any time claim
through or under it, hereby waives, to the full extent that it may lawfully so
do, the benefit of all such laws, and any and all right to have the assets
comprising the Mortgaged Property marshalled upon any foreclosure of the lien
hereof and agrees that Mortgagee or any court having jurisdiction to foreclose
such lien may sell the Mortgaged Property in part or as an entirety.

     3.9.  Receiver - in Possession. Subject to the terms of the last paragraph
of the Granting Clauses herein, the Security Agreement and the Intercreditor
Agreement, if an Event of Default shall have occurred, Mortgagee, to the
extent permitted by law and without regard to the value of the Mortgaged
Property or the adequacy of the security for the indebtedness and other sums

                                      12
<PAGE>

secured hereby, shall be entitled as a matter of right and without any
additional showing or proof, at Mortgagee's election, to either: (a) the
appointment by the court of a receiver, trustee, liquidator, conservator or
other custodian of the Mortgaged Property (without the necessity of Mortgagee
posting a bond) to enter upon and take possession of the Mortgaged Property
and to collect all rents, income and other benefits thereof and apply the same
as the court may direct, without regard for the adequacy of the security for
Obligations and without regard for the solvency of Mortgagor or any other
person, firm or entity liable for the payment thereof; or (b) to be placed by
the court into possession of the Mortgaged Property as in possession with the
same power herein granted to a receiver and with all other rights and
privileges of a in possession under law. The right to enter and take
possession of and to manage and operate the Mortgaged Property, and to collect
all Rents, income and other benefits thereof, whether by a receiver or as
otherwise permitted, shall be cumulative to any other right or remedy
hereunder or afforded hereunder or by law and may be exercised concurrently
therewith or independently thereof. Mortgagee shall be liable to account only
for such rents, income and other benefits actually received by Mortgagee,
whether received pursuant to this Section 3.9 or Section 3.3. Notwithstanding
the appointment of any receiver or other custodian, Mortgagee shall be
entitled as pledgee to the possession and control of any cash, deposits. or
instruments at the time held by, or payable or deliverable under the terms of
this Mortgage to Mortgagee. Section 254, subsection 10 of the New York Real
Property Law is incorporated herein, by this reference.

     3.10.  Mortgagor to Pay Obligations in Event of Default; Application of
Monies by Mortgagee.

          (a) Subject to the terms of the last paragraph of the Granting
     Clauses herein, the Security Agreement and the Intercreditor Agreement,
     and upon occurrence of an Event of Default, Mortgagee shall be entitled
     to sue for and to recover judgment against Mortgagor under the Notes and
     for Obligations due and unpaid, together with costs and expenses,
     including, without limitation, the reasonable compensation, expenses and
     disbursements of Mortgagee's Mortgagees, attorneys and other
     representatives, either before, after or during the pendency of any
     proceedings for the enforcement of this Mortgage; and the right of
     Mortgagee to recover such judgment shall not be affected by any taking of
     possession or foreclosure sale hereunder, or by the exercise of any other
     right, power or remedy for the enforcement of the terms of this Mortgage,
     or the foreclosure of the lien hereof.

          (b) In case of a foreclosure sale of all or any part of the
     Mortgaged Property and of the application of the proceeds of sale to the
     payment of Obligations, Mortgagee shall be entitled to enforce all other
     rights and remedies under the Note Instruments.

          (c) Mortgagor hereby agrees, to the extent permitted by law, that no
     recovery of any judgment by Mortgagee under any of the Note Instruments,
     and no attachment or levy of execution upon any of the Mortgaged Property
     or any other property of Mortgagor, shall (except as otherwise provided
     by law) in any way affect the lien of this Mortgage upon the Mortgaged
     Property or any part thereof or any lien, rights, powers or remedies of
     Mortgagee hereunder, but such lien, rights, powers and remedies shall
     continue unimpaired as before until Obligations are paid in full.

                                      13
<PAGE>

          (d) To the extent permitted by applicable law, any monies collected
     or received by Mortgagee under this Section 3.10 shall be applied to the
     payment of compensation, expenses and disbursements of the Mortgagees,
     attorneys and other representatives of Mortgagee, and the balance
     remaining shall be applied to the payment of Obligations, in such order
     and manner as Mortgagee may elect, and any surplus, after payment of all
     Obligations, shall be paid to Mortgagor.

     3.11.  Non-judicial Foreclosure. Mortgagee may sell for cash or upon
credit the Mortgaged Property or any part thereof and all estate, claim,
demand, right, title and interest of Mortgagor therein and rights of
redemption thereof, pursuant to power of sale or otherwise, at one or more
sales, as an entity or in parcels, at such time and place, upon such terms and
after such notice thereof as may be required or permitted by law (including
pursuant to the nonjudicial power of sale enacted in 1998 and codified as
Article 14 of the RPAPL), and in the event of sale, by foreclosure or
otherwise, of less than all of the Mortgaged Property, this Mortgage shall
continue as a lien on the remaining portion of the Mortgaged Property.

     3.12.  No Mortgagee in Possession. Nothing contained in this Article or
elsewhere herein shall be construed as constituting Mortgagee as a "mortgagee
in possession" in the absence of the taking of actual possession of the
Mortgaged Property by Mortgagee. In the exercise of the powers herein granted
to Mortgagee, no liability shall be asserted or enforced against Mortgagee,
all such liability being expressly waived and released by Mortgagor for itself
and its successors and assigns.

     3.13.  Compliance with New York Mortgage Foreclosure Law. In the event
that any provision in this Mortgage shall be inconsistent with any rights or
protections afforded to Holders or Mortgagee under the New York statutes
regarding foreclosure of this Mortgage, including without limitation, Articles
13 and 14 of the RPAPL (collectively, the "Act"), the provisions of the Act
shall take precedence over the provisions of this Mortgage, but shall not
invalidate or render unenforceable any other provision of this Mortgage that
can be reasonably construed in a manner consistent with the Act.

     3.14.  Remedies Cumulative. No right, power or remedy conferred upon or
reserved to Mortgagee or Holders by the Notes, the Indentures, the Security
Agreement, this Mortgage or any other Note Instrument is exclusive of any
other right, power or remedy, but each and every such right, power and remedy
shall be cumulative and concurrent and shall be in addition to any other
right, power and remedy given hereunder or under the Notes, the Security
Agreement or any other Note Instrument, or now or hereafter existing at law,
in equity or by statute.

                                 ARTICLE FOUR

                           MISCELLANEOUS PROVISIONS

     4.1.  Heirs, Successors and Assigns Included in Parties. Whenever
Mortgagor, Mortgagee or Holders are named or referred to herein, heirs and
successors and assigns of such person or entity shall be included, and all
covenants and agreements contained in this Mortgage shall bind the successors

                                      14
<PAGE>

and assigns of Mortgagor, including any subsequent owner of all or any part of
the Mortgaged Property and inure to the benefit of the successors and assigns
of Mortgagee and Holders.

     4.2.  Notices. All notices, requests, reports, demands or other
instruments required or contemplated to be given or furnished under this
Mortgage to Mortgagor or Mortgagee shall be directed to Mortgagor or
Mortgagee, as the case may be, in the manner and at the addresses for notice
set forth in the Security Agreement.

     4.3.  Headings. The headings of the articles, sections, paragraphs and
subdivisions of this Mortgage are for convenience only, are not to be
considered a part hereof, and shall not limit, expand or otherwise affect any
of the terms hereof.

     4.4.  Invalid Provisions. In the event that any of the covenants,
agreements, terms or provisions contained in this Mortgage shall be invalid,
illegal or unenforceable in any respect, the validity of the remaining
covenants, agreements, terms or provisions contained herein (or the
application of the covenant, agreement, term held to be invalid, illegal or
unenforceable, to persons or circumstances other than those in respect of
which it is invalid, illegal or unenforceable) shall be in no way affected,
prejudiced or disturbed thereby.

     4.5.  Changes. Neither this Mortgage nor any term hereof may be released,
changed, waived, discharged or terminated orally, or by any action or
inaction, but only by an instrument in writing signed by the party against
which enforcement of the release, change, waiver, discharge or termination is
sought.

     4.6.  Governing Law. Except with respect to the creation, perfection,
priority and enforcement of the lien and security interest created hereunder,
all of which shall be construed, interpreted, enforced, and governed by the
laws of the State of New York; the validity and interpretation of this
Mortgage shall be governed by and in accordance with the internal laws of the
State of New York, without regard to conflicts of law principles.

     4.7.  Limitation of Interest. In no event whatsoever shall the aggregate
of all amounts deemed interest under the Security Agreement or under the Notes
and charged or collected pursuant to the terms of the Security Agreement or
pursuant to the Notes exceed the highest rate permissible under any law which
a court of competent jurisdiction shall, in a final determination, deem
applicable, all as more specifically provided in the Security Agreement.

     4.8.  Future Advances. This Mortgage is given to secure not only existing
indebtedness, but also future advances (whether made at the option of
Mortgagee, or otherwise) made by Mortgagee under the Security Agreement, the
Indentures, or other Note Instruments, to the same extent as if such future
advances were made on the date of the execution of this Mortgage. Subject to
Section 4.16 below and as set forth therein, the total amount of indebtedness
that may be so secured may decrease or increase from time to time, but the
principal amount of all indebtedness which under any contingency may be
secured hereby shall, in no event, exceed the Maximum Mortgage Indebtedness.

     4.9.  Last Dollar. The lien of this Mortgage shall remain in effect until
the last dollar of Obligations is paid in full and all obligations of
Mortgagee under the Security Agreement have been terminated.

                                      15
<PAGE>

     4.10.  Release. Upon full payment and satisfaction of Obligations and the
termination of all obligations of Mortgagee under the Security Agreement,
Mortgagee shall issue to Mortgagor an appropriate release or satisfaction in
recordable form.

     4.11.  Time of the Essence. Time is of the essence with respect to this
Mortgage and all the provisions hereof.

     4.12.  Other Agreements. In the event of any conflict between the terms of
this Mortgage and the terms of the Security Agreement or the Intercreditor
Agreement, the terms of the Security Agreement and the Intercreditor Agreement
shall control.

     4.13.  Replacement of Notes. One or more of the Notes may from time to
time be replaced, provided that the terms of the Notes following such
replacement, including the principal amount evidenced thereby, shall remain
the same. As the indebtedness secured by this Mortgage shall remain the same,
such replacement of the Notes shall not be construed as a novation and shall
not affect, diminish or abrogate Mortgagor's liability under this Mortgage or
the priority of this Mortgage.

     4.14.  Authority. Mortgagor does hereby represent and certify that the
persons executing this Mortgage on behalf of Mortgagor are the duly elected
officers of Mortgagor and have been fully empowered, by a proper resolution of
the Board of Directors of Mortgagor, to execute and deliver this Mortgage and
all necessary corporate action for the making of such Mortgage has been taken
and done.

     4.15.  Incorporation of Section 254 of the RPL. The provisions of Section
254 of the New York Real Property Law are incorporated herein by this
reference and in the event of any conflict between the provisions of the New
York Real Property Law and the provisions of this Mortgage, the provisions of
said Law shall govern and control, except as otherwise expressly provided
herein or under the Security Agreement.

     4.16.  Maximum Mortgage Indebtedness. Notwithstanding anything to the
contrary in this Mortgage, the maximum aggregate principal amount of
indebtedness that is, or under any contingency may be, secured by this
Mortgage (including Mortgagor's obligation to reimburse advances made by
Mortgagee), either at execution or at any time thereafter, shall not exceed at
any time the Maximum Mortgage Indebtedness, plus amounts which Mortgagee
expends, pursuant to the provisions of this Mortgage or the Security
Agreement, to the extent that any such amounts constitutes payment of (a)
interest, (b) taxes, charges or assessments that may be imposed by law upon
the Mortgaged Property, or any portion thereof, (c) premiums on insurance
policies covering the Mortgaged Property, or any portion thereof, (d) expenses
incurred in upholding the lien of this Mortgage, including the expenses of any
litigation to prosecute or defend the rights and the lien created by this
Mortgage, (e) other charges permitted at law, in equity or in this Mortgage to
protect or preserve all or any portion of the Mortgaged Property, or (f) any
amount, cost or charge to which Mortgagee becomes subrogated, upon payment;
whether under recognized principles of law or equity or under express
statutory authority, then and in each such event, such amount or costs,
together with interest thereon, if any, shall be added to Obligations and
shall be secured by this Mortgage. Mortgagor covenants, warrants and agrees in
favor of Mortgagee that the foregoing limitation on the indebtedness secured
hereby shall not, in any manner, limit or waive any of Mortgagee's rights and

                                      16
<PAGE>

remedies under the other Note Instruments nor limit the amount of any
obligations, liabilities or indebtedness secured by any of the other Note
Instruments or other collateral granted thereunder, nor affect the priority
thereof.

     4.17.  Treatment of Borrowings and Repayments. Pursuant to the terms and
provisions of the Indentures, the amount of Obligations may decrease from time
to time as Mortgagor repays, sums on account of Obligations, all as more fully
described in the Indentures. Notwithstanding the foregoing, so long as the
outstanding principal balance of the Notes exceeds the amount of the Maximum
Mortgage Indebtedness, any payments and repayments of the Notes by Mortgagor
shall not be deemed to be applied against, or to reduce, the portion of the
Notes secured by this Mortgage. For purposes of this Mortgage, such payments
shall instead be deemed to reduce only such portion of the Notes exceeding the
Maximum Mortgage Indebtedness, and secured by collateral other than the
Mortgaged Property.

     4.18.  Reduction of the Mortgage Indebtedness. The portion of Obligations
secured by this Mortgage shall be reduced only by the last and final sums that
Mortgagor repays with respect to the Notes and shall not be reduced by any
intervening repayments of the Notes by Mortgagor. As of the date of recording
of this Mortgage, the outstanding principal balance of the Notes exceeds the
amount of the Maximum Mortgage Indebtedness, so that the Maximum Mortgage
Indebtedness represents only a portion of Obligations actually outstanding.

     4.19.  Waiver. Mortgagor hereby waives to the greatest extent permitted
under law the right to a discharge of any of Obligations under any statute or
rule of law now or hereafter in effect which provides that foreclosure of the
lien of this Mortgage or other remedy exercised under this Mortgage
constitutes the exclusive means for satisfaction of Obligations or which makes
unavailable a deficiency judgment or any subsequent remedy because Mortgagee
elected to proceed with a power of sale foreclosure or such other remedy or
because of any failure by Mortgagee to comply with laws that prescribe
conditions to the entitlement to a deficiency judgment. In the event that,
notwithstanding the foregoing waiver, any court shall for any reason hold that
Mortgagee is not entitled to a deficiency judgment, Mortgagor shall not (i)
introduce in any other jurisdiction such judgment as a defense to enforcement
against Mortgagor of any remedy in the Security Agreement or any other Note
Instrument or (ii) seek to have such judgment recognized or entered in any
other jurisdiction, and any such judgment shall in all events be limited in
application only to the state or jurisdiction where rendered. For purposes of
this subsection the term "deficiency judgment" shall mean a judgment against
Mortgagor personally for that portion of Obligations which is not satisfied by
a foreclosure, exercise of a power of sale or conveyance in lieu of either,
under or pursuant to this Mortgage, to the extent such unsatisfied portion is
recoverable under applicable law. The use of the term "deficiency judgment" as
aforesaid shall never be deemed to limit the obligations of Mortgagor with
respect to the Notes.

     4.20.  Lien Law. Mortgagor shall comply with the provisions of Section 13
of the Lien Law of the State of New York. Mortgagor shall receive the monies
secured hereby and will hold the right to receive such monies as a trust fund
to be applied first for the purpose of paying the cost of the improvement, and
will apply the same first to the payment of the cost of the improvement before
using any part of the total for any other purpose.

                                      17
<PAGE>

     4.21.  Mortgagor's Statement. By signing below, Mortgagor hereby states
that this Mortgage covers real property not principally improved by one or
more structures containing in the aggregate more than six (6) residential
dwelling units, each having its own separate cooking facilities.

     4.22.  Mortgagee's Right to Sever Indebtedness.

          (a) Mortgagor acknowledges that (i) the Mortgaged Property does not
     constitute the sole source of security for the payment and performance of
     Obligations and that Obligations are also secured by property of
     Mortgagor and its affiliates in other jurisdictions (all such property,
     collectively, the "Collateral"), (ii) the number of such jurisdictions
     and the nature of the transaction of which this instrument is a part are
     such that it would have been impracticable for the parties to allocate to
     each item of Collateral a specific loan amount and to execute in respect
     of such item a separate indenture, security agreement, mortgage or other
     appropriate instrument and (iii) Mortgagor intends that Mortgagee have
     the same rights with respect to the Mortgaged Property, in foreclosure or
     otherwise, that Mortgagee would have had if each item of collateral had
     been mortgaged or pledged pursuant to a separate indenture, security
     agreement, mortgage or other appropriate instrument. In furtherance of
     such intent, Mortgagor agrees that Mortgagee may at any time by notice
     (an "Allocation Notice") to Mortgagor allocate a portion of Obligations
     to the Mortgaged Property (the "Allocated Indebtedness") and sever from
     the remaining Obligations the Allocated Indebtedness. From and after the
     giving of an Allocation Notice with respect to the Mortgaged Property,
     Obligations hereunder shall be limited to the extent set forth in the
     Allocation Notice and (as so limited) shall, for all purposes, be
     construed as a separate loan obligation of Mortgagor unrelated to the
     other transactions contemplated by the Security Agreement or any document
     related to either thereof. To the extent that the proceeds of any
     foreclosure of the Mortgaged Property shall exceed the Allocated
     Indebtedness, such proceeds shall belong to Mortgagor and shall not be
     available hereunder to satisfy any of Obligations other than the
     Allocated Indebtedness. In any action or proceeding to foreclose the lien
     of this Mortgage or in connection with any power of sale foreclosure or
     other remedy exercised under this Mortgage commenced after the giving by
     Mortgagee of an Allocation Notice, the Allocation Notice shall be
     conclusive proof of the limits of Obligations hereby secured, and
     Mortgagor may introduce, by way of defense or counterclaim, evidence
     thereof in any such action or proceeding. In no event may Mortgagee
     designate Allocated Indebtedness, the principal amount of which exceeds
     the Maximum Mortgage Indebtedness.

          (b) In the event any instrument in addition to the Allocation Notice
     is necessary to effectuate the provisions of this Section 4.22,
     including, without limitation, any amendment to, or substitution of, this
     Mortgage, any substitute promissory note or affidavit or certificate of
     any kind, Mortgagee may execute, deliver or record such instrument,
     consistent with the provisions hereof and the other Note Instruments, as
     the attorney-in-fact of Mortgagor in the event that Mortgagor fails to
     deliver such instrument within ten (10) business days after receipt by
     Mortgagor of a request therefor. Such power of attorney is coupled with
     an interest and is irrevocable.

                                      18
<PAGE>

         IN WITNESS WHEREOF, Mortgagor has caused this instrument to be
executed by its duly authorized officer as of the day and year first above
written.

                                    ADVANCED D.C. MOTORS, INC., a
                                    New York corporation

                  [SEAL]

                                    By:  /s/ Gordon L. Nelson, Jr.
                                        ---------------------------------
                                    Its:  Vice President
                                         --------------------------------
                                    Print Name:  Gordon L. Nelson, Jr.
                                               --------------------------

                                      19

                                ACKNOWLEDGMENT

STATE OF _________________ )
                                            ) ss:
COUNTY OF ________________ )

         On the ____ day of April, 2002, before me personally came
______________________ to me known, who, being by me duly sworn, did depose
and say that he/she resides at ____________________________________,
__________________, ____________; that he/she is the _______________________
of Advanced D.C. Motors, Inc., a New York corporation, the corporation
described in and which executed the above instrument; that he/she knows the
seal of said corporation (or if corporation has no seal that fact must be
stated); that the seal affixed to said instrument is such corporate seal; that
it was so affixed by order of the board of directors of said corporation, and
that he/she signed his/her name thereto by like authority.

                                       ----------------------------------------
                                        Notary Public

                                      20
<PAGE>

                                      A-2
                                   EXHIBIT A

                               Legal Description

     ALL that tract or parcel of land situated in the Town of Dewitt County of
Onondaga, State of New York, being part of Lot Number 21 bounded and described
as follows:

     BEGINNING at a point in the southerly Highway Boundary of East Molloy
     Road, said point being 32 feet +/- measured at right angles from Station
     72-73.5 +/- of the 1976 survey Baseline for Hosman Road, County Road #71;

     RUNNING THENCE North 86 degrees 31 minutes 50 seconds East along the
     southerly highway boundary of said East Molloy Road, a distance of 269.64
     feet to a point;

     THENCE South 03 degrees 28 minutes 10 seconds East, along the westerly
     boundary of lands now or formerly owned by Syracuse Movers, Inc. (Tax Map
     #24.00-05-004) a distance of 507.75 feet to a point;

     THENCE South 00 degrees 57 minutes 30 seconds East, along the westerly
     line of lands now or formerly owned by Wellco Associates, LLC (Tax Map
     #24.00-05-16.1), a distance of 228.91 feet to a point;

     THENCE 86 degrees 01 minutes 40 seconds West, along the northerly line of
     lands now or formerly owned by Peter A. Low as filed in the Onondaga
     County Clerk's Office as Liber 3309 of deeds page 343, a distance of
     433.14 feet to a point;

     THENCE North 03 degrees 58 minutes 20 seconds West, a distance of 50.00
     feet to a point;

     THENCE North 86 degrees 01 minutes 40 seconds East, along the southerly
     line of lands now or formerly owned by Central City Enterprises Ltd. as
     filed in the Onondaga County Clerk's Office as Liber 3215 of deeds page
     101, a distance of 180.00 feet to a point;

     THENCE North 03 degrees 58 minutes 20 seconds West, along the easterly
     line of lands now or formerly owned by said Central City Enterprises
     Ltd., a distance of 688.69 feet to the point or place of BEGINNING.

TOGETHER WITH A RIGHT OF WAY for ingress and egress over a strip of land 50
feet in width by 259.98 feet deep to Joy Drive and bounded and described as
follows:

     ALL that tract or parcel of land situate in the Town of Dewitt, County of
     Onondaga and State of New York, bounded and described as follows:

     BEGINNING at a point on the easterly line of Joy Drive South 03 degrees
     58 minutes 20 seconds East 684.80 feet measured along the easterly line
     of Joy Drive from the intersection of said easterly line of Joy Drive
     with the southerly line of East Molloy Road;

                                      A-1
<PAGE>

     RUNNING THENCE from the above mentioned point of beginning North 86
     degrees 01 minutes 40 seconds East, a distance of 259.98 feet;

     THENCE South 03 degrees 58 minutes 20 seconds East, a distance of 50 feet
     to a point;

     THENCE South 86 degrees 01 minutes 40 seconds West, a distance of 259.98
     feet to the easterly line of Joy Drive;

     THENCE North 03 degrees 58 minutes 20 seconds West, along the easterly
     line of Joy Drive 50 feet to the place of BEGINNING.

                                     A-2
<PAGE>

                                Schedule 1 - 1
                                  SCHEDULE 1

                           Environmental Assessments

Environmental Assessment dated ___________________, 2001, by GaiaTech
Incorporated.

                                Schedule 1 - 1

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