Document:

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                                    MORTGAGE,
                        SECURITY AGREEMENT AND FINANCING
                      STATEMENT (INCLUDING FIXTURE FILING),
                                       AND
                                   SUPPLEMENT
                                       AND
                         SHORT FORM/MEMORANDUM OF LEASE

                          Dated as of December 15, 2004

                                     between

                                  REXUS L.L.C.,
                               as Lessor/Mortgagee

                                       and

                              ITT INDUSTRIES, INC.,
                               as Lessee/Mortgagor

LOCATION OF MORTGAGED PROPERTY:

Street Address: 4410 & 4450 Fountain Boulevard
                Colorado Springs, Colorado
County:         El Paso County, Colorado

                              Record and Return to:

                                    Jones Day
                              222 East 41st Street
                               New York, NY 10017
                      Attention: Leonard C. Pojednic, Esq.

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

<PAGE>

                        MORTGAGE, SECURITY AGREEMENT AND
                 FINANCING STATEMENT (INCLUDING FIXTURE FILING),
                AND SUPPLEMENT AND SHORT FORM/MEMORANDUM OF LEASE

      THIS MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT (INCLUDING
FIXTURE FILING), AND SUPPLEMENT AND SHORT FORM/MEMORANDUM OF LEASE (this
"Supplement") dated as of December 17, 2004, between REXUS L.L.C., a Delaware
limited liability company with an address at Societe Generale, New York Branch,
1221 Avenue of the Americas, New York, New York 10020 as the lessor/mortgagee
(the "Lessor/Mortgagee"), and ITT INDUSTRIES, INC., an Indiana corporation, with
an address at 4 West Red Oak Lane, White Plains, New York 10604, as
Lessee/Mortgagor (the "Lessee/Mortgagor").

      WHEREAS, Lessor/Mortgagee and Lessee/Mortgagor have executed that certain
Master Lease and Deed of Trust, Deed to Secure Debt and Mortgage dated as of
December 14, 2004 (the "Master Lease");

      WHEREAS the Lessor/Mortgagee is the owner of the land described on
Schedule I attached hereto (the "Land"), and wishes to lease the Land and lease
all Improvements now thereon or which hereafter may be constructed thereon to
the Lessee/Mortgagor;

      NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

      SECTION 1. Definitions; Interpretation. For purposes of this Supplement,
capitalized terms used herein and not otherwise defined herein or in Schedule IV
hereto shall have the meanings assigned to them in Appendix A to the Master
Lease, and the rules of interpretation set forth in such Appendix A shall apply
to this Supplement.

      SECTION 2. The Properties. Effective upon the execution and delivery of
this Supplement by the Lessor/Mortgagee and the Lessee/Mortgagor, the Land, all
Improvements on the Land and all other improvements now on the Land or which
hereafter may be constructed thereon and all Appurtenant Rights with respect
thereto and all Equipment (collectively, the "Subject Property") shall be
subject to the terms and provisions of the Master Lease and the Lessor/Mortgagee
hereby grants, conveys, transfers and assigns to the Lessee/Mortgagor those
interests, rights, titles, estates, powers and privileges provided for in the
Master Lease with respect to the Subject Property.

      SECTION 3. Amendments to Master Lease with Respect to Subject Property.
Effective upon the execution and delivery of this Supplement by the
Lessor/Mortgagee and the Lessee/Mortgagor, the following terms and provisions
shall apply to the Master Lease with respect to the Subject Property:

<PAGE>

      A. Short Form/Memorandum of Lease. The parties hereto set forth the
following information which shall constitute a short form or memorandum of the
Master Lease, as supplemented by this Supplement:

            (a)   The name and address of the Lessor/Mortgagee as set forth in
                  the is:

                        Rexus L.L.C.
                        c/o Societe Generale (Canada), as Lessor Administrator
                        1501 McGill College
                        Bureau 1800
                        Montreal, Quebec, H3A 3MB
                        Canada
                        Attention: Manager, Treasury & Loan Servicing Group

                        with a copy to:

                        Societe Generale, New York Branch
                        1221 Avenue of the Americas
                        New York, New York 10020
                        Attention: President

            (b)   The name and address of the Lessee/Mortgagor as set forth in
                  the Master Lease is:

                        ITT Industries, Inc.
                        4 West Red Oak Lane
                        White Plains, New York 10604
                        Attention: _________________

            (c)   The lease to which this memorandum of lease pertains is the
                  Master Lease as supplemented by this Supplement and the other
                  Supplements.

            (d)   The leased premises are the Subject Property which includes
                  the Land more particularly described on Schedule I attached
                  hereto.

            (e)   The Lessor/Mortgagee acquired title to the Land by deed dated
                  on or about the date hereof and about to be recorded or filed
                  for record in the El Paso County, Colorado Clerk's office.

            (f)   The term of the Master Lease shall commence on the date hereof
                  and shall expire on December 17, 2014 unless earlier
                  terminated in accordance with the terms of the Master Lease,
                  as supplemented by this Supplement.

            (g)   The Master Lease contains certain purchase rights and options
                  during the Lease Term pursuant to which the Lessee/Mortgagor
                  or its designee may acquire the Subject Property.

                                     - 2 -
<PAGE>

            (h)   In addition to those terms referred to herein, the Master
                  Lease contains numerous other terms, covenants and conditions
                  that affect the Subject Property, and notice is hereby given
                  that reference should be had to the Master Lease with respect
                  to the details of such terms, covenants and conditions. A copy
                  of the Master Lease or of the other agreements referenced
                  herein or therein may be obtained from any of the parties
                  hereto at the addresses set forth herein.

      B. Ownership of the Subject Property. The parties hereto intend that for
(i) financial accounting purposes with respect to the Lessee/Mortgagor, (ii)
United States federal and all United States state and local income tax purposes
and (iii) United States state real estate and commercial law and bankruptcy
purposes, (1) the Lease will be treated as a financing arrangement, (2) the
Lessor/Mortgagee will be deemed a lender making a loan to the Lessee/Mortgagor
in an aggregate amount equal to the Original Aggregate Property Cost which loan
is secured by the Properties, and (3) the Lessee/Mortgagor will be treated as
the owner of the Properties described in the Lease Supplements and will be
entitled to all tax benefits ordinarily available to an owner of properties
similar to the Properties for such tax purposes. Nevertheless, the
Lessee/Mortgagor acknowledges and agrees that none of the Lessor/Mortgagee, the
Arranger or any Investor has made any representations or warranties to the
Lessee/Mortgagor concerning the tax, accounting or legal characteristics of the
Operative Documents and that the Lessee/Mortgagor has obtained and relied upon
such tax, accounting and legal advice concerning the Operative Documents as it
deems appropriate. The parties hereto will not take any position inconsistent
with the intentions expressed herein. It is the intent of the parties hereto
that this Lease grants a security interest and mortgage or deed to secure debt
or deed of trust, as the case may be, in and on each Property to the
Lessor/Mortgagee for the benefit of the Lessor/Mortgagee to secure the
performance of the Lessee/Mortgagor under and payment of all amounts under this
Master Lease and the other Operative Documents all as more specifically set
forth in each Lease Supplement. Specifically, without limiting the generality of
the foregoing, the parties hereto intend and agree that in the event of any
insolvency or receivership proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency laws or statute of the United
States of America or any state or commonwealth thereof affecting the
Lessee/Mortgagor, the Lessor/Mortgagee or the Investors or any collection
actions, the transactions evidenced by the Operative Documents shall be regarded
as loans made to the Lessee/Mortgagor by the Lessor/Mortgagee and the Investors
as unrelated third party lenders of the Lessee/Mortgagor.

      C. Grant of Mortgage Lien and Security Interest: Assignment of Rents. To
secure to the Lessor/Mortgagee the payment and performance of all Obligations:

            (a)   Subject to the terms and conditions of the Master Lease as
                  supplemented by this Supplement (including, without
                  limitation, the Lessee/Mortgagor's rights hereunder and
                  thereunder), the Lessee/Mortgagor has caused the
                  Lessor/Mortgagee to hold title to the Subject Property and
                  Lessee/Mortgagor does hereby mortgage, grant, bargain, sell,
                  convey, assign, transfer and set over to the Lessor/Mortgagee,
                  with power of sale, to the extent permitted by Applicable Law:
                  (i) all of the Lessee/Mortgagor's right, title and interest
                  from time to time in the

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<PAGE>

                  Subject Property of whatever nature including, without
                  limitation, Lessee/Mortgagor's leasehold interest under the
                  Master Lease; all condemnation and insurance proceeds relative
                  to the Subject Property and all Profits as defined below; and
                  (ii) all of the Lessee/Mortgagor's right, title and interest
                  in and to all proceeds of the conversion, whether voluntary or
                  involuntary, of any of the above-described property into cash
                  or other liquid claims, including, without limitation, all
                  awards, payments or proceeds, including interest thereon, and
                  the right to receive the same, which may be made as a result
                  of casualty, any exercise of the right of eminent domain or
                  deed in lieu thereof, the alteration of the grade of any
                  street and any injury to or decrease in the value thereof, the
                  foregoing being referred to hereinafter as the "Security
                  Property".

                  TO HAVE AND TO HOLD the Security Property, subject however to
                  Permitted Property Liens (which shall include the items set
                  forth on Schedule II), unto the Lessor/Mortgagee, its
                  successors and assigns forever.

                  (i)   Protective Advances. The Lessor/Mortgagee shall have the
                        right, but not the obligation, to make protective
                        advances with respect to the Security Property for the
                        payment of taxes, assessments, insurance premiums or
                        costs incurred for the protection of the Security
                        Property, and such protective advances, together with
                        interest thereon at the Overdue Rate from the date of
                        each such advance until it is repaid in full, shall be
                        secured by this Supplement to the fullest extent and
                        with the highest priority contemplated by applicable
                        law.

                  (ii)  Mortgage. The Lessee/Mortgagor and the Lessor/Mortgagee
                        intend that this Supplement shall secure
                        Lessee/Mortgagor's obligation to repay the unpaid
                        balance of advances made by the Lessor/Mortgagee and/or
                        the holder hereof under the Master Lease and other
                        Operative Documents to the fullest extent and with the
                        highest priority contemplated by applicable law. The
                        obligations secured hereby shall include, without
                        limitation, all Basic Rent, Accrual Rent and Fixed Rent
                        as well as all Supplemental Rent due from
                        Lessee/Mortgagor under the Master Lease. The maximum
                        amount of advances, exclusive of interest thereon
                        (whether or not identified as interest and including
                        specifically all Accrual Rent under the Master Lease),
                        and exclusive of advances made for the payment of real
                        estate taxes, assessments, insurance premiums and costs
                        incurred for the protection of the Security Property,
                        all of which are also secured by this Supplement, which
                        may be outstanding at any time is One Hundred Twenty
                        Million and 00/100 Dollars ($120,000,000.00).

                                     - 4 -
<PAGE>

            (b)   Subject to the terms and conditions of the Master Lease as
                  supplemented by this Supplement (including, without
                  limitation, the Lessee/Mortgagor's rights hereunder and
                  thereunder so long as no Lease Event of Default has occurred
                  and is continuing), the Lessee/Mortgagor hereby grants to the
                  Lessor/Mortgagee a security interest in the Lessee/Mortgagor's
                  interest in that portion of the Security Property (the "UCC
                  Property") subject to the Uniform Commercial Code of the State
                  of Colorado (the "UCC"). The Master Lease, as supplemented by
                  this Supplement, shall also be deemed to be a security
                  agreement and shall support any financing statement showing
                  the Lessor/Mortgagee's interest as a secured party with
                  respect to any portion of the UCC Property described in such
                  financing statement. The Lessee/Mortgagor agrees, at its sole
                  cost and expense, to execute, deliver and file from time to
                  time such further instruments as may be requested by the
                  Lessor/Mortgagee to confirm and perfect the lien of the
                  security interest in the collateral described in this
                  Supplement.

            (c)   The Lessee/Mortgagor hereby irrevocably assigns, conveys,
                  transfers and sets over unto the Lessor/Mortgagee (subject,
                  however, to the Master Lease and the rights of the
                  Lessee/Mortgagor thereunder and hereunder) any and all
                  subleases or other occupancy agreements now existing, or that
                  may hereafter come into existence with respect to the Subject
                  Property or any part thereof, including any guaranties of such
                  sublease or occupancy agreements (collectively, the
                  "Subleases") and all and every part of the rents, issues and
                  profits (collectively, the "Profits") that may from time to
                  time become due and payable on account of the Subleases,
                  provided, that, unless a Lease Event of Default is continuing,
                  the Lessee/Mortgagor shall have the right to collect and
                  retain such Profits. Upon request of the Lessor/Mortgagee, the
                  Lessee/Mortgagor shall execute and cause to be recorded, at
                  its expense, supplemental or additional assignments of any
                  Subleases of the Subject Property. Upon the occurrence and
                  during the continuance of a Lease Event of Default, the
                  Lessor/Mortgagee is hereby fully authorized and empowered in
                  its discretion (in addition to all other powers and rights
                  herein granted), to apply for and collect and receive all such
                  Profits and enforce such guaranty or guaranties, and all money
                  so received under and by virtue of this assignment shall be
                  applied as further security for the payment and performance of
                  the Obligations secured hereby.

            (d)   Notwithstanding that this Supplement is an absolute assignment
                  of the Profits and the Subleases and not merely the collateral
                  assignment of, or the grant of a lien or security interest in
                  the Profits and the Subleases, the Lessor/Mortgagee grants to
                  the Lessee/Mortgagor a revocable license to collect and
                  receive the Profits and to retain, use and enjoy such Profits.
                  Such license shall be automatically revoked upon the
                  occurrence and during the continuance of any Lease Event of
                  Default.

                                     - 5 -
<PAGE>

D.    Remedies.

            (a)   Upon the occurrence and during the continuance of a Lease
                  Event of Default, each of which are also events of default
                  under this Supplement, the Lessor/Mortgagee may exercise any
                  one or more of the following rights and remedies as it, in its
                  sole discretion, may deem necessary or appropriate:

                  (i)   collect interest on all past due sums at the Overdue
                        Rate;

                  (ii)  terminate the Master Lease and, either in person or by
                        agent, with or without bringing any action or
                        proceeding, or by a receiver appointed by a court, and
                        without regard to the adequacy of security, enter upon
                        and take possession of the Security Property, or any
                        part thereof, in its own name, and do any acts which it
                        deems necessary or desirable to preserve the value,
                        marketability or rentability of the Security Property,
                        or any part thereof or interest therein, to increase the
                        income therefrom or to protect the security hereof and,
                        with or without taking possession of the Security
                        Property, to sue for or otherwise to collect the Profits
                        thereof, including, without limitation, those past due
                        and unpaid, and to apply the same, less costs and
                        expenses of operation and collection, including, without
                        limitation, reasonable attorneys' fees, upon any
                        Obligations secured hereby, all in such order as the
                        Lessor/Mortgagee may determine. The entering upon and
                        taking possession of the Security Property, and the
                        collection of such Profits and the application thereof
                        as aforesaid, shall not cure or waive any Lease Event of
                        Default or notice of a Lease Event of Default hereunder
                        or invalidate any act done in response to such Lease
                        Event of Default and, notwithstanding the continuance in
                        possession of the Lessor/Mortgagee or the collection,
                        receipt and application of Profits by the
                        Lessor/Mortgagee, the Lessor/Mortgagee shall be entitled
                        to exercise every right provided for herein or by law
                        upon the occurrence and during the continuance of any
                        Lease Event of Default, including, without limitation,
                        the right to exercise the power of sale;

                  (iii) declare all sums secured hereby immediately due and
                        payable by delivery to the Lessee/Mortgagor a written
                        declaration of the occurrence and continuance of a Lease
                        Event of Default and deliver a notice of non-judicial
                        foreclosure by power of sale of the Subject Property,
                        and proceed with such non-judicial foreclosure in
                        accordance with Applicable Law;

                  (iv)  in lieu of sale pursuant to the power of sale conferred
                        hereby, foreclose in the manner provided by Applicable
                        Law for the foreclosure of mortgages on real property;

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<PAGE>

                  (v)   whether or not a non-judicial or judicial foreclosure
                        proceeding as described above has been commenced,
                        declare immediately due and payable without notice or
                        demand, as otherwise required hereunder or under
                        Applicable Law, all amounts payable by the
                        Lessee/Mortgagor hereunder or under the other Operative
                        Documents which are then unpaid, with all interest and
                        sums accrued and accelerate payment thereof
                        notwithstanding contrary terms of payment stated therein
                        and exercise all rights and remedies available
                        hereunder, at law, in equity or otherwise;

                  (vi)  as a matter of right, and upon notice to the
                        Lessee/Mortgagor or anyone under the Lessee/Mortgagor
                        and without regard to the adequacy of its security or
                        the then value of the Security Property or the interest
                        of the Lessee/Mortgagor therein, apply to any court
                        having jurisdiction to appoint a receiver or receivers
                        of the Security Property and the Lessee/Mortgagor hereby
                        irrevocably consents to such appointment and, to the
                        extent permitted by Applicable Law, waives notice of any
                        application therefor. Any such receiver or receivers
                        shall have all the usual powers and duties of receivers
                        in like or similar cases and all the powers of the
                        Lessor/Mortgagee provided for above, and shall continue
                        as a receiver and exercise all such powers until the
                        date of confirmation of sale of the Security Property
                        unless such receivership is sooner terminated by the
                        Lessor/Mortgagee in its sole discretion.

                  Upon the occurrence and during the continuance of a Lease
                  Event of Default, the Lessor/Mortgagee shall be entitled to
                  enforce payment and performance of any Obligations secured
                  hereby and to exercise all rights and powers hereunder or any
                  laws now or hereafter in force notwithstanding that some or
                  all of said Obligations secured hereby may now or hereafter be
                  otherwise secured, whether by mortgage, deed of trust, pledge,
                  lien, assignment or otherwise. Neither the acceptance nor the
                  enforcement hereof, whether by court action or pursuant to the
                  power of sale or other powers herein contained, shall
                  prejudice or in any manner affect the Lessor/Mortgagee's right
                  to realize upon or enforce any other security now or hereafter
                  held by the Lessor/Mortgagee, and the Lessor/Mortgagee shall
                  be entitled to enforce the rights and remedies provided for
                  herein and any other security now or hereafter held by the
                  Lessor/Mortgagee in such order and manner as it may in its
                  absolute discretion determine. No remedy conferred upon or
                  reserved to the Lessor/Mortgagee is intended to be exclusive
                  of any other remedy, but each shall be cumulative and shall be
                  in addition to every other remedy given hereby or now or
                  hereafter existing at law or in equity or by statute. Every
                  power or remedy given hereby to the Lessor/Mortgagee or to
                  which the Lessor/Mortgagee may be otherwise entitled, may be
                  exercised, concurrently or independently, from time to time
                  and as often as may be

                                     - 7 -
<PAGE>

                  deemed expedient by the Lessor/Mortgagee, and the
                  Lessor/Mortgagee may pursue inconsistent remedies.

            (b)   Upon the occurrence and during the continuance of a Lease
                  Event of Default, the Lessor/Mortgagee, in addition to and not
                  in lieu of or in diminution of the rights and remedies
                  provided above shall have all of the rights and remedies of a
                  secured party under the UCC, which rights and remedies may be
                  exercised without application to any court to the extent
                  permitted by the UCC.

            (c)   It is the intent of the parties hereto that the Master Lease
                  be treated as a secured borrowing as provided in Section 3B
                  above, and that, upon the occurrence and during the
                  continuance of a Lease Event of Default, the Lessor/Mortgagee
                  shall have remedies provided for herein. In the event that,
                  notwithstanding the intention of the parties, a court of
                  competent jurisdiction determines that, for the purpose of
                  remedies, the transaction contemplated by the Master Lease
                  constitutes a leasing arrangement, the parties hereto
                  acknowledge and agree that the Lessor/Mortgagee shall have, as
                  a result of such determination, in addition to the remedies
                  set forth in this Section 3D(a) above, all of the rights and
                  remedies of a landlord provided for in Article XVI of the
                  Master Lease, provided that the parties hereto acknowledge and
                  agree that it is their intent that the Master Lease be
                  construed as provided in Section 3B above.

      SECTION 4. Lessor/Mortgagee Grant. (a) The Lessor/Mortgagee hereby
unconditionally grants a security interest in and a Lien to the Lessee/Mortgagor
against all of the Lessor/Mortgagee's right, title and interest in and to the
Security Property, which Lien shall be effective only if the Lessor/Mortgagee
shall become the subject of any bankruptcy, insolvency or similar proceeding and
such proceeding shall result in the rejection of the Master Lease. Such Lien
shall secure the satisfaction of the Lessee/Mortgagor's right to damages and
other claims arising out of the rejection of the Master Lease to the extent and
in the manner provided for pursuant to the Operative Documents.

      (b) The Lessee/Mortgagor agrees that the conditional Lien created in
paragraph (a) of this Section 4 will terminate upon the termination of the
Master Lease with respect to the Subject Property for any reason other than a
rejection of the Master Lease in connection with a bankruptcy, insolvency or
similar proceeding with respect to the Lessor/Mortgagee. Lessee/Mortgagor
covenants to promptly deliver any releases or reconveyances reasonably required
by Lessor/Mortgagee to evidence such termination of Lien.

      (c) The Lien created in paragraph (a) of this Section 4 is junior and
subordinate in all respects to the Liens granted by the Lessee/Mortgagor in
favor of the Lessor/Mortgagee pursuant to this Supplement and the other
Operative Documents.

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<PAGE>

      SECTION 5. Ratification; Incorporation. Except as specifically modified
hereby, the terms and provisions of the Master Lease are hereby ratified and
confirmed and remain in full force and effect. The terms of the Master Lease (as
amended by this Supplement) are by this reference incorporated herein and made a
part hereof.

      SECTION 6. Original Supplement. The single executed original of this
Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART" on the
signature page thereof and containing the receipt of the Lessor/Mortgagee
therefor on or following the signature page thereof shall be the original
executed counterpart of this Supplement (the "Original Executed Counterpart").
To the extent that this Supplement constitutes chattel paper, as such term is
defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction, no security interest in this Supplement may be created through the
transfer or possession of any counterpart other than the Original Executed
Counterpart.

      SECTION 7. Applicable Law; Certain Particular Provisions. This Supplement
shall be governed by and construed in accordance with the laws of the
jurisdictions identified in this Section 7 (the "Applicable Law") which shall
for most purposes be the laws of the State of New York; provided, however, that
the provisions of this Supplement relating to the creation, perfection and
enforcement of the lien and security interest created by this Supplement in
respect of the Subject Property and the exercise of each remedy provided hereby,
including the power of foreclosure or power of sale procedures set forth in this
Supplement, shall be governed by and construed in accordance with the internal
law of the State of Colorado, and each of the Lessor/Mortgagee and the
Lessee/Mortgagor agree to submit to jurisdiction and the laying of venue for any
suit on this Supplement in the State of Colorado. The terms and provisions set
forth in Schedule III attached hereto are hereby incorporated by reference as
though fully set forth herein. In the event of any conflict between the terms
and provisions contained in the body of the Master Lease (as amended by this
Supplement) and the terms and provisions set forth in Schedule III, the terms
and provisions set forth in Schedule III shall govern and control.

      SECTION 8. No Merger of Title. There shall be no merger of the Master
Lease (as amended by this Supplement) or of the leasehold estate created thereby
by reason of the fact that the same Person may acquire, own or hold, directly or
indirectly, in whole or in part, (a) the Master Lease (as amended by this
Supplement) or the leasehold estate created thereby or any interest in the
Master Lease (as amended by this Supplement) or such leasehold estate, (b) the
fee estate or ground leasehold estate in the Subject Property, except as may
expressly be stated in a written instrument duly executed and delivered by the
Lessor/Mortgagee.

      SECTION 9. Satisfaction of the Mortgage, Security Interest and Assignment
of Rents and Subleases. If the Lessee/Mortgagor complies with the provisions of
this Supplement and irrevocably pays and performs (to the reasonable
satisfaction of Lessor/Mortgagee) all of the Obligations secured hereby, in
accordance with the provisions of the Master Lease, as supplemented by this
Supplement and the other Operative Documents and in the manner and at the times
set forth therein, without deduction, fraud or delay, then and from thenceforth
this Supplement and the estate hereby granted and created in favor of the
Lessor/Mortgagee, shall cease and become void, anything hereinbefore contained
to the contrary notwithstanding.

                                     - 9 -

<PAGE>

      SECTION 10. Maximum Interest Rate. No provision of this Supplement or any
transaction related thereto shall require the payment or permit the collection
of interest or any other amount in excess of the maximum permitted by Applicable
Law. If any excess of interest or any other amount in such respect is herein or
any other Operative Document provided for, the Lessee/Mortgagor shall not be
obligated to pay such excess interest or any other amounts in excess of the
amount permitted by applicable law, and the right to demand the payment of any
such excess shall be and hereby is waived, and this provision shall control any
other provision of this Supplement and the other Operative Documents.

      SECTION 11. Security Agreement and Fixture Financing Statement. This
Supplement is both a real property mortgage and a "security agreement" within
the meaning of the UCC. The Subject Property includes both real and personal
property and all other rights and interests, whether tangible or intangible in
nature, of Lessee/Mortgagor in the Subject Property. In Section 3.C (b) above,
Lessee/Mortgagor has granted to Lessor/Mortgagee, as security for the
Obligations, a security interest in the UCC Property to the full extent that the
UCC Property may be subject to the UCC. The information contained in this
Section 11 is provided in order that this Supplement shall comply with the
requirements of the UCC for mortgages to be effective as financing statement
filed as a fixture filing. The name of the "debtor" is ITT INDUSTRIES, INC.; the
name of the "secured party" is REXUS L.L.C.; the mailing address of the "secured
party" from which information concerning the security interest may be obtained
and the mailing address of the "debtor" are as set forth in Section 12 of this
Supplement. The types, or the items, of collateral covered hereby consist of the
UCC Property identified in Section 3.C which constitute fixtures or personal
property. The Lessor/Mortgagee is the record owner of the Land.

      SECTION 12. Notices. For purposes of this instrument all notices shall be
in writing and must be given in the manner provided in Section 14.3 of the
Participation Agreement to the addresses set forth in Schedule V hereto.

      SECTION 13. Counterpart Execution. This Supplement may be executed in any
number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts together constituting but one and the same
instrument.

[Signature Blocks on Following Page]

                                     - 10 -

<PAGE>

      IN WITNESS WHEREOF, each of the parties hereto has caused this Supplement
to be duly executed by an officer thereunto duly authorized as of the date and
year first above written.

                                   REXUS L.L.C., as Lessor/Mortgagee

                                         By: /s/ Larry Bowman
                                             ----------------
                                         Name: Larry Bowman
                                         Title: President

                                   ITT INDUSTRIES, INC., as Lessee/Mortgagor

                                         By: /s/ Donald Foley
                                             ----------------
                                         Name: Donald Foley
                                         Title: Senior Vice President,
                                                Treasurer and Director
                                                of Tax

                                      N - 2

<PAGE>

                                   Schedule I

                                Legal Description

LOT 1 IN FOSTER TECHNOLOGICAL CENTER, IN THE CITY OF COLORADO SPRINGS, EL PASO
COUNTY, COLORADO (A PLAT OF WHICH IS RECORDED IN PLAT BOOK D-4 AT PAGE 76 OF THE
RECORDS OF EL PASO COUNTY, COLORADO), TOGETHER WITH A NON-EXCLUSIVE EASEMENT FOR
INGRESS, EGRESS AND PUBLIC UTILITY PURPOSES AS RECORDED IN BOOK 5556 AT PAGE
1087 OF THE EL PASO COUNTY RECORDS.

LOT 2 IN FOSTER TECHNOLOGICAL CENTER, IN THE CITY OF COLORADO SPRINGS, COUNTY OF
EL PASO, STATE OF COLORADO, AS RECORDED IN PLAT BOOK D-4 AT PAGE 76 OF THE
RECORDS OF EL PASO COUNTY, COLORADO AND AS AMENDED BY ENGINEER'S STATEMENT
RECORDED NOVEMBER 16, 1989 IN BOOK 5686 AT PAGE 979 OF THE RECORDS OF EL PASO
COUNTY, COLORADO.

THE ABOVE-DESCRIBED PROPERTY CONTAINS 5.79 ACRES, MORE OR LESS, AND IS SHOWN ON
THAT CERTAIN SURVEY PREPARED BY JOHN KEILERS & ASSOCIATES, BY JOHN KEILERS,
PROFESSIONAL LAND SURVEYOR NO. 23890, DATED DECEMBER 14, 1993.

                                       AND

      property located in the County of El Paso, State of Colorado, to wit:

      LOT 1 IN BLOCK 1 IN GATEWAY SUBDIVISION NO. 13, IN EL PASO COUNTY,
      COLORADO. NOTE: SAID PROPERTY HAS BEEN REPLATTED INTO LOTS 1 AND 2, FOSTER
      TECHNOLOGICAL CENTER AND LOTS 1,2 AND 3, FOSTER TECHNOLOGICAL CENTER
      FILING NO. 2, COUNTY OF EL PASO, STATE OF COLORADO. EXCEPT: 1. LOT 2,
      FOSTER TECHNOLOGICAL CENTER (PARTIAL RELEASE RECORDED AUGUST 26, 1988 IN
      BOOK 5547 AT PAGE 1030). 2. THE MAJORITY OF LOT 1, FOSTER TECHNOLOGICAL
      CENTER (AS DESCRIBED IN PARTIAL RELEASE RECORDED JUNE 27, 1985 IN BOOK
      5026 AT PAGE 103).

<PAGE>

                                   Schedule II

                       Additional Permitted Property Liens

                                      NONE

<PAGE>

                                  Schedule III

                              Local Law Provisions

                                     - 2 -

<PAGE>

                                   Schedule IV

                                  Defined Terms

      "Appurtenant Rights" means, with respect to the Land and the Subject
Property, (i) all agreements, easements, rights of way or use, rights of ingress
or egress, privileges, appurtenances, tenements, and other rights and benefits
at any time belonging or pertaining to the Land and the Subject Property,
including the use of any streets, ways, alleys, vaults or strips of land
adjoining, abutting, adjacent or contiguous to the Land and (ii) all permits,
licenses and rights, whether or not of record, appurtenant to the Land and (iii)
all of the Lessee/Mortgagor's right, title and interest in all general
intangibles relating to the design, development, operation, management and use
of the Subject Property, all certificates of occupancy, zoning variances,
building, use or other permits, approvals, authorizations and consents obtained
from and all materials prepared for filing or filed with any Governmental
Authority in connection with the development, use, operation or management of
the Subject Property, all construction, service, engineering, consulting,
leasing, architectural and other similar contracts concerning the design,
construction, management, operation, occupancy and/or use of the Subject
Property, all architectural drawings, plans, specifications, soil tests,
feasibility studies, appraisals, environmental studies, engineering reports and
similar materials relating to any portion of or all of the Subject Property, and
all payment and performance bonds or warranties or guarantees relating to the
Subject Property, all to the extent assignable.

      "Equipment" means any equipment the removal of which could reasonably be
expected to affect the value or utility of the Land or the Subject Property,
taken together or separately, including heating, electrical, switch gear, power
supply, lighting, plumbing, ventilation, air conditioning and air cooling
systems, refrigerating equipment, generators, locking and unlocking equipment,
communication systems, sprinkler system and fire prevention systems, security
systems and fixtures of all kinds; provided, however, that the term "Equipment"
shall expressly exclude all inventory, furniture and furnishings.

                                     - 3 -

<PAGE>

                                   Schedule V

                               Notice Information

LESSEE/MORTGAGOR

ITT INDUSTRIES, INC.
4 West Red Oak Lane
White Plains, New York 10604
Attention: Donald Foley, Treasurer

with a copy to:

Red Oak Corporate Park
4 West Red Oak Lane
White Plains, New York 10604
Attention: Keith Richey, International Tax Counsel

LESSOR/MORTGAGEE

REXUS L.L.C.
c/o Societe Generale (Canada), as Lessor Administrator
1501 McGill College
Bureau 1800
Montreal, Quebec, H3A 3MB
Canada
Attention: Manager, Treasury & Loan Servicing Group

with a copy to:

Societe Generale, New York Branch
1221 Avenue of the Americas
New York, New York 10020
Attention: President

                                     - 4 -<PAGE>

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

                               OPEN-END MORTGAGE,
                        SECURITY AGREEMENT AND FINANCING
                      STATEMENT (INCLUDING FIXTURE FILING),
                                       AND
                                   SUPPLEMENT
                                       AND
                         SHORT FORM/MEMORANDUM OF LEASE

                          Dated as of December 15, 2004

                                     between

                                  REXUS L.L.C.,
                               as Lessor/Mortgagee

                                       and

                              ITT INDUSTRIES, INC.,
                               as Lessee/Mortgagor

LOCATION OF MORTGAGED PROPERTY:

Street Address:       701 E. Lugbill Road
                      Archbold, Ohio
County:               Fulton County, Ohio

                              Record and Return to:

                                    Jones Day
                              222 East 41st Street
                               New York, NY 10017
                      Attention: Leonard C. Pojednic, Esq.

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

Archbold, Ohio Lease Supplement

<PAGE>

                    OPEN-END MORTGAGE, SECURITY AGREEMENT AND
                 FINANCING STATEMENT (INCLUDING FIXTURE FILING),
                AND SUPPLEMENT AND SHORT FORM/MEMORANDUM OF LEASE

    Maximum Principal Amount Secured Hereunder Not to Exceed $120,000,000.00

      THIS OPEN-END MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT
(INCLUDING FIXTURE FILING), AND SUPPLEMENT AND SHORT FORM/MEMORANDUM OF LEASE
(this "Supplement") dated as of December 17, 2004, between REXUS L.L.C., a
Delaware limited liability company with an address at Societe Generale, New York
Branch, 1221 Avenue of the Americas, New York, New York 10020 as the
lessor/mortgagee (the "Lessor/Mortgagee"), and ITT INDUSTRIES, INC., an Indiana
corporation, with an address at 4 West Red Oak Lane, White Plains, New York
10604, as Lessee/Mortgagor (the "Lessee/Mortgagor").

      WHEREAS, Lessor/Mortgagee and Lessee/Mortgagor have executed that certain
Master Lease and Deed of Trust, Deed to Secure Debt and Mortgage dated as of
December 14, 2004 (the "Master Lease");

      WHEREAS the Lessor/Mortgagee is the owner of the real property legally
described on Schedule I attached hereto, and wishes to lease the land (the
"Land") and lease all Improvements now thereon or which hereafter may be
constructed thereon to the Lessee/Mortgagor;

      NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

      SECTION 1. Definitions; Interpretation. For purposes of this Supplement,
capitalized terms used herein and not otherwise defined herein or in Schedule IV
hereto shall have the meanings assigned to them in Appendix A to the Master
Lease, and the rules of interpretation set forth in such Appendix A shall apply
to this Supplement.

      SECTION 2. The Properties. Effective upon the execution and delivery of
this Supplement by the Lessor/Mortgagee and the Lessee/Mortgagor, the Land, all
Improvements on the Land and all other improvements now on the Land or which
hereafter may be constructed thereon and all Appurtenant Rights with respect
thereto and all Equipment (collectively, the "Subject Property") shall be
subject to the terms and provisions of the Master Lease and the Lessor/Mortgagee
hereby grants, conveys, transfers and assigns to the Lessee/Mortgagor those
interests, rights, titles, estates, powers and privileges provided for in the
Master Lease with respect to the Subject Property.

      SECTION 3. Amendments to Master Lease with Respect to Subject Property.
Effective upon the execution and delivery of this Supplement by the
Lessor/Mortgagee and the Lessee/Mortgagor, the following terms and provisions
shall apply to the Master Lease with respect to the Subject Property:

Archbold, Ohio Lease Supplement

<PAGE>

      A. Short Form/Memorandum of Lease. The parties hereto set forth the
following information which shall constitute a short form or memorandum of the
Master Lease, as supplemented by this Supplement:

            (a)   The name and address of the Lessor/Mortgagee as referenced in
                  the Master Lease and set forth in the Participation Agreement
                  is:

                     Rexus L.L.C.
                     c/o Societe Generale (Canada), as Lessor Administrator
                     1501 McGill College
                     Bureau 1800
                     Montreal, Quebec, H3A 3MB
                     Canada
                     Attention: Manager, Treasury & Loan Servicing Group

                     with a copy to:

                     Societe Generale, New York Branch
                     1221 Avenue of the Americas
                     New York, New York 10020
                     Attention: President

            (b)   The name and address of the Lessee/Mortgagor as set forth in
                  the Master Lease is:

                     ITT Industries, Inc.
                     4 West Red Oak Lane
                     White Plains, New York 10604
                     Attention: _________________________

            (c)   The lease to which this memorandum of lease pertains is the
                  Master Lease as supplemented by this Supplement and the other
                  Supplements.

            (d)   The leased premises are the Subject Property which includes
                  the Land more particularly described on Schedule I attached
                  hereto.

            (e)   The Lessor/Mortgagee acquired title to the Land by deed dated
                  on or about the date hereof and about to be recorded or filed
                  for record in the Recorder's Office of Fulton County, Ohio.

            (f)   The term of the Master Lease shall commence on the date hereof
                  and shall expire on December 17, 2014 unless earlier
                  terminated in accordance with the terms of the Master Lease,
                  as supplemented by this Supplement.

            (g)   The Master Lease contains certain purchase rights and options
                  during the Lease Term pursuant to which the Lessee/Mortgagor
                  or its designee may acquire the Subject Property.

Archbold, Ohio Lease Supplement

                                     - 2 -

<PAGE>

            (h)   In addition to those terms referred to herein, the Master
                  Lease contains numerous other terms, covenants and conditions
                  that affect the Subject Property, and notice is hereby given
                  that reference should be had to the Master Lease with respect
                  to the details of such terms, covenants and conditions. A copy
                  of the Master Lease or of the other agreements referenced
                  herein or therein may be obtained from any of the parties
                  hereto at the addresses set forth herein.

      Lessor/Mortgagee and Lessee/Mortgagor agree to execute and record a
separate document containing information set forth above.

      B. Ownership of the Subject Property. The parties hereto intend that for
(i) financial accounting purposes with respect to the Lessee/Mortgagor, (ii)
United States federal and all United States state and local income tax purposes
and (iii) United States state real estate and commercial law and bankruptcy
purposes, (1) the Master Lease will be treated as a financing arrangement, (2)
the Lessor/Mortgagee will be deemed a lender making a loan to the
Lessee/Mortgagor in an aggregate amount equal to the Original Aggregate Property
Cost which loan is secured by the Properties, and (3) the Lessee/Mortgagor will
be treated as the owner of the Properties described in the Lease Supplements and
will be entitled to all tax benefits ordinarily available to an owner of
properties similar to the Properties for such tax purposes. Nevertheless, the
Lessee/Mortgagor acknowledges and agrees that none of the Lessor/Mortgagee, the
Arranger or any Investor has made any representations or warranties to the
Lessee/Mortgagor concerning the tax, accounting or legal characteristics of the
Operative Documents and that the Lessee/Mortgagor has obtained and relied upon
such tax, accounting and legal advice concerning the Operative Documents as it
deems appropriate. The parties hereto will not take any position inconsistent
with the intentions expressed herein. It is the intent of the parties hereto
that the Master Lease grants a security interest and mortgage or deed to secure
debt or deed of trust, as the case may be, in and on each Property to the
Lessor/Mortgagee for the benefit of the Lessor/Mortgagee to secure the
performance of the Lessee/Mortgagor under and payment of all amounts under this
Master Lease and the other Operative Documents all as more specifically set
forth in each Lease Supplement. Specifically, without limiting the generality of
the foregoing, the parties hereto intend and agree that in the event of any
insolvency or receivership proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency laws or statute of the United
States of America or any state or commonwealth thereof affecting the
Lessee/Mortgagor, the Lessor/Mortgagee or the Investors or any collection
actions, the transactions evidenced by the Operative Documents shall be regarded
as loans made to the Lessee/Mortgagor by the Lessor/Mortgagee and the Investors
as unrelated third party lenders of the Lessee/Mortgagor.

      C. Grant of Mortgage Lien and Security Interest: Assignment of Rents. To
secure to the Lessor/Mortgagee the payment and performance of all Obligations:

            (a)   Subject to the terms and conditions of the Master Lease as
                  supplemented by this Supplement (including, without
                  limitation, the Lessee/Mortgagor's rights hereunder and
                  thereunder), the Lessee/Mortgagor has caused the
                  Lessor/Mortgagee to hold title to the Subject Property and
                  Lessee/Mortgagor does hereby mortgage, grant, bargain, sell,
                  convey,

Archbold, Ohio Lease Supplement

                                     - 3 -

<PAGE>

                  assign, transfer and set over to the Lessor/Mortgagee, with
                  power of sale, to the extent permitted by Applicable Law: (i)
                  all of the Lessee/Mortgagor's right, title and interest from
                  time to time in the Subject Property of whatever nature
                  including, without limitation, Lessee/Mortgagor's leasehold
                  interest under the Master Lease; all condemnation and
                  insurance proceeds relative to the Subject Property and all
                  Profits as defined below; and (ii) all of the
                  Lessee/Mortgagor's right, title and interest in and to all
                  proceeds of the conversion, whether voluntary or involuntary,
                  of any of the above-described property into cash or other
                  liquid claims, including, without limitation, all awards,
                  payments or proceeds, including interest thereon, and the
                  right to receive the same, which may be made as a result of
                  casualty, any exercise of the right of eminent domain or deed
                  in lieu thereof, the alteration of the grade of any street and
                  any injury to or decrease in the value thereof, the foregoing
                  being referred to hereinafter as the "Security Property".

                  TO HAVE AND TO HOLD the Security Property, subject however to
                  Permitted Property Liens (which shall include the items set
                  forth on Schedule II), unto the Lessor/Mortgagee, its
                  successors and assigns forever.

                  (i)   Protective Advances. The Lessor/Mortgagee shall have the
                        right, but not the obligation, to make protective
                        advances with respect to the Security Property for the
                        payment of taxes, assessments, insurance premiums or
                        costs incurred for the protection of the Security
                        Property, and such protective advances, together with
                        interest thereon at the Overdue Rate from the date of
                        each such advance until it is repaid in full, shall be
                        secured by this Supplement to the fullest extent and
                        with the highest priority contemplated by applicable
                        law.

                  (ii)  Mortgage. The Lessee/Mortgagor and the Lessor/Mortgagee
                        intend that this Supplement shall secure
                        Lessee/Mortgagor's obligation to repay the unpaid
                        balance of advances made by the Lessor/Mortgagee and/or
                        the holder hereof under the Master Lease and other
                        Operative Documents to the fullest extent and with the
                        highest priority contemplated by applicable law. The
                        obligations secured hereby shall include, without
                        limitation, all Basic Rent, Accrual Rent and Fixed Rent
                        as well as all Supplemental Rent due from
                        Lessee/Mortgagor under the Master Lease. The maximum
                        amount of advances, exclusive of interest thereon
                        (whether or not identified as interest and including
                        specifically all Accrual Rent under the Master Lease),
                        and exclusive of advances made for the payment of real
                        estate taxes, assessments, insurance premiums and costs
                        incurred for the protection of the Security Property,
                        all of which are also secured by this Supplement, which
                        may be

Archbold, Ohio Lease Supplement

                                     - 4 -

<PAGE>

                        outstanding at any time is One Hundred Twenty Million
                        and 00/100 Dollars ($120,000,000.00).

            (b)   Subject to the terms and conditions of the Master Lease as
                  supplemented by this Supplement (including, without
                  limitation, the Lessee/Mortgagor's rights hereunder and
                  thereunder so long as no Lease Event of Default has occurred
                  and is continuing), the Lessee/Mortgagor hereby grants to the
                  Lessor/Mortgagee a security interest in the Lessee/Mortgagor's
                  interest in that portion of the Security Property (the "UCC
                  Property") subject to the Uniform Commercial Code of the State
                  of Ohio (the "UCC"). The Master Lease, as supplemented by this
                  Supplement, shall also be deemed to be a security agreement
                  and shall support any financing statement showing the
                  Lessor/Mortgagee's interest as a secured party with respect to
                  any portion of the UCC Property described in such financing
                  statement. The Lessee/Mortgagor agrees, at its sole cost and
                  expense, to execute, deliver and file from time to time such
                  further instruments as may be requested by the
                  Lessor/Mortgagee to confirm and perfect the lien of the
                  security interest in the collateral described in this
                  Supplement.

            (c)   The Lessee/Mortgagor hereby irrevocably assigns, conveys,
                  transfers and sets over unto the Lessor/Mortgagee (subject,
                  however, to the Master Lease and the rights of the
                  Lessee/Mortgagor thereunder and hereunder) any and all
                  subleases or other occupancy agreements now existing, or that
                  may hereafter come into existence with respect to the Subject
                  Property or any part thereof, including any guaranties of such
                  sublease or occupancy agreements (collectively, the
                  "Subleases") and all and every part of the rents, issues and
                  profits (collectively, the "Profits") that may from time to
                  time become due and payable on account of the Subleases,
                  provided, that, unless a Lease Event of Default is continuing,
                  the Lessee/Mortgagor shall have the right to collect and
                  retain such Profits. Upon request of the Lessor/Mortgagee, the
                  Lessee/Mortgagor shall execute and cause to be recorded, at
                  its expense, supplemental or additional assignments of any
                  Subleases of the Subject Property. Upon the occurrence and
                  during the continuance of a Lease Event of Default, the
                  Lessor/Mortgagee is hereby fully authorized and empowered in
                  its discretion (in addition to all other powers and rights
                  herein granted), to apply for and collect and receive all such
                  Profits and enforce such guaranty or guaranties, and all money
                  so received under and by virtue of this assignment shall be
                  applied as further security for the payment and performance of
                  the Obligations secured hereby.

            (d)   Notwithstanding that this Supplement is an absolute assignment
                  of the Profits and the Subleases and not merely the collateral
                  assignment of, or the grant of a lien or security interest in
                  the Profits and the Subleases, the Lessor/Mortgagee grants to
                  the Lessee/Mortgagor a revocable license to collect and
                  receive the Profits and to retain, use and enjoy such Profits.

Archbold, Ohio Lease Supplement

                                     - 5 -

<PAGE>

                  Such license shall be automatically revoked upon the
                  occurrence and during the continuance of any Lease Event of
                  Default.

      D.    Remedies.

            (a)   Upon the occurrence and during the continuance of a Lease
                  Event of Default, each of which are also events of default
                  under this Supplement, the Lessor/Mortgagee may exercise any
                  one or more of the following rights and remedies as it, in its
                  sole discretion, may deem necessary or appropriate:

                  (i)   collect interest on all past due sums at the Overdue
                        Rate;

                  (ii)  terminate the Master Lease and, either in person or by
                        agent, with or without bringing any action or
                        proceeding, or by a receiver appointed by a court, and
                        without regard to the adequacy of security, enter upon
                        and take possession of the Security Property, or any
                        part thereof, in its own name, and do any acts which it
                        deems necessary or desirable to preserve the value,
                        marketability or rentability of the Security Property,
                        or any part thereof or interest therein, to increase the
                        income therefrom or to protect the security hereof and,
                        with or without taking possession of the Security
                        Property, to sue for or otherwise to collect the Profits
                        thereof, including, without limitation, those past due
                        and unpaid, and to apply the same, less costs and
                        expenses of operation and collection, including, without
                        limitation, reasonable attorneys' fees, upon any
                        Obligations secured hereby, all in such order as the
                        Lessor/Mortgagee may determine. The entering upon and
                        taking possession of the Security Property, and the
                        collection of such Profits and the application thereof
                        as aforesaid, shall not cure or waive any Lease Event of
                        Default or notice of a Lease Event of Default hereunder
                        or invalidate any act done in response to such Lease
                        Event of Default and, notwithstanding the continuance in
                        possession of the Lessor/Mortgagee or the collection,
                        receipt and application of Profits by the
                        Lessor/Mortgagee, the Lessor/Mortgagee shall be entitled
                        to exercise every right provided for herein or by law
                        upon the occurrence and during the continuance of any
                        Lease Event of Default, including, without limitation,
                        the right to exercise the power of sale;

                  (iii) declare all sums secured hereby immediately due and
                        payable by delivery to the Lessee/Mortgagor a written
                        declaration of the occurrence and continuance of a Lease
                        Event of Default and deliver a notice of non-judicial
                        foreclosure by power of sale of the Subject Property,
                        and proceed with such non-judicial foreclosure in
                        accordance with Applicable Law;

Archbold, Ohio Lease Supplement

                                     - 6 -

<PAGE>

                  (iv)  whether or not a non-judicial or judicial foreclosure
                        proceeding as described above has been commenced,
                        declare immediately due and payable without notice or
                        demand, as otherwise required hereunder or under
                        Applicable Law, all amounts payable by the
                        Lessee/Mortgagor hereunder or under the other Operative
                        Documents which are then unpaid, with all interest and
                        sums accrued and accelerate payment thereof
                        notwithstanding contrary terms of payment stated therein
                        and foreclose against the Security Property in the
                        manner provided by Applicable Law, and exercise all
                        other rights and remedies available hereunder, at law,
                        in equity or otherwise;

                  (v)   as a matter of right, and upon notice to the
                        Lessee/Mortgagor or anyone under the Lessee/Mortgagor
                        and without regard to the adequacy of its security or
                        the then value of the Security Property or the interest
                        of the Lessee/Mortgagor therein, apply to any court
                        having jurisdiction to appoint a receiver or receivers
                        of the Security Property and the Lessee/Mortgagor hereby
                        irrevocably consents to such appointment and, to the
                        extent permitted by Applicable Law, waives notice of any
                        application therefor. Any such receiver or receivers
                        shall have all the usual powers and duties of receivers
                        in like or similar cases and all the powers of the
                        Lessor/Mortgagee provided for above, and shall continue
                        as a receiver and exercise all such powers until the
                        date of confirmation of sale of the Security Property
                        unless such receivership is sooner terminated by the
                        Lessor/Mortgagee in its sole discretion.

                  Upon the occurrence and during the continuance of a Lease
                  Event of Default, the Lessor/Mortgagee shall be entitled to
                  enforce payment and performance of any Obligations secured
                  hereby and to exercise all rights and powers hereunder or any
                  laws now or hereafter in force notwithstanding that some or
                  all of said Obligations secured hereby may now or hereafter be
                  otherwise secured, whether by mortgage, deed of trust, pledge,
                  lien, assignment or otherwise. Neither the acceptance nor the
                  enforcement hereof, whether by court action or pursuant to the
                  power of sale or other powers herein contained, shall
                  prejudice or in any manner affect the Lessor/Mortgagee's right
                  to realize upon or enforce any other security now or hereafter
                  held by the Lessor/Mortgagee, and the Lessor/Mortgagee shall
                  be entitled to enforce the rights and remedies provided for
                  herein and any other security now or hereafter held by the
                  Lessor/Mortgagee in such order and manner as it may in its
                  absolute discretion determine. No remedy conferred upon or
                  reserved to the Lessor/Mortgagee is intended to be exclusive
                  of any other remedy, but each shall be cumulative and shall be
                  in addition to every other remedy given hereby or now or
                  hereafter existing at law or in equity or by statute. Every
                  power or remedy given hereby to the Lessor/Mortgagee or to
                  which the Lessor/Mortgagee may be otherwise entitled, may be
                  exercised,

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<PAGE>

                  concurrently or independently, from time to time and as often
                  as may be deemed expedient by the Lessor/Mortgagee, and the
                  Lessor/Mortgagee may pursue inconsistent remedies.

            (b)   Upon the occurrence and during the continuance of a Lease
                  Event of Default, the Lessor/Mortgagee, in addition to and not
                  in lieu of or in diminution of the rights and remedies
                  provided above shall have all of the rights and remedies of a
                  secured party under the UCC, which rights and remedies may be
                  exercised without application to any court to the extent
                  permitted by the UCC.

            (c)   It is the intent of the parties hereto that the Master Lease
                  be treated as a secured borrowing as provided in Section 3B
                  above, and that, upon the occurrence and during the
                  continuance of a Lease Event of Default, the Lessor/Mortgagee
                  shall have remedies provided for herein. In the event that,
                  notwithstanding the intention of the parties, a court of
                  competent jurisdiction determines that, for the purpose of
                  remedies, the transaction contemplated by the Master Lease
                  constitutes a leasing arrangement, the parties hereto
                  acknowledge and agree that the Lessor/Mortgagee shall have, as
                  a result of such determination, in addition to the remedies
                  set forth in this Section 3D(a) above, all of the rights and
                  remedies of a landlord provided for in Article XVI of the
                  Master Lease, provided that the parties hereto acknowledge and
                  agree that it is their intent that the Master Lease be
                  construed as provided in Section 3B above.

      SECTION 4. Lessor/Mortgagee Grant. (a) The Lessor/Mortgagee hereby
unconditionally grants a security interest in and a Lien to the Lessee/Mortgagor
against all of the Lessor/Mortgagee's right, title and interest in and to the
Security Property, which Lien shall be effective only if the Lessor/Mortgagee
shall become the subject of any bankruptcy, insolvency or similar proceeding and
such proceeding shall result in the rejection of the Master Lease. Such Lien
shall secure the satisfaction of the Lessee/Mortgagor's right to damages and
other claims arising out of the rejection of the Master Lease to the extent and
in the manner provided for pursuant to the Operative Documents.

      (b) The Lessee/Mortgagor agrees that the conditional Lien created in
paragraph (a) of this Section 4 will terminate upon the termination of the
Master Lease with respect to the Subject Property for any reason other than a
rejection of the Master Lease in connection with a bankruptcy, insolvency or
similar proceeding with respect to the Lessor/Mortgagee. Lessee/Mortgagor
covenants to promptly deliver any releases or reconveyances reasonably required
by Lessor/Mortgagee to evidence such termination of Lien.

      (c) The Lien created in paragraph (a) of this Section 4 is junior and
subordinate in all respects to the Liens granted by the Lessee/Mortgagor in
favor of the Lessor/Mortgagee pursuant to this Supplement and the other
Operative Documents.

      SECTION 5. Ratification; Incorporation. Except as specifically modified
hereby, the terms and provisions of the Master Lease are hereby ratified and
confirmed and remain in full

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                                     - 8 -

<PAGE>

force and effect. The terms of the Master Lease (as amended by this Supplement)
are by this reference incorporated herein and made a part hereof.

      SECTION 6. Original Supplement. The single executed original of this
Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART" on the
signature page thereof and containing the receipt of the Lessor/Mortgagee
therefor on or following the signature page thereof shall be the original
executed counterpart of this Supplement (the "Original Executed Counterpart").
To the extent that this Supplement constitutes chattel paper, as such term is
defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction, no security interest in this Supplement may be created through the
transfer or possession of any counterpart other than the Original Executed
Counterpart.

      SECTION 7. Applicable Law; Certain Particular Provisions. This Supplement
shall be governed by and construed in accordance with the laws of the
jurisdictions identified in this Section 7 (the "Applicable Law") which shall
for most purposes be the laws of the State of New York; provided, however, that
the provisions of this Supplement relating to the creation, perfection and
enforcement of the lien and security interest created by this Supplement in
respect of the Subject Property and the exercise of each remedy provided hereby,
including the power of foreclosure or power of sale procedures set forth in this
Supplement, shall be governed by and construed in accordance with the internal
law of the State of Ohio, and each of the Lessor/Mortgagee and the
Lessee/Mortgagor agree to submit to jurisdiction and the laying of venue for any
suit on this Supplement in the State of Ohio. The terms and provisions set forth
in Schedule III attached hereto are hereby incorporated by reference as though
fully set forth herein. In the event of any conflict between the terms and
provisions contained in the body of the Master Lease (as amended by this
Supplement) and the terms and provisions set forth in Schedule III, the terms
and provisions set forth in Schedule III shall govern and control.

      SECTION 8. No Merger of Title. There shall be no merger of the Master
Lease (as amended by this Supplement) or of the leasehold estate created thereby
by reason of the fact that the same Person may acquire, own or hold, directly or
indirectly, in whole or in part, (a) the Master Lease (as amended by this
Supplement) or the leasehold estate created thereby or any interest in the
Master Lease (as amended by this Supplement) or such leasehold estate, (b) the
fee estate or ground leasehold estate in the Subject Property, except as may
expressly be stated in a written instrument duly executed and delivered by the
Lessor/Mortgagee.

      SECTION 9. Satisfaction of the Mortgage, Security Interest and Assignment
of Rents and Subleases. If the Lessee/Mortgagor complies with the provisions of
this Supplement and irrevocably pays and performs (to the reasonable
satisfaction of Lessor/Mortgagee) all of the Obligations secured hereby, in
accordance with the provisions of the Master Lease, as supplemented by this
Supplement and the other Operative Documents and in the manner and at the times
set forth therein, without deduction, fraud or delay, then and from thenceforth
this Supplement and the estate hereby granted and created in favor of the
Lessor/Mortgagee, shall cease and become void, anything hereinbefore contained
to the contrary notwithstanding.

      SECTION 10. Maximum Interest Rate. No provision of this Supplement or any
transaction related thereto shall require the payment or permit the collection
of interest or any other amount in excess of the maximum permitted by Applicable
Law. If any excess of interest

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<PAGE>

or any other amount in such respect is herein or any other Operative Document
provided for, the Lessee/Mortgagor shall not be obligated to pay such excess
interest or any other amounts in excess of the amount permitted by applicable
law, and the right to demand the payment of any such excess shall be and hereby
is waived, and this provision shall control any other provision of this
Supplement and the other Operative Documents.

      SECTION 11. Security Agreement and Fixture Financing Statement. This
Supplement is both a real property mortgage and a "security agreement" within
the meaning of the UCC. The Subject Property includes both real and personal
property and all other rights and interests, whether tangible or intangible in
nature, of Lessee/Mortgagor in the Subject Property. In Section 3.C (b) above,
Lessee/Mortgagor has granted to Lessor/Mortgagee, as security for the
Obligations, a security interest in the UCC Property to the full extent that the
UCC Property may be subject to the UCC. The information contained in this
Section 11 is provided in order that this Supplement shall comply with the
requirements of the UCC for mortgages to be effective as financing statement
filed as a fixture filing. The name of the "debtor" is ITT INDUSTRIES, INC.; the
name of the "secured party" is REXUS L.L.C.; the mailing address of the "secured
party" from which information concerning the security interest may be obtained
and the mailing address of the "debtor" are as set forth in Section 12 of this
Supplement. The types, or the items, of collateral covered hereby consist of the
UCC Property identified in Section 3.C which constitute fixtures or personal
property. The Lessor/Mortgagee is the record owner of the Land.

      SECTION 12. Notices. For purposes of this instrument all notices shall be
in writing and must be given in the manner provided in Section 14.3 of the
Participation Agreement to the addresses set forth in Schedule V hereto.

      SECTION 13. Counterpart Execution. This Supplement may be executed in any
number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts together constituting but one and the same
instrument.

[Signature Blocks on Following Page]

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<PAGE>

      IN WITNESS WHEREOF, each of the parties hereto has caused this Supplement
to be duly executed by an officer thereunto duly authorized as of the date and
year first above written.

                                       REXUS L.L.C., as Lessor/Mortgagee

                                              By: /s/ Larry Bowman
                                                  ----------------
                                              Name: Larry Bowman
                                              Title: President

                                       ITT INDUSTRIES, INC., as Lessee/Mortgagor

                                              By: /s/ Donald Foley
                                                  ----------------
                                              Name: Donald Foley
                                              Title: Senior Vice President,
                                              Treasurer and Director of Tax

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                                      N - 2

<PAGE>

                                   Schedule I

                                Legal Description

Being a parcel of land in the northwest 1/4 of Section 4, Town 6 North, Range 5
East, Archbold Village, German Township, Fulton County, Ohio; more particularly
described as follows:

Commencing at the 1/4 corner on the north side of the above described section;
thence in a southerly direction and binding upon the quarter line a distance of
1078.82 feet to a metal surveyor's stake and the place of beginning; thence
continuing in a southerly direction and binding upon the quarter line a distance
of 550 feet to an anchor post and the north right of way line of Lugbill Road;
thence in a westerly direction and binding upon the north right of way line of
Lugbill Road a distance of 1188 feet to a metal surveyor's stake; thence in a
northerly direction and parallel with quarter line a distance of 550 feet to a
metal surveyor's stake; thence in an easterly direction and parallel with
Lugbill Road a distance of 1188 feet to a metal surveyor's stake and the place
of beginning and containing fifteen (15) acres of land, more or less; subject,
however, to all legal highways and easements of record.

Address of Premises: 701 E. Lugbill Road

                           Archbold, Ohio

Permanent Parcel Number: 17-033388-00.000

Archbold, Ohio Lease Supplement

<PAGE>

                                   Schedule II

                       Additional Permitted Property Liens

                                      NONE

Archbold, Ohio Lease Supplement

<PAGE>

                                  Schedule III

                              Local Law Provisions

Archbold, Ohio Lease Supplement

<PAGE>
                                   Schedule IV

                                  Defined Terms

      "Appurtenant Rights" means, with respect to the Land and the Subject
Property, (i) all agreements, easements, rights of way or use, rights of ingress
or egress, privileges, appurtenances, tenements, and other rights and benefits
at any time belonging or pertaining to the Land and the Subject Property,
including the use of any streets, ways, alleys, vaults or strips of land
adjoining, abutting, adjacent or contiguous to the Land and (ii) all permits,
licenses and rights, whether or not of record, appurtenant to the Land and (iii)
all of the Lessee/Mortgagor's right, title and interest in all general
intangibles relating to the design, development, operation, management and use
of the Subject Property, all certificates of occupancy, zoning variances,
building, use or other permits, approvals, authorizations and consents obtained
from and all materials prepared for filing or filed with any Governmental
Authority in connection with the development, use, operation or management of
the Subject Property, all construction, service, engineering, consulting,
leasing, architectural and other similar contracts concerning the design,
construction, management, operation, occupancy and/or use of the Subject
Property, all architectural drawings, plans, specifications, soil tests,
feasibility studies, appraisals, environmental studies, engineering reports and
similar materials relating to any portion of or all of the Subject Property, and
all payment and performance bonds or warranties or guarantees relating to the
Subject Property, all to the extent assignable.

      "Equipment" means any equipment the removal of which could reasonably be
expected to affect the value or utility of the Land or the Subject Property,
taken together or separately, including heating, electrical, switch gear, power
supply, lighting, plumbing, ventilation, air conditioning and air cooling
systems, refrigerating equipment, generators, locking and unlocking equipment,
communication systems, sprinkler system and fire prevention systems, security
systems and fixtures of all kinds; provided, however, that the term "Equipment"
shall expressly exclude all inventory, furniture and furnishings.

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<PAGE>

                                   Schedule V

                               Notice Information

LESSEE/MORTGAGOR

ITT INDUSTRIES, INC.
4 West Red Oak Lane
White Plains, New York 10604
Attention: Donald Foley, Treasurer

with a copy to:

Red Oak Corporate Park
4 West Red Oak Lane
White Plains, New York 10604

Attention: Keith Richey, International Tax Counsel

LESSOR/MORTGAGEE

REXUS L.L.C.
c/o Societe Generale (Canada), as Lessor Administrator
1501 McGill College
Bureau 1800
Montreal, Quebec, H3A 3MB
Canada
Attention: Manager, Treasury & Loan Servicing Group

with a copy to:

Societe Generale, New York Branch
1221 Avenue of the Americas
New York, New York 10020
Attention: President

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                                     - 4 -

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