Document:

Exhibit 10.5

Return to:

Davis & Boghigian, P.C.
221 Main Street, Suite 301
P.O. Box 525
Nashua, NH 03061-0525

Account #
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              MORTGAGE DEED AND SECURITY AGREEMENT

      This Mortgage Deed and Security Agreement is made this 13th
day of February, 2004, by and between Micronetics, Inc., formerly
Micronetics Wireless, Inc., a Delaware corporation, with a  place
of  business  at 26 Hampshire Drive, Hudson, New Hampshire  03051
(the   "Mortgagor")  and  Banknorth,  N.A.,  a  national  banking
association,  with its principal office at 300  Franklin  Street,
Manchester, New Hampshire and a mailing address of P.O. Box  600,
Manchester, New Hampshire 03105-0600 (the "Mortgagee").

                 KNOW ALL MEN BY THESE PRESENTS

      That  Mortgagor, for consideration paid, hereby irrevocably
grants,  mortgages, transfers and assigns to the  Mortgagee,  the
following tract(s) of land and other property:

      I.    LAND:  Each of those certain parcels of land situated
in  Hudson, New Hampshire, more particularly described in Exhibit
A annexed hereto and hereby made a part hereof (the "Premises").

      II.   IMPROVEMENTS:   All buildings  and  improvements  now
situated  upon the Premises or which may hereafter be constructed
on  the Premises or added thereto, together with all fixtures now
or  hereafter  owned by Mortgagor or in which  Mortgagor  has  an
interest (but only to the extent of such interest) and placed  in
or  upon  the  Premises or the buildings or improvements  thereon
(the "Improvements").

      III.  EASEMENTS:   Any easement, bridge or  right  of  way,
contiguous   or  adjoining  the  Premises  and  the  Improvements
thereon, and all other easements, if any, inuring to the  benefit
of the Premises.

      IV.   PERSONAL  PROPERTY AND FIXTURES:  All the  equipment,
personal property and fixtures of every kind and description  now
or  hereafter owned by the Mortgagor or in which Mortgagor has an
interest  (but only to the extent of such interest) and  situated
or  to  be situated upon the Premises or in any of said buildings
and  Improvements,  together with any renewals,  replacements  or
additions thereto or substitutions therefor, and now or hereafter
located  at,  or  used in connection with the  operation  of  the
Premises or the Improvements.

      All  of which land, Improvements and other property  hereby
granted,  sold  and conveyed, or intended so to  be,  hereinafter
generally referred to as the "Mortgaged Property".

                         TOGETHER WITH:

      A.    PROCEEDS  FOR DAMAGE TO THE MORTGAGED PROPERTY:   All
proceeds  paid for any damage done to the Mortgaged Property,  or
any part thereof, or for any portion thereof appropriated for any
character  of  public or quasipublic use in accordance  with  the
provisions, terms and conditions hereinafter set forth.

      B.   RENTS:  All of the rents, issues, benefits and profits
of   the   Mortgaged  Property  as  provided  in  the  Collateral
Assignment of Leases and Rents of even date herewith delivered by
the Mortgagor to the Mortgagee (the "Collateral Assignment").

      C.    RECORDS:  All of the records and books of account now
or  hereafter  maintained by Mortgagor  in  connection  with  the
operation of the Premises.

      D.   NAME AND GOODWILL:  The right, in event of foreclosure
hereunder of the Mortgaged Property, to take and use any name  by
which  the Mortgaged Property is then known, and the goodwill  of
Mortgagor with respect thereto.

      SUBJECT, HOWEVER, to those certain liens, encumbrances  and
other  matters,  if  any,  set forth in  Exhibit  A  (hereinafter
sometimes referred to as the "Permitted Encumbrances").

      TO  HAVE  AND  TO  HOLD  the Mortgaged  Property  unto  the
Mortgagee, and its successors, and assigns forever, together with
all  and singular the tenements, hereditaments, and appurtenances
belonging or in anyway appertaining thereto, whether now owned or
acquired  hereafter,  with  the  reversions,  remainders,  rents,
issues,  incomes  and profits thereof, and  all  of  the  estate,
right,  title, interest and claim whatsoever which Mortgagor  now
has  or  may hereafter acquire in and to the Mortgaged  Property.
And  Mortgagor does hereby bind itself, its heirs, successors and
assigns,  to  warrant  and  forever  defend  the  same  unto  the
Mortgagee,  or  its  successors, against all  persons  whomsoever
claiming or to claim the same or any part thereof.

     The conveyance is made for the purpose of securing:

           (1)   Payment  of  all principal, interest  and  other
amounts  pursuant to the terms of a promissory note of  Mortgagor
of  even  date  herewith  in the amount  of  Six  Hundred  Thirty
Thousand and No/100ths Dollars ($630,000.00) payable to the order
of  the  Mortgagee and any and all extensions, modifications  and
renewals  thereof  and  substitutions therefor,  such  promissory
note,  as extended, modified, or renewed or its substitution,  is
referred  to  as  the  "Note", and of the  performance  of  every
obligation and agreement of Mortgagor contained in the Note, and;

          (2)  Performance by Mortgagor of all of its obligations
and   payment  of  any  amounts  due  under  (a)  the  Collateral
Assignment and (b) any other document or instrument securing  the
Note;
           (3)   Performance  of  each and  every  obligation  of
Mortgagor contained in this Mortgage and payment of any sums  due
hereunder;

          (4)  Payment of any and all sums or indebtedness now or
hereafter existing and owed to Mortgagee from Mortgagor.

     ARTICLE I - Covenants and Warranties.

     Mortgagor covenants, warrants and agrees as follows:

           1.1   Mortgagor  is lawfully seized of  the  Mortgaged
Property  and has the right to encumber it with the lien  created
by  this  instrument, which lien is subject only to the Permitted
Encumbrances.   Mortgagor will defend the title  thereto  in  any
action  affecting the rights of the Mortgagee hereunder  and  pay
all  costs  of  any such action (including, but not  limited  to,
attorneys'  fees), whether or not such action (i)  progresses  to
judgment, or (ii) is brought by or against the Mortgagee.

          1.2  Mortgagor will pay (before they become delinquent)
all  taxes  and  exhibit the receipts therefor to the  Mortgagee.
The  term  "taxes" as used in the paragraph shall  be  deemed  to
include  all  assessments,  impositions  and  other  governmental
charges, ordinary or extraordinary, foreseen or unforeseen, which
may be levied, assessed or otherwise become a lien upon or charge
against  the Mortgaged Property, or the interest created  therein
by  this  instrument.   If  an Event of  Default  as  defined  in
Article  V hereof shall occur, then, upon written demand  by  the
Mortgagee, the Mortgagor will deposit monthly with the  Mortgagee
or  its duly authorized agent an amount which will create a  fund
sufficient to make each and every payment of taxes in the  future
as the same shall become due and payable.  Such deposits shall be
received and held by the Mortgagee or its agent, in a noninterest
bearing  account, and applied to the payment of each  installment
of  such taxes as it becomes due and payable and Mortgagor  shall
furnish to the Mortgagee or its agent, promptly upon receipt, the
tax   bills  with  respect  thereto.   If  Mortgagor  shall  have
deposited  amounts in the aggregate more than sufficient  to  pay
such  taxes, the excess shall be applied by the Mortgagee  toward
the  deposits  next  required to be  made  hereunder  or  at  its
election  shall  be  repaid  to Mortgagor.   All  of  Mortgagor's
interest in such deposits is hereby assigned by Mortgagor to  the
Mortgagee,  and the Mortgagor hereby pledges to the Mortgagee  an
interest in such deposits, as additional security for the payment
of  the indebtedness secured hereby in the event that an Event of
Default  shall  occur hereunder.  Upon payment  in  full  of  all
indebtedness  secured hereby, any monthly deposits then  held  by
the  Mortgagee or its agent shall be repaid to Mortgagor,  or  as
otherwise may be required by law.

           1.3   Mortgagor  will  also pay  (before  they  become
delinquent)  any  and  all assessments, water,  sewer  and  other
utility charges and all other charges and encumbrances which  are
or may be a lien upon the Mortgaged Property.

           1.4   Mortgagor will commit or permit no waste on  the
Mortgaged  Property  and  will  keep  all  Improvements  now   or
hereafter erected on the Premises in a sound condition and  in  a
first-class state of decoration and repair.

          1.5  Mortgagor will:

                 1.5.1      Promptly  repair,  restore,  rebuild,
replace  or  alter  as  necessary any portion  of  the  Mortgaged
Property  which  may be damaged or destroyed  by  fire  or  other
casualty, or taken by condemnation, as nearly as possible to  the
condition  such  Improvements  were  in  prior  to  such  damage,
destruction  or  taking, without regard to  the  availability  or
adequacy of insurance proceeds or condemnation awards.  Mortgagor
will   give  the  Mortgagee  prompt  notice  of  damage  to  such
Improvements or personal property in excess of $10,000.00;

                1.5.2      Pay when due all claims for labor  and
materials thereon;

                1.5.3     Provide management satisfactory to  the
Mortgagee;

                 1.5.4      Not  remove  or  demolish  any   such
Improvements,   and  make  no  change  or  alteration   to   such
Improvements  as  would change their general character  or  size,
without  the  prior consent of the Mortgagee.  Mortgagor  further
covenants that it will not make, authorize or permit to  be  made
any  structural alterations, or any alteration the estimated cost
of which exceeds $10,000.00, except in such manner and under such
terms and conditions as the Mortgagee may reasonably require.  No
fixtures  or personal property shall be removed from the Premises
or  such Improvements during the course of any work performed  in
accordance  with this subsection except as authorized in  Section
8.10, without the prior consent of the Mortgagee.  The provisions
of  this  subsection  shall apply to any  change,  alteration  or
addition  made or required to be made by Mortgagor in the  course
of  complying with the provisions of any other Section  contained
herein.

           1.6  Mortgagor will continuously operate the Mortgaged
Property  in  material compliance with (a) all  applicable  laws,
ordinances,  rules,  regulations  and  directions  of  government
authorities  having  jurisdiction of the Premises,  and  (b)  the
requirements  of  all  policies of  insurance  on  the  Mortgaged
Property   and   of  the  national  or  local  Boards   of   Fire
Underwriters.  Mortgagor will also procure, pay for and  maintain
all  permits,  licenses and other authorizations needed  for  the
operation of such.

           1.7  Mortgagor will keep proper and separate books  of
account,   in  accordance  with  generally  accepted   accounting
practice, and make, or cause to be made, full and true entries of
all  dealings  with transactions of every kind  relating  to  the
Mortgaged  Property,  which books and records  will  be  open  to
inspection   by  the  Mortgagee,  its  agents,  accountants   and
representatives,  at all reasonable times.   Within  ninety  (90)
days  after  the end of each fiscal year of Mortgagor,  Mortgagor
will  furnish  the  Mortgagee with Mortgagor's  annual  financial
statements,  which  statements shall include a  profit  and  loss
statement, as at the last day of such fiscal year which shall  be
prepared  in  reasonable  detail  in  accordance  with  generally
accepted  accounting practice, and shall be in form  satisfactory
to Mortgagee.  Mortgagor shall also deliver copies of its federal
tax  returns  to Mortgagee at the time it submits  its  financial
statements.

           1.8  All leases of all or any portion of the Mortgaged
Property hereafter made by Mortgagor will be subordinated to  the
lien  created  by this Mortgage, and shall provide that,  at  the
option  of  the Mortgagee, the tenant thereunder shall attorn  to
the  Mortgagee  or  any  assignee of the Mortgagee.   Except  for
leases  at  market rents in the ordinary course of  business,  no
lease  will  be  executed  by  Mortgagor  without  prior  written
approval  of the Mortgagee.  Mortgagor will, from time  to  time,
promptly upon demand, deliver to the Mortgagee a true and correct
schedule of all such leases then in effect, showing the  name  of
the   tenant,  the  space  occupied,  the  rental  rate  and  the
expiration date of the term.

           1.9   The Mortgagor is and will continue to be a  duly
organized and validly existing corporation under the laws of  the
State of Delaware, is duly authorized to do business as a foreign
corporation  in  each  state  in  which  the  character  of   the
properties owned by the Mortgagor, or the nature of the  business
transacted by it therein make such qualifications necessary,  and
is  duly  authorized  to enter into and perform  the  Note,  this
Mortgage and the acts required by them.

           1.10      None of the terms and conditions of the Note
or  this  Mortgage  are beyond its powers or in contravention  or
violation  of  any  provisions  of  New  Hampshire  law,  or   of
organizational  and governing agreements, or of any  contract  to
which it is or may become a party.

           1.11      No litigation or proceeding, governmental or
otherwise,  is  pending, or to the knowledge of  its  principals,
threatened against it, which could have a material adverse effect
on its financial condition or business.

     ARTICLE II - Insurance.

          2.1  Mortgagor will at all times (a) keep the Mortgaged
Property  insured,  for the mutual benefit of Mortgagor  and  the
Mortgagee,  as their respective interests may appear, in  amounts
sufficient  to  prevent  the  Mortgagor  or  the  Mortgagee  from
becoming  a  coinsurer of any loss under the applicable  policies
but  in  any  event  in amounts not less than 100%  of  the  full
replacement  value  of the Mortgaged Property,  against  loss  or
damage  by (i) fire, such other risks and hazards as now  are  or
hereafter may be insured under standard "Extended Coverage" forms
or  endorsements,  and (ii) such other risks  of  damage  as  the
Mortgagee  shall  from time to time reasonably require,  provided
that  insurance against such other risks shall then  be  commonly
carried by prudent owners or lessees of buildings or improvements
in  the  locality  similar in character,  construction,  use  and
occupancy to the Improvements then constituting a portion of  the
Mortgaged Property; and (b) maintain general accident and  public
liability  insurance against all claims for bodily injury,  death
or  property  damage occurring upon, in or about the Premises  or
the   Improvements  thereon,  or  any  vault  space  or  sidewalk
adjoining the Premises, or any area or passageway adjacent to the
Premises  which is under the control of Mortgagor, such insurance
to  afford  protection  to  such  limits  as  the  Mortgagee  may
reasonably require.

          2.2  All such insurance shall be evidenced by valid and
enforceable  policies in form and substance, and issued  by  such
insurers  of recognized responsibility authorized to do  business
in  the  state where the Premises are located, which are approved
by  the  Mortgagee.  The originals of all such policies  provided
for  in  Section 2.1 hereof shall be delivered to  the  Mortgagee
concurrently  with the execution and delivery of  this  Mortgage,
and  thereafter all renewals or replacement policies shall be  so
delivered to the Mortgagee not less than fifteen (15) days  prior
to the expiration date of the policy or policies to be renewed or
replaced,  in  each case accompanied by evidence satisfactory  to
the Mortgagee that all premiums currently payable with respect to
such policies have been paid in full by Mortgagor.

           2.3   All  policies  of  insurance  of  the  character
described in subdivision (a) of Section 2.1 hereof shall:

                2.3.1     Contain a standard noncontributory form
of  mortgage  clause satisfactory to the Mortgagee, which  clause
shall name the Mortgagee;

                2.3.2      Provide that such policies may not  be
canceled  or  amended without at least thirty  (30)  days'  prior
written  notice  (ten (10) days written notice in  the  event  of
nonpayment  of  premiums) to the Mortgagee,  that  the  Mortgagee
shall  in no event be responsible for the payment of any premiums
thereon or assessments thereunder), and that no act of negligence
of Mortgagor, its agents, servants or employees, or any tenant or
other  occupant  of all or any portion of the Mortgaged  Property
which might otherwise result in a forfeiture of such insurance or
any  part  thereof,  shall  in any way  affect  the  validity  or
enforceability  of  such insurance insofar as  the  Mortgagee  is
concerned.

          All policies of insurance of the character described in
subdivision  (b)  of Section 2.1 hereof shall provide  that  such
policies  may not be canceled or amended without at  least  sixty
(60) days prior written notice to the Mortgagee.

           2.4   Mortgagor will furnish to the Mortgagee,  within
ten  (10)  days  after demand, receipted bills or other  evidence
satisfactory to the Mortgagee of payment of all premiums  due  on
all  insurance  policies  required to  be  maintained  hereunder.
Within ten (10) days after written demand by the Mortgagee, if an
Event  of Default defined in Article V hereof shall occur,  then,
upon  written demand by the Mortgagee, the Mortgagor will deposit
monthly with the Mortgagee or its duly authorized agent an amount
sufficient  to  create a fund to make each and every  payment  of
insurance  premiums as and when the same shall become due.   Such
deposits  shall  be  received and held by the  Mortgagee  or  its
agent,  in  a  noninterest bearing account, and  applied  to  the
payment  of  the  premium  for  each  insurance  policy  required
hereunder  as  it  becomes due and payable  and  Mortgagor  shall
furnish to the Mortgagee or its agent, promptly upon receipt, the
insurance  bills with respect thereto.  If Mortgagor  shall  have
deposited  amounts in the aggregate more than sufficient  to  pay
premiums  under  all insurance policies required  hereunder,  the
excess shall be applied by the Mortgagee toward the deposits next
required to be made hereunder or at its election shall be  repaid
to  Mortgagor.  All of Mortgagor's interest in such  deposits  is
hereby  assigned by Mortgagor to the Mortgagee, and the Mortgagor
hereby  pledges to the Mortgagee an interest in such deposit,  as
additional  security for the payment of the indebtedness  secured
hereby  in  the  event  that  an Event  of  Default  shall  occur
hereunder.   Upon  payment  in full of all  indebtedness  secured
hereby,  any monthly deposits then held by the Mortgagee  or  its
agent  shall  be  repaid to Mortgagor, or  as  otherwise  may  be
required by law.

     ARTICLE III - Damage By Fire or Other Casualty.

           3.1  If by reason of any damage or destruction to  the
Mortgaged Property, any sums are paid under any insurance  policy
mentioned  in  or  contemplated by Article II hereof,  such  sums
shall be paid as follows:

                3.1.1      If  the  aggregate insurance  proceeds
received  by  reason of any single instance  of  such  damage  or
destruction shall be $50,000.00 or less, such insurance  proceeds
shall be paid over to the Mortgagee and Mortgagor jointly or,  at
the option of the Mortgagee, to Mortgagor alone, to be held as  a
trust fund to be used first for the payment of the entire cost of
restoring,  repairing,  rebuilding or replacing  the  damaged  or
destroyed Mortgaged Property before using the same for any  other
purpose;  provided, however, that if any Event of  Default  shall
exist hereunder at the time such proceeds are so to be paid over,
such  proceeds shall be paid over to the Mortgagee alone,  to  be
applied  in  the  Mortgagee's discretion to the  payment  of  the
indebtedness  secured  hereby  or the  repair  of  the  Mortgaged
Property.

                3.1.2      If  the  aggregate insurance  proceeds
received  by  reason of any single instance  of  such  damage  or
destruction shall exceed $50,000.00, such proceeds shall be  paid
to the Mortgagee alone, to be applied toward reimbursement of all
costs  and expenses of the Mortgagee in collecting such proceeds,
and then to the repair, restoration, rebuilding or replacement of
that  part of the Mortgaged Property so damaged or destroyed,  or
if  an  uncured  Event  of Default exists,  at  Mortgagee's  sole
discretion  to  the payment of the indebtedness  secured  hereby.
The  Mortgagee  is authorized (i) to adjust and  compromise  such
loss  without  the  consent of the Mortgagor,  (ii)  to  collect,
receive  and  receipt  for  such proceeds  in  the  name  of  the
Mortgagee and the Mortgagor, and (iii) to endorse the Mortgagor's
name upon any draft or check in payment thereof.

               3.1.3     In the event that the insurance proceeds
received  pursuant  to Section 3.1.2 are to  be  applied  to  the
restoration of the Mortgaged Property, such restoration shall  be
done, subject to the following conditions:

                     (a)   Mortgagor  shall submit  to  Mortgagee
plans  and  specifications and a budget of  all  costs  for  such
restoration,  which  items  shall be reasonably  satisfactory  to
Mortgagee;

                     (b)   at any time and from time to time,  to
the  extent  the estimated cost of completion of such restoration
exceeds   then   available   insurance   proceeds   during   such
restoration,  the  Mortgagor  shall deposit  with  Mortgagee  the
amount   of   such   deficiency  or  otherwise  demonstrate   the
availability of funds for such deficiency within twenty (20) days
after demand by Mortgagee;

                    (c)  the deficiency referred to in clause (b)
of  this  section  shall  be spent on  such  restoration  of  the
Mortgaged Property prior to any advance of insurance proceeds  by
Mortgagee;

                     (d)   Mortgagee  being  satisfied  that  all
leases  with  respect  to the Mortgaged  Property  which  are  in
existence  at  the time of such damage will be, at  the  time  of
completion  of  the  reconstruction or  repair  of  the  portions
damaged, in full force and effect; and
                    (e)  such proceeds shall be disbursed subject
to  such other terms and conditions as Mortgagee shall reasonably
require.

           3.2   Nothing contained in this Article shall  relieve
Mortgagor of its obligations in Section 1.5.1 hereof in the event
that  no  or  inadequate proceeds of insurance are  available  to
defray  the cost of such work, except that, on the occurrence  of
any  fire or other casualty which affects the Mortgaged Property,
Mortgagor  shall have the right to pay the Mortgagee  the  entire
principal  balance  of the Note, together with  all  accrued  and
unpaid  interest thereunder to the date of such payment  and  all
other  sums, if any, then due under this Mortgage.  In  addition,
nothing  contained herein shall relieve Mortgagor of its duty  to
pay  all  installments of principal and interest and to make  all
other  payments  called for or required  by  the  Note  and  this
Mortgage  subsequent  to the occurrence  of  any  fire  or  other
casualty.

     ARTICLE IV - Condemnation.

           4.1  Forthwith upon receipt by Mortgagor of notice  of
the  institution of any proceeding or negotiations for the taking
of  the  Mortgaged Property, or any part thereof, in condemnation
or  by  the  exercise of the power of eminent  domain,  Mortgagor
shall  give  notice thereof to the Mortgagee.  The Mortgagee  may
appear  in  any  such  proceedings and participate  in  any  such
negotiations  and  may  be represented  by  counsel.   Mortgagor,
notwithstanding that the Mortgagee may not be a party to any such
proceeding,  will promptly give to the Mortgagee  copies  of  all
notices,  pleadings, judgments, determinations and  other  papers
received  by  Mortgagor in connection therewith.  Mortgagor  will
not  enter  into  any agreement for the taking of  the  Mortgaged
Property, or any part thereof, with anyone authorized to  acquire
the  same  in  condemnation  or  by  eminent  domain  unless  the
Mortgagee shall first have consented thereto.

           4.2   In the event of a taking of all or substantially
all  of  the  Mortgaged Property in condemnation  or  by  eminent
domain,  the  whole of the principal sum and accrued  and  unpaid
interest  evidenced  and secured by the Note and  this  Mortgage,
together  with  all other amounts, if any, then due  and  secured
hereby, shall forthwith become due and payable, at the option  of
the  Mortgagee, and all awards paid or payable on account of such
taking  shall be paid to the Mortgagee.  As used in this Section,
a  taking  of all or substantially all of the Mortgaged  Property
shall  mean a taking of so much as leaves a balance which  cannot
economically be operated for the purposes for which the same  was
operated or intended to be operated prior to such taking.

            4.3    In  the  event  of  a  taking  of  less   than
substantially all of the Mortgaged Property in condemnation or by
eminent  domain,  or  by agreement in lieu  thereof,  all  awards
payable as a result of such taking shall forthwith be paid to the
Mortgagee,  and the proceeds of such awards shall, at the  option
of  the  Mortgagee, be applied at the Mortgagee's sole discretion
either (i) towards the payment of the indebtedness secured hereby
or  (ii)  towards  the  repair or restoration  of  the  Mortgaged
Property  if such repair or restoration is commercially  feasible
in  the  reasonable opinion of the Mortgagee; provided,  however,
that  if  any Event of Default shall exist hereunder at the  time
such proceeds are so to be paid over, such proceeds shall be paid
over to the Mortgagee alone, to be applied to the payment of  the
indebtedness  secured  hereby.   In  the  event  Mortgagor  shall
request, and Mortgagee shall agree, to repair, restore and  alter
the Mortgaged Property to the extent required as a result of such
taking,  the  proceeds  of  such taking  shall  be  disbursed  in
accordance  with  and  subject to the  provisions  of  subsection
3.1.3.

     ARTICLE V - Default Provisions.

      The  happening  and  continuance for the  period,  if  any,
hereinafter  indicated,  of  any of the  following  events  shall
constitute an Event of Default hereunder:

          5.1  Failure of Mortgagor to pay any:

                5.1.1     Installment of principal or interest or
other  amount when due under the Note prior to the expiration  of
any grace period provided therein;

                5.1.2      Other amount payable pursuant to  this
Mortgage,  or  any supplement, modification or extension  thereof
when  due  and the continuance of such failure for ten (10)  days
after written notice from the Mortgagee of such failure.

           5.2   Failure  of  Mortgagor to  perform  any  of  its
obligations, covenants, or agreements contained in this  Mortgage
(other  than  an obligation to pay Mortgagee) and the continuance
of such failure for thirty (30) days after written notice thereof
from  the Mortgagee to Mortgagor; provided, however, that if  the
curing  of such default cannot be accomplished with due diligence
within said period of thirty (30) days and Mortgagor commences to
cure  such default promptly after receipt of notice thereof  from
the  Mortgagee, such period of thirty (30) days shall be extended
to  a period of time necessary to cure such default with all  due
diligence,  but in no event shall such period exceed ninety  (90)
days.

          5.3  Mortgagor

                 5.3.1       Becomes  insolvent   (however   such
insolvency may be evidenced); or

                5.3.2     Makes an assignment for the benefit  of
creditors; or

               5.3.3     Is adjudicated a bankrupt; or

                 5.3.4       Admits  in  writing  its   inability
generally to pay its debts as they become due.

           5.4   A  trustee, custodian or receiver of Mortgagor's
business,  or  any  substantial part of  Mortgagor's  assets,  is
appointed by or at the behest of Mortgagor, or, if appointed in a
proceeding brought against Mortgagor, that Mortgagor approves of,
consents  to, or acquiesces in such appointment, or such  trustee
or receiver is not discharged within sixty (60) days.

           5.5  Any proceedings involving Mortgagor are commenced
by  or  against Mortgagor under any bankruptcy or reorganization,
arrangement,   probate,   insolvency,   readjustment   of   debt,
dissolution  or  liquidation law of the  United  States,  or  any
state,  but if such proceedings are instituted against Mortgagor,
no  Event  of Default shall be deemed to have occurred  hereunder
unless  Mortgagor either approves of, consents to, or  acquiesces
in such proceedings, or such proceedings are not dismissed within
sixty (60) days.

           5.6   Any  judgment, warrant, warrant  of  attachment,
garnishment,  or any similar process is entered or filed  against
Mortgagor  or against any of Mortgagor's property or assets,  and
is not vacated, satisfactorily bonded or stayed within sixty (60)
days.

            5.7    Any  direct  or  indirect  mortgage,   pledge,
hypothecation  or  encumbrance or any  sale,  lease  (other  than
tenant leases in the ordinary course of business), assignment  or
other  transfer  of  the  Mortgaged  Property  is  made  by   the
Mortgagor,  without the prior written consent of  the  Mortgagee.
Any  merger  with Mortgagor or takeover of Mortgagor wherein  the
surviving entity is not the Mortgagor.

           5.8   Any representation or warranty made by Mortgagor
is  not  true  in  any material respect as of  the  date  of  the
issuance or making thereof as contained in:

                5.8.1      This Mortgage, or any other instrument
now  or  hereafter securing the Note or executed or delivered  in
conjunction therewith;

                5.8.2      Any  commitment letter,  statement  or
certificate  furnished or signed by Mortgagor  or  on  behalf  of
Mortgagor  pursuant or incident to the application  for,  or  the
closing of, the transaction establishing the indebtedness secured
hereby.

           5.9   The death, incompetency or incapacity to act  of
the Mortgagor.

           5.10       The occurrence of an Event of Default under
the  terms  of  the Note, any other instrument now  or  hereafter
securing  the Note or evidencing the indebtedness secured  hereby
or  the  failure to comply with the terms and conditions  of  the
Collateral  Assignment, or any commitment  letter,  statement  or
certificate  furnished or signed by Mortgagor  or  on  behalf  of
Mortgagor  pursuant or incident to the application  for,  or  the
closing of, the transaction establishing the indebtedness secured
hereby,  all of which are hereby incorporated herein  as  if  set
forth at length.

           5.11      Any material adverse change in the financial
condition  of,  or  act  or  omission of  Mortgagor  which  leads
Mortgagee  reasonably to believe that the performance of  any  of
the  covenants,  agreements, or conditions of the  Note  or  this
Mortgage is or may be substantially impaired.

           For the purposes of Section 5.3, 5.4, 5.5, 5.6 and 5.7
herein, the term "Mortgagor" shall be deemed to include Mortgagor
named  herein,  or any other person, firm, corporation  or  other
entity which is then the owner of all or substantially all of the
Mortgaged Property.

     ARTICLE VI - Remedies Upon Default.

           6.1   Upon  the  occurrence of any  Event  of  Default
thereunder,  the  Mortgagee, at its option, without  presentment,
demand,   protest  or  notice  of  any  kind,  may  declare   the
indebtedness  evidenced by the Note and secured by this  Mortgage
immediately  due and payable.  However, the Mortgagee  need  not,
and  is  not  obligated to, declare said indebtedness  due  as  a
condition  precedent to exercising its rights under  the  several
remedies upon default set forth herein.

           6.2   Upon  the  occurrence of any  Event  of  Default
hereunder:

                6.2.1      The Mortgagee, at its option,  without
obligation  to do so, without notice to, or demand on,  Mortgagor
and without releasing Mortgagor from any liability under the Note
or  this Mortgage, may make any payment or perform any act  which
Mortgagor  is  obligated to pay or do under  the  terms  of  this
Mortgage.

                6.2.2      In  exercising any of the  rights  set
forth  under subsection 6.2.1 above, the Mortgagee may incur  any
liability and expend whatever amounts it may deem necessary.  All
such amounts, without notice or demand, shall be immediately  due
and  payable to the Mortgagee by Mortgagor with interest thereon,
to the extent permitted by law, at the same rate per annum as the
Note, and shall be secured hereby;

                6.2.3     If the Mortgagee shall pay or discharge
any  lien, rents or claim on the Mortgaged Property, or  pay  any
delinquent tax, assessment or similar charge, the Mortgagee shall
be  subrogated to the rights of the holder of such lien, rents or
claim or to the rights of such taxing authority.

           6.3   Upon  the  occurrence of any  Event  of  Default
hereunder, the Mortgagee, at its option, without notice,  without
any  liability to Mortgagor, to the extent permitted by  law  and
without  regard  to the adequacy of the security for  said  debt,
may:

                6.3.1      Enter upon and take possession of  the
Mortgaged  Property  (with  or without  bringing  any  action  or
proceeding in court); or

               6.3.2     Demand and receive payment of all rents,
benefits  and profits of the Mortgaged Property, including  those
past  due  and  unpaid  (whether or not the Mortgagee  has  taken
possession of the Mortgaged Property); or

                6.3.3      Have a receiver immediately  appointed
for  the  Mortgaged Property and the earnings,  revenues,  rents,
issues, profits and other income thereof and therefrom, with  all
such powers as the Court making such appointment shall confer.

           6.4  If the Mortgagee enters upon and takes possession
of  the  Mortgaged  Property  as provided  in  Section  6.3,  the
Mortgagee  may  operate  and manage the  Mortgaged  Property  and
perform  any  acts  which the Mortgagee, in its sole  discretion,
deems  necessary  or  desirable  to  protect  and  preserve   the
marketability, rentability, increase the income, or conserve  the
value  of  the Mortgaged Property.  The Mortgagee shall  have  no
liability for any action or inaction while in possession  of  the
Mortgaged Property so long as such action or inaction is taken or
refrained from being taken in good faith.

           6.5   Upon  the  occurrence of  an  Event  of  Default
hereunder  the Mortgagee is irrevocably appointed the  agent  and
attorney-in-fact of Mortgagor in its name and stead  and  on  its
behalf,  for  the  purposes  of effectuating  any  sale  for  the
enforcement  of this Mortgage, whether under the  power  of  sale
hereby given or pursuant to judicial proceedings or otherwise, to
execute  and deliver all such deeds, conveyances, bills of  sale,
assignments, transfers and other instruments as the Mortgagee may
consider necessary or appropriate, and to substitute one or  more
persons   with   like  power,  Mortgagor  hereby  ratifying   and
confirming  all  that  the  Mortgagee,  or  such  substitute   or
substitutes,  shall  lawfully  do  by  virtue  hereof,   provided
however,  Mortgagee  will give Mortgagor seven  (7)  days  notice
prior to exercise of said power of attorney.  In addition, if  so
requested  by the Mortgagee or by any purchaser, Mortgagor  shall
ratify  and confirm any such sale by executing and delivering  to
the  Mortgagee or to such purchaser or purchasers all such proper
deeds,  conveyances,  assignments, instruments  of  transfer  and
releases as may be designated in any such request.

          6.6  This Mortgage is upon the STATUTORY CONDITIONS and
upon  the further condition that all covenants and agreements  of
the  Mortgagor contained herein, and in the Note, shall  be  kept
and  fully performed, for any breach of which the Mortgagee shall
have the STATUTORY POWER OF SALE.

           6.7  Acceptance by the Mortgagee of any payment in  an
amount less than the amount then due on said debt shall be deemed
an  acceptance on account only and the failure to pay the  entire
amount  then due shall be and continue to be an Event of Default;
at  any  time thereafter and until the entire amount then due  on
said  debt  has  been paid, the Mortgagee shall  be  entitled  to
exercise all rights conferred upon it in this instrument upon the
occurrence of an Event of Default.

           6.8   No  remedy herein conferred upon  the  Mortgagee
shall  be exclusive of any other remedy herein or by law provided
or  permitted,  but such shall be cumulative and in  addition  to
every  other remedy given herein or now or hereafter existing  at
law.

           6.9  The exercise of any option in this instrument  by
the  Mortgagee  shall not be deemed a waiver  of  its  rights  to
exercise  any  other  option;  and  the  filing  of  a  suit  for
collection  of the Note and foreclosure of this instrument  as  a
mortgage  or  for any other default hereunder shall not  preclude
sale  pursuant to the power of sale contained in this  instrument
after  a  dismissal of the suit.  No provision  hereof  shall  be
deemed  to  release Mortgagor's obligation to pay  the  interest,
principal  and other sums and charges secured hereby  until  such
time as all thereof have been paid to the Mortgagee in full.

           6.10       If foreclosure should be commenced  by  the
Mortgagee, at any time before the sale of the Mortgaged Property,
the  Mortgagee may abandon such sale and may at any time or times
thereafter again commence such sale, or the Mortgagee may sue for
collection of the Note and foreclosure of this instrument in  the
courts;  if  the Mortgagee should sue for such collection  and/or
foreclosure,  it may at any time before entry of  final  judgment
dismiss the suit and sell the Mortgaged Property pursuant to  the
power of sale contained herein.

           6.11      At any foreclosure sale, whether pursuant to
the  power  of sale contained in this instrument, or pursuant  to
the  judgment  of a court, all of the Mortgaged Property  at  the
option  of the Mortgagee and without notice to Mortgagor, may  be
sold  as  a  whole  and it shall not be necessary  to  have  said
personal property present at the place of sale.  The recitals  in
the  bill of sale to any purchaser at such sale shall be full and
conclusive  evidence of the truth of the matters stated  therein,
and all prerequisites to such sale shall be presumed to have been
performed  and  such  sale and bill of sale shall  be  conclusive
against Mortgagor.

           6.12      Mortgagor agrees, to the extent that it  may
lawfully  so  agree,  that if an Event  of  Default  shall  occur
hereunder, neither Mortgagor nor anyone claiming through or under
Mortgagor  shall or will set up, seek or claim to take  advantage
of  any  appraisement,  valuation, stay,  extension,  redemption,
moratorium  or marshaling laws now or hereafter in force  in  the
locality  where the property subject to the lien of this Mortgage
may be situated, in order to prevent or hinder the enforcement or
foreclosure  of  this  Mortgage, or  the  absolute  sale  of  the
Mortgaged  Property,  or  the  final  or  absolute  putting  into
possession thereof, immediately after such sale, of the purchaser
thereof, and Mortgagor for itself and its successors and  assigns
hereby waives, to the full extent that it may lawfully do so, the
benefit  of  all  such laws and any and all  right  to  have  the
estates  comprising the security intended to  be  created  hereby
marshaled upon any foreclosure of the lien hereof and agrees that
the Mortgaged Property may be sold as an entirety.

          6.13      Mortgagor, to the extent that it may lawfully
do  so,  hereby submits to the jurisdiction of the courts of  the
State  of New Hampshire and the United States District Court  for
the District of New Hampshire, as well as to the jurisdiction  of
all  courts from which an appeal may be taken from the  aforesaid
courts,  for the purpose of any suit, action or other  proceeding
arising  out of the breach by Mortgagor of any of its obligations
under or with respect to the Note or this Mortgage, and expressly
waives  any and all objections it may have as to venue in any  of
such courts.

     ARTICLE VII - Indemnity Regarding Hazardous Materials.

           7.1   As  used  in  this Article, the term  "Hazardous
Materials" shall mean any substance, water or material which  has
been  determined  by  any  state,  federal  or  local  government
authority  to  be capable of posing a risk of injury  to  health,
safety and property, including, but not limited to, all of  those
materials, wastes and substances designated as hazardous or toxic
by   the   U.S.   Environmental  Protection  Agency,   the   U.S.
Department  of  Labor,  the U.S.  Department  of  Transportation,
and/or  any other governmental agency, federal, state, or  local,
now  or hereafter authorized to regulate materials and substances
in the environment (collectively "Governmental Authority(ies)").

           7.2   The  parties acknowledge that certain  Hazardous
Materials   could  be  present  in  the  soil  at  the  Premises.
Mortgagor  acknowledges  that  the Hazardous  Material,  if  any,
existed  in the soil at the Premises during Mortgagor's ownership
of  the  Premises  and  that  Mortgagee  is  not  in  any  manner
responsible  for  the presence of the Hazardous Material  at  the
Premises.   Mortgagor  hereby  covenants  that  (i)  it  did  not
release, nor did it cause the release of, the Hazardous Material,
if  any, acknowledged in this Paragraph 7.2, and (ii) it will not
release or cause the release of Hazardous Material in the future,
on or about the Mortgaged Property.

           7.3   Mortgagor agrees to take responsibility for  any
remedial   action  required  by  Government  Authorities   having
jurisdiction   regarding   the  Hazardous   Material,   if   any,
acknowledged  in  Paragraph 7.2 above,  or  any  other  Hazardous
Material, whether now known or hereafter discovered at  any  time
prior  to  the time that the Mortgagor's obligations  under  this
Mortgage have been completely performed and satisfied.  Mortgagor
shall pay all costs in connection with any such investigation  or
remedial    activity   including,   without    limitation,    all
installation,  operation, maintenance,  testing,  and  monitoring
costs, all power and utility costs and any and all pumping  taxes
or  fees  that  may  be  applicable  to  Mortgagor's  activities.
Mortgagor  shall  perform  all such work  in  a  good,  safe  and
workmanlike  manner, in compliance with all laws and  regulations
thereto,  and  shall diligently pursue any required investigation
and  remedial  activity until Mortgagor is allowed  to  terminate
these   activities   by  those  Government   Authorities   having
jurisdiction.

           7.4   To  the  extent allowed by law, Mortgagor  shall
retain  the exclusive right to negotiate with and to fulfill  any
requirement  or claim made by any Government Authority  or  third
party  related  to the presence of Hazardous Materials,  if  any,
acknowledged   in   Paragraph  7.2   arising   from   Mortgagor's
activities, or any other Hazardous Material, including the  right
to  settle  or  contest such requirement or  third  party  claim.
Mortgagor  shall conduct any testing, monitoring,  reporting  and
remedial  activities in connection with the Premises in  a  good,
safe  and  workmanlike  manner,  compliance  with  all  laws  and
regulations applicable thereto.  Mortgagor shall promptly provide
Mortgagee with copies of any testing results and reports that are
generated in connection with Mortgagor's activities and that  are
submitted to any Government Authority.

           7.5   Mortgagor  shall indemnify, hold  harmless,  and
defend  Mortgagee, its officers, directors, employees and  agents
(collectively "Indemnitees") against all claims, demands, losses,
liabilities,  costs  and  expenses,  including  attorneys'  fees,
(collectively  "Liabilities") imposed upon  or  accruing  against
Indemnitees  as  actual  and  direct costs  of  investigatory  or
remedial  action  required  by  any Government  Authority  having
jurisdiction  or as damages to third persons for personal  injury
or  property  damage  arising  from the  existence  of  Hazardous
Material, if any, at the Premises acknowledged in Paragraph  7.2,
or any other Hazardous Material.  Such Liabilities shall include,
without  limitation:  (i) injury or death  to  any  person,  (ii)
damage to or loss of use of any other property, (iii) the cost of
any   demolition  and  rebuilding  of  the  Improvements  on  the
Premises,  repair,  or  remediation and the  preparation  of  any
closure or other activity required by any Governmental Authority,
(iv)  any  lawsuit  brought or threatened, good faith  settlement
reached,   or  governmental  order  relating  to  the   presence,
disposal,   release  or  threatened  release  of  any   Hazardous
Material,  if  any, acknowledged in Paragraph 7.2 above,  or  any
other Hazardous Material, on, from or under the Premises and  (v)
the  imposition  of  any  liens  on  the  Premises  arising  from
Mortgagor's  activities on the Premises or from the existence  of
Hazardous Material, if any, acknowledged in Paragraph 7.2  above,
or any other Hazardous Material, upon the Premises.

           7.6   Mortgagor shall use its best efforts  (including
payment  of money) not to cause or suffer any lien to be recorded
against  the Premises as a consequence of, or in any way  related
to,  the  presence, remediation or disposal of Hazardous Material
in  or about the Premises, including any mechanics' liens and any
so-called  state, federal or local "superfund" lien  relating  to
such matters.

     ARTICLE VIII - Miscellaneous Provisions.

           8.1  Without affecting the liability of Mortgagor,  or
any  other  person  (except  any  person  expressly  released  in
writing), for payment of said debt or for the performance of  any
obligations set forth in this Mortgage, and without affecting the
lien  or  other  rights  of the Mortgagee  with  respect  to  any
property or other security not expressly released in writing, the
Mortgagee  at any time, and from time to time, either  before  or
after maturity of the Note, and without notice or consent, may:

               8.1.1     Release any person liable for payment of
said debt, or for the performance of any obligation;

                8.1.2     Make any agreement extending the  time,
or  otherwise  altering the terms of payment  of  said  debt,  or
modifying  or waiving any obligation, or subordinating, modifying
or otherwise dealing with the lien securing payment of the Note;

                8.1.3     Exercise or refrain from exercising  or
waive any right the Mortgagee may have;

                8.1.4     Accept additional security of any kind;
and

                8.1.5      Release  or otherwise  deal  with  any
property, real or personal, securing said debt, including all  or
any part of the Mortgaged Property.

           8.2   In the event that Mortgagor conveys its interest
in  the  Mortgaged  Property to parties  not  appearing  in  this
instrument  (without implying any right of  Mortgagor  to  do  so
without Mortgagee's consent) the Mortgagee may, without notice to
Mortgagor,  deal  with such successor or successors  in  interest
with  reference  to  this Mortgage and the Note  secured  hereby,
either  by  way  of forbearance on the part of the  Mortgagee  or
extension  of the time of payment of the debt or any  sum  hereby
secured, without in any way modifying or affecting the conveyance
under this Mortgage or the original liability of the Mortgagor or
any other party on the Note secured hereby, either in whole or in
part.

          8.3  All payments on the debt and advancements, if any,
hereby  secured shall be applied, first to advancements, if  any,
in  the  order  of maturity, and second, to the  payment  of  the
indebtedness  evidenced  by  the Note hereinabove  described  and
secured   hereby   in  such  manner  as  Mortgagee   shall   deem
appropriate.   Proceeds  from  foreclosure  sales  and  insurance
proceeds  or  condemnation awards shall be applied  in  the  same
manner  after  payment  of  all  costs  and  expenses  of  sales,
including attorney's and auctioneer's fees.

          8.4  At any time and from time to time until payment of
the  indebtedness  and  upon request of the Mortgagee,  Mortgagor
will   promptly  execute  and  deliver  to  the  Mortgagee   such
additional  instruments as may be reasonably required to  further
evidence  the  lien of the Mortgage and further  to  protect  the
security  position of the Mortgagee with respect to the  property
subject to this Mortgage.

          8.5  In the event of any sale of the Mortgaged Property
under  the provisions hereof, Mortgagor shall forthwith surrender
possession  thereof  to the purchaser.  Upon  failure  to  do  so
Mortgagor  shall  thereupon be a tenant  at  sufferance  of  such
purchaser,  and upon its failure to surrender possession  of  the
Mortgaged  Property  upon demand, such purchaser,  his  heirs  or
assigns,   shall  be  entitled  to  institute  and  maintain   an
appropriate action for possession of the Mortgaged Property.

           8.6   Upon payment in full of the indebtedness secured
hereby,  this instrument shall become null and void and shall  be
released by the Mortgagee at Mortgagor's expense.
           8.7   In  case  any  one  or more  of  the  provisions
contained in the Note or in this Mortgage shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not  affect  any
other provision hereof or thereof, but each shall be construed as
if  such  invalid, illegal or unenforceable provision  had  never
been included.

           8.8  All notices, requests, demands, consents or other
communications given hereunder or in connection herewith (for the
purposes of this Section collectively called "Notices") shall  be
in  writing  and shall be sent by certified mail, return  receipt
requested,  postage prepaid, addressed to the  party  to  receive
such  Notice at its address first set forth above.  Either  party
may,  by  Notice given as aforesaid, change its address  for  all
subsequent Notices.  Notices shall be deemed given when mailed as
aforesaid.   All Notices by or on behalf of the Mortgagee  herein
named  shall  be deemed sufficient if signed by any  one  of  its
directors, officers or counsel and if otherwise given or made  in
compliance with this Section.

          8.9  The Mortgagee and its agents may enter and inspect
the  Mortgaged Property during usual business hours upon not less
than 24 hours notice to Mortgagee.

           8.10      It is the intent of the parties hereto  that
this instrument shall constitute a Security Agreement within  the
meaning  of  the Uniform Commercial Code as then in  effect  (the
"Uniform  Commercial  Code") with respect  to  all  fixtures  and
personal property above referred to and all replacements thereof,
substitutions therefor or additions thereto (said property  being
sometimes hereinafter referred to as the "Collateral"), and  that
a  security interest shall attach thereto for the benefit of  the
Mortgagee  to secure the indebtedness evidenced by the  Note  and
secured  by  this Mortgage, and all other sums and charges  which
may   become  due  hereunder  or  thereunder.   Mortgagor  hereby
authorizes  the  Mortgagee  to file  financing  and  continuation
statements  with respect to the Collateral without the  signature
of Mortgagor whenever lawful.  In the event of default under this
Mortgage and to the extent permitted by law, the Mortgagee, shall
have  the  option  of  proceeding as to both  real  and  personal
property in accordance with its rights and remedies in respect of
the  real property, in which event the default provisions of  the
Uniform Commercial Code shall not apply.  The parties agree  that
in  the event the Mortgagee elects to proceed with respect to the
Collateral  separately  from the real property,  five  (5)  days'
notice  of the sale of the Collateral shall be reasonable notice.
Mortgagor  agrees  that,  without  the  written  consent  of  the
Mortgagee, Mortgagor will not remove or permit to be removed from
the  Premises  or  the Improvements thereon any of  the  fixtures
unless   the  same  is  immediately  replaced  with  unencumbered
fixtures, of a quality and value equal or superior to those which
they  replace.   All  such replacements, renewals  and  additions
shall  become and be immediately subject to the security interest
of  this  Mortgage  and this agreement and  be  covered  thereby.
Mortgagor  shall, from time to time, on request of the Mortgagee,
deliver  to  the  Mortgagee an inventory  of  the  Collateral  in
reasonable  detail, including an itemization of all items  leased
to  Mortgagor  or subject to conditional bill of  sale,  security
agreement or other title retention agreement.

           8.11       Mortgagor, to the extent reasonably  within
its control, will maintain, preserve and renew all rights of way,
easements, grants, privileges, licenses and franchises reasonably
necessary for the use of the Mortgaged Property from time to time
and  will  not,  without  the  prior  consent  of  the  Mortgagee
initiate, join in or consent to any private restrictive  covenant
or  other  public or private restriction as to  the  use  of  the
Mortgaged  Property.  Mortgagor shall, however, comply  with  all
restrictive covenants which may at any time affect the  Mortgaged
Property,   zoning  ordinances  and  other  public   or   private
restrictions as to the use of the Mortgaged Property.

           8.12       If at any time any governmental body  shall
impose  a  stamp, documentary or other similar tax on  the  Note,
this  Mortgage,  the debt secured hereby or the income  generated
therefrom,   or   any  modification,  amendment,   extension   or
consolidation  of  either thereof, Mortgagor will  pay  the  same
within ten (10) days after demand by the Mortgagee.

           8.13      This instrument shall inure to and bind  the
successors  and assigns of the parties hereto, and  shall  be  so
construed that whenever applicable with reference to any  of  the
parties hereto, the use of the singular number shall include  the
plural  number,  the use of the plural number shall  include  the
singular  number, the use of the masculine gender  shall  include
the  feminine  gender,  and shall likewise  be  so  construed  as
applicable to and including a corporation or corporations or  any
other entity that may be a part or parties hereto.  This Mortgage
may  not be waived, changed or discharged orally, but only by  an
agreement in writing signed by the party against whom any waiver,
change or discharge is sought.

            8.14       It  is  understood  and  agreed  that  the
validity,  construction and interpretation of this Mortgage  will
be in accordance with the laws of the State of New Hampshire.

      IN  WITNESS  WHEREOF, the Mortgagee and the Mortgagor  have
each duly caused this Agreement to be executed, as of the day and
year indicated above.

                                   Micronetics,Inc.
                                   formerly  Micronetics Wireless,Inc.

                                   By:/s/David Robbins
                                      ----------------------
                                      David Robbins
                                      Its: President

                                   Banknorth, N.A.

                                   By: Michael F. Fox
                                       -------------------------
                                       Michael F. Fox
                                       Its: Senior Vice President

STATE OF NEW HAMPSHIRE
COUNTY OF HILLSBOROUGH

The foregoing instrument was acknowledged before me this 13th day
of  February, 2004, by David Robbins, being President of
Micronetics,  Inc.,  formerly  Micronetics  Wireless,  Inc., a
Delaware corporation, on behalf of the corporation.

                 /s/Gregory Boghigian
                 ----------------------------------
                 Notary Public/Justice of  the Peace
                 My Commission Expires: April 16, 2008

STATE OF NEW HAMPSHIRE
COUNTY OF HILLSBOROUGH

The foregoing instrument was acknowledged before me this 13th day
of  February, 2004, by Michael F. Fox, a Senior Vice President of
Banknorth, N.A., a national banking association, on behalf of the
bank.

                    /s/Gregory Boghigian
                    ---------------------------------
                    Notary Public/Justice of the Peace
                    My Commission Expires: April 16, 2008EXHIBIT 10.46

Exhibit 10.46

THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO DIAMOND ENTERTAINMENT CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

Right to Purchase 35,000,000 shares of Common

 Stock of Diamond Entertainment Corporation 

(subject to adjustment as provided herein)

COMMON STOCK PURCHASE WARRANT

No. 1

Issue Date: March 26, 2004

DIAMOND ENTERTAINMENT CORPORATION, a corporation organized under the laws of the State of New Jersey (the "Company"), hereby certifies that, for value received, BI-COASTAL CONSULTING CORP., 25, Longview Court, Hillsborough, CA 94010, telecopier: (650) 343-2506 (the “Holder”), or its assigns, is entitled, subject to the terms set forth below, to purchase from the Company from and after the Issue Date and at any time or from time to time before 5:00 p.m., New York time, through five (5) years after such date (the “Expiration Date”), up to 35,000,000 fully paid and nonassessable shares of Common Stock (as hereinafter defined), no par value per share, of the Company at a per share purchase price of $.012.  The aforedescribed purchase price per share, as adjusted from time to time as herein provided, is referred to herein as the "Purchase Price".  The number and character of such shares of Common Stock and the Purchase Price are subject to adjustment as provided herein.  The Company may reduce the Purchase Price without the consent of the Holder.  

As used herein the following terms, unless the context otherwise requires, have the following respective meanings: 

(a)

The term “Company” shall include Diamond Entertainment Corporation and any corporation which shall succeed or assume the obligations of Diamond Entertainment Corporation hereunder. 

(b)

The term "Other Securities" refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the holder of the Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 4 or otherwise. 

1.

Exercise of Warrant.

1.1.

Number of Shares Issuable upon Exercise.  From and after the Issue Date through and including the Expiration Date, the Holder hereof shall be entitled to receive, upon exercise of this Warrant in whole in accordance with the terms of subsection 1.2 or upon exercise of this Warrant in part in accordance with subsection 1.3, shares of Common Stock of the Company, subject to adjustment pursuant to Section 4 and subject to DMEC’s shareholders have increased the number of authorized common shares.

1

1.2.

Full Exercise.  This Warrant may be exercised in full by the Holder hereof by delivery of an original or facsimile copy of the form of subscription attached as Exhibit A hereto (the “Subscription Form") duly executed by such Holder and surrender of the original Warrant within seven (7) days of exercise, to the Company at its principal office or at the office of its Warrant Agent (as provided hereinafter), accompanied by payment, in cash, wire transfer or by certified or official bank check payable to the order of the Company, in the amount obtained by multiplying the number of shares of Common Stock for which this Warrant is then exercisable by the Purchase Price then in effect. 

1.3.

Partial Exercise.  This Warrant may be exercised in part (but not for a fractional share) by surrender of this Warrant in the manner and at the place provided in subsection 1.2 except that the amount payable by the Holder on such partial exercise shall be the amount obtained by multiplying (a) the number of whole shares of Common Stock designated by the Holder in the Subscription Form by (b) the Purchase Price then in effect.  On any such partial exercise, the Company, at its expense, will forthwith issue and deliver to or upon the order of the Holder hereof a new Warrant of like tenor, in the name of the Holder hereof or as such Holder (upon payment by such Holder of any applicable transfer taxes) may request, the whole number of shares of Common Stock for which such Warrant may still be exercised.

2.

Assignment; Exchange of Warrant.  Subject to compliance with applicable securities laws, this Warrant, and the rights evidenced hereby, may be transferred by any registered holder hereof (a "Transferor") with respect to any or all of the shares of Common Stock. On the surrender for exchange of this Warrant, with the Transferor's endorsement in the form of Exhibit B attached hereto (the “Transferor Endorsement Form") and together with evidence reasonably satisfactory to the Company demonstrating compliance with applicable securities laws, the Company at its expense, but with payment by the Transferor of any applicable transfer taxes, will issue and deliver to or on the order of the Transferor thereof a new Warrant or Warrants of like tenor, in the name of the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form (each a "Transferee"), calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant so surrendered by the Transferor.

3.

Notices.  All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice.  Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.  The addresses for such communications shall be: (i) if to the Company to: Diamond Entertainment Corporation, Diamond Entertainment Corporation, 800 Tucker Lane, Walnut, California  91789, telecopier number: (909) 869-1990, with a copy by telecopier only to: Owen M. Naccarato, Esq., Naccarato & Associates, 19600 Fairchild, Suite 260, Irvine, CA 92614, telecopier: (949) 851-9262, and (ii) if to the Holder, to the address and telecopier number listed on the first paragraph of this Warrant.

2

	 	DIAMOND ENTERTAINMENT CORPORATION 

By:

      /S/  James Lu                                          

Name:   James Lu 

Title:     President

	Witness:

 Fred U. Odaka

	 	 

3

Exhibit A

FORM OF SUBSCRIPTION

(to be signed only on exercise of Warrant)

TO:  DIAMOND ENTERTAINMENT CORPORATION 

The undersigned, pursuant to the provisions set forth in the attached Warrant (No.____), hereby irrevocably elects to purchase (check applicable box):

___

________ shares of the Common Stock covered by such Warrant; or

___

the maximum number of shares of Common Stock covered by such Warrant pursuant to the cashless exercise procedure set forth in Section 2.

The undersigned herewith makes payment of the full purchase price for such shares at the price per share provided for in such Warrant, which is $___________.  Such payment takes the form of (check applicable box or boxes):

___

$__________ in lawful money of the United States; and/or

___

the cancellation of such portion of the attached Warrant as is exercisable for a total of _______ shares of Common Stock (using a Fair Market Value of $_______ per share for purposes of this calculation); and/or

___

the cancellation of such number of shares of Common Stock as is necessary, in accordance with the formula set forth in Section 2, to exercise this Warrant with respect to the maximum number of shares of Common Stock purchasable pursuant to the cashless exercise procedure set forth in Section 2. 

The undersigned requests that the certificates for such shares be issued in the name of, and delivered to _____________________________________________________ whose address is _____________________________________________________________________________________

____________________________________________________________________________________.

The undersigned represents and warrants that all offers and sales by the undersigned of the securities issuable upon exercise of the within Warrant shall be made pursuant to registration of the Common Stock under the Securities Act of 1933, as amended (the "Securities Act"), or pursuant to an exemption from registration under the Securities Act.

	

Dated:___________________

	

_____________________________________

 (Signature must conform to name of holder as specified on the face of the Warrant)

_____________________________________

_____________________________________

(Address)

4

Exhibit B

FORM OF TRANSFEROR ENDORSEMENT

(To be signed only on transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto the person(s) named below under the heading "Transferees" the right represented by the within Warrant to purchase the percentage and number of shares of Common Stock of DIAMOND ENTERTAINMENT CORPORATION to which the within Warrant relates specified under the headings "Percentage Transferred" and "Number Transferred," respectively, opposite the name(s) of such person(s) and appoints each such person Attorney to transfer its respective right on the books of DIAMOND ENTERTAINMENT CORPORATION with full power of substitution in the premises.

	Transferees

	Percentage Transferred

	Number Transferred

	 	 	 
	 	 	 
	 	 	 

	

Dated:  ______________, ___________

Signed in the presence of:

____________________________________

(Name)

ACCEPTED AND AGREED:

[TRANSFEREE]

____________________________________

(Name)

	

_____________________________________

(Signature must conform to name of holder as specified on the face of the warrant)

_____________________________________

_____________________________________

(address)

_____________________________________

_____________________________________

(address)

5

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