Document:

Exhibit 10.13

                                                                      NEW JERSEY

         LEASEHOLD MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT

                          Dated: As of October 31, 2006

                 Maximum Amount Unpaid Principal Indebtedness of
                                   $65,000,000

                              FMI INTERNATIONAL LLC

                              having an office at:
                              800 Federal Boulevard
                           Carteret, New Jersey 07008

                                 the Mortgagor,

                                       TO

                         FORTRESS CREDIT CORP., as Agent

                              having an office at:
                           1345 Avenue of the Americas
                            New York, New York 10105

                                  the Mortgagee

                              Location of Premises:

                         Street Address: 800 Federal Boulevard,
                         County of: Middlesex
                         City of : Carteret
                         State of: New Jersey

   This Instrument prepared by and after recording, please return by mail to:

                   OTTERBOURG, STEINDLER, HOUSTON & ROSEN P.C.
                                 230 Park Avenue
                            New York, New York 10169
                      Attention: Daniel P. Greenstein, Esq.

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      THIS LEASEHOLD MORTGAGE,  ASSIGNMENT OF RENTS AND SECURITY AGREEMENT, made
as of October 31, 2006 by FMI  INTERNATIONAL  LLC, a Delaware limited  liability
company,  having an office at 800 Federal Boulevard,  Carteret, New Jersey 07008
(the "Mortgagor") to FORTRESS CAPITAL CORP., as Agent for the Lenders, having an
office at 1345 Avenue of the Americas,  New York, New York 10105, for itself and
as agent for the lenders now or hereafter named in the Loan  Agreement,  as such
term is hereinafter  defined (the  "Mortgagee").  All capitalized terms used but
not defined in this  Mortgage  shall have the  meanings  ascribed to them in the
Loan Agreement.

      WITNESSETH,  pursuant to the Loan and Security  Agreement dated as of even
date  herewith  (as  amended,  consolidated,  restated,  modified,  extended  or
supplemented from time to time, the "Loan Agreement") by and among Mortgagor, as
a Borrower,  the other Borrowers and Guarantors,  the Lenders and Mortgagee as a
Lender,  and as Agent for the  Lenders,  the Lenders have agreed to make and the
Mortgagor has agreed to accept Loans  consisting  of (a) Revolving  Loans in the
principal  amount of up to $10,000,000  advanced  pursuant to the Loan Agreement
and (b) Term Loans in the aggregate  principal  amount of  $55,000,000  advanced
pursuant to the Loan Agreement. The Loans shall mature on October 31, 2011.

      WHEREAS,  that to secure the payment of the  principal  sum of up to SIXTY
FIVE MILLION  ($65,000,000) DOLLARS lawful money of the United States to be paid
according to the Loan  Agreement,  which is by this reference made a part hereof
as said Loan Agreement may be hereafter modified,  amended, extended, renewed or
substituted  for, and any and all sums,  amounts and expenses paid  hereunder or
thereunder by the Mortgagee  and/or any Lender according to the terms hereof and
all other  obligations  and  liabilities of the Mortgagor under this Mortgage or
the Loan  Agreement,  together  with  all  interest  on the  said  indebtedness,
obligations,  liabilities,  sums,  amounts  and  expenses  and any and all other
obligations  and  liabilities  now due and  owing or which may  hereafter  be or
become due and owing by the Mortgagor to the Lenders,  (all of the aforesaid are
hereinafter collectively,  the "Indebtedness"),  the Mortgagor hereby mortgages,
grants,  bargains,  sells,  warrants,  conveys,  alienates,  remises,  releases,
assigns,  sets over and confirms to the Mortgagee  and grants to the  Mortgagee,
for its benefit and the ratable benefit of the Lenders, a security interest in:

      I. All that certain  leasehold estate (the "Leasehold  Estate") created by
and the right, title and interest of the Mortgagor in, to and under that certain
Lease Agreement dated August 14, 1996 between SDI Technologies, Inc. ("SDI"), as
landlord,  and FMI  International  Corp., as tenant,  as amended by that certain
Lease Extension  Agreement dated March 7, 2002 and Lease Modification  Agreement
dated  December  8, 2003,  assigned  by FMI  International  Corp.  to  Mortgagor
pursuant to that certain  Assignment and Assumption of Lease and further amended
by that  certain  Amendment  to Lease dated  August 23, 2004 between 800 Federal
Blvd  LLC,  successor-in-interest  to  SDI  as  landlord  (the  "Landlord")  and
Mortgagor as "Tenant" (the "Lease"),  under which Lease the Landlord demised and
leased, for the term provided therein, the following described premises:

            All that certain lot, piece or parcel of land particularly described
in SCHEDULE A annexed  hereto and made a part hereof (the "Land") upon which the
demised  premises more  particularly  described in SCHEDULE B annexed hereto and
made a part hereof are located (the

<PAGE>

"Demised  Premises")  (the Land,  together  with the  Demised  Premises  and the
Leasehold Estate hereinafter sometimes, collectively, the "Real Property");

            Together  with the  appurtenances,  including,  but not  limited to,
renewal and option rights, and all the estate and rights of the Mortgagor of, in
and to the Real Property under and by virtue of the Lease;

            Together with all right, title and interest of the Mortgagor, in and
to: (i) all  modifications,  extensions  and renewals of the Lease and in and to
all  rights to renew or extend the term of the  Lease;  (ii) all  credits to and
deposits of (other than  security  deposits  made by  sublessees)  the Mortgagor
under the Lease; and (iii) all other options,  privileges and rights granted and
demised to the Mortgagor under the Lease;

            Together  with  all the  right  or  privilege  of the  Mortgagor  to
terminate, cancel, surrender, merge, modify, renew or amend the Lease; and

      II. Subject to the terms and  conditions of the Leases,  all of the right,
title  and  interest  of the  Mortgagor,  if any,  in and to the  buildings  and
improvements (hereinafter,  collectively,  together with all building equipment,
the "Improvements") now or hereafter located on the Real Property and all of its
right, title and interest,  if any, in and to the streets and roads abutting the
Real  Property  to the center  lines  thereof,  and  strips and gores  within or
adjoining the Real Property, the air space and right to use said air space above
the Real Property, all rights of ingress and egress by motor vehicles to parking
facilities  on or within  the Real  Property,  all  easements  now or  hereafter
affecting  the Real Property or the  Improvements,  all royalties and all rights
appertaining to the use and enjoyment of the Real Property or the  Improvements,
including,  without limitation,  alley,  drainage,  crop, timber,  agricultural,
horticultural, mineral, water, oil and gas rights; and

      III. Subject to the terms and conditions of the Leases,  all of the right,
title and interest of the Mortgagor, if any, in and to all fixtures and articles
of  personal   property  and  all   appurtenances   and  additions  thereto  and
substitutions  or  replacements  thereof,  now  or  hereafter  attached  to,  or
contained in, the Real Property  and/or the  Improvements  or placed on any part
thereof,  though  not  attached  thereto,  including,  but not  limited  to, all
screens, awnings, shades, blinds, curtains,  draperies, carpets, rugs, furniture
and furnishings,  heating, lighting,  plumbing,  ventilating,  air conditioning,
refrigerating,  incinerator  and/or  compacting  and  elevator  plants,  stoves,
ranges, vacuum cleaning systems, call systems,  sprinkler systems and other fire
prevention and extinguishing apparatus and materials,  motors, machinery, pipes,
appliances,  equipment, fittings and fixtures, and the trade name, good will and
books and records relating to the business  operated on the Real Property and/or
the Improvements. Without limiting the foregoing, the Mortgagor hereby grants to
the  Mortgagee,  for its  benefit  and the  ratable  benefit of the  Lenders,  a
security  interest  in all of its present and future  "equipment"  and  "general
intangibles" (as said quoted terms are defined in the Uniform Commercial Code of
the State wherein the Real Property and/or the Improvements are located) and the
Mortgagee  shall have, in addition to all rights and remedies  provided  herein,
and in any other agreements,  commitments and undertakings made by the Mortgagor
to the Mortgagee,  all of the rights and remedies of a "secured party" under the
said Uniform Commercial Code. To the extent permitted under applicable law, this
Mortgage shall be deemed to be a "security agreement" (as defined in the

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<PAGE>

aforesaid Uniform Commercial Code). If the lien of this Mortgage is subject to a
security  interest covering any such personal  property,  then all of the right,
title and  interest  of the  Mortgagor  in and to any and all such  property  is
hereby assigned to the Mortgagee, for its benefit and the ratable benefit of the
Lenders,  together  with  the  benefits  of all  deposits  and  payments  now or
hereafter made thereon by the Mortgagor, and

      IV. Subject to the terms and  conditions of the Leases,  all of the right,
title and interest of the Mortgagor in and to all leases,  lettings and licenses
of the Real  Property,  the  Improvements  and/or any other  property  or rights
encumbered or conveyed hereby,  or any part thereof,  (other than the Lease) now
or  hereafter  entered into and all right,  title and interest of the  Mortgagor
thereunder,   including,  without  limitation,  cash  and  securities  deposited
thereunder,  the right to receive  and  collect  the rents,  issues and  profits
payable  thereunder  and the right to  enforce,  whether  by action at law or in
equity or by other means, all provisions, covenants and agreements thereof; and

      V. Subject to the terms and conditions of the Leases, all right, title and
interest of the Mortgagor in and to all unearned premiums,  accrued, accruing or
to accrue under  insurance  policies now or hereafter  obtained by the Mortgagor
and all  proceeds  of the  conversion,  voluntary  or  involuntary,  of the Real
Property,  the  Improvements  and/or any other property or rights  encumbered or
conveyed hereby, or any part thereof, into cash or liquidated claims, including,
without  limitation,  proceeds of hazard and title  insurance and all awards and
compensation  heretofore  and hereafter  made to the present and all  subsequent
owners of the Real  Property,  the  Improvements  and/or any other  property  or
rights  encumbered  or  conveyed  hereby  by any  governmental  or other  lawful
authority for the taking by eminent domain, condemnation or otherwise, of all or
any part of the Real  Property,  the  Improvements  and/or any other property or
rights encumbered or conveyed hereby or any easement therein, including, but not
limited to, awards for any change of grade of streets; and

      VI.  Subject to the terms and conditions of the Leases,  all right,  title
and  interest  of  the  Mortgagor  in  and  to  all  extensions,   improvements,
betterments,  renewals,  substitutions and replacements of and all additions and
appurtenances to the Real Property,  the Improvements  and/or any other property
or rights  encumbered or conveyed hereby,  hereafter  acquired by or released to
the Mortgagor or  constructed,  assembled or placed by the Mortgagor on the Real
Property,  the  Improvements  and/or any other property or rights  encumbered or
conveyed hereby, and all conversions of the security  constituted thereby which,
immediately upon such acquisition, release, construction,  assembling, placement
or  conversion  as the case may be, and in each such case  without  any  further
mortgage,  conveyance,  assignment or other act by the  Mortgagor,  shall become
subject to the lien of this Mortgage as fully and completely,  and with the same
effect,  as though now owned by the Mortgagor and specifically  described herein
(the Real  Property and the  Improvements,  together with the fixtures and other
property,  rights,  privileges  and  interests  encumbered  or  conveyed  hereby
hereinafter, collectively, the "Premises").

      TO HAVE AND TO HOLD the Premises unto the Mortgagee and its successors and
assigns until the Indebtedness is paid in full.

      AND the Mortgagor covenants and agrees with the Mortgagee as follows:

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<PAGE>

                                    ARTICLE I

                 REPRESENTATIONS AND WARRANTIES OF THE MORTGAGOR

      The Mortgagor  represents and warrants to the best of its knowledge to the
Mortgagee as follows:

            Section 1.1 LEASE. (i) The Mortgagor has a good and marketable title
to the  Leasehold  Estate  created  by the Lease and is the owner of a valid and
subsisting  interest as lessee  under the Lease  subject to no lien,  exception,
charge or other encumbrance except for any easements,  covenants or restrictions
of record; (ii) the Lease is in full force and effect and has not been assigned,
modified, amended, cancelled, surrendered,  terminated, supplemented or extended
in any way and except as may be disclosed by Landlord in any document  delivered
by Landlord to Lender in connection  with the Loan;  (iii) the Lease  represents
the entire agreement between the parties as to the leasing of the Premises; (iv)
to the best of Mortgagor's  knowledge there is no default which has occurred and
is continuing  under the Lease nor has any act,  omission  and/or event occurred
which,  with notice,  the passage of time, or both,  would  constitute a default
under the Lease by either  the  lessor  or  lessee  thereunder,  (v) all  rental
payments  and other  charges  under the Lease  which are due and owing  from the
lessee  thereunder as of the date of the execution and delivery of this Mortgage
have been paid in full,  including,  but not limited to, the  security  deposits
specified therein; (vi) this Mortgage is and will remain a legal, valid, binding
and  enforceable  first  lien on and prior  security  interest  in the  Premises
subject only to the exceptions  referred to above;  (vii) the Mortgagor has full
right,  power and  authority  to mortgage  the Lease to the  Mortgagee  pursuant
hereto subject to the terms and  conditions of the Leases;  (viii) the Mortgagor
knows of no adverse claim to the title and/or possession of the Mortgagor or the
Landlord;  and (ix) no fire or casualty has  affected the Real  Property and the
Mortgagor  knows  of no  actual  or  proposed  condemnation  or  eminent  domain
proceeding or settlement in lieu thereof which may affect same.

            Section 1.2 MORTGAGE AUTHORIZED.  The execution and delivery of this
Mortgage has been duly  authorized  by the members of the Mortgagor and there is
no  provision  in the  certificate  of limited  liability  company or  operating
agreement  of the  Mortgagor  requiring  further  consent for such action by any
other entity or person. The Mortgagor is duly organized, validly existing and is
in good standing under the laws of the state of its  formation,  and has (i) all
required licenses, authorizations,  registrations,  permits and/or approvals and
(ii) full power and authority to own its properties and carry on its business as
presently  conducted and the execution and delivery by it of, and performance of
its obligations  under,  this Mortgage will not result in the Mortgagor being in
default under any provision of its certificate of limited  liability  company or
operating  agreement or of any  mortgage,  lease,  credit or other  agreement to
which it is a party or which affects it or its interest in the Premises,  or any
part thereof.

            Section 1.3 FLOOD INSURANCE STATUS.  The Premises are not located in
an area identified by the Secretary of Housing and Urban  Development as an area
having  special  flood  hazards  pursuant  to the  terms of the  National  Flood
Insurance Act of 1968, or the Flood Disaster Protection Act of 1973, as same may
have been amended to date.

            Section  1.4  OPERATION  OF  THE  PREMISES.   (i)  To  the  best  of
Mortgagor's

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<PAGE>

knowledge,   the   Mortgagor   has   all   required   certificates,    licenses,
authorizations,   registrations,  permits  and/or  approvals  required  for  the
operation of the Premises or any part  thereof,  and all required  environmental
permits, all of which as of the date of the signing hereof are in full force and
effect and not, to the knowledge of the  Mortgagor,  subject to any  revocation,
amendment,  release,  suspension,  forfeiture  or the like,  (ii) to the best of
Mortgagor's  knowledge,  the present use and/or occupancy of the Premises and/or
Improvements  does not conflict with or violate any such  certificate,  license,
authorization,  registration,  permit and/or  approval,  or any applicable  law,
ordinance,  statute,  rule,  order,  requirement  or  regulation  and  (iii) the
Mortgagor has delivered to the Mortgagee, prior to the signing hereof, duplicate
originals or appropriately certified copies of all such certificates,  licenses,
authorizations, registrations, permits and/or approvals.

                                   ARTICLE II

                           COVENANTS OF THE MORTGAGOR

            Section  2.1  PAYMENT  OF  THE  INDEBTEDNESS.   The  Mortgagor  will
punctually pay the Indebtedness in same day funds as provided  herein,  the Loan
Agreement, all in the coin and currency of the United States of America which is
legal tender for the payment of public and private debts.

            Section 2.2 MAINTENANCE OF THE IMPROVEMENTS.

                  (iv) The Mortgagor  shall  maintain the  Improvements  in good
repair,  subject  to  ordinary  wear and  tear,  damage by  casualty,  taking by
condemnation  or eminent  domain,  shall  comply  with the  requirements  of any
governmental authority claiming jurisdiction over the Premises within the lesser
of thirty (30) days after an order (an "Order")  containing such requirement has
been issued by any such authority  (unless such  requirement  cannot be complied
with within such thirty (30) day period, in which event the Mortgagor shall have
such longer period as necessary to cause compliance provided,  however, that the
Mortgagor  shall promptly  commence and diligently  prosecute to completion such
compliance  and  provided,  further,  that such period shall not exceed the time
required  pursuant to the terms of such Order) or the time required  pursuant to
the  terms of such  Order and  shall  permit  the  Mortgagee  to enter  upon the
Improvements  and inspect the  Improvements at all reasonable  hours and without
prior notice.  The Mortgagor shall not, without the prior written consent of the
Mortgagee,  threaten,  commit,  permit or suffer to occur any waste or except as
may be expressly  permitted under the terms of the Loan Agreement,  the material
alteration,  demolition  or removal  of the  Improvements  or any part  thereof;
PROVIDED,  HOWEVER, that fixtures and articles of personal property owned by the
Mortgagor may be removed from the  Improvements  if the  Mortgagor  concurrently
therewith  replaces same with equivalent  items which do not reduce the value of
the Premises or the Improvements,  free of any lien, charge or claim superior to
the lien and/or security interest created hereby.

                  (v) Nothing in this SECTION 2.2 shall  require the  compliance
by the Mortgagor with any Order so long as (a) the failure so to do shall not be
a default or event of default  under any other  mortgage or  security  agreement
affecting the Premises, any part thereof or interest therein, (b) the failure so
to do shall not result in the voiding, rescission or invalidation

                                      -5-
<PAGE>

of the  certificate  of occupancy or any other license,  certificate,  permit or
registration  in respect  of the  Premises,  (c) the  failure so to do shall not
prevent,  hinder or unreasonably  interfere with the lawful use and occupancy of
the entirety of the  Improvements  for their present use and occupancy,  (d) the
failure so to do shall not void or invalidate  any  insurance  maintained by the
Mortgagor  in respect of the  Premises,  or result in an increase of any premium
therefor or a decrease in any coverage provided  thereby,  and (e) the Mortgagor
in good faith and at its own expense  shall  contest  the Order or the  validity
thereof by appropriate  legal  proceedings,  which  proceedings  must operate to
prevent  (1) the  occurrence  of any of the events  described  in the  preceding
clauses (a) through (d) of this  paragraph  (ii) and (2) the collection or other
realization on any sums due or payable as a consequence  of the Order,  the sale
of any lien arising in respect of the Order,  and/or the sale or  forfeiture  of
the  Premises,  any part  thereof or interest  therein,  or the sale of any lien
connected  therewith;  provided that during such contest the Mortgagor shall, at
the option of the Mortgagee,  provide  security  reasonably  satisfactory to the
Mortgagee assuring the discharge of the Mortgagor's obligations hereunder and of
any interest,  charge, fine, penalty, fee or expense arising from or incurred as
a result of such contest;  and provided  further if at any time  compliance with
any obligation imposed upon the Mortgagor by the Order shall become necessary to
prevent (1) the occurrence of any of the events described in clauses (a) through
(d) of this  paragraph (ii) or (2) the delivery of a deed conveying the Premises
or any portion thereof or interest therein because of noncompliance, or the sale
of a lien in connection therewith,  or (3) the imposition of any penalty,  fine,
charge,  fee, cost or expense on the Mortgagee,  then the Mortgagor shall comply
with the Order in sufficient  time to prevent the occurrence of any such events,
the delivery of such deed or the sale of such lien,  or the  imposition  of such
penalty, fine, charge, fee, cost or expense on the Mortgagee.

            Section  2.3   INSURANCE:   COVERAGE.   Subject  to  the   insurance
requirements  of tenant  under the Leases and in  accordance  with the terms and
conditions  of the Loan  Agreement,  the Mortgagor  shall keep the  Improvements
insured  against  (vi)  damage  by fire and the  other  hazards  covered  by the
standard  extended  coverage  all risk  insurance  policy,  and (vii)  damage by
vandalism,  malicious  mischief,  and  such  other  hazards  against  which  the
Mortgagee  shall  require  insurance,  and each  policy  of  insurance  required
pursuant to this  SECTION  2.3,  shall be endorsed  to name the  Mortgagee  as a
mortgagee-loss  payee thereunder,  as its interest may appear, with loss payable
to  the  Mortgagee  without   contribution  or  assessment,   under  a  standard
non-contributory  mortgagee  clause.  All  insurance  policies and  endorsements
required pursuant to this SECTION 2.3 shall be fully paid for, nonassessable and
contain such  provisions  (including,  without  limitation,  inflation guard and
replacement  cost  endorsements)  and expiration dates and shall be in such form
and  amounts  and  issued by such  insurance  companies  with a rating of "A" or
better as established by Best's Rating Guide (or an equivalent  rating with such
other  publication of a similar nature as shall be in current use) or such other
companies,  as  shall  be  approved  by  the  Mortgagee.   The  Mortgagor  shall
additionally keep the Improvements insured against loss by flood if the Premises
are  located  in an area  identified  by the  Secretary  of  Housing  and  Urban
Development  as an area  having  special  flood  hazards  and in which the Flood
Insurance Act of 1968 and the Flood Disaster Protection Act of 1973, as the same
may have been or may hereafter be amended or modified  (and any  successor  acts
thereto)  in an amount at least  equal to the  outstanding  Indebtedness  or the
maximum limit of coverage  available with respect to the Improvements under said
Act,  whichever  is less,  and in a company or  companies  to be approved by the
Mortgagee.  In all events and without a  modification  of or  limitation  on the
foregoing the Mortgagor will assign and deliver the policy or policies (or 'true
copies thereof) of all such

                                      -6-
<PAGE>

insurance to the Mortgagee, which policy or policies shall have endorsed thereon
a standard non-contributory  mortgagee clause (PROVIDED,  HOWEVER, the Mortgagee
shall have thirty (30) days' notice from the insurer  prior to the  ,expiration,
cancellation  or termination  (for any reason  whatsoever) of any policy) in the
name of the Mortgagee, so and in such manner and form that the Mortgagee and its
successors  and assigns shall at all times have and hold said policy or policies
as collateral and further security for the payment of the Indebtedness until the
full payment of the Indebtedness. Insurance required hereunder may be carried by
the Mortgagor pursuant to blanket policies, provided that all other requirements
herein set forth are satisfied and that the underlying  policy in respect of the
Premises is assigned and delivered to the Mortgagee as herein  required.  In the
event that the Mortgagor  fails to keep the Premises  insured in compliance with
the Loan  Agreement or this SECTION  2.3,  the  Mortgagee  may, but shall not be
obligated to, obtain  insurance and pay the premiums  therefor and the Mortgagor
shall,  on demand,  reimburse the Mortgagee for all sums,  advances and expenses
incurred in connection therewith and such sums, advances and expenses shall bear
interest at the Post-Default Rate until reimbursed.  The Mortgagor shall deliver
copies of all original policies to the Mortgagee  together with the endorsements
thereto required  hereunder  subject to the requirements  under the Leases.  The
proceeds  of  insurance  paid on  account of any  damage or  destruction  to the
Premises or any part thereof  shall be paid over to the  Mortgagee to be applied
as  hereinafter  provided.  Notwithstanding  anything to the contrary  contained
herein or in any provision of applicable law, the proceeds of insurance policies
coming into the possession of the Mortgagee  shall not be deemed trust funds and
the  Mortgagee  shall be  entitled to dispose of such  proceeds  as  hereinafter
provided in SECTION 2.4.

            Section  2.4  INSURANCE:  PROCEEDS.  The  Mortgagor  shall  give the
Mortgagee prompt notice of any loss covered by insurance and the Mortgagee shall
have the right to join the Mortgagor in adjusting any loss in excess of $20,000.
Subject to and in accordance with the terms of the Loan Agreement, the Mortgagee
shall have the option, in its sole discretion, subject to the requirements under
the Leases,  to apply any insurance  proceeds it may receive pursuant to SECTION
2.3,  or  otherwise,  to the  payment of the  Indebtedness  or to allow all or a
portion of such  proceeds to be used for the  restoration  of the  Improvements,
subject, however, to the provisions of SECTION 2.6 hereof. In the event any such
insurance  proceeds shall be used to reduce the Indebtedness,  the same shall be
applied by the  Mortgagee,  after the  deduction  therefrom and repayment to the
Mortgagee  of any  and all  costs  incurred  by the  Mortgagee  in the  recovery
thereof;  in any manner it shall  designate,  including  but not limited to, the
application  of such proceeds to the then unpaid  installments  of the principal
balance of the  Indebtedness in the inverse order of their  maturity,  such that
the regular  payments,  if any, under the Loan Agreement shall not be reduced or
altered in any manner.  In the event that the Mortgagee  elects to allow the use
of such proceeds for the restoration of the  Improvements,  then such use of the
proceeds shall be governed as hereinafter provided in SECTION 2.6.

            Section 2.5 RESTORATION OF THE IMPROVEMENTS.  In the event of damage
or  destruction  of the  Improvements,  or any  part  thereof;  as a  result  of
casualty,  condemnation,  taking or other cause, the Mortgagor shall give prompt
written   notice   thereof  to  the  Mortgagee  and  (except  in  the  event  of
impossibility  of  restoration or repair in the event of  condemnation  or other
taking)  subject  to the  requirements  under  the  Leases,  provided  that  the
Mortgagee shall make available to the Mortgagor the insurance  proceeds (if any)
(or in the event of  condemnation  or taking,  the award (if any) arising out of
such condemnation or taking) recovered by the

                                      -7-
<PAGE>

Mortgagee  as  herein  provided,  the  Mortgagor  shall  promptly  commence  and
diligently  continue to perform the repair,  restoration  and rebuilding of that
portion of the Improvements so damaged or destroyed (hereinafter, the "Work") so
as to restore the  Improvements in full  compliance with all legal  requirements
and so that  the  Improvements  shall be at least  equal  in value  and  general
utility as they were prior to the damage or  destruction,  and if the Work to be
done is structural  or if the cost of the Work,  as estimated by the  Mortgagee,
shall exceed  Twenty  Thousand  ($20,000)  Dollars  (hereinafter,  collectively,
"Major Work"), the Mortgagor shall, prior to the commencement of the Major Work,
furnish to the Mortgagee for its approval: (i) complete plans and specifications
for the Major Work, with  satisfactory  evidence of the approval  thereof (a) by
all governmental  authorities whose approval is required,  (b) by all parties to
or having an  interest in the  leases,  if any,  of any portion of the  Premises
whose approval is required,  and (c) by an architect reasonably  satisfactory to
the Mortgagee  (hereinafter,  the "Architect") and which shall be accompanied by
the Architect's  signed  estimate,  bearing the Architect's  seal, of the entire
cost of completing the Major Work;  and (ii) certified or photostatic  copies of
all permits and approvals required by law in connection with the commencement of
the Work and as and when  obtainable,  the conduct of the Work.  Mortgagee shall
have thirty (30) days following receipt of the foregoing within which to approve
or disapprove the Major Work, and if Mortgagee  fails to respond such Major Work
shall be deemed approved.

            The  Mortgagor  shall not  commence  any of the Major Work until the
Mortgagor  shall have complied with the applicable  requirements  referred to in
this Section,  and after  commencing the Major Work the Mortgagor  shall perform
the Major Work  diligently  and in good faith in  accordance  with the plans and
specifications referred to in this SECTION 2.5 if applicable.

            Section 2.6 RESTORATION;  ADVANCES.  In the event that the Mortgagee
is required,  or in its sole discretion,  elects to apply insurance  proceeds to
the restoration of the Improvements,  the insurance proceeds (or, in the case of
condemnation or taking,  the award therefor in the event that the Mortgagee,  in
its sole discretion,  shall elect to apply such award to repair and restoration)
recovered  by  the  Mortgagee  on  account  of  damage  or  destruction  to  the
Improvements  (if any) less the cost,  if any, to the Mortgagee of such recovery
and of paying out such proceeds (including  reasonable attorneys' fees and costs
allocable to  inspecting  the Work and the plans and  specifications  therefor),
shall be applied  by the  Mortgagee  to the  payment of the cost of the Work and
shall be paid out from time to time to the Mortgagor  and/or, at the Mortgagee's
option exercised from time to time, directly to the contractor,  subcontractors,
materialmen,   laborers,  engineers,  architects  and  other  persons  rendering
services or materials for the Work, as said Work progresses  except as otherwise
hereinafter provided, but subject to the following conditions,  any of which the
Mortgagee may waive:

                  (i) if the Work to be done is Major Work, as determined by the
Mortgagee, the Architect shall be in charge of the Work;

                  (ii) each request for payment shall be made on seven (7) days'
prior notice to the Mortgagee and shall be  accompanied  by (a) a certificate of
the authorized officer of the Mortgagor, as applicable,  specifying the party to
whom  (and  for the  account  of  which)  such  payment  is to be made and (b) a
certificate  of the  Architect  if one be  required  under  SECTION  2.5  above,
otherwise  by a  certificate  of the  authorized  officer of the  Mortgagor,  as
applicable, stating

                                      -8-
<PAGE>

(a) that all of the Work completed has been done in compliance with the approved
plans and  specifications,  if any be required  under said  SECTION  2.5, and in
accordance  with all provisions of law; (b) the sum requested is justly required
to reimburse  the  Mortgagor  for payments by the Mortgagor to, or is justly due
to, the contractor, subcontractors, materialmen, laborers, engineers, architects
or other  persons  rendering  services or materials for the Work (giving a brief
description of such services and materials), and that when added to all sums, if
any,  previously paid out by the Mortgagee does not exceed the value of the Work
done to the date of such  certificate,  and (c) that the amount of such proceeds
remaining in the hands of the  Mortgagee,  together with any sums made available
by the  Mortgagor,  will be  sufficient on completion of the Work to pay for the
same in full (giving in such  reasonable  detail as the Mortgagee may require an
estimate of the cost of such completion);

                  (iii) each request shall be  accompanied  by waivers of liens,
or if unavailable,  lien bonds, satisfactory to the Mortgagee covering that part
of the Work  previously  paid for, if any, and by a search prepared by the title
insurance  company  insuring  the lien of this  Mortgage  or by such other title
company  or  licensed  abstractor  satisfactory  to the  Mortgagee  or by  other
evidence  satisfactory  to the  Mortgagee,  that  there has not been  filed with
respect to the Premises any mechanic's  lien or other lien or instrument for the
retention of title in respect of any part of the Work not  discharged  of record
and that there exist no  encumbrances  on or affecting the Premises (or any part
thereof)  other than  encumbrances,  if any,  existing as of the date hereof and
which have been approved by the Mortgagee;

                  (iv) no event shall have occurred and be continuing which with
the passage of time or the giving of notice,  or both, would constitute an Event
of Default;

                  (v) the  request  for any  payment  after  the  Work  has been
completed shall be accompanied by certified copies of all certificates, permits,
licenses,  waivers .and/or other  documents  required by law (or pursuant to any
agreement  binding  upon the  Mortgagor  or  affecting  the Premises or any part
thereof) to render occupancy of the Premises legal;

                  (vi) the Work can be  completed  not later  than one (1) month
prior to the Termination Date.

                  (vii) the Mortgagor,  prior to the  commencement  of the Work,
shall  have  deposited  with the  Mortgagee  an amount  equal to the  difference
between  the  cost of the  Work,  as  estimated  by the  Architect,  and the net
insurance  proceeds  (or  condemnation  award,  as the  case may be)  after  the
deduction  therefrom of the cost,  if any, to the  Mortgagee of the recovery and
paying out of such  proceeds  (including  reasonable  attorneys'  fees and costs
allocable to inspecting the Work and the plans and specifications therefor).

            Upon  completion of the Work and payment in full  therefor,  or upon
failure on the part of the  Mortgagor  promptly  to commence  or  diligently  to
continue the Work, or at any time upon request by the  Mortgagor,  the Mortgagee
may, at its option,  apply the amount of any such proceeds then or thereafter in
the hands of the  Mortgagee  to the  payment  of the  Indebtedness,  PROVIDED  ,
HOWEVER, that nothing herein contained shall prevent the Mortgagee from applying
at any time the whole or any part of such proceeds to the curing of any Event of
Default.

                                      -9-
<PAGE>

            In the event the Work to be done is not Major Work, as determined by
the  Mortgagee,  then  the net  insurance  proceeds  held by the  Mortgagee  for
application thereto shall be paid to the Mortgagor by the Mortgagee from time to
time upon  submission  to the Mortgagee of bills and/or  invoices  showing costs
incurred  in  connection  with the  Work,  subject,  however,  to the  foregoing
provisions of this SECTION 2.6,  except those which are  applicable  only if the
Work to be done is Major Work, as determined by the Mortgagee.

            Section  2.7  RESTORATION  BY  THE  MORTGAGEE.   Provided  that  the
Mortgagee shall make available to the Mortgagor the insurance  proceeds (if any)
recovered by the  Mortgagee  as herein  provided,  if within one hundred  twenty
(120) days after the occurrence of any damage or destruction to the Improvements
requiring Major Work in order to restore the  Improvements,  the Mortgagor shall
not have  submitted to the  Mortgagee and received the  Mortgagee's  approval of
plans and  specifications  for the repair,  restoration  and  rebuilding  of the
Improvements  so damaged or  destroyed  (approved  by the  Architect  and by all
governmental  authorities and other persons or entities,  if any, whose approval
is  required),  or if, after such plans and  specifications  are approved by all
such  governmental  authorities  and other persons or entities,  if any, and the
Mortgagee,   the  Mortgagor  shall  fail  to  commence   promptly  such  repair,
restoration and rebuilding,  or if thereafter the Mortgagor fails  diligently to
continue such repair, restoration and rebuilding or is delinquent in the payment
to mechanics,  materialmen  or others of the costs  incurred in connection  with
such Major  Work,  or, in the case of any damage or  destruction  not  requiring
Major  Work,  as  determined  by  the   Mortgagee,   in  order  to  restore  the
Improvements,  if the  Mortgagor  shall  fail to  repair,  restore  and  rebuild
promptly the  Improvements  so damaged or  destroyed,  then,  in addition to all
other rights  herein set forth,  and after giving the  Mortgagor  ten (10) days'
written notice of the nonfulfillment of one or more of the foregoing conditions,
the Mortgagee,  or any lawfully appointed receiver of the Premises, may at their
respective  options,  perform or cause to be performed such repair,  restoration
and rebuilding,  and may take such other steps as they deem advisable to perform
such repair,  restoration and rebuilding, and upon twenty-four (24) hours' prior
written notice to the Mortgagor,  the Mortgagee may enter upon the  Improvements
to the extent  reasonably  necessary  or  appropriate  for any of the  foregoing
purposes,  and the  Mortgagor  hereby  waives,  for the Mortgagor and all others
holding under the  Mortgagor,  any claim against the Mortgagee and such receiver
arising out of anything done by the Mortgagee or such receiver  pursuant hereto,
and the Mortgagee may, at its option, apply insurance proceeds (without the need
by the  Mortgagee  to  fulfill  any  other  requirements  of this  Mortgage)  to
reimburse  the  Mortgagee,  and/or such  receiver  for all  amounts  expended or
incurred by them, respectively, in connection with the performance of such Work,
and any  excess  costs  shall be paid by the  Mortgagor  to the  Mortgagee  upon
demand,  and  such  payment  of  excess  costs  shall  be  deemed  part  of  the
Indebtedness and shall be secured by the lien of this Mortgage.

            Section 2.8 MAINTENANCE OF EXISTENCE. The Mortgagor will, so long as
it is owner of the  Premises  (or any part  thereof  or  interest  therein)  and
subject to the terms and  conditions of the Leases,  do all things  necessary to
preserve and keep in full force and effect its existence, franchises, rights and
privileges  under the laws of the state of its  formation  and,  subject  to the
provisions of paragraph  (ii) of SECTION 2.2, will comply with all  regulations,
rules, ordinances, statutes, orders and decrees of any governmental authority or
court applicable to the Mortgagor, or to the Premises or any part thereof.

                                      -10-
<PAGE>

            Section 2.9 TAXES AND OTHER CHARGES.

                  (i) Subject to the terms and  conditions  of the Leases and to
the extent payable by Mortgagor,  the Mortgagor  shall,  in accordance  with the
Lease,  pay and discharge by the last day payable without penalty or premium all
taxes of every  kind and  nature,  water  rates,  sewer  rents and  assessments,
levies, permits,  inspection and license fees and all other charges imposed upon
or assessed  against  the  Premises  or any part  thereof or upon the  revenues,
rents,  issues,  income and profits of the Premises or arising in respect of the
occupancy,  use or  possession  thereof.  The  Mortgagor  shall  exhibit  to the
Mortgagee  within ten (10) days after request and after the same are required to
be paid pursuant to the foregoing sentence, validated receipts or other evidence
satisfactory  to the Mortgagee  showing the payment of such taxes,  assessments,
water rates, sewer rents,  levies, fees and other charges which may be or become
a lien on the Premises.  Should the  Mortgagor  default in the payment of any of
the foregoing taxes,  assessments,  water rates,  sewer rents,  levies,  fees or
other charges, the Mortgagee may, but shall not be obligated to, pay the same or
any part thereof and the Mortgagor shall, on demand, reimburse the Mortgagee for
all amounts so paid and such  amounts  shall bear  interest at the  Post-Default
Rate until reimbursed.

                  (ii) Nothing in this SECTION 2.9 shall  require the payment or
discharge of any obligation imposed upon the Mortgagor by subsection (i) of this
SECTION 2.9 so long as the Mortgagor  shall in good faith and at its own expense
contest the same or the validity thereof by appropriate  legal proceedings which
proceedings must operate to prevent the collection  thereof or other realization
thereon, the sale of the lien thereof and the sale or forfeiture of the Premises
or any part thereof,  to satisfy the same; PROVIDED that during such contest the
Mortgagor shall, at the option of the Mortgagee,  establish reserves  reasonably
satisfactory  to the  Mortgagee,  assuring  the  discharge  of  the  Mortgagor's
obligation  hereunder and of any additional interest charge,  penalty or expense
arising from or incurred as a result of such  contest;  and  PROVIDED,  FURTHER,
that if at any time  payment of any  obligation  imposed  upon the  Mortgagor by
subsection  (i) of this  SECTION  2.9 shall  become  necessary  to  prevent  the
delivery of a tax deed conveying the Premises or any portion thereof or the sale
of the tax lien  therefor  because  of  non-payment,  or the  imposition  of any
penalty  or cost on the  Mortgagee,  then the  Mortgagor  shall  pay the same in
sufficient  time to prevent  the  delivery  of such tax deed or the sale of such
lien, or the imposition of such penalty or cost on the Mortgagee.

                  (iii) The  Mortgagor  shall pay when due all (a)  premiums for
fire,  hazard and other insurance  required to be maintained by the Mortgagor on
the Premises  pursuant to the terms of SECTION 2.3 hereof,  (b) title  insurance
premiums  relating  to  the  insurance  to be  maintained  on  the  Premises  in
connection  with the  Mortgage,  and (c) any and all other  costs,  expenses and
charges expressly required to be paid hereunder, and ( subject to the provisions
hereof,  to be paid for the maintenance  and/or  protection of, or on account of
any other collateral delivered,  assigned,  pledged,  mortgaged,  transferred or
hypothecated to the Mortgagee as security for the  Indebtedness or in connection
with the execution and delivery of this Mortgage.

            Section 2.10 MECHANICS' AND OTHER LIENS.

                  (iv) Subject to the terms and  conditions  of the Leases,  the
Mortgagor shall pay, bond or discharge of record, from time to time,  forthwith,
all liens (and all claims and  demands of  mechanics,  materialmen,  laborers or
others,  which, if unpaid,  might result in or permit the creation of a lien) on
or affecting

                                      -11-
<PAGE>

the  Premises or any part  thereof,  or on or  affecting  the  revenues,  rents,
issues,  income or profits  arising  therefrom  and, in general,  the  Mortgagor
forthwith  shall do, at the cost of the  Mortgagor  and  without  expense to the
Mortgagee,  everything necessary to fully preserve the lien of this Mortgage. In
the event that the  Mortgagor  fails in a timely  manner to make payment in full
of, bond or discharge,  such liens the Mortgagee may, but shall not be obligated
to, make payment,  bond or discharge such liens, upon notice to the Mortgagor if
practicable  in order to preserve  the lien of this  Mortgage or the  collateral
value  of the  Premises  and the  Mortgagor  shall,  on  demand,  reimburse  the
Mortgagee  for all sums so  expended  and such sums shall bear  interest  at the
Post-Default Rate until reimbursed.

                  (v) Nothing in this SECTION 2.10 shall  require the payment or
discharge of any obligation imposed upon the Mortgagor by subsection (i) of this
SECTION 2.10 so long as the  Mortgagor  shall bond or discharge  any lien on the
Premises  arising from such  obligation  or in good faith and at its own expense
contest the same or the validity thereof by appropriate  legal proceedings which
proceedings must operate to prevent the collection  thereof or other realization
thereon, the sale of the lien thereof and the sale or forfeiture of the Premises
or any part thereof,  to satisfy the same; PROVIDED that during such contest the
Mortgagor shall, at the option of the Mortgagee,  provide security  satisfactory
to the Mortgagee, assuring the discharge of the Mortgagor's obligation hereunder
and of any  additional  interest  charge,  penalty  or expense  arising  from or
incurred as a result of such contest; and PROVIDED, FURTHER, that if at any time
payment of any  obligation  imposed upon the Mortgagor by subsection (i) of this
SECTION 2.10 shall become necessary (a) to prevent the sale or forfeiture of the
Premises or any portion thereof  because of  non-payment,  or (b) to protect the
lien of this Mortgage,  then the Mortgagor shall pay the same in sufficient time
to prevent the sale or forfeiture of the Premises or to protect the lien of this
Mortgage, as the case may be.

            Section 2.11 CONDEMNATION  AWARDS.  The Mortgagor,  immediately upon
obtaining  knowledge of the institution of any proceedings for the  condemnation
of the  Premises  or any  portion  thereof,  will  notify the  Mortgagee  of the
pendency  of  such  proceedings.  The  Mortgagee  may  participate  in any  such
proceedings  and the  Mortgagor  from time to time will deliver to the Mortgagee
all  instruments  requested by it to permit such  participation.  Subject to the
terms and conditions of the Leases,  all awards and compensation  payable to the
Mortgagor  as a result of any  condemnation  or other taking or purchase in lieu
thereof,  of the Premises or any part thereof,  are hereby assigned to and shall
be paid to the Mortgagee. Subject to the terms and conditions of the Leases, the
Mortgagor hereby authorizes the Mortgagee to collect and receive such awards and
compensation,  to give proper  receipts and  acquittances  therefor  and, in the
Mortgagee's  sole  discretion,  to apply  the same  toward  the  payment  of the
Indebtedness, notwithstanding the fact that the Indebtedness may not then be due
and payable,  or to the restoration of the  Improvements.  In the event that any
portion of the condemnation  awards or compensation  shall be used to reduce the
Indebtedness,  same  shall be applied  by the  Mortgagee  in any manner it shall
designate,  including,  but not  limited  to, the  application  of such award or
compensation  to  then  unpaid  installments  of the  principal  balance  of the
Indebtedness in the inverse order of their maturity so that the regular payments
under the Loan  Agreement  shall not be reduced or  altered in any  manner.  The
Mortgagor,  upon request by the Mortgagee,  shall make,  execute and deliver any
and all  instruments  requested for the purpose of confirming  the assignment of
the aforesaid  awards and  compensation  to the Mortgagee  free and clear of any
liens,  charges or encumbrances of any kind or nature whatsoever.  The Mortgagee
shall  not be  limited  to the  interest  paid on the  proceeds  of any award or
compensation, but shall be entitled to

                                      -12-
<PAGE>

the payment by the  Mortgagor of interest at the  applicable  rate  provided for
herein or in the Loan Agreement .

            Notwithstanding the voiding of the original sale(s) or leasing(s) of
all or any portion of the  Premises,  the  Mortgagor  shall  continue to pay the
Indebtedness  at the time and in the manner provided for its payment in the Loan
Agreement and in this Mortgage and the  Indebtedness  shall not be reduced until
any  payment  therefor  shall have been  actually  received  and  applied by the
Mortgagee to the discharge of the Indebtedness. The Mortgagee may apply any such
payment to the discharge of the Indebtedness whether or not then due and payable
in such priority and  proportions as the Mortgagee in its discretion  shall deem
to be proper. If the Premises are sold, through foreclosure or otherwise,  prior
to the receipt by the  Mortgagee of such payment,  the Mortgagee  shall have the
right,  whether or not a deficiency judgment under the Loan Agreement shall have
been sought,  recovered or denied, to receive said payment, or a portion thereof
sufficient to pay the  Indebtedness,  whichever is less.  The  Mortgagor,  after
obtaining the prior written  consent of the Mortgagee,  shall file and prosecute
its claim or claims for any such  payment  in good faith and with due  diligence
and cause the same to be collected  and paid over to the  Mortgagee,  and hereby
irrevocably authorizes and empowers the Mortgagee,  in the name of the Mortgagor
or  otherwise,  to collect  and  receipt  for any such  payment  and to file and
prosecute such claim or claims,  and although it is hereby expressly agreed that
the same shall not be necessary in any event, the Mortgagor  shall,  upon demand
of the Mortgagee,  make,  execute and deliver any and all  assignments and other
instruments  sufficient  for the purpose of  assigning  any such  payment to the
Mortgagee, free and clear of any encumbrances of any kind or nature whatsoever.

            Section  2.12 COSTS OF  DEFENDING  AND  UPHOLDING  THE LIEN.  If any
action or proceeding is commenced to which action or proceeding the Mortgagee is
made a party or in which it  becomes  necessary  to defend or uphold the lien of
this Mortgage,  the Mortgagor shall, on demand,  reimburse the Mortgagee for all
expenses  (including,   without  limitation,   reasonable  attorneys'  fees  and
disbursements  and  reasonable  appellate  attorneys'  fees  and  disbursements)
incurred by the  Mortgagee in any such action or  proceeding  and such  expenses
shall bear interest at the Post-Default Rate until reimbursed.  In any action or
proceeding to foreclose this Mortgage or to recover or collect the Indebtedness,
the  provisions of law relating to the  recovering of costs,  disbursements  and
allowances shall prevail unaffected by this covenant.

            Section 2.13 ADDITIONAL  ADVANCES AND  DISBURSEMENTS.  The Mortgagor
shall pay by the last day payable  without  premium or penalty all  payments and
charges  on all  liens,  encumbrances,  ground  and other  leases  and  security
interests which affect or may affect or attach or may attach to the Premises, or
any part thereof,  and in default  thereof;  the Mortgagee shall have the right,
but shall not be  obligated,  to pay,  without  notice  to the  Mortgagor,  such
payments and charges and the Mortgagor shall, on demand, reimburse the Mortgagee
for  amounts  so  paid.  In  addition,  upon  default  of the  Mortgagor  in the
performance of any other terms, covenants, conditions or obligations by it to be
performed  hereunder  or under any such  lien,  encumbrance,  lease or  security
interest, the Mortgagee shall have the right, but shall not be obligated,  with,
except in the case of an emergency condition, prior notice to Mortgagor, to cure
such default in the name and on behalf of the  Mortgagor.  All  reasonable  sums
advanced  and  reasonable  out-of-pocket  expenses  incurred  at any time by the
Mortgagee pursuant to this SECTION 2.13 or as otherwise provided under the terms
and provisions of this Mortgage or under applicable law shall

                                      -13-
<PAGE>

bear interest from the date that such sum is advanced or expenses  incurred,  to
and including the date of reimbursement,  computed at the Post-Default Rate. All
interest payable hereunder shall be computed on the basis of a 360-day year over
the actual number of days elapsed.  Any such amounts advanced or incurred by the
Mortgagee,  together  with the  interest  thereon,  shall be  payable on demand,
shall,  until paid,  be secured by this  Mortgage as a lien on the  Premises and
shall be part of the Indebtedness.

            Section 2.14 COSTS OF ENFORCEMENT.  The Mortgagor agrees to bear and
pay all expenses (including, without limitation,  reasonable attorneys' fees and
disbursements  and reasonable  appellate  attorneys' fees and  disbursements for
legal  services of every kind) of or incidental to (i) any  amendment,  renewal,
modification,  consolidation,  supplement,  restatement or restructuring of this
Mortgage, the Loan Agreement or any document entered into in connection with the
Indebtedness,  or (ii) the enforcement of any provision hereof, by litigation or
otherwise,  or the enforcement,  compromise of settlement of this Mortgage,  the
Loan Agreement or the  Indebtedness,  and for the curing  thereof,  or (iii) for
defending  or  asserting  the  rights  and  claims of the  Mortgagee  in respect
thereof,  by litigation  or otherwise.  All rights and remedies of the Mortgagee
shall be cumulative and may be exercised singly or concurrently.

            Section  2.15  FILING  CHARGES,  RECORDING  FEES,  TAXES,  ETC.  The
Mortgagor  shall  pay any and  all  taxes,  charges,  filing,  registration  and
recording  fees,  excises and levies imposed upon the Mortgagee by reason of its
ownership of the Loan  Agreement or this  Mortgage or any mortgage  supplemental
hereto, any security instrument with respect to any interest of the Mortgagor in
and to any fixture or personal  property at the  Premises or any  instrument  of
further  assurance,  other  than  income,  franchise,  succession,  inheritance,
business and similar taxes,  and shall pay all other taxes, if any,  required to
be paid on the debt evidenced by the Loan Agreement.  In the event the Mortgagor
fails to make such payment  within ten (10) days after written notice thereof to
the  Mortgagor,  then the  Mortgagee  shall  have the  right,  but  shall not be
obligated, to pay the amount due, and the Mortgagor shall, on demand,  reimburse
the Mortgagee for said amount,  together with interest  thereon  computed at the
Post-Default Rate.

            Section  2.16 TAX AND  INSURANCE  DEPOSITS.  If an Event of  Default
shall occur and be continuing hereunder or if the Mortgagor shall default in its
obligations set forth in Section 2.9 hereof, then the Mortgagee,  at its option,
to be exercised by ten (10) days' written notice to the  Mortgagor,  may require
that the Mortgagor deposit with the Mortgagee,  monthly, one-twelfth (1/12th) of
the annual  charges for insurance  premiums and real estate taxes,  assessments,
water,  sewer and other  charges  which might become a lien upon the Premises or
any part thereof (all of the foregoing,  the  "Impositions"),  and the Mortgagor
shall,  accordingly,  make  such  deposits.  In  addition,  if  required  by the
Mortgagee,  the  Mortgagor  shall  simultaneously  therewith  deposit  with  the
Mortgagee  a  sum  of  money  which  together  with  the  monthly   installments
aforementioned will be sufficient to make each of the payments aforementioned at
least  thirty  (30) days prior to the date such  payments  are due.  Should said
charges not be ascertainable at the time any deposit is required to be made with
the Mortgagee, the deposit shall be made on the basis of an estimate made by the
Mortgagee  in its sole  discretion,  and when the  charges  are  fixed  for then
current year, the Mortgagor shall deposit any deficiency with the Mortgagee. All
funds so  deposited  with the  Mortgagee  shall be held by it, but not in escrow
and,  except to the extent required by applicable law,  without  interest,  and,
provided  that no Event of  Default  shall  have  occurred,  shall be applied in
payment of the charges aforementioned when and as payable, to the

                                      -14-
<PAGE>

extent the Mortgagee  shall have such funds on hand.  Should an Event of Default
occur, the funds deposited with the Mortgagee, as aforementioned, may be applied
in payment of the charges for which such funds shall have been  deposited  or to
the payment of the  Indebtedness or any other charges  affecting the security of
the  Mortgagee,  as the  Mortgagee  sees fit, but no such  application  shall be
deemed to have been made by operation of law or otherwise until actually made by
the Mortgagee as herein provided,  nor shall any application be deemed to affect
any right or remedy of the  Mortgagee  hereunder or under any statute or rule of
law. If deposits are being made with the Mortgagee,  the Mortgagor shall furnish
the Mortgagee with bills for the charges for which such deposits are required to
be made hereunder and/or such other documents necessary for the payment of same,
at least  fifteen (15) days prior to the date on which the charges  first become
payable.  In the event  that the  Mortgagor  fails to pay any such  amount,  the
Mortgagee  may, but shall not be obligated  to, make  payment  thereof,  and the
Mortgagor  shall,  on demand,  reimburse the Mortgagee for all sums so expended,
together with interest thereon computed at the Post-Default Rate.

            Section 2.17 RESTRICTIVE COVENANTS AND LEASING REQUIREMENTS.

            Except  as may be  expressly  permitted  under the terms of the Loan
Agreement  without the prior  written  consent of the  Mortgagee,  the Mortgagor
shall  not:  (a)  execute  or permit to exist any lease or  occupancy  of all or
substantially  all of the  Premises;  (b)  modify,  renew or amend  any lease or
occupancy  agreement  affecting the  Premises;  (c) grant rent  concessions,  or
discount any rents,  or collect any rents for a period of more than one month in
advance;  (d) execute any conditional  bill of sale,  chattel  mortgage or other
security   instruments  covering  any  furniture,   furnishings,   fixtures  and
equipment,  intended to be  incorporated in the,  Premises or the  appurtenances
thereto,  or covering  articles of personal  property  placed in the Premises or
purchase any of such  furniture,  furnishings,  fixtures  and  equipment so that
ownership of the same will not vest unconditionally in the Mortgagor,  free from
encumbrances  on delivery  to the  Premises;  (e) further  assign the leases and
rents affecting the Premises;  (f) sell,  transfer,  alienate,  grant, convey or
assign  any  interest  in the  Premises  or any  part  thereof;  or (g)  further
mortgage, encumber, alienate, hypothecate, grant a security interest in or grant
any other interest  whatsoever in the Premises or any part thereof,  or interest
therein.

            Section 2.18 ESTOPPEL CERTIFICATES.  The Mortgagor,  within ten (10)
business days upon request in person or by mail,  shall furnish to the Mortgagee
a written  statement,  duly  acknowledged,  setting forth the amount due on this
Mortgage, the terms of payment and the maturity date of the Loan Agreement,  the
date to which  interest  has been paid,  whether any  offsets or defenses  exist
against  the  Indebtedness  and,  if  any  are  alleged  to  exist,  a  detailed
description of the nature thereof.

            Section  2.19  TRUST  FUNDS.  To the  extent,  if any,  required  by
applicable  law or to preserve  the lien of this  Mortgage,  the priority of the
lien  of this  Mortgage  and/or  the  rights  of the  Mortgagee  hereunder,  the
Mortgagor will receive the advances  secured hereby,  and will hold the right to
receive such  advances,  as a trust fund to be applied  first for the purpose of
paying the cost of the  improvement and will apply the same first to the payment
of the  cost of the  improvement  before  using  any  part of the  total of such
advances for any other purpose.

            Section 2.20 ASSIGNMENT OF RENTS.  Subject to the Landlord's  rights
under the

                                      -15-
<PAGE>

Leases,  Mortgagor hereby assigns to the Mortgagee,  as further security for the
payment of the  Indebtedness,  its interest in the rents,  issues and profits of
the  Premises,  together  with its  interest  in all leases and other  documents
evidencing  such rents,  issues and profits now or  hereafter  in effect and its
interest in any and all deposits held as security under said leases,  and shall,
upon demand,  deliver to the Mortgagee an executed  counterpart of each lease or
other  document to which it is a party and which affects the  Premises.  Nothing
contained in the foregoing  sentence shall be construed to bind the Mortgagee to
the performance of any of the covenants,  conditions or provisions  contained in
any such lease or other  document or otherwise to impose any  obligation  on the
Mortgagee  (including,  without limitation,  any liability under the covenant of
quiet  enjoyment  contained in any lease or in any  applicable  state law in the
event that any tenant shall have been joined as a party  defendant in any action
to foreclose this Mortgage and shall have been barred and foreclosed  thereby of
all right, title and interest and equity of redemption in the Premises),  except
that the Mortgagee shall be accountable for any money actually received pursuant
to such  assignment.  The Mortgagor  hereby  further grants to the Mortgagee the
right (i) to enter upon and take  possession  of the Premises for the purpose of
collecting the said rents,  issues and profits,  (ii) to dispossess by the usual
summary proceedings (or any other proceedings of the Mortgagee's  selection) any
tenant  defaulting  in the payment  thereof to the  Mortgagee,  (iii) to let the
Premises, or any part thereof, and (iv) to apply said rents, issues and profits,
after  payment  of all  necessary  charges  and  expenses  on  account  of  said
Indebtedness.  Such  assignment  and grant shall  continue  in effect  until the
Indebtedness is paid, the execution of this Mortgage constituting and evidencing
the irrevocable consent of the Mortgagor to the entry upon and taking possession
of the Premises by the Mortgagee pursuant to such grant, whether foreclosure has
been instituted or not and without applying for a receiver. Until the occurrence
of an Event of Default,  the Mortgagor shall have a revocable license to receive
said rents, issues and profits and otherwise manage the Premises.  The Mortgagor
agrees to hold said rents, issues and profits in trust and to use the same fast,
in  payment  of  the  cost  of  the  improvement,  second,  in  payment  of  the
Indebtedness  to the extent the same is then due and owing,  and third,  in such
manner as the Mortgagee may elect.  Such license of the Mortgagor to collect and
receive said rents,  issues and profits may be revoked by the Mortgagee upon the
occurrence of an Event of Default by giving not less than five (5) days' written
notice of such revocation,  served personally upon or sent by registered mail to
the record owner of the Premises. The Mortgagor hereby appoints the Mortgagee as
its attorney-in-fact, coupled with an interest, to receive and collect all rent,
additional  rent and other  sums due under the terms of each  lease to which the
Mortgagor  is a party  and to  direct  any such  tenant,  by  written  notice or
otherwise,  to forward  such rent,  additional  rent or other sums by mail or in
person to the Mortgagee.

            Section  2.21  INDEMNITY.   The  Mortgagor   agrees  that  it  shall
indemnify,  defend and hold  harmless  the  Mortgagee  and each  Lender from and
against  all loss,  liability,  obligation,  claim,  damage,  penalty,  cause or
action, reasonable, out-of-pocket cost and expense, including without limitation
any assessments, levies, impositions,  judgments, reasonable attorneys' fees and
disbursements, cost of appeal bonds and printing costs, imposed upon or incurred
by or asserted against the Mortgagee  and/or any other Lender,  except as may be
caused by Mortgagee's  gross  negligence or willful  misconduct by reason of (a)
ownership of this Mortgage;  (b) any accident,  injury to or death of persons or
loss of or damage to property  occurring on or about the Premises;  (c) any use,
non-use  or  condition  of the  Premises;  (d) any  failure  on the  part of the
Mortgagor  to perform or comply  with any of the terms of this  Mortgage  in any
material respect;  (e) performance of any labor or services or the furnishing of
any

                                      -16-
<PAGE>

materials  or  other  property  in  respect  of the  Premises  or any  part  for
maintenance  or otherwise;  (f) the  imposition of any mortgage,  real estate or
governmental  tax incurred as a result of this  Mortgage or the Loan  Agreement,
other than income tax payable by, or other taxes personal to, the Mortgagee;  or
(g) any violation or alleged violation by the Mortgagor of any law, in each case
except  if  resulting  from  the  gross  negligence  or  willful  misconduct  of
Mortgagee.  Any amounts  payable  under this Section shall be due and payable on
demand and until  paid shall bear  interest  at the  Post-Default  Rate.  If any
action is  brought  against  the  Mortgagee  by  reason of any of the  foregoing
occurrences, the Mortgagor will, upon the Mortgagee's request, defend and resist
such action,  suit or proceeding,  at the  Mortgagor's  sole cost and expense by
counsel approved by the Mortgagee.

            Section  2.22  ENVIRONMENTAL  PROVISIONS.  For the  purposes of this
Section the  following  terms shall have the  following  meanings:  (i) the term
"Hazardous  Material" shall mean any material or substance that,  whether by its
nature or use, is subject to  regulation  under any  Environmental  Requirement,
(ii)  the  term   "Environmental   Requirements"  shall  collectively  mean  the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C. ss. 9601 ET SEQ.), the Hazardous Materials  Transportation Act (49 U.S.C.
ss. 1801 ET SEQ.),  the Resource  Conservation  and Recovery Act (42 U.S.C.  ss.
6901 ET SEQ.),  the Toxic  Substances  Control Act (15 U.S.C. ss. 2601 ET SEQ.),
the Clean Air Act (42 (U.S.C.  ss. 7401 et SEQ.) and the Federal Water Pollution
Control Act (33 U.S.C.  ss. 1251 ET SEQ.), all as presently in effect and as the
same may hereafter be amended,  any regulation  pursuant  thereto,  or any other
present  or  future  law,  ordinance,  rule,  regulation,   order  or  directive
addressing  environmental,  health  or safety  issues of or by any  Governmental
Authority,  (iii)  the term  "Governmental  Authority"  shall  mean the  Federal
government,  or any state or other political subdivision thereof, or any agency,
court  or  body  of  the  Federal  government,  any  state  or  other  political
subdivision thereof, exercising executive, legislative,  judicial, regulatory or
administrative  functions,  and (iv)) the term  "diligent  inquiry" shall mean a
level of inquiry at least  equal to any  environmental  site  assessment  of the
Premises conducted in accordance with the Mortgagee's environmental policies and
procedures.  The Mortgagor hereby  represents and warrants to the Mortgagee that
to the best of its knowledge (a) no Hazardous  Material is currently located at,
on, in, under or about the Premises in violation of any Environmental  Laws, (b)
no Hazardous Material is currently or, to the best of the Mortgagor's  knowledge
after diligent inquiry, has been located at, in, on, under or about the Premises
in a manner which  violates any  Environmental  Requirement,  or which  requires
cleanup or corrective  action of any kind by Mortgagor  under any  Environmental
Requirement,  (c) no  releasing,  emitting,  discharging,  leaching,  dumping or
disposing of any  Hazardous  Material  from the Premises  onto or into any other
property or from any other  property  onto or into the Premises is occurring or,
to the best of the Mortgagor's  knowledge after diligent inquiry,  has occurred,
in violation of any Environmental Requirement, (d) no notice of violation, lien,
complaint,  suit,  order or  other  notice  with  respect  to the  environmental
condition of the Premises is  outstanding,  nor, to the best of the  Mortgagor's
knowledge after diligent inquiry,  has any such notice been issued which has not
been fully  satisfied and complied  with in a timely  fashion so as to bring the
Premises into full compliance with all Environmental Requirements,  and will not
generate,  store, handle, process dispose of or otherwise use, and (e) Mortgagor
will not permit any tenant or other occupant of the Premises to generate, store,
handle, process, dispose of or otherwise use, Hazardous Materials at, in,

                                      -17-
<PAGE>

on, under or about the  Premises in a manner in  violation of any  Environmental
Requirement.  The Mortgagor shall notify the Mortgagee  promptly in the event of
any spill or other release of any Hazardous  Material at, in, on, under or about
the Premises which is required to be reported to a Governmental  Authority under
any Environmental Requirement,  will promptly forward to the Mortgagee copies of
any notices  received by the  Mortgagor  relating to alleged  violations  of any
Environmental  Requirement and will promptly pay when due any fine or assessment
against  the  Mortgagee,   the  Mortgagor  or  the  Premises   relating  to  any
Environmental Requirement. If at any time it is determined that the operation or
use of the Premises  violates any applicable  Environmental  Requirement or that
there are  Hazardous  Materials  located at, in, on, under or about the Premises
which,  under  any  Environmental  Requirement,   require  special  handling  in
collection,  storage,  treatment  or  disposal,  or any other form of cleanup or
corrective  action by Mortgagor,  the Mortgagor  shall,  within thirty (30) days
after  receipt of notice  thereof  from any  Governmental  Authority or from the
Mortgagee,  take, at its sole cost and expense, such actions as may be necessary
to fully comply in all respects with all Environmental  Requirements,  PROVIDED,
HOWEVER,  that if such  compliance  cannot  reasonably be completed  within such
thirty (30) day period,  the  Mortgagor  shall  commence such  necessary  action
within  such  thirty  (30)  day  period  and  shall  thereafter  diligently  and
expeditiously  proceed to complete in a timely  fashion  with all  Environmental
Requirements.  If the  Mortgagor  fails to timely  take,  or to  diligently  and
expeditiously  proceed to complete in a timely  fashion,  any such  action,  the
Mortgagee may, in its sole and absolute  discretion,  but, except in the case of
any emergency condition,  with delivery of prior written notice to Grantor, make
advances or payments  towards the  performance or  satisfaction of the same, but
shall in no event be under  any  obligation  to do so.  All  reasonable  sums so
advanced or paid by the Mortgagee  (including,  without limitation,  counsel and
consultant  fees and expenses,  investigation  and laboratory fees and expenses,
and fines or other penalty payments) and all reasonable sums advanced or paid in
connection  with any  judicial or  administrative  investigation  or  proceeding
relating thereto, will immediately, upon demand, become due and payable from the
Mortgagor  and shall bear  interest at the  Post-Default  Rate from the date any
such sums are so advanced or paid by the Mortgagee  until the date any such sums
are repaid by the Mortgagor to the  Mortgagee.  The  Mortgagor  will execute and
deliver, promptly upon request, such instruments as the Mortgagee reasonably may
deem useful or  necessary to permit the  Mortgagee to take any such action,  and
such additional notes and mortgages,  as the Mortgagee may require to secure all
sums so  advanced  or paid by the  Mortgagee.  If a lien is  filed  against  the
Premises by any Governmental  Authority resulting from the need to expend or the
actual  expending  of  monies  arising  from  an  action  or  omission,  whether
intentional  or  unintentional,  of the  Mortgagor or for which the Mortgagor is
responsible,  resulting in the releasing,  spilling, leaking, leaching, pumping,
emitting, pouring, emptying or dumping of any Hazardous Material into the waters
or onto land located within or without the state where the Premises are located,
then the  Mortgagor  will,  within  thirty  (30)  days  from  the date  that the
Mortgagor  is first  given  notice  that such lien has been  placed  against the
Premises  (or within  such  shorter  period of time as may be  specified  by the
Mortgagee  if such  Governmental  Authority  has  commenced  steps to cause  the
Premises to be sold  pursuant to such lien)  either (a) pay the claim and remove
the lien,  or (b) furnish a cash  deposit,  bond,  or such other  security  with
respect  thereto as is  satisfactory  in all  respects to the  Mortgagee  and is
sufficient  to effect a complete  discharge  of such lien on the  Premises.  The
Mortgagee  may, at its  option,  if the  Mortgagee  reasonably  believes  that a
Hazardous,;  Material or other environmental  condition violates or threatens to
violate  any  Environmental  Requirement,  except  in the  case of an  emergency
condition  with  delivery  of  prior  written  notice  to  Mortgagor,  cause  an
environmental  audit of the  Premises or  portions  thereof to be  conducted  to
confirm the

                                      -18-
<PAGE>

Mortgagor's  compliance  with the provisions of this Section,  and the Mortgagor
shall cooperate in all reasonable ways with the Mortgagee in connection with any
such  audit  and  shall  pay all  costs  and  expenses  incurred  in  connection
therewith. The Mortgagor will defend, indemnify, and hold harmless the Mortgagee
and  each  Lender,  and  their  respective  employees,   agents,  officers,  and
directors,  from and against any and all claims, demands,  penalties,  causes of
action, fines, liabilities, settlements, damages, costs, or expenses of whatever
kind or  nature,  known  or  unknown,  foreseen  or  unforeseen,  contingent  or
otherwise  (including,  without  limitation,  counsel  and  consultant  fees and
expenses,  investigation  and  laboratory  fees and expenses,  court costs,  and
litigation expenses) arising out of, or in any way related to, (i) any breach by
the  Mortgagor of any of the  provisions  of this  Section,  (ii) the  presence,
disposal, spillage, discharge, emission, leakage, release, or threatened release
of any Hazardous  Material by Mortgagor which is at, in, on, under,  about, from
or affecting the Premises,  including,  without limitation, any damage or injury
resulting from any such  Hazardous  Material to or affecting the Premises or the
soil, water, air, vegetation,  buildings,  personal property, persons or animals
located  on the  Premises  or on any  other  property  or  otherwise,  (iii) any
personal injury (including wrongful death) or property damage (real or personal)
arising  out of or  related to any such  Hazardous  Material,  (iv) any  lawsuit
brought or threatened,  settlement  reached,  or order or directive of or by any
Governmental Authority relating to such Hazardous Material, or (v) any violation
of any  Environmental  Requirement or any policy or requirement of the Mortgagee
except if caused by the gross  negligence or willful  misconduct of Beneficiary,
its   employees,   agents,   officers,   directors  or   representatives.   This
indemnification  shall,  notwithstanding any exculpatory or the provision of any
nature whatsoever to the contrary set forth in the Loan Agreement, this Mortgage
or any other document or instrument  now or hereafter  executed and delivered in
connection  with the loan  evidenced by the Loan  Agreement  and secured by this
Mortgage,  constitute  the  personal  recourse  undertakings,   obligations  and
liabilities  of the  Mortgagor.  If this Mortgage is foreclosed or the Mortgagor
tenders a deed or assignment in lieu of foreclosure, the Mortgagor shall deliver
the Premises to the purchaser at foreclosure  or to the Mortgagee,  its nominee,
or wholly owned subsidiary,  as the case may be, in a condition that complies in
all material respects with all Environmental  Requirements.  The obligations and
liabilities  of the  Mortgagor  under this Section shall survive and continue in
full force and effect and shall not be  terminated,  discharged or released,  in
whole or in part, irrespective of whether the Indebtedness has been paid in full
and  irrespective  of any  foreclosure  of this  Mortgage or  acceptance  by the
Mortgagee,  its nominee or wholly owned  subsidiary  of a deed or  assignment in
lieu of foreclosure and irrespective of the discharge,  satisfaction, release or
assignment of this Mortgage or of any other fact or  circumstance  of any nature
whatsoever.

            Section 2.23 RIGHT OF ENTRY. The Mortgagee and its agents shall have
the right to enter and inspect the Premises at all reasonable times.

            Section 2.24 WAIVER OF STATUTORY  RIGHTS.  Notwithstanding  anything
herein  contained to the contrary,  the Mortgagor:  (i) hereby  irrevocably  and
unconditionally waives any

                                      -19-
<PAGE>

and all rights to trial by jury in any action,  suit or counterclaim  arising in
connection  with,  out of or  otherwise  relating  to the Loan  Agreement , this
Mortgage or any other  document or  instrument  now or  hereafter  executed  and
delivered in connection therewith or the loan secured by this Mortgage; and (ii)
will not (a) at any time insist upon, or plead,  or in any manner whatever claim
or take any benefit or advantage of any stay or extension or moratorium law, any
exemption from  execution or sale of the Premises or any part thereof,  wherever
enacted,  now or at any time hereafter in force,  which may affect the covenants
and terms of performance of this  Mortgage,  nor (b) claim,  take or insist upon
any benefit or advantage of any law now or hereafter in force  providing for the
valuation or appraisal of the Premises,  or any part thereof,  prior to any sale
or sales thereof which may be made pursuant to any provision hereof, or pursuant
to the decree, judgment or order of any court of competent jurisdiction; nor (c)
after any such sale or sales,  claim or  exercise  any right  under any  statute
heretofore  or  hereafter  enacted  to redeem the  property  so sold or any part
thereof;  (iii) hereby expressly waives all benefit or advantage of any such law
or laws; and (iv) covenants not to hinder,  delay or impede the execution of any
power herein granted or delegated to the Mortgagee, but to suffer and permit the
execution of every power as though no such law or laws had been made or enacted.
The Mortgagor,  for itself and all who may claim under it, waives, to the extent
that it  lawfully  may,  all right to have the  Premises  (or any part  thereof)
marshalled upon any foreclosure hereof.

            Section 2.25 LEASEHOLD MORTGAGE PROVISIONS.

                  (i) The  Mortgagor  covenants  and agrees as  follows:  (a) to
promptly pay all rent,  additional rent and other sums or charges required to be
paid by the tenant  under the Leases;  (b) to promptly and  faithfully  observe,
perform and comply with all the terms,  covenants and provisions  thereof on its
part to be  observed,  performed  and  complied  with,  at the  times  set forth
therein;  (c) not to do,  permit,  suffer or refrain  from doing  anything  as a
result of which,  there  could be a default  under or breach of any of the terms
thereof; (d) not to cancel, or terminate the Lease; nor to suffer or permit such
cancellation or termination,  not to modify, amend or in any way alter or permit
the  alteration  of any of the material  terms  thereof,  nor to  surrender  the
property demised  thereunder,  (e) to give the Mortgagee immediate notice of any
default by anyone  thereunder and to promptly deliver to the Mortgagee copies of
each  notice  of  default  and  all  other   notices,   communications,   plans,
specifications  and other  similar  instruments  received  or  delivered  by the
Mortgagor in connection therewith;  (f) not to waive, excuse or discharge any of
the obligations and agreements of the landlord thereunder, (g) to furnish to the
Mortgagee such information and evidence as the Mortgagee may reasonably  request
concerning the Mortgagor's  due observance,  performance and compliance with the
terms,  covenants and provisions  thereof;  and (h) that any material default of
the tenant thereunder shall constitute a default under this Mortgage.

                  (ii) In the event of any material  default by the Mortgagor in
the performance of any of its obligations  under the Lease,  including,  without
limitation, any default in the payment of rent and other charges and impositions
made payable by the tenant  thereunder,  which default shall continue beyond the
applicable'  grace period,  if any,  then, in each and every case, the Mortgagee
may,  at its option and  without  notice,  cause the  default or  defaults to be
remedied  and  otherwise  exercise  any and all of the  rights of the  Mortgagor
thereunder in the name of and on behalf of the Mortgagor.  The Mortgagor  shall,
on demand,  reimburse the Mortgagee for all advances made and expenses  incurred
by the Mortgagee in curing any such

                                      -20-
<PAGE>

default (including,  without limitation,  reasonable  attorneys' fees), together
with interest thereon  computed at the  Post-Default  Rate from the date that an
advance is made or expense is  incurred  to and  including  the date the same is
paid.  Upon receipt by the Mortgagee  from the Landlord of any written notice of
default on the part of the  Mortgagor  under the Lease,  the  Mortgagee may rely
thereon and take any action as the Mortgagee  shall deem  necessary or desirable
even though the existence of such default or the nature thereof be questioned or
denied by or on behalf of the Mortgagor.

                  (iii)  That the fee  title  and the  leasehold  estate  in the
property  demised by the Lease shall not merge but shall always be kept separate
and distinct,  notwithstanding  the union of said estates in either the landlord
thereunder,  the Mortgagor,  the Mortgagee or a third party, whether by purchase
or otherwise.  If the Mortgagor acquires any greater or further estate, title or
interest in and to any of the fee of property  now or hereafter  constituting  a
part of the Lease, the lien of this Mortgage shall automatically and without the
necessity  of the  execution  and/or  delivery  of any  further  instruments  or
documents be spread to cover and be a lien upon such acquired  estate;  title or
interest and same shall  thereupon be and become a part of the Premises with the
same  force and  effect as if  specifically  encumbered  herein and as so spread
shall  be  prior to the lien of any  mortgage  or deed of trust  placed  on such
acquired estate subsequent to the date of this Mortgage.  Without  limitation or
derogation  of the  foregoing  sentence  the  Mortgagor  nevertheless  agrees to
execute all instruments and documents which the Mortgagee may require to ratify,
confirm and further evidence the Mortgagee's lien on the acquired estate,  title
or interest.  Furthermore,  the Mortgagor hereby appoints the Mortgagee its true
and lawful  attorney-in-fact  to execute and deliver  all such  instruments  and
documents in the name and on behalf of the Mortgagor.  This power, being coupled
with an  interest,  shall be  irrevocable  as long as the  indebtedness  remains
unpaid.

                  (iv) The  Mortgagor  shall use its best  efforts to obtain and
deliver to the Mortgagee within twenty (20) days after receipt of written demand
by the  Mortgagee,  an estoppel  certificate  from the landlord  under the Lease
setting forth (i) the name of the tenant thereunder, (ii) that the Lease has not
been  modified  or,  if it has  been  modified,  the  date of each  modification
(together with copies of each such modification certified as true and correct by
the landlord),  (iii) the basic rent payable under the Lease,  (iv)) the date to
which all rental  charges have been paid by the tenant under the Lease,  and (v)
whether  there are any alleged  defaults  of the tenant  under the Lease and, if
there are, setting forth the nature thereof in reasonable detail.

                  (v) Notwithstanding anything to the contrary contained herein,
this Mortgage shall not constitute an assignment of the Lease within the meaning
of any provision thereof prohibiting its assignment and the Mortgagee shall have
no  liability  or  obligation  thereunder  by reason of its  acceptance  of this
Mortgage.  The  Mortgagee  shall be liable  for the  obligations  of the  tenant
arising  under the Lease for only that period of time which the  Mortgagee is in
possession of the Premises or has acquired, by foreclosure or otherwise,  and is
holding all of the Mortgagor's right, title and interest therein.

                  (vi) In the  event  the  Lease  shall  be  terminated  and the
Mortgagee  shall  require  from the  lessor  under  the Lease a new  lease,  the
Mortgagor hereby waives any right, title or interest in and to such new lease or
the leasehold  estate created  thereby,  waiving all rights of redemption now or
hereafter operable under any law.

                                      -21-
<PAGE>

                  (vii) The  Mortgagor  expressly  agrees that if there shall be
filed by or  against  the lessor  under the Lease any  petition,  action  and/or
proceeding under the Revised Bankruptcy Act of 1978, ET SEQ., as amended and any
successor act thereto (the  "Bankruptcy  Code"),  or any other  similar  federal
and/or state law now or hereafter in effect  (collectively  hereinafter referred
to as the "Landlord's  Bankruptcy"),  the Mortgagor shall not elect to treat the
Lease  as  terminated,  cancelled  and/or  surrendered  pursuant  to  applicable
provisions  of the  Bankruptcy  Code  including,  but not  limited  to,  Section
365(h)(l),  without the Mortgagee's  prior written consent.  In the event of the
Landlord's Bankruptcy,  the Mortgagor expressly covenants and agrees,  intending
that the Mortgagee rely thereon, that it shall reaffirm and ratify the legality,
validity,  binding effect and  enforceability  of the Lease to the Mortgagee and
the  Mortgagor  also  covenants and agrees that it shall remain in possession of
the Premises and the leasehold estate created by the Lease,  notwithstanding any
rejection  thereof by the lessor under the Lease and/or any trustee,  custodian,
receiver or other similar official.

                  (viii)  The  lien  of  this  Mortgage  attaches  to all of the
Mortgagor's  rights and remedies now and hereafter  arising under or pursuant to
the Bankruptcy  Code,  including,  but not limited to, the Mortgagor's  right to
elect to remain in possession of the Premises and the leasehold  estate  created
by the Lease in the  event of the  Landlord's  Bankruptcy  pursuant  to  Section
365(h)(l). Any such election to terminate,  cancel and/or surrender the Lease in
the event of the Landlord's  Bankruptcy  without the  Mortgagee's  prior written
consent shall be null and void.

                  (ix) The Mortgagor hereby unconditionally assigns,  transfers,
and sets over to the Mortgagee (a) all of the  Mortgagor's  claims and rights to
damages,  and any  other  remedies  in  connection  therewith  arising  from any
rejection of the Lease by the lessor thereunder  pursuant to the Bankruptcy Code
in the event of the  Landlord's  Bankruptcy,  and/or by any trustee,  custodian,
receiver or other similar official.  The Mortgagee shall have the right, but not
the  obligation,  to proceed in its own name and/or in the name of the Mortgagor
in  respect  of any claim,  suit,  action  and/or  proceeding  relating  to such
rejection  of the Lease,  including,  but not  limited to, the right to file and
prosecute,  to the  exclusion  of the  Mortgagor,  any and all proofs of claims,
complaints,  notices and other documents in any case in respect of the lessor of
the Lease under and pursuant to the  Bankruptcy  Code,  and (b) the  Mortgagor's
right of election to remain in  possession  of the  Premises in the event of the
Landlord's  Bankruptcy under and pursuant to Section 365(h)(l) of the Bankruptcy
Code.  This  assignment  constitutes  a  present,   absolute,   irrevocable  and
unconditional  assignment  of  the  foregoing  claims,  elections,   rights  and
remedies,  and shall  continue in full force and effect  until the  Indebtedness
have been paid in full and this Mortgage has been satisfied and discharged.  Any
amounts received by the Mortgagee as damages arising out of the rejection of the
Lease by the Landlord shall be applied in the manner set forth in SECTION 3.2 of
this Mortgage.

                  (x) If,  pursuant to any applicable  section of the Bankruptcy
Code,  the  Mortgagor  seeks to offset,  counterclaim,  deduct,  and/or assert a
defense against the rent, additional rent or other sums due under the Lease, the
amount of any damages caused by the non-observance and/or non-performance of the
lessor under the Lease, the Mortgagor shall, prior to such offset, counterclaim,
defense  and/or  deduction  notify the Mortgagee of its intent to do so, setting
forth with  specificity  the  amounts  proposed  to be  offset,  counterclaimed,
deducted,  and/or  defended  against and for what purposes.  The Mortgagee shall
thereupon have the right, but not

                                      -22-
<PAGE>

the obligation, to object to all or any part of such offset, counterclaim and/or
deduction and, in the event of such  objection,  the Mortgagor  shall not effect
any such offset counterclaim  and/or deduction.  Neither the Mortgagee's failure
to object to any such offset, counterclaim and/or deduction nor any objection or
other communication  between the Mortgagee and the Mortgagor shall constitute an
approval  of any such  offset,  counterclaim,  deduction  and/or  defense by the
Mortgagee.  The Mortgagor  expressly agrees to pay, protect,  indemnify and save
harmless the Mortgagee  from and against any and all claims,  demands,  actions,
suits, proceedings, damages, losses, liabilities,  judgments, costs and expenses
of every kind and nature (including  reasonable attorneys' fees) arising from or
relating to any offset, counterclaim, deduction and/or assertion of a defense by
the Mortgagor as herein described.

                  (xi) If any action, proceeding,  motion and/or notice shall be
commenced or filed with respect to the  Mortgagor or the Real  Property,  or any
part thereof,  in connection with the Bankruptcy  Code, the Mortgagee shall have
the  right,  but  not  the  obligation,  to  the  exclusion  of  the  Mortgagor,
exercisable upon five (5) days prior written notice,  to conduct and control any
litigation with counsel of the Mortgagee's  choice. The Mortgagee may proceed in
its own  name or in the  name of the  Mortgagor  in  connection  with  any  such
litigation,  and the Mortgagor  expressly  agrees to execute and deliver all and
every  power,  consent,  authorization  and  other  documents  required  by  the
Mortgagee in connection  therewith.  The Mortgagor shall pay to the Mortgagee on
demand any and all costs and expenses  (including  reasonable  attorneys'  fees)
paid or incurred and payable by the Mortgagee in connection with such litigation
shall be secured by the lien of this Mortgage.  The Mortgagor also agrees not to
commence any action,  suit,  proceeding  and/or case or file any  application or
make  any  motion  in  respect  of the  Lease  in the  event  of the  Landlord's
Bankruptcy without the prior written consent of the Mortgagee.

                  (xii) The Mortgagor hereby irrevocably  appoints the Mortgagee
its agent and  attorney-in-fact  (which appointment is coupled with an interest)
to observe and perform on behalf of the Mortgagor  the covenants and  agreements
contained in this section,  and any advances made by the Mortgagee in connection
with such  performance or observance shall be repaid by the Mortgagor within ten
(10) days of demand  with  interest at the  Post-Default  Rate and the amount so
advanced,  and interest thereon,  shall be a lien upon the Premises and shall be
secured by this Mortgage.  Such performance or observance by the Mortgagee shall
not prevent the Mortgagor's  failure to perform or observe from  constituting an
Event of Default.

                  (xiii) The Mortgagor  shall give the  Mortgagee  notice of its
intention  to exercise  each and every option to extend the term of the Lease at
least twenty (20) but not more than sixty (60) days prior to the  expiration  of
the time to exercise such option under the terms of the Lease.  If the Mortgagor
intends  to extend  the term of the Lease,  it shall  deliver to the  Mortgagee,
together  with the notice of such  decision,  a copy of the notice of  extension
delivered  to  the  Landlord.  If,  following  the  occurrence  and  during  the
continuance of an Event of Default,  the Mortgagor does not intend to extend the
term of the Lease,  the  Mortgagee  may, at its  option,  in  connection  with a
foreclosure or other enforcement of this Mortgage, exercise the option to extend
in the  name  and on  behalf  of the  Mortgagor.  In any  event,  following  the
occurrence  and during the  continuance  of an Event of Default,  the  Mortgagor
hereby  appoints the Mortgagee as its  attorney-in-fact  to execute and deliver,
for and in the name of the Mortgagor,  all instruments and agreements  necessary
under the Lease or  otherwise  to cause any  extension of the term of the Lease.
This power, being coupled with an interest, shall be irrevocable as long as the

                                      -23-
<PAGE>

indebtedness secured hereby remains unpaid.

                                   ARTICLE III

                              DEFAULT AND REMEDIES

            Section  3.1  EVENTS OF  DEFAULT.  The  following  shall  constitute
"Events of Default"  under this  Mortgage:  (a) the  occurrence  of any Event of
Default under the Loan Agreement or any of the Financing  Agreements (as defined
in Section 4.11  hereof),  or  (b)failure by the Mortgagor in the payment of any
amounts  required to be paid  hereunder;  or (c) failure by the Mortgagor in the
due  observance  or  performance  of any of the terms,  covenants or  conditions
contained herein,  subject to any applicable grace periods contained in the Loan
Agreement; or (d) should any representation or warranty made by Mortgagor herein
or by any guarantor prove to be untrue in any material  respect at the time when
made; or (e) except as may be expressly permitted under the terms and conditions
of the Loan Agreement, the further assignment or encumbrance by the Mortgagor of
the leases or rents of the Premises or any part thereof without in each instance
the prior written  consent of the  Mortgagee;  or (f) except as may be expressly
permitted under the terms and conditions of the Loan Agreement, if the Mortgagor
leases all or part of the Premises  without in each  instance the prior  written
consent of the  Mortgagee;  or (g) subject to the provisions of paragraph (i) of
Section 2.9 hereof  permitting the Mortgagor to contest the same, the failure by
the Mortgagor to pay (or cause to be paid), before any fine,  penalty,  interest
or cost  may be added  thereto  all  franchise  taxes  and  charges,  and  other
governmental   charges,   general  and  special,   ordinary  and  extraordinary,
unforeseen as well as foreseen,  of any kind and nature  whatsoever,  including,
but not limited to,  assessments  for public  improvements or benefits which are
assessed,  levied, confirmed,  imposed or become a lien upon the Premises or any
part  thereof or become  payable  during the term of the Loan  Agreement or this
Mortgage or if the Mortgagor enters into any agreement,  either written or oral,
which has the effect of  deferring  the  payment  of any taxes or other  charges
which are or can be assessed, levied, confirmed, imposed or become a lien on the
Premises  or any part  thereof  or become  payable  during  the term of the Loan
Agreement or this Mortgage;  or (h) except as may be expressly  permitted  under
the terms and conditions of the Loan Agreement, the further mortgage,  pledge or
encumbrance by the Mortgagor of the Premises or any part thereof or any interest
therein without in each instance the prior written consent of the Mortgagee;  or
if any  mortgage,  pledge or  encumbrance  affecting  the  Premises  or any part
thereof or interest  therein  (whether  prior or subordinate to the lien of this
Mortgage) shall be amended, modified, refinanced,  increased in amount, replaced
or substituted for,  PROVIDED,  HOWEVER,  that nothing herein contained shall be
deemed to permit  the  Mortgagor  to  create,  grant or suffeR to exist any such
mortgage,  pledge or encumbrance;  or (i) if a default occurs under any mortgage
which  is  prior  or  subordinate  to the  lien of  this  Mortgage  (beyond  the
applicable  notice and grace  period,  if any) or the  mortgagee  under any such
prior or  subordinate  mortgage  commences a  foreclosure  or other  enforcement
action in  connection  with said  mortgage;  or (j)  except as may be  expressly
permitted under the terms and conditions of the Loan Agreement, if the Premises,
or any  part  thereof  or  interest  therein,  is sold,  transferred,  assigned,
conveyed,  granted or  alienated  without  in each  instance  the prior  written
consent of the Mortgagee.

                                      -24-
<PAGE>

            Section 3.2 REMEDIES

                  (i) Upon the occurrence of any Event of Default, the Mortgagee
may, in addition to any rights or remedies available to it hereunder,  take such
action as it deems  advisable  to protect  and  enforce  its rights  against the
Mortgagor  and in and to the  Premises,  including,  but  not  limited  to,  the
following actions,  each of which may be pursued  concurrently or otherwise,  at
such  time  and in such  order  as the  Mortgagee  may  determine,  in its  sole
discretion,  without  impairing  or  otherwise  affecting  the other  rights and
remedies of the  Mortgagee:  (1) declare the entire  unpaid  Indebtedness  to be
immediately  due and  payable;  or (2) enter into or upon the  Premises,  either
personally or by its agents,  nominees or attorneys and dispossess the Mortgagor
and its agents and servants therefrom,  and thereupon the Mortgagee may (a) use,
operate, manage, control,  insure, maintain,  repair, restore and otherwise deal
with all and every part of the Premises and conduct the  business  thereat;  (b)
complete  any  construction  on the  Premises  in such  manner  and  form as the
Mortgagee  deems  advisable;   (c)  make   alterations,   additions,   renewals,
replacements  and  improvements to or on the Improvements and the balance of the
Premises;  (d) exercise all rights and powers of the  Mortgagor  with respect to
the  Premises,  whether in the name of the  Mortgagor or  otherwise,  including,
without limitation,  the right to make, cancel, enforce or modify leases, obtain
and evict  tenants,  and sue for,  collect and receive all  earnings,  revenues,
rents, issues,  profits and other income of the Premises and every part thereof;
and (e) apply the receipts from the Premises to the payment of the Indebtedness,
after deducting therefrom all expenses (including reasonable attorneys' fees and
disbursements)  incurred in  connection  with the aforesaid  operations  and all
amounts necessary to pay the taxes, assessments,  insurance and other charges in
connection with the Premises,  as well as just and reasonable  compensation  for
the  services  of the  Mortgagee,  its  counsel,  agents and  employees;  or (3)
institute  proceedings  for the complete  foreclosure  of this Mortgage in which
case the Premises may be sold for cash or credit in one or more parcels;  or (4)
with or  without  entry  and,  to the  extent  permitted,  and  pursuant  to the
procedures  provided by applicable  law,  institute  proceedings for the partial
foreclosure  of this Mortgage for the portion of the  Indebtedness  then due and
payable,  subject to the lien of this Mortgage continuing unimpaired and without
loss of priority so as to secure the balance of the  Indebtedness  not then due;
or (5)  institute  an action,  suit or  proceeding  in equity  for the  specific
performance of any covenants,  condition or agreement contained herein or in the
Loan  Agreement;  or (6) recover  judgment on the Loan Agreement or any guaranty
either before, during or after or in lieu of any proceedings for the enforcement
of this  Mortgage;  or (7) apply for the  appointment  of a  trustee,  receiver,
liquidator or  conservator  of the Premises,  without regard for the adequacy of
the security  for the  Indebtedness  and without  regard for the solvency of the
Mortgagor,  any guarantor or of any person,  firm or other entity liable for the
payment of the  Indebtedness  to which  appointment  the  Mortgagor  does hereby
consent; or (8) sell the Premises,  or any part thereof, to the extent permitted
and  pursuant to the  procedures  provided by the laws of the State in which the
Premises are  located,  and all estate,  right,  title and  interest,  claim and
demand  therein,  and right of redemption  thereof,  at one or more sales, as an
entity or in parcels, and at such time and place, upon such terms and after such
notice  thereof as may be  required by  applicable  law or (9) pursue such other
remedies as the Mortgagee may have under applicable law.

                  (ii) The  purchase  money  proceeds or avails of any sale made
under or by virtue of this Article III,  together with any other sums which then
may be held by the Mortgagee  under this Mortgage,  whether under the provisions
of this Article III or otherwise, shall be applied as follows:

                                      -25-
<PAGE>

                        FIRST:  To the payment of the costs and  expenses of any
                  such sale, or the costs and expenses of entering upon,  taking
                  possession of; removal from,  holding,  operating and managing
                  the  Premises  or any  part  thereof,  as  the  case  may  be,
                  including reasonable compensation to the Mortgagee, its agents
                  and counsel,  and of any judicial proceedings wherein the same
                  may be made,  and of all  expenses,  liabilities  and advances
                  made  or  incurred  by  the  Mortgagee  under  this  Mortgage,
                  together with interest as provided herein on all advances made
                  by the  Mortgagee  and all taxes or  assessments,  except  any
                  taxes,  assessments  or other  charges  subject  to which  the
                  Premises shall have been sold.

                        SECOND:  To the  payment of the whole  amount  then due,
                  owing or unpaid  upon the Loan  Agreement  for  principal  and
                  interest  with  interest on the unpaid  principal  at the rate
                  herein  specified from and after the happening of any Event of
                  Default  from the due date of any such  payment  of  principal
                  until the same is paid.

                        THIRD:  To the payment of any other sums  required to be
                  paid  by the  Mortgagor  pursuant  to any  provision  of  this
                  Mortgage or of the Loan Agreement.

                        FOURTH:  To the  payment  of the  surplus,  if  any,  to
                  whomsoever may be lawfully entitled to receive the same.

The  Mortgagee  and any receiver of the  Premises or any part  thereof  shall be
liable to account for only those rents,  issues and profits actually received by
it.

            (iii) The  Mortgagee may adjourn from time to time any sale by it to
be made  under or by virtue of this  Mortgage  by  announcement  at the time and
place appointed for such sale or for such adjourned sale or sales; and except as
otherwise  provided by any applicable  provision of law, the Mortgagee,  without
further notice or publication, may make such sale at the time and place to which
the same shall be so adjourned.

            (iv) Upon the  completion of any sale or sales made by the Mortgagee
under or by virtue of this  Article  III,  the  Mortgagee,  or an officer of any
court empowered to do so, shall execute and deliver to the accepted purchaser or
purchasers a good and sufficient instrument, or good and sufficient instruments,
granting,  conveying,  assigning and transferring all estate,  right,  title and
interest  in and to the  property  and  rights  sold.  The  Mortgagee  is hereby
irrevocably  appointed the true and lawful  attorney of the  Mortgagor  (coupled
with an interest),  in its name and stead,  to make all  necessary  conveyances,
assignments, transfers and deliveries of the Premises and rights so sold and for
that purpose the Mortgagee may execute all necessary  instruments of conveyance,
assignment,  transfer and delivery,  and may substitute one or more persons with
like power, the Mortgagor hereby ratifying and confirming all that said attorney
or  such  substitute  or  substitutes   shall  lawfully  do  by  virtue  hereof.
Nevertheless,  the Mortgagor, if so requested by the Mortgagee, shall ratify and
confirm any such sale or sales by executing  and  delivering to the Mortgagee or
to such purchaser or purchasers all such instruments as may be advisable, in the
judgment of the  Mortgagee,  for the purpose,  and as may be  designated in such

                                      -26-
<PAGE>

request.  Any such sale or sales  made under or by virtue of this  ARTICLE  III,
whether  made  under the power of sale  herein  granted or under or by virtue of
judicial  proceedings or of a judgment or decree of foreclosure and sale,  shall
operate to divest  all the  estate,  right,  title,  interest,  claim and demand
whatsoever,  whether  at  law  or in  equity,  of  the  Mortgagor  in and to the
properties  and rights so sold,  and shall be a perpetual bar both at law and in
equity against the Mortgagor and against any and all persons claiming or who may
claim the same, or any part thereof from, through or under the Mortgagor.

                  (v) In the event of any sale  made  under or by virtue of this
ARTICLE III (whether made by virtue of judicial  proceedings or of a judgment or
decree of foreclosure and sale), the entire Indebtedness,  if not previously due
and payable,  immediately  thereupon shall, anything in the Loan Agreement or in
this Mortgage to the contrary notwithstanding, become due and payable.

                  (vi) Upon any sale made under or by virtue of this ARTICLE III
(whether  made by virtue of judicial  proceedings  or of a judgment or decree of
foreclosure and sale), the Mortgagee may bid for and acquire the Premises or any
part  thereof or interest  therein and in lieu of paying cash  therefor may make
settlement  for the purchase  price by crediting  upon the  Indebtedness  of the
Mortgagor secured by this Mortgage the net sales price after deducting therefrom
the  expenses  of the sale and the costs of the  action and any other sums which
the Mortgagee is authorized to deduct under this Mortgage.

                  (vii) No recovery : of any  judgment by the  Mortgagee  and no
levy of an  execution  under any  judgment  upon the  Premises or upon any other
property of the Mortgagor shall affect in any manner or to any extent,  the lien
of this Mortgage upon the Premises or any part  thereof,  or any liens,  rights,
powers or remedies of the Mortgagee hereunder,  but such liens,  rights,  powers
and remedies of the Mortgagee shall continue unimpaired as before.

            Section  3.3  PAYMENT  OF  INDEBTEDNESS  AFTER  DEFAULT.   Upon  the
occurrence of any Event of Default and the  acceleration of the maturity hereof,
at any time prior to foreclosure sale, the Mortgagor or any other person tenders
payment of the amount  necessary  to satisfy  the  Indebtedness,  the same shall
constitute an evasion of the payment  terms hereof and/or of the Loan  Agreement
and shall be deemed to be a voluntary prepayment  hereunder,  in which case such
payment  must  include  the premium  and/or fee  required  under the  prepayment
provision,  if any,  contained  herein or in the Loan Agreement . This provision
shall be of no force or effect if at the time that  such  tender of  payment  is
made,  the Mortgagor has the right under this Mortgage or the Loan  Agreement to
prepay the Indebtedness without penalty or premium.

            Section 3.4  POSSESSION OF THE PREMISES.  Upon the occurrence of any
Event of  Default  hereunder,  it is  agreed  that the  Mortgagor,  if it is the
occupant  of the  Premises  or any part  thereof,  shall  immediately  surrender
possession of the Premises so occupied to the Mortgagee, and if the Mortgagor is
permitted to remain in possession,  the  possession  shall be as a tenant of the
Mortgagee and, on demand, the Mortgagor shall pay to the Mortgagee  monthly,  in
advance, a reasonable rental for the space(,) so occupied and in default thereof
the  Mortgagor  may  be  dispossessed  by the  usual  summary  proceedings.  The
covenants  herein contained may be enforced by a receiver of the Premises or any
part thereof.  Nothing in this SECTION 3.4 shall be deemed to be a waiver of the
provisions of this Mortgage prohibiting the sale or other disposition

                                      -27-
<PAGE>

of the Premises without the Mortgagee's prior written consent.

            Section 3.5 INTEREST AFTER DEFAULT.  If any payment due hereunder or
under the Loan  Agreement  is not paid when due  subject  to any grace or notice
periods,  whether on any stated due date, any  accelerated due date or any other
date or at any other time  specified  under any of the terms  hereof or thereof,
then,  and in such  event,  the  Mortgagor  shall  pay  interest  on the  entire
outstanding and unpaid principal balance of Indebtedness from and after the date
on which  such  payment  first  becomes  due at the  Post-Default  Rate and such
interest shall be due and payable,  on demand,  at such rate until such Event of
Default  shall have been cured or, if such Event of Default  shall not have been
cured,  until  the  entire  amount  due is paid to the  Mortgagee  and the other
Lenders, whether or not any action shall have been taken or proceeding commenced
to recover  the same or to  foreclose  this  Mortgage.  All  unpaid and  accrued
interest  shall  be  secured  by this  Mortgage  as a part of the  Indebtedness.
Nothing in this  Section 3.5 or in any other  provision of this  Mortgage  shall
constitute an extension of the time of payment of the Indebtedness.

            Section  3.6  THE  MORTGAGOR'S  ACTIONS  AFTER  DEFAULT.  After  the
happening of any Event of Default and immediately  upon the  commencement of any
action,  suit or other legal proceedings by the Mortgagee to obtain judgment for
the  Indebtedness,  or of any other nature in aid of the enforcement of the Loan
Agreement or of this  Mortgage,  the  Mortgagor  will (i) waive the issuance and
service of process and enter its voluntary  appearance  in such action,  suit or
proceeding and (ii) if required by the Mortgagee,  consent to the appointment of
a receiver or  receivers  of the  Premises  and of all the  earnings;  revenues,
rents, issues, profits and income thereof.

            Section 3.7 CONTROL BY THE MORTGAGEE AFTER DEFAULT.  Notwithstanding
the appointment of any receiver,  liquidator or trustee of the Mortgagor,  or of
any of its property, or of the Premises or any part thereof, the Mortgagee shall
be entitled to retain  possession  and control of all property now and hereafter
covered by this Mortgage.

                                   ARTICLE IV

                                  MISCELLANEOUS

            Section 4.1 CREDITS WAIVED.  The Mortgagor will not claim nor demand
nor be entitled to any credit or credits against the Indebtedness for so much of
the taxes assessed against the Premises or any part thereof,  as is equal to the
tax rate applied to the amount due on this Mortgage or any part thereof,  and no
deductions  shall  otherwise  be made or claimed  from the taxable  value of the
Premises  or any part  thereof by reason of this  Mortgage  or the  Indebtedness
secured hereby.

            Section 4.2 NO RELEASE.  The Mortgagor agrees, that in the event the
Premises  (or any part thereof or interest  therein) are sold and the  Mortgagee
enters into any agreement with the then owner of the Premises extending the time
of payment of the  Indebtedness,  or otherwise  modifying the terms hereof,  the
Mortgagor shall continue to be liable to pay the' Indebtedness  according to the
tenor of any such agreement unless expressly  released and discharged in writing
by the Mortgagee.

                                      -28-
<PAGE>

            Section 4.3 NOTICES.  All notices  hereunder shall be in writing and
shall be deemed to have been sufficiently  given or served for all purposes when
sent to any party  hereto at its address  above  stated in  accordance  with the
terms and conditions of the Loan Agreement.

            Section 4.4 BINDING  OBLIGATIONS.  The  provisions  and covenants of
this Mortgage  shall run with the land,  shall be binding upon the Mortgagor and
shall  inure  to the  benefit  of the  Mortgagee,  subsequent  holders  of  this
Mortgage,  and the respective  successors and assigns of the foregoing.  For the
purpose of this Mortgage,  the term "the  Mortgagor"  shall include and refer to
the Mortgagor named herein,  any subsequent  owners of the Premises (or any part
thereof or interest  therein),  and its respective  successors and assigns;  the
term "Loan  Agreement"  shall  include and refer to the Loan  Agreement  and any
other evidence of the  indebtedness  secured by this Mortgage;  and the tam "the
Mortgagee"  shall  include  and  refer to the  Mortgagee  named  herein  and its
respective successors and assigns.

            Section  4.5  GOVERNING  LAW.  The  creation of this  Mortgage,  the
perfection of the lien or security interest in the Premises,  and the rights and
remedies of Mortgagee  with respect to the Premises,  as provided  herein and by
the laws of the State in which the Premises is located, shall be governed by and
construed  in  accordance  with the  internal  laws of the  State  in which  the
Premises is located without regard to principles 6f conflict of law.  Otherwise,
to the extent  permitted by applicable law, this Mortgage and the Loan Agreement
(including the liability of Mortgagor for any deficiency following a foreclosure
of all or any  part of the  Premises)  shall be  governed  by and  construed  in
accordance  with the internal  laws of the State of New York  without  regard to
principles of conflicts of laws.

            Section 4.6 CAPTIONS.  The captions of the Sections of this Mortgage
are for the  purpose of  convenience  only and are not  intended to be a part of
this  Mortgage and shall not be deemed to modify,  explain,  enlarge or restrict
any of the provisions hereof.

            Section 4.7 FURTHER  ASSURANCES.  The Mortgagor  shall do,  execute,
acknowledge and deliver, at the sole cost and expense of the Mortgagor,  all and
ever such further acts, deeds,  conveyances,  mortgages,  assignments,  estoppel
certificates,  notices of assignment,  transfers and assurances as the Mortgagee
may require from time to time in order to better assure,  convey, grant, assign,
transfer and confirm unto the Mortgagee, the rights now or hereafter intended to
be granted to the Mortgagee under this Mortgage,  any other instrument  executed
in  connection  with this  Mortgage  or any  other  instrument  under  which the
Mortgagor may be or may hereafter become bound to convey,  mortgage or assign to
the Mortgagee for carrying out the intention of facilitating  the performance of
the terms of this  Mortgage.  The  Mortgagor  hereby  appoints the Mortgagee its
attorney-in-fact to execute,  acknowledge and deliver for and in the name of the
Mortgagor any and all of the instruments  mentioned in this Section 4.7 and this
power, being coupled with an interest, shall be, irrevocable as long as any part
of the Indebtedness remains unpaid.

            Section 4.8  SEVERABILITY.  Any provision of this Mortgage  which is
prohibited or  unenforceable  in any jurisdiction or prohibited or unenforceable
as to any person or entity shall, as to such  jurisdiction,  person or entity be
ineffective  to the  extent  of such  prohibition  or  unenforceability  without
invalidating  the  remaining  provisions  hereof or  affecting  the  validity or
enforceability  of such provisions in any other  jurisdiction or as to any other
person or entity.

                                      -29-
<PAGE>

            Section 4.9 ABSOLUTE AND  UNCONDITIONAl  OBLIGATION.  The  Mortgagor
acknowledges  that  the  Mortgagor's  obligation  to  pay  the  Indebtedness  in
accordance  with the  provisions of the Loan  Agreement and this Mortgage is and
shall at all times  continue to be absolute and  unconditional  in all respects,
and  shall at all  times be valid  and  enforceable  irrespective  of any  other
agreements  or  circumstances  of any nature  whatsoever  which might  otherwise
constitute a defense to the Loan Agreement or this Mortgage or the obligation of
the Mortgagor thereunder to pay the Indebtedness or the obligations of any other
person relating to the Loan Agreement or this Mortgage or the obligations of the
Mortgagor under the Loan Agreement or this Mortgage or otherwise with respect to
the  loan  secured  hereby.  The  Mortgagor   absolutely,   unconditionally  and
irrevocably waives any and all right to assert any defense, setoff, counterclaim
or crossclaim  of any nature  whatsoever  with respect to the  obligation of the
Mortgagor to pay the  Indebtedness in accordance with the provisions of the Loan
Agreement and this Mortgage or the  obligations of any other person  relating to
the Loan Agreement or this Mortgage or  obligations  of the Mortgagor  under the
Loan  Agreement or this  Mortgage or otherwise  with respect to the loan secured
hereby,  or in any action or proceeding  brought by the Mortgagor to collect the
Indebtedness,  or any portion thereof, or to enforce, foreclose and realize upon
the lien and Security interest created by this Mortgage or any other document or
instrument securing repayment of the Indebtedness, in whole or in part.

            Section 4.10 GENERAL CONDITIONS.

                  (iii) All covenants  hereof shall be construed as affording to
the Mortgagee  rights  additional  to and not exclusive of the rights  conferred
under the provisions of any other applicable law.

                  (iv) This  Mortgage  cannot be altered,  amended,  modified or
discharged  orally and no  executory  agreement  shall be effective to modify or
discharge  it in whole or in part,  unless it is in  writing  and  signed by the
party against whom  enforcement of the  modification,  alteration,  amendment or
discharge is sought. The Mortgagor acknowledges that the Loan Agreement and this
Mortgage and the other  documents  and  instruments  executed  and  delivered in
connection therewith or otherwise in connection with the loan secured hereby set
forth the entire agreement and  understanding of the Mortgagor and the Mortgagee
with  respect to the loan secured  hereby and that no oral or other  agreements,
understanding,  representation  or  warranties  exist  with  respect to the loan
secured hereby other than those set forth in the Loan  Agreement,  this Mortgage
and such other executed and delivered documents and instruments.

                  (v)  No  remedy  herein  conferred  upon  or  reserved  to the
Mortgagee is intended to be exclusive of any other remedy or remedies,  and each
and every such  remedy  shall be  cumulative,  and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute.  No delay or omission of the  Mortgagee in  exercising  any right or
power  accruing  upon any Event of Default shall impair any such right or power,
or shall be  construed  to be a waiver  of any  such  Event of  Default,  or any
acquiescence  therein.  Acceptance of any payment (other than a monetary payment
in cure of a monetary default) after the occurrence of an Event of Default shall
not be deemed a waiver of or a cure of such Event of Default and every power and
remedy given by this  Mortgage to the  Mortgagee  may be exercised  from time to
time as often as may be  deemed  expedient  by the  Mortgagee.  Nothing  in this
Mortgage or in the Loan Agreement shall limit or diminish the obligation of the

                                      -30-
<PAGE>

Mortgagor  to pay the  Indebtedness  in the  manner  and at the time  and  place
therein respectively expressed,

                  (vi) No waiver by the Mortgagee will be effective unless it is
in writing and then only to the extent specifically stated. Without limiting the
generality  of the  foregoing,  any payment made by the  Mortgagee for insurance
premiums,  taxes,  assessments,  water rates, sewer rentals, levies, fees or any
other  charges  affecting  the  Premises,  shall not  constitute a waiver of the
Mortgagor's default in making such payments and shall not obligate the Mortgagee
to make any further payments.

                  (vii)  The  Mortgagee  shall  have the  right to appear in and
defend  any  action or  proceeding,  in the name and on behalf of the  Mortgagor
which the Mortgagee,  in its  discretion,  determines  may adversely  affect the
Premises or this Mortgage.  The Mortgagee shall also have the right to institute
any action or proceeding which the Mortgagee, in its discretion, feels should be
brought to protect its  interest in the  Premises or its rights  hereunder.  All
costs and expenses  incurred by the Mortgagee in connection with such actions or
proceedings,  including,  without  limitation,  reasonable  attorneys'  fees and
expenses  and  appellate  attorneys'  fees  and  expenses,  shall be paid by the
Mortgagor on demand and shall be secured by this Mortgage.

                  (viii)  In the  event of the  passage  after  the date of this
Mortgage of any law of any governmental  authority having jurisdiction hereof or
the  Premises,  deducting  from the value of land for the  purpose of  taxation,
affecting  any lien  thereon or changing in any way the laws for the taxation of
mortgages or debts secured by mortgages for federal, state or local purposes, or
the manner of the  collection of any such taxes,  so as to affect this Mortgage,
the Mortgagor shall promptly pay to the Mortgagee,  on demand,  all taxes, costs
and charges  for which the  Mortgagee  is or may be liable as a result  thereof;
provided  that if said  payment  shall be  prohibited  by law,  render  the Loan
Agreement  usurious or subject the Mortgagee to any penalty or forfeiture,  then
and in such event the  Indebtedness  shall,  at the option of the Mortgagee,  be
immediately due and payable.

                  (ix)  The  Mortgagor  hereby  appoints  the  Mortgagee  as its
attorney-in-fact  in connection with the personal  property and fixtures covered
by this  Mortgage,  where  permitted by law, to file on its behalf any financing
statements  or other  statements in connection  therewith  with the  appropriate
public office. This power, being coupled with an interest,  shall be irrevocable
so long as any part of the Indebtedness remains unpaid.

                  (x) If the  Mortgagee  purchases  the  Premises  pursuant to a
foreclosure under this Mortgage,  or accepts a deed to the Premises in lieu of a
foreclosure,  the  Mortgagor  hereby  authorizes  the  Mortgagee to withhold the
amount  of tax,  if any,  required  to be  withheld  under  Section  1445 of the
Internal Revenue Code of 1986, as amended (or any successor  provision thereto),
out of  any  sums  payable  to the  Mortgagor  from  such  foreclosure  sale  or
assignment  in lieu  thereof,  as the case may be, after  payment of all parties
other than the Mortgagor who are entitled to be paid out of any  foreclosure  or
assignment  proceeds,  as if the  Mortgagor  were a foreign  person,  unless the
Mortgagor  certifies its nonforeign  status at the time of such foreclosure sale
or assignment,  as the case may be, by executing and delivering to the Mortgagee
a certificate satisfactory to the Mortgagee.

                                      -31-
<PAGE>

                  (xi) The  information  set forth on the cover hereof is hereby
incorporated herein.

                  (xii) The Mortgagor  acknowledges  that it has received a true
copy of this Mortgage provided without charge.

                  (xiii)  For   purposes   of  this   Mortgage,   whenever   the
circumstances or the context of this Mortgage so requires, the singular shall be
construed as the plural, the masculine shall be construed as the feminine and/or
the neuter and vice.

                  (xiv) The  Mortgagee is hereby  irrevocably  authorized at any
time and from time to time, to the fullest  extent  permitted by law, to set off
and apply any and all deposits (general or special, time or demand,  provisional
or  final)  other  than  tenant  security  accounts  at any  time  held or other
indebtedness  at any time  owing by the  Mortgagee  to or for the  credit or the
account of the Mortgagor against any and all of the obligations of the Mortgagor
now or  hereafter  existing  under this  Mortgage  and/or  Loan  Agreement.  The
Mortgagee  agrees  promptly to notify the  Mortgagor  after any such set-off and
application,  provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of the Mortgagee under this
paragraph  are in  addition to other  rights and  remedies  (including,  without
limitation, other rights of set-off) which the Mortgagee may have.

                  (xv) If at any time the Mortgagor  believes that the Mortgagee
has not acted  reasonably  in granting or  withholding  any  approval or consent
under the Loan Agreement,  this Mortgage or any other document or instrument now
or hereafter  executed and delivered in connection  therewith or otherwise  with
respect to the loan secured  hereby,  as to which approval or consent either the
Mortgagee has expressly  agreed to act reasonably,  or absent such agreement,  a
court of law having  jurisdiction  over the  subject  matter  would  require the
Mortgagee to act reasonably,  then the Mortgagor's  sole remedy shall be to seek
injunctive relief or specific  performance and no action for monetary damages or
punitive damages shall in any event or under any  circumstances be maintained by
the Mortgagor against the Mortgagee.

            Section   4.11   MULTISITE   REAL  ESTATE   TRANSACTION.   Mortgagor
acknowledges that this Mortgage is one of a number of other mortgages,  deeds of
trust  and  assignments  of  leases  and  rents  and  other  security  documents
(hereinafter   collectively  the  "Financing   Agreements")   which  secure  the
Indebtedness  in  whole  or in  part.  Mortgagor  agrees  that  the lien of this
Mortgage  shall be  absolute  and  unconditional  and shall not in any manner be
affected or impaired  by any acts or  omissions  whatsoever  of  Mortgagee  and,
without  limiting the generality of the foregoing,  the lien hereof shall not be
impaired by any  acceptance by Mortgagee of any security for or guarantors  upon
any of the  Indebtedness  or by any failure,  neglect or omission on the part of
Mortgagee to realize upon or protect any of the  Indebtedness  or any collateral
security therefor including the Financing Agreements.  The lien hereof shall not
in any manner be impaired or affected by any release  (except as to the property
released), sale, pledge, surrender, compromise,  settlement, renewal, extension,
indulgence,  alteration, changing, modification or any disposition of any of the
Indebtedness  or of any of  the  collateral  security  therefor,  including  the
Financing  Agreements or any guarantee thereof Mortgagee may, at its discretion,
foreclose,  exercise any power of sale or exercise any other remedy available to
it under any or all of the  Financing  Agreements  without  first  exercising or
enforcing any of its rights and remedies

                                      -32-
<PAGE>

hereunder,  or may foreclose,  exercise any power of sale, or exercise any other
right available under this Mortgage without first exercising or enforcing any of
its rights  and  remedies  under any or all of the  Financing  Agreements.  Such
exercise of  Mortgagee's  rights and remedies  under any or all of the Financing
Agreements  shall  not in any  manner  impair  the  Indebtedness  or lien of the
Mortgage,  and any  exercise of the rights or remedies  of  Mortgagee  hereunder
shall  not  impair  the  lien  of  any  of the  Financing  Agreements  or any of
Mortgagee's rights and remedies thereunder.  Mortgagor specifically consents and
agrees that  Mortgagee may exercise its rights and remedies  hereunder and under
the  Financing  Agreements  separately  or  concurrently  and in any order  that
Mortgagee may deem appropriate.

            Section 4.12 LOAN AGREEMENT PARAMOUNT. If and to the extent that any
provisions of this  Mortgage  conflict or are  otherwise  inconsistent  with any
provisions of the Loan  Agreement,  the provisions of the Loan  Agreement  shall
prevail

                                   ARTICLE V

         CERTAIN MATTERS RELATING TO THE LEASEHOLD ESTATE LOCATED IN THE
                              STATE OF NEW JERSEY.

            Section 5.1 With respect to the Leasehold Estate which is located in
the State of New Jersey (the "State"), notwithstanding anything contained to the
contrary:

                  (i) Additional Environmental Covenants and Representations.

                        (1)  The  Leasehold   Estate  has  never  been  used  by
Mortgagor  or, to the best  knowledge  of  Mortgagor,  by any prior owner of the
Leasehold Estate as a dump site for Hazardous  Materials or (except as disclosed
in  the  Loan  Agreement  for  routine  activities   incidental  to  Mortgagor's
activities  as now  conducted on the Leasehold  Estate in full  compliance  with
Environmental  Laws)  a  storage  (whether  temporary  or  permanent)  site  for
Hazardous Materials.

                  (ii) With  respect to the Spill  Compensation  and Control Act
(N.J.S.A. 58:10-28.1 ET SEQ., Mortgagor agrees as follows:

                        (1) Mortgagor shall not permit any hazardous  substances
or  wastes  to be  present  at,  on or under the  Leasehold  Estate  (except  as
disclosed in the Loan Agreement for routine activities incidental to Mortgagor's
activities  as now  conducted on the Leasehold  Estate in full  compliance  with
Environmental Laws). Not in limitation of the foregoing  unconditional covenant,
the breach of which shall  permit  Mortgagee to exercise the rights and remedies
available  to it as an Event of  Default  in the event  that the  Department  of
Environmental  Protection  of the State of New Jersey (the  "Department")  shall
serve upon the  Mortgagor  a  directive  to remove or arrange for the removal or
discharge  of any  hazardous  substances  on the  Leasehold  Estate or any other
property  within the State of New Jersey  owned by Mortgagor  and (1)  Mortgagor
fails to comply with the directive  within sixty (60) days from its date or such
shorter period as described  therein,  to the  satisfaction of the Department or
(2) Mortgagor fails to provide a bond or title insurance endorsement, reasonably
satisfactory to the Mortgagee, insuring the Lenders continuing first lien status
on the Leasehold Estate.

                        (2) In the  event  that  there  shall  be  filed  a lien
against the

                                      -33-
<PAGE>

Leasehold Estate by the Department, Mortgagor agrees that Mortgagor shall either
cause said lien to be  removed  from the  Leasehold  Estate or provide a bond or
title insurance endorsement,  reasonably satisfactory to Mortgagee,  insuring to
Mortgagee a  continuing  first lien status  within sixty (60) days from the date
that  Mortgagee  is given notice that the lien is placed  against the  Leasehold
Estate or such shorter  period of time in the event that the State of New Jersey
may take steps to cause the Leasehold Estate to be sold pursuant to the lien. In
the event the Mortgagor  shall not accomplish the foregoing  within the required
time period, the Mortgagor agrees that such failure shall constitute an Event of
Default hereunder.

                        (3) Mortgagor shall not permit any part of the Leasehold
Estate to be used as an  "industrial  establishment"  within the meaning the New
Jersey Industrial Site Recovery Act, N.J.S.A.  13:1K-6 ET SEQ. ("ISRA").  In the
event that in contravention  of the foregoing,  the Leasehold Estate or any part
thereof  constitutes  an  "industrial  establishment",  in addition to Mortgagee
having the right to exercise any of the rights and  remedies  available to it in
the case of an Event of Default, if a sale, transfer,  closure or termination of
operations,  as defined in ISRA, is planned by Mortgagor or the user or operator
of the  industrial  establishment,  Mortgagor  shall fully  comply and  promptly
comply, or cause full and prompt  compliance by such user or operator,  with the
provisions  of  ISRA.  Mortgagor  shall  deliver  to  Mortgagee  copies  of  all
correspondence,  notices,  submissions,  negative declarations and cleanup plans
that it sends to the  Department in connection  with ISRA or proof of compliance
as described below.  Mortgagor's obligation to comply, cause compliance with, or
provide proof of the inapplicability of ISRA shall,  notwithstanding its general
applicability,   also  specifically  apply  to  a  sale,  transfer,  closure  or
termination of operations associated with any foreclosure action and sale of the
Leasehold Estate or any part thereof.  If Mortgagor  believes that the Leasehold
Estate,  or any  relevant  part  thereof,  does  not  constitute  an  industrial
establishment  within the meaning of ISRA,  Mortgagor  shall, at least two weeks
prior to the sale,  transfer,  closure or  termination  deliver to  Mortgagee  a
letter from the Department stating that the contemplated sale, transfer, closure
or  termination  is exempt from ISRA.  Any and all  damages,  costs and expenses
incurred by Mortgagee or Lenders due to  Mortgagor's  failure to comply with the
provisions of this paragraph, including but not limited to Mortgagee's costs and
expenses incurred by Mortgagee in complying with ISRA, implementing any clean up
plan  in  connection  therewith,  as  well  as  reasonable  attorneys'  fees  in
connection  therewith,  shall  be  added  to and  become  a part of the  Secured
Obligations.  Nothing  contained in this paragraph shall be deemed to permit the
sale,  transfer,  closure or  termination of operations as to all or any part of
the  Leasehold  Estate  except as  otherwise  provided  hereunder or in the Loan
Agreements.  The provisions of this paragraph  shall survive the  termination of
this Mortgage and the repayment of the Obligations.

                  (iii) THIS IS A FIRST MORTGAGE.

                  (iv)  Loans  made  pursuant  to the  Loan  Agreement  shall be
modifications,  as defined in P.L.1985, C 353; N.J.S.A. 46:9-8.1 ET SEQ. and the
priority of this Mortgage shall be subject to that law.

                  (v)  Mortgagor,  Mortgagee and Lenders may agree to change the
interest  rate,  maturity  date,  or term or  terms of this  Mortgage,  the Loan
Agreement or the Loans. Any such agreement shall be in writing, duly executed by
both Mortgagor and Mortgagee.  In the event that any such agreement shall occur,
it shall, to the extent provided by law, be deemed a

                                      -34-
<PAGE>

"modification" as defined in N.J.S.A.  46:9-8.1 ET SEQ., and this Mortgage shall
be subject to, and the Mortgagee  shall be the  beneficiary of the mortgage lien
priority provisions of such statute.

                  (vi)  Mortgagor   acknowledges   receipt  of  the  disclosures
required by N.J.S.A. 46:10A-6.

              [REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]

                                      -35-
<PAGE>

      IN WITNESS WHEREOF,  this Mortgage has been duly executed by the Mortgagor
as of the date first above written.

                                                  FMI INTERNATIONAL LLC

                                                  By: __________________________
                                                      Name:  ___________________
                                                      Title: ___________________

WITNESSES:

___________________________
Name

___________________________
Name

<PAGE>

                                 ACKNOWLEDGMENT

STATE OF NEW YORK    :
                     SS:
COUNTY OF NEW YORK   :

      On  the  26th  day  of   October,   2006,   before  me   personally   came
___________________,  to me known,  who, being by me duly sworn,  did depose and
say that he/she is the ________ of FMI INTERNATIONAL  LLC, the limited liability
company  described in and which  executed  the  foregoing  instrument;  and that
he/she  signed  his/her  name  thereto  as  authorized  in  accordance  with the
certificate  of formation  and  operating  agreement  of said limited  liability
company.

                                                ________________________________
                                                Notary Public

<PAGE>

                                  SCHEDULE "A"

                               DESCRIPTION OF LAND

At that certain tot, parcel or tract of land, situate and lying in the Borough
of Carteret, County of Middlesex and State of New Jersey being more particularly
described as follows:

BEGINNING at a point in the Northerly sideline of Federal Boulevard (50'
R.O.W.), said point being located a distance of 1183.96 feet from the point of
intersection of the easterly sideline of Blair Road with the Northerly sideline
of Federal Boulevard and from said beginning point running; thence

(1) South 81 degrees 34 minutes 12 seconds East, along the Northerly sideline of
Federal Boulevard, a distance of 720.00 feet to a point; thence

(2) North 08 degrees 25 minutes 48 seconds East, along the dividing line between
lots 6.02, 6.03, 6.04, 6.05, 6.06 and Lot S (Tract II) in Block 64.02, a
distance of 802.84 feet to a point; thence

(3) North 76 degrees 32 minutes 22 seconds West, along the Southerly R.O.W. One
of the New Jersey Terminal Railroad-C.R.R. of NJ, a distance of 722.78 feet to a
point; thence

(4) South 08 degrees 25 minutes 48 seconds West, along the Northerly fine of Lot
5 in common with Lot 5.01, a distance of 866.21 feet to a point in the Northerly
sideline of Federal Boulevard, said point being the point and place of
beginning.

Being known as Tax Block 64.02, loot 5.02.

                                      A-1
<PAGE>

                                  SCHEDULE "B"

                                DEMISED PREMISES

All portions of the real estate and improvements located at 800 Federal
Boulevard, Carteret, New Jersey as more particularly described in the Lease
Agreement dated August 14, 1996 between SDI Technologies, Inc. ("SDP'), as
landlord, and FMI International Corp., as tenant, as amended by that certain
Lease Extension Agreement dated March 7, 2002 and Lease Modification Agreement
dated December 8, 2003, assigned by FMI International Corp. to FMI International
LLC pursuant to that certain Assignment and Assumption of Lease and further
amended by that certain Amendment to Lease dated August 23, 2004 between 800
Federal Blvd LLC, successor-in-interest to SDI as landlord, and FMI
International LLC as tenant.

                                      A-1Confidential Treatment has been requested for portions of this document marked
with asterisks ("[*]").

                                                          Redacted Exhibit 10.14

                                                                  EXECUTION COPY

                           SALE AND PURCHASE AGREEMENT

                                  by and among

                      Maritime Logistics US Holdings Inc.,

                                  as Purchaser,

                                       and

                             Protex Holdings Limited

                             as Selling Shareholder

                                       and

                     Sea Master Logistics (Holding) Limited

                                    as target

                               September 28, 2006

<PAGE>

                           SALE AND PURCHASE AGREEMENT

      THIS SALE AND PURCHASE AGREEMENT (the "Agreement") is dated September 28,
2006 by and among MARITIME LOGISTICS US HOLDINGS INC., a New Jersey corporation
("Purchaser") and SEA MASTER LOGISTICS (HOLDING) LIMITED, a Hong Kong
corporation, ("SeaMaster"), and PROTEX HOLDINGS LIMITED, a Hong Kong corporation
(the "Selling Shareholder").

                              W I T N E S S E T H:

      WHEREAS, SeaMaster is engaged or will engage in, the business of providing
ocean, air and land transportation intermediary services in China to major
retailers, wholesalers, importers, and domestic manufacturers in the
Transpacific and South African trade lanes as an international freight agency
(collectively, the "SeaMaster's Logistics Business");

      WHEREAS, the Purchaser desires to purchase and the Selling Shareholder
desires, respectively, to sell to the Purchaser, one hundred percent (100%) of
their interest in the issued and outstanding share capital of SeaMaster, and the
Purchaser shall acquire such Shares through its wholly-owned subsidiary,
SeaMaster Logistics, Inc., a Delaware corporation;

                                      [*]

      WHEREAS, it is intended that a public shell company (tbr Maritime
Logistics International, Inc.) incorporated under the laws of Delaware (the
"Company"), MLI Acquisition Corp., a Delaware corporation and a direct
wholly-owned subsidiary of the Company (the "Merger Sub"), and Purchaser, will
enter into that certain merger agreement, dated as of the closing date of the
merger (the "Merger Agreement"), pursuant to which the Merger Sub will merge
into the Purchaser and the Purchaser is the surviving entity (the "Surviving
Entity") and wholly-owned subsidiary of the Company, and as a condition to the
effectiveness of the Merger (as defined in the Merger Agreement), the Selling
Shareholder, SeaMaster and the Purchaser shall have executed this Agreement;

      WHEREAS, simultaneously with the effectiveness of the Merger, the Company
shall enter into the following agreements on or about October 7, 2006 (the
"Finance Closing Date"): (i) that certain securities purchase agreement by and
among the Company and the convertible noteholders which are parties thereto (the
"Convertible Noteholders"), pursuant to which the Company shall issue senior
secured convertible notes due 2011 (the "Convertible Notes") and warrants
exercisable to purchase shares of

<PAGE>

common stock (the "Common Stock") of the Company (the "Note Warrants"), the
proceeds of which convertible note offering shall finance a portion of the
purchase price of FMI Holdco I, LLC ("FMI") and the assets of the TUG Logistics
group of companies ("TUG"), among other things (the "Acquisitions"); (ii) that
certain registration rights agreement (the "Registration Rights Agreement")
between the Convertible Noteholders and the Company, and others (including the
Selling Shareholder) in respect of the registration of the Common Stock
underlying the Convertibles Notes and the Common Stock underlying the Note
Warrants and certain other common stock; (iii) the lockup agreement, by and
among the Selling Shareholder and the Company (the "SeaMaster Lockup
Agreement"), in the form attached as Exhibit A; (iv) that certain term loan (the
"Senior Secured Term Loan") by and between the Company and the lenders which are
parties thereto (the "Lenders"), pursuant to which the Company shall borrow
funds to finance a portion of the purchase price of the Acquisitions, among
other things; (v) the credit agreement (the "Credit Agreement") between the
Company and Lender(s), pursuant to which the Lenders may finance a portion of
the purchase price of the Acquisitions; (vi) the securities purchase agreement,
by and among the Company and the buyers listed on Schedule C attached thereto
(the "PIPE Buyers") (the "PIPE Security Agreement") pursuant to which the
Company agrees to issue and deliver to each PIPE Buyer the Common Stock (the
"PIPE Common Stock") and warrants (the "PIPE Warrants"), which will be
exercisable to purchase shares of Common Stock, and proceeds from the PIPE
Buyers may be used to finance the remaining portion of the purchase price of the
Acquisitions; and (vii) the voting agreement (the "Voting Agreement"; together
with the Convertible Note, the Note Warrant, the Registration Rights Agreement,
SeaMaster Lockup Agreement, the Senior Secured Term Loan, the Credit Agreement,
the PIPE Security Agreement and the PIPE Warrants, the "Financing Documents")
between the Company and certain holders of the Common Stock (the
"Stockholders"), including the Selling Shareholder, providing for the agreement
of certain stockholders, comprising of management, FMI, TUG and the Selling
Shareholder to vote their respective Common Stock as provided therein, in the
form attached as Exhibit B;

                                      [*]

      WHEREAS, the Selling Shareholder has a call option to acquire all of the
capital stock of SeaMaster Logistics Inc. for One United States Dollar (US$1.00)
and other good and valuable consideration in the event that the transactions
contemplated by the Financing Documents are not consummated by December 31,
2006.

      NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein set forth, the parties hereby agree as follows:

<PAGE>

                                    ARTICLE I

                           SALE AND PURCHASE OF SHARES

      1.1 AGREEMENT TO SELL AND PURCHASE. Subject to the terms and conditions
hereinafter set forth, the Selling Shareholder hereby agrees to sell one
fully-paid share of US$1.00 in the capital of SeaMaster, representing one
hundred percent (100%) of the issued and outstanding share capital of SeaMaster
(the "Shares") as of the date hereof, legally and beneficially owned by the
Selling Shareholder to Purchaser and Purchaser hereby agrees to purchase the
Shares from the Selling Shareholder. The Shares represent all of the issued and
outstanding share capital of SeaMaster.

      1.2 SHARES TO BE TRANSFERRED. At the Closing, the Selling Shareholder
shall sell, transfer, assign and deliver to Purchaser, and Purchaser shall
purchase, for the consideration hereinafter provided, the Shares, free and clear
of all mortgages, liens, pledges, security interests, claims and encumbrances of
any nature.

      1.3 CONSIDERATION FOR SHARES. Subject to the consummation of the
transaction contemplated by the Financing Documents, the aggregate consideration
(hereinafter referred to as the "Purchase Price") to be paid by Purchaser to the
Selling Shareholder will be paid on in stock and an earn out basis for cash in
accordance with the terms set out in Article II.

                                   ARTICLE II

                              SHARE PURCHASE PRICE

      2.1 PURCHASE PRICE:

      a. Price: The Selling Shareholder would be entitled to receive an
aggregate cash component of the Purchase Price (the "Earn-Out Cash Payment") in
accordance with paragraph b. below. In addition, the Selling Shareholder will
receive a common stock component of the Purchase Price consisting in total of
[*] in accordance with paragraph c. below. SeaMaster Restricted Stock shall be
restricted stock and subject to the prohibitions of selling by the Selling
Shareholder in accordance with the terms set forth in SeaMaster Lockup Agreement
and the Voting Agreement. As of the Finance Closing Date, the Company will [*]
of the Company's Common Stock to be distributed to the employees of SeaMaster as
directed by the Selling Shareholder in writing from time to time at its sole
discretion in accordance with the Company's employee stock ownership plan. The
SeaMaster's Logistics Business and the Shares are deemed fully paid for in
exchange for the SeaMaster Restricted Stock and payment of the Earn-Out Cash
Payments in accordance with the terms of this Agreement, and the covenants
herein as of the Closing Date.

      b. [*]

<PAGE>

                                      [*]

<PAGE>

                                      [*]

<PAGE>

                                      [*]

      2.6 DISBURSEMENT OF PURCHASE PRICE. The Selling Shareholder and the
Purchaser agree that the Purchase Price shall be disbursed as specified in
Schedule 2.6 attached hereto and made a part hereof and to the bank accounts set
forth therein.

                                   ARTICLE III

              EXCLUDED LIABILITIES AND OBLIGATIONS BY THE PURCHASER

      3.1 EXCLUDED LIABILITIES. The Purchaser and the Selling Shareholder agree
that the Purchaser shall not assume any of the following, for SeaMaster,
SeaMaster China and the Selling Shareholder, other than the Post-Closing
Shareholder Loan:

      (a) all liabilities and obligations that arise out of the use and
operation of the SeaMaster's Logistics Business prior to the Closing Date;

      (b) any and all liabilities and obligations of SeaMaster which exist on
the Closing Date arising out of all contracts; other than Transportation
Contracts, any contracts entered or to be entered into by SeaMaster as
contemplated by this Agreement, and real property leases disclosed to Purchaser.

      (c) all liabilities and obligations which arise and/or become due in
connection with any contracts (other than Transportation Contracts disclosed to
Purchaser) entered into or relating to performance made or acts committed prior
to the Closing Date;

      (d) any and all liabilities, losses and damages and alleged liabilities,
losses and damages arising out of or resulting from any accident or occurrence
occurring prior

<PAGE>

to the Closing Date resulting in personal injury, sickness, death, property
damage, property destruction or loss of use of property arising out of or
resulting from the operation of the business purchased hereunder including,
without limitation, the performance of any contract or the ownership, operation
or use of equipment in connection with the SeaMaster's Logistics Business;

      (e) all accounts payable and accrued expenses of the SeaMaster's Logistics
Business ("Accounts Payable") provided, however, the Purchaser shall only assume
reasonable Accounts Payable related to: (1) SeaMaster's Logistics Business
rendered in the ordinary course of business within 60 days prior to the Closing
Date;

      (f) any liability or obligation of SeaMaster or Selling Shareholder in
respect of any amount of federal, state, local or foreign taxes (including
interest, penalties and additions to such taxes) which are imposed or measured
by the income of SeaMaster, in each case for any period or periods prior to the
Closing Date, including franchise taxes of SeaMaster;

      (g) any liability or obligation of SeaMaster or Selling Shareholder under
this Agreement or any of the transactions contemplated hereby;

      (h) any liability and obligation of SeaMaster under or with respect to any
transactions not in the ordinary course of the business of the SeaMaster's
Logistics Business prior to the Closing Date unless otherwise agreed in writing
by the Purchaser and the Selling Shareholder;

      (i) any tax (including, without limitation, any federal, state or local
income, franchise, sales, transfer, recording, documentary or other tax) imposed
upon, or incurred by, SeaMaster or Selling Shareholder in connection with or
related to this Agreement or the transactions contemplated hereby, or by reason
of its receipt of any of the consideration provided for herein for the sale and
transfer of the SeaMaster's Logistics Business;

      (j) any liability or obligation of SeaMaster or the Selling Shareholder
for unpaid sales, use, social security, unemployment withholding, real estate,
property and income taxes prior to the Closing Date;

      (k) unless otherwise agreed to in writing, any obligations of SeaMaster or
the Selling Shareholder to third parties other than the Purchaser arising out of
the failure of SeaMaster or the Selling Shareholder to obtain any necessary
consents to the assignment to the Purchaser of contracts or leases to which
SeaMaster or the Selling Shareholder are a party (including, but not limited to,
damages asserted by third parties for breach of such contracts due to the
failure to obtain such consents);

      (l) any liability or obligation of SeaMaster or the Selling Shareholder
under any credit facilities and any related guaranty of the Selling Shareholder
entered or to be entered into prior to the Closing Date in relation to or in
connection with the SeaMaster's

<PAGE>

Logistics Business;

      (m) any liability and obligation of SeaMaster or the Selling Shareholder
under the letters of credit with any lender and any related guaranty of the
Selling Shareholder entered or to be entered into prior to the Closing Date in
relation to or in connection with the SeaMaster's Logistics Business;

      (n) any liability and obligation of SeaMaster or the Selling Shareholder
under the letters of credit relating to insurance maintained by SeaMaster
entered or to be entered into prior to the Closing Date in relation to or in
connection with the SeaMaster's Logistics Business;

      (o) any claim (including any auto liability claim), obligation, liability,
right of action, fine or penalty which may be asserted or imposed by any party
at any time arising from or in anyway relating to any act or omission which
occurred or commenced prior to the Closing Date, including but not limited to
any violations of or any remediation obligation under any foreign law, federal,
state or local law;

      (p) any liability or obligation arising under any affiliate transactions
or similar transactions; and

      (q) any liability or obligation arising under any litigation against
SeaMaster the proceeding of which shall have commenced prior to the Closing
Date.

      The liabilities and obligations not assumed by the Purchaser hereunder
includes those listed above for SeaMaster China existing prior to the date of
consummation of the acquisition of SeaMaster China by SeaMaster.

                                   ARTICLE IV

                                   THE CLOSING

      The closing ("Closing") of the sale and purchase of the Shares shall take
place at the offices of Brown Rudnick Berlack Israels LLP, 7 Times Square, New
York, New York 10036 on November 8, 2006, at 10:00 a.m., or on such other date
(the "Closing Date") or location as the Selling Shareholder and the Purchaser
shall mutually agree in accordance with this Agreement. The Closing shall be
effective as of the opening of business on the Closing Date.

                                    ARTICLE V

                        REPRESENTATIONS AND WARRANTIES OF
                         THE SELLER AND SEAMASTER CHINA

      SeaMaster represents and warrants to the Purchaser as follows:

<PAGE>

      5.1 ORGANIZATION STANDING, ETC. OF SEAMASTER. SeaMaster is a company
incorporated under the laws of the Hong Kong Special Administration Region
("Hong Kong") of the People's Republic of China and is validly existing. Subject
to the approval of the acquisition by the necessary governmental authority, [*]

      5.2 AUTHORITY, BINDING EFFECT. SeaMaster has the corporate power and
authority to enter into this Agreement and to carry out the transactions
contemplated hereby. The execution and delivery of this Agreement and the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of SeaMaster, and this Agreement has been duly
executed and delivered by duly authorized officers of SeaMaster and constitutes
a valid, legal and binding obligation of SeaMaster enforceable in accordance
with its terms.

      5.3 COMPLIANCE WITH OTHER INSTRUMENTS AND LAWS, ETC.; PERMITS, LICENSES
AND INDUSTRY AFFILIATIONS. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not result in any
violation of or be in conflict with, or constitute a default under, any
provision of the constitutional documents of [*] or any material agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to SeaMaster or any of its properties which in any case would
individually or in the aggregate have a material adverse effect on SeaMaster. No
consent, approval or authorization of, or declaration or filing with, any
governmental authority is required of SeaMaster under existing law in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby (or if so required, has been obtained on or
before the Closing Date). [*] in compliance in all material respects with the
terms of such licenses, permits, authorizations, variances, exemptions, orders
and approvals as are held by it or applicable to it and with all applicable
material requirements, standards and procedures of the federal, state, local and
foreign governmental or regulatory bodies which issued them. Each [*] in
compliance in all material respects with all applicable federal, state, local
and foreign laws (including, without limitation, any tax, health, employment,
labor, customs or interstate or international commerce), ordinances, codes,
regulations, orders, requirements, standards or procedures which are applicable
to the SeaMaster's Logistics Business operated by it except where any default,
violation or contravention would not have a material adverse effect on the
SeaMaster's Logistics Business.

<PAGE>

      5.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Each representation and
warranty given by SeaMaster shall be treated as a separate representation or
warranty and the interpretation of a representation or a warranty shall not be
restricted by reference to or inference from another representation or warranty.
The representations and warranties shall survive after the Closing Date.

                                   ARTICLE VI

            REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDER

      The Selling Shareholder represents and warrants to the Purchaser as
follows:

      6.1 CORPORATE ORGANIZATION AND QUALIFICATION. SeaMaster is a company
incorporated under the laws of Hong Kong, validly existing and is qualified as a
foreign corporation in each jurisdiction where the properties owned, leased or
operated, or the business conducted by it, require such qualification, except
where failure to so qualify would not have a material adverse effect. SeaMaster
has all requisite power and authority (corporate or otherwise) to own, lease and
operate their properties and to carry on their business as it is now being
conducted. All of the representations and warranties of SeaMaster apply, MUTATIS
MUTANDIS, to SeaMaster China to the extent such representations and warranties
are applicable.

      6.2 CAPITALIZATION. The authorized share capital of SeaMaster is Ten
Million United States Dollars (US $10,000,000) divided into Ten Million
(10,000,000) shares of One United States Dollar (US $1) each (the "Shares"), of
which one fully-paid share in the capital of SeaMaster is issued, representing
all of the issued and outstanding share capital of SeaMaster. The Selling
Shareholder is the record and beneficial owner of all of the Shares representing
all of the issued and outstanding share capital of SeaMaster. All of the
outstanding shares in the capital of SeaMaster have been duly authorized,
validly issued and are fully paid and nonassessable. SeaMaster does not have any
obligation (contingent or other) to purchase, redeem or otherwise acquire any
shares of its share capital or any interest therein, or to pay any dividend or
make any other distribution in respect thereof. There are no existing options,
warrants, stock appreciation rights or other rights of any kind to purchase
shares in the capital of SeaMaster.

      6.3 AUTHORITY RELATIVE TO THIS SALE AND PURCHASE AGREEMENT. SeaMaster has
the requisite corporate power and authority to approve, authorize, execute and
deliver this Agreement and to consummate the transactions contemplated hereby
(subject to the approval of the sale by the Selling Shareholder). This Agreement
and the consummation of the transaction contemplated hereby have been duly and
validly authorized by the Board of Directors of SeaMaster and no other corporate
proceedings on the part of SeaMaster is necessary to authorize this Agreement or
to consummate the transactions contemplated hereby (other than the approval of
the sale by the Selling Shareholder). This Agreement has been duly and validly
executed and delivered by SeaMaster and

<PAGE>

constitutes the valid and binding agreement of SeaMaster, enforceable against
SeaMaster in accordance with its terms, subject, as to enforceability, to
bankruptcy, insolvency, reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity.

      6.4 CONSENTS AND APPROVALS; NO VIOLATION. Neither the execution and
delivery of this Agreement nor the consummation by SeaMaster of the transactions
contemplated hereby will (i) conflict with or result in any breach of any
provision of its constitutional documents of SeaMaster; (ii) require any
consent, approval, authorization or permit of, or registration, declaration or
filing with or notification to, any governmental authority, except such
consents, approvals, authorizations, permits, filings or notifications where the
failure to obtain such consent, approval, authorization or permit, or to make
such filing or notification, could not in the aggregate reasonably be expected
to have a material adverse effect or adversely affect the ability of SeaMaster
to consummate the transactions contemplated hereby; (iii) result in a violation
or breach of, or constitute (with or without notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration
or lien or other charge or encumbrance) under any of the terms, conditions or
provisions of any material note, license, agreement or other instrument or
obligation to which SeaMaster or any of its assets may be bound, which would in
the aggregate reasonably be expected to have a material adverse effect, except
for such violations, breaches and defaults (or rights of termination,
cancellation or acceleration or lien or other charge or encumbrance) as to which
requisite waivers or consents have been obtained; or (iv) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to SeaMaster or
its assets, except for violations which could not in the aggregate reasonably be
expected to have a material adverse effect or adversely affect the ability of
SeaMaster to consummate the transactions contemplated hereby.

      6.5 LITIGATION. There are no civil, criminal or administrative actions,
suits, demands, claims, hearings, notices of violation, investigations, demand
letters or proceedings pending or, to the best knowledge of SeaMaster and the
Selling Shareholder, threatened against SeaMaster.

      6.6 FINANCIAL STATEMENTS. Schedule 6.6 sets forth the audited balance
sheet of SeaMaster at December 31, 2005 and unaudited balance sheet at June 30,
2006, respectively, the related statement of operations and retained earnings,
stockholder's equity and of comprehensive income for the years then ended of
December 31, 2004 and December 31 2005, and the interim period through June 30,
2006, respectively, each prepared in accordance with U.S. GAAP (the "Financial
Statements"), together with related notes and the audit report on each of such
statements issued by Freidman LLP, SeaMaster's certified public accountants and
the review reports issued by Freidman LLP.

      6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since June 30, 2005, the
business of SeaMaster has been carried on only in the ordinary and usual course
and there has not been any material adverse change in its business, properties,
operations or financial condition and no event has occurred and no fact or set
of circumstances has arisen which has resulted in or could reasonably be
expected to result in a material adverse effect in the

<PAGE>

operations of SeaMaster. Except for liabilities and obligations incurred in the
ordinary course of business and consistent with past practice, liabilities and
obligations reflected on or reserved against in the balance sheet and as
otherwise disclosed in SCHEDULE 6.7, since December 31, 2005, the Selling
Shareholder has not incurred any liabilities or obligations that would be
required to be reflected or reserved against in a balance sheet of the Selling
Shareholder prepared in accordance with the principles used to prepare the
audited balance sheet. Since June 30, 2006, there has been no change or
development in the business, properties, operations, condition (financial or
otherwise), or results of operations or prospects of the Selling Shareholder
that has had or could reasonably be expected to have a material adverse effect.
Since June 30, 2006, the Selling Shareholder has not (i) declared or paid any
dividends, (ii) sold any assets, individually or in the aggregate, in excess of
$100,000 outside of the ordinary course of business, (iii) had capital
expenditures, individually or in the aggregate, in excess of $100,000 or (iv)
waived any material rights in respect of any Indebtedness or other rights in
excess of $100,000 owed to it. The Selling Shareholder has not taken any steps
to seek protection pursuant to any bankruptcy law, to the Selling Shareholder's
knowledge none of its creditors intend to initiate involuntary bankruptcy
proceedings and to the Selling Shareholder's knowledge there is no fact which
would reasonably lead a creditor to do so.

      6.8 EMPLOYMENT AGREEMENTS. SeaMaster is not a party to any employment,
consulting, non-competition, severance, golden parachute, indemnification
agreement or any other agreement providing for payments or benefits or the
acceleration of payments or benefits upon the consummation of the transactions
contemplated hereby (including, without limitation, any contract to which
SeaMaster or any of SeaMaster is a party involving employees of SeaMaster).

      6.9 BROKERS AND FINDERS. SeaMaster and Selling Shareholder has not
employed any investment banker, broker, finder, consultant or intermediary in
connection with the transactions contemplated by this Sale and Purchase
Agreement which would be entitled to any investment banking, brokerage, finder's
or similar fee or commission in connection with this Agreement or the
transactions contemplated hereby.

      6.10 TAXES. SeaMaster has (x) filed all returns, declarations, reports,
information returns and statements of whatsoever kind ("Tax Returns") in respect
of all federal, state, county, local, foreign and other Taxes (as defined below)
that it is required to file, and all such Tax Returns are true, complete and
accurate in all material respects and (y) paid or provided for the payment of
all Taxes due with respect to such Tax Returns and all Taxes, if any, required
to be paid for which no return is required. SeaMaster has complied in all
material respects with all applicable legal requirements relating to the payment
and withholding of taxes, and within the time and in the manner prescribed by
law, has withheld from wages, fees and other payments and paid over to the
proper government or regulatory authorities all amounts required. SeaMaster has
set aside on its books provision reasonably adequate for the payment of all
Taxes for periods to which its Tax Returns apply. There are no unpaid taxes in
any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of

<PAGE>

SeaMaster know of no basis for any such claim. No liens have been filed and no
claims are being asserted by or against SeaMaster or any subsidiary of SeaMaster
in respect of any Taxes (other than liens for Taxes not yet due and payable).
Neither SeaMaster nor any subsidiary of SeaMaster has received notice of
assessment or proposed assessment of any Taxes claimed to be owed by it or any
other entity on its behalf. Neither SeaMaster nor any subsidiary of SeaMaster is
a party to any tax sharing or tax indemnity agreement or any other agreement of
a similar nature that remains in effect. For purposes of this Agreement, the
term "Tax" (and, with correlative meaning, the terms "Taxes" and "Taxable")
shall include all federal, state, local and foreign income, profits, franchise,
gross receipts, payroll, sales, employment, use, property, withholding, excise
and other taxes, duties or assessments of any nature whatsoever, together with
all interest, penalties and additions imposed with respect to such amounts.

      6.11 EMPLOYEE BENEFITS. SeaMaster is not a party nor obligated for any (x)
Company Benefit Plans for the employees, directors and officers of SeaMaster,
(y) severance arrangements, or (z) employee benefit plans. SeaMaster has
complied in all material respects with all applicable legal requirements
relating to the payment and withholding of taxes, and within the time and in the
manner prescribed by law, has withheld from wages, fees and other payments and
paid over to the proper governmental or regulatory authorities all amounts
required.

      6.12 INTANGIBLE PROPERTY. SeaMaster has good, valid and marketable title
to all such assets free and clear of all liens and other encumbrances, and has a
valid right to use all such assets, including any trademark (whether registered
or unregistered), trademark application, trade name, fictitious business name,
service mark (whether registered or unregistered), service mark application,
copyright (whether registered or unregistered), copyright application, trade
secrets, licenses, information and proprietary rights and processes, all patents
and patent rights, customer list, franchise, or intangible asset, together with
all goodwill related to the foregoing.

      6.13 PERSONAL PROPERTY. SeaMaster has good title, free and clear of all
title defects, security interests, pledges, options, claims or liens (including,
without limitation, leases, chattel mortgages, conditional sale contracts,
collateral security arrangements and OTHER title or interest retaining
agreements) to all Personal Property, but excluding any such liens or
encumbrances which will not materially affect the value of such property or
interfere with the use of such property in the conduct of SeaMaster's business.

      6.14 INSURANCE. SeaMaster has all necessary bonds, workers compensation
insurance (and PEO workers compensation insurance) and all contracts of
insurance and indemnity of SeaMaster with respect to its business in force at
the date of this Agreement, which shall be provided to Purchaser prior to the
Closing Date (including name of insurer or indemnitor, agent, form of coverage
and expiration date). All premiums and other payments due from SeaMaster with
respect to any such contracts of insurance or indemnity have been paid, and
SeaMaster knows of no fact, act or omission which has caused or might cause any
such contract to be cancelled or

<PAGE>

terminated prior to the Closing. All notices have been given, all known claims
have been presented and all other required or appropriate action with respect to
such contracts have been taken by SeaMaster in a timely fashion.

      6.15 INTERESTS IN REAL PROPERTY. SeaMaster will promptly provided a
correct and complete list and brief description of all real properties leased by
SeaMaster. SeaMaster does not own any real property. All leases in respect of
such real property leased by SeaMaster are valid and enforceable and no party to
any such lease is in default thereunder, respectively, and true and complete
copies of such leases have previously been delivered to the Purchaser. All rent
currently due and payable under the real property leases has been paid.

      6.16 INTERESTS IN EQUIPMENT LEASES. SeaMaster will promptly provide a
correct and complete list and brief description of all property leased by
SeaMaster, identifying each piece of equipment with each lease. All leases are
valid and enforceable and no party to any such lease is in default thereunder,
respectively, and true and complete copies of such Leases have previously been
delivered to the Purchaser. All payments currently due and payable under the
Leases have been paid.

      6.17 TRANSPORTATION CONTRACTS. SeaMaster will promptly provide a complete
and correct list of all written Transportation Contracts in effect on the date
hereof and in respect of any such contract which is not written, a description
of the parties and the nature of the contract. No customer of SeaMaster has
expressed to the Selling Shareholder any intention to terminate or modify its
relationship with SeaMaster.

      6.18 SUPPLIERS; OTHER CONTRACTS. SeaMaster will promptly provide a
complete and correct list of the names of any suppliers of transportation
services to SeaMaster with respect to which practical alternative sources of
supply are, in the good faith opinion of SeaMaster, not available on
commercially reasonable terms and conditions, together with a description of any
existing contractual arrangements for, and any pending discussions or
negotiations relating to, continued supply from such suppliers and a completed
list of the Contracts which involve payments in excess of $100,000.

      6.19 COMPENSATION OF EMPLOYEES. SeaMaster will promptly provide a complete
and accurate list of all current directors, officers, employees and consultants
of SeaMaster on the date hereof and the Finance Closing Date respectively.
SeaMaster shall separately deliver a schedule containing the current job title,
aggregate remuneration rate (bonus, commission and salary) and accrued but
untaken vacation and sick leave for each such individual.

      6.20 EMPLOYEE RELATIONS. As of August 28, 2006, SeaMaster had an aggregate
of 3 permanent employees and SeaMaster China had an aggregate of 29 permanent
employees. SeaMaster are not delinquent in payments to any of its employees or
consultants (including the leased or temporary employee agreements) for any
wages, salaries, commissions, bonuses or other direct compensation for any
services performed by them or for amounts required to be reimbursed to such
employees. Upon

<PAGE>

termination of the employment of any of its employees, SeaMaster will not by
reason of anything done prior to the Closing, be liable to any of its employees
or consultants for severance pay or any other payments (other than accrued
salary, vacation or sick pay in accordance with SeaMaster normal policies).
SeaMaster does not have any contracts of employment with any employees or any
legal responsibility for the employees of any other entity, and all employees of
SeaMaster are terminable by SeaMaster at will.

      6.21 LABOR AGREEMENTS. There are no contracts with labor unions binding
upon SeaMaster and SeaMaster have not been requested to recognize nor agreed to
recognize any union or other collective bargaining unit nor has any union or
other collective bargaining unit been certified as representing any employees of
SeaMaster. SeaMaster have no knowledge of any organization effort currently
being made or threatened by or on behalf of any labor union with respect to
employees of SeaMaster.

      6.22 COMMISSION ARRANGEMENTS. There are no commission arrangements,
involving SeaMaster, except as have been disclosed in writing to the Purchaser
as of the Closing.

      6.23 BANK AND OTHER ACCOUNTS. SeaMaster will promptly provide Purchaser a
true and complete list of all bank, savings, brokerage and other accounts of
SeaMaster, including the name of the depositary, the account number and the
persons authorized to make deposits and withdrawals or to effect transactions in
such accounts.

      6.24 LETTERS OF CREDIT AND BONDS. There are no loans, credit facilities,
letters of credit and bonds outstanding on the date hereof which are the
obligations of SeaMaster together with their face amounts and a description as
to their character (e.g., standby, irrevocable, etc.), except as necessary to
the SeaMaster's Logistics Business which SeaMaster has provided and contributed
hereunder.

      6.25 ENVIRONMENTAL MATTERS. (i) SeaMaster and the operations thereof are
in material compliance with all applicable environmental laws including, without
limitation, all laws pertaining to hazardous materials; (ii) there are no
judicial or administrative actions, suits, proceedings or investigations pending
or, to the knowledge of SeaMaster, threatened against SeaMaster or alleging the
violation of or liability of SeaMaster under any applicable environmental laws,
and SeaMaster has not received notice from any governmental body or other person
alleging any violation of or liability under any applicable environmental laws,
in either cease which could reasonably be expected to result in material
environmental costs and liabilities; (iii) to the knowledge of SeaMasters, there
are no facts, activities, circumstances or conditions relating to, arising from,
associated with, or attributable to SeaMaster or any real property currently or
previously owned, operated or leased by SeaMaster that could reasonably be
expected to result in material environmental costs and liabilities; and (iv) no
notices to, or authorizations from, any governmental authority pursuant to any
applicable environmental laws are required in order to complete the sale or as a
result of having entered into this Agreement.

<PAGE>

      6.26 ACCOUNTS RECEIVABLE. SeaMaster's accounts receivable are reflected in
SeaMaster's consolidated balance sheet and such accounts receivable arose in the
ordinary course of business; were not, as of the date of such balance sheet,
subject to any material discount, contingency, claim of offset or recoupment or
counterclaim; and represented, as of the date of such balance sheet, bona fide
claims against debtors for sales, leases, licenses and other charges thereto.

      6.27 LICENSES TO OPERATE. SeaMaster has all permits, licenses, orders or
approvals of any federal, state, local or foreign governmental or regulatory
body required in order to permit it to carry on the SeaMaster's Logistics
Business. All such permits, licenses, orders and approvals are in full force and
effect and no suspension or cancellation of any of them is threatened.

      6.28 NO THIRD PARTY OPTIONS. There are no existing agreements, options,
commitments or rights with, of or to any person to acquire any material assets
or rights of SeaMaster.

      6.29 CERTIFICATES. No certificate executed by SeaMaster or by any officer
of SeaMaster pursuant to this Agreement contains or will contain any
misstatement of a material fact or omits or will omit any material fact
necessary to make the statements made not misleading.

      6.30 NO DEFAULT. The business of SeaMaster has not been and is not being
conducted in default or violation of any term, condition or provision of (i) its
constitutional documents or similar organizational documents, (ii) any agreement
or (iii) any federal, state, local or foreign law, statute, regulation, rule,
ordinance, judgment, decree, order, writ, injunction, concession, grant,
franchise, permit or license or other governmental authorization or approval
applicable to SeaMaster or relating to any of the property owned, leased or used
by it, or applicable to its business, excluding from the foregoing clauses (i),
(ii) and (iii), defaults or violations that would not, individually or in the
aggregate, have a material adverse effect on SeaMaster or materially impair the
ability of SeaMaster to consummate this Agreement.

      6.31 SCHEDULES. Each of the Schedules attached hereto constitutes, and
each of the schedules to be delivered at the Closing will constitute, a true and
complete list of the items purported to be set forth therein except for items
the omission of which would not be considered material.

      6.32 FOREIGN ASSET CONTROL REGULATIONS. SeaMaster is not a "national" of
any "designated foreign country", within the meaning of the Foreign Asset
Control Regulations or the Cuban Asset Control Regulations of the U.S. Treasury
Department, 31 C.F.R., Subtitle B, Chapter V, as amended, or any regulations or
rulings issued thereunder.

      6.33 APPLICATION OF TAKEOVER PROTECTIONS; RIGHTS AGREEMENT. SeaMaster and
its board of directors have taken all necessary action, if any, in order to
render

<PAGE>

inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
antitakeover provision under SeaMaster's constitutional documents or the laws of
the respective state of incorporation which is or could become applicable as a
result of the transactions contemplated by this Agreement. SeaMaster has not
adopted a stockholder rights plan or similar arrangement relating to
accumulations of beneficial ownership of its common shares or a change in
control of the company.

      6.34 FOREIGN CORRUPT PRACTICES. Neither SeaMaster, its affiliates, nor any
director, officer, agent, employee or other person acting on behalf of any of
them has, in the course of its actions for, or on behalf of, such entity (i)
used any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expenses relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv)
made any unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or employee.

      6.35 TRANSACTIONS WITH AFFILIATES. None of the officers, directors or
employees of SeaMaster is presently a party to any transaction with SeaMaster
(other than for ordinary course services as employees, officers or directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any such
officer, director or employee or, to SeaMaster's knowledge, any corporation,
partnership, trust or other entity in which any such officer, director, or
employee has a substantial interest or is an officer, director, trustee or
partner.

      6.36 INDEBTEDNESS AND OTHER CONTRACTS. Save as disclosed in this
Agreement, SeaMaster does not have any outstanding Indebtedness (as defined
below) other than the Post-Closing Shareholder Loan, (ii) is not a party to any
contract, agreement or instrument, the violation of which, or default under
which, by the other party(ies) to such contract, agreement or instrument could
reasonably be expected to result in a material adverse effect, (iii) is not in
violation of any term of or in default under any contract, agreement or
instrument relating to any Indebtedness, except where such violations and
defaults would not result, individually or in the aggregate, in a material
adverse effect, or (iv) is not a party to any contract, agreement or instrument
relating to any Indebtedness, the performance of which, in the judgment of
SeaMaster's officers, has or is expected to have a material adverse effect.
Immediately after giving effect to the transactions contemplated hereby,
SeaMaster will not have any outstanding Indebtedness. For purposes of this
Agreement: (x) "Indebtedness" of any Person means, without duplication (A) all
indebtedness for borrowed money, (B) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services, including
(without limitation) "capital leases" in accordance with generally accepted
accounting principles (other than trade payables entered into in the ordinary
course of business), (C) all reimbursement or payment obligations in respect of
letters of credit, surety bonds and other similar instruments, (D) all
obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the

<PAGE>

acquisition of property, assets or businesses, (E) all indebtedness created or
arising under any conditional sale or other title retention agreement, or
incurred as financing, in either case in respect of any property or assets
acquired with the proceeds of such indebtedness (even though the rights and
remedies of SeaMaster or bank under such agreement in the event of default are
limited to repossession or sale of such property), (F) all monetary obligations
under any leasing or similar arrangement which, in connection with generally
accepted accounting principles, consistently applied for the periods covered
thereby, is classified as a capital lease, (G) all indebtedness referred to in
clauses (A) through (F) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any mortgage, lien, pledge, charge, security interest or other encumbrance upon
or in any property or assets (including accounts and contract rights) owned by
any Person, even though the Person which owns such assets or property has not
assumed or become liable for the payment of such indebtedness, and (H) all
Contingent Obligations in respect of indebtedness or obligations of others of
the kinds referred to in clauses (A) through (G) above; (y) "Contingent
Obligation" means, as to any Person, any direct or indirect liability,
contingent or otherwise, of that Person in respect of any indebtedness, lease,
dividend or other obligation of another Person if the primary purpose or intent
of the Person incurring such liability, or the primary effect thereof, is to
provide assurance to the obligee of such liability that such liability will be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such liability will be protected (in whole or in
part) against loss in respect thereof; and (z) "Person" means an individual, a
limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization or a government or any department or
agency thereof.

      6.37 INTERNAL ACCOUNTING CONTROLS. As of the Closing, SeaMaster maintains
a system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset and liability
accountability, (iii) access to assets or incurrence of liabilities is permitted
only in accordance with management's general or specific authorization and (iv)
the recorded accountability for assets and liabilities is compared with the
existing assets and liabilities at reasonable intervals and appropriate action
is taken in respect of any difference.

      6.38 CONDUCT OF BUSINESS; REGULATORY PERMITS. The Selling Shareholder is
not in violation of any term of or in default under its certificate of
incorporation and memorandum and articles of association or other constituent
documents, respectively. The Selling Shareholder is not in violation of any
judgment, decree or order or any statute, ordinance, rule or regulation
applicable to such entity, and the Selling Shareholder will not conduct its
respective business in violation of any of the foregoing, except for such
violations (each of which is set forth on SCHEDULE 6.38A) and/or possible
violations which would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect. The Selling Shareholder possesses
all certificates, authorizations and permits issued by the appropriate
regulatory authorities necessary to

<PAGE>

conduct their respective businesses, except where the failure to possess such
certificates, authorizations or permits would not have, individually or in the
aggregate, a material adverse effect, and the Selling Shareholder has not
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit except where such proceedings,
revocation or modification (each of which is set forth on SCHEDULE 6.38B) would
not have a material adverse effect.

      6.39 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Each representation and
warranty given by the Selling Shareholder shall be treated as a separate
representation or warranty and the interpretation of a representation or a
warranty shall not be restricted by reference to or inference from another
representation or warranty. The representations and warranties shall survive
after the Closing Date.

                                   ARTICLE VII

                 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

      The Purchaser represents and warrants to each of SeaMaster as follows:

      7.1 ORGANIZATION, STANDING, ETC. OF THE PURCHASER. The Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New Jersey. The Purchaser has all requisite corporate and
limited liability company, as applicable, power and authority to own the Shares
and conduct the business to be transferred hereunder.

      7.2 AUTHORITY; BINDING EFFECT. The Purchaser has the corporate and limited
liability company, as applicable, power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby. The execution
and delivery of this Agreement and the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of the
Purchaser, and this Agreement has been duly executed and delivered by duly
authorized officers of the Purchaser and constitutes the valid, legal and
binding obligation of the Purchaser enforceable in accordance with its terms.

      7.3 COMPLIANCE WITH OTHER INSTRUMENTS AND LAWS, ETC. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby will not result in any violation of or be in conflict with, or constitute
a default under any provision of the constitutional documents of the Purchaser,
or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to the Purchaser or any of its properties. No
consent, approval or authorization of, or declaration or filing with, any
governmental authority is required of the Purchaser under existing law in
connection with the execution or delivery of this Agreement or the consummation
of the transactions contemplated hereby.

      7.4 LEGAL PROCEEDINGS. There are no actions, suits, proceedings or

<PAGE>

investigations pending or threatened against the Purchaser or its properties or
assets which question the validity of this Agreement or any action taken or to
be taken pursuant hereto, or which might have a material adverse effect upon the
properties or business of the Purchaser. There is no judgment, order, writ,
injunction or decree of any court or administrative agency which might interfere
with the consummation of the transactions contemplated hereby.

      7.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Each representation and
warranty given by the Purchaser shall be treated as a separate representation or
warranty and the interpretation of a representation or a warranty shall not be
restricted by reference to or inference from another representation or warranty.
The representations and warranties shall survive after the Closing Date.

                                  ARTICLE VIII

                                    COVENANTS

      8.1 FURTHER ASSURANCES AND ASSISTANCE. SeaMaster and the Selling
Shareholder shall, from time to time, at the request of the Purchaser, do,
execute, acknowledge and deliver or will cause to be done, executed,
acknowledged and delivered all such further acts, deeds, assignments, transfers,
conveyances, assurances and take such other action as the Purchaser may
reasonably request and as may be reasonably necessary in order to vest in the
Purchaser title to, and possession and control of all of Shares and provide the
information reasonably requested by Purchaser hereunder. The Purchaser shall,
from time to time, at the request and expense of SeaMaster and/or the Selling
Shareholder, take such action as SeaMaster and/or the Selling Shareholder may
reasonably request to assist SeaMaster and the Selling Shareholder in complying
with state or Federal and foreign laws applicable to the SeaMaster's Logistics
Business or the consummation of the transactions contemplated by this Agreement
or in defending or prosecuting any litigation in which any of SeaMaster may be
involved.

      8.2 CONDUCT OF BUSINESS PENDING THE CLOSING. From and after the date
hereof and through the Closing Date, SeaMaster will:

            (i) maintain the SeaMaster's Logistics Business in their present
      operating condition and repair, except for ordinary wear and tear;

            (ii) not sell, pledge, lease, mortgage, encumber or dispose of, or
      agree to any of the foregoing regarding, any part of the Logistic Business
      without the prior written approval of the Purchaser;

            (iii) use their commercially reasonable efforts to preserve intact
      the Logistic Business, including the real property leases, its business
      organizations, management and personnel, and use reasonable best efforts
      to keep available the services of all of its employees, agents,
      independent contractors and consultants,

<PAGE>

      commensurate with its business requirements;

            (iv) use its commercially reasonable efforts to preserve intact each
      of SeaMaster's customers and suppliers relationships and their goodwill in
      their business relations with SeaMaster;

            (v) keep in force all policies of insurance covering the SeaMaster's
      Logistics Business of SeaMaster;

            (vi) operate the SeaMaster's Logistics Business in the ordinary
      course of SeaMaster's business, upon their usual terms and conditions,
      provided, however, that, without the prior written consent of the
      Purchaser, SeaMaster and the Selling Shareholder shall not enter into any
      agreement, written or oral, relating to the SeaMaster's Logistics Business
      which involves or relates to:

                  (A) any labor union or collective bargaining agreement;

                  (B) any new lease or license for any real property or
            equipment;

                  (C) any agreement or arrangement as to which any government,
            any state, local or municipal government or any agency or
            instrumentality of any of the foregoing is a party;

                  (D) any distributions to its Selling Shareholder other than
            distributions for base salary, tax distributions and reimbursements
            for reasonable business expenses that shall not exceed US$50,000
            singly nor US$100,000 in the aggregate;

                  (E) any material arrangement or agreement with any customer to
            grant such customer a credit or rebate for services rendered or to
            be rendered; or

            (vii) promptly notify the Purchaser in writing of any material
      outstanding or threatened claims, legal, administrative, governmental or
      other proceedings, suits, investigations, complaints, notices or violation
      or other process involving any request or demand for specific performance
      or involving in any single instance more than US$25,000 other than cargo
      claims arising in the ordinary course of the SeaMaster's Logistics
      Business, or any judgments, orders, directives, injunctions, restraining
      orders or restrictions against or involving the SeaMaster's Logistics
      Business or the transactions contemplated by this Agreement.

      8.3 EMPLOYEES, EMPLOYEE BENEFIT PLANS AND POLICIES. The Purchaser agrees
that, under terms and conditions of employment the Purchaser will unilaterally
establish for all applicants for employment, the Purchaser will consider for
employment on the

<PAGE>

same basis as any other applicant for employment former SeaMaster's Logistics
Business employees of SeaMaster, if such former employees apply and are
otherwise qualified and available for employment with the Purchaser. All such
successful applicants shall be new employees of the Purchaser for all purposes.
Each of the Purchaser, the Selling Shareholder and SeaMaster agrees that the
contracts of employment of the employees of SeaMaster as of the date hereof,
whose names and job positions are as set forth in SCHEDULE 8.3, shall not be
affected in any way whatsoever by this Agreement and the Closing and shall
continue in full force and effect after Closing, subject to the respective terms
of the relevant contracts of employment.

      8.4 INDEMNITIES.

            8.4.1 INDEMNIFICATION OF THE PURCHASER. (a) Subject to Sections
      8.4.3, 8.16 and 11.8 hereof, the Selling Shareholder shall indemnify the
      Purchaser for and hold it harmless against any and all costs, expenses,
      claims, damages, lawsuits, attorneys', accountants' and other professional
      fees, losses, deficiencies, assessments, administrative orders, fines,
      penalties, actions, proceedings, judgments, liabilities and obligations of
      any kind or description (a "Claim") asserted against, incurred, or
      required to be paid by the Purchaser (regardless of when asserted or by
      whom), associated with or arising, from (i) any and all Excluded
      Liabilities, (ii) any breach by SeaMaster or the Selling Shareholder of
      any representation, warranty or covenant contained in this Agreement,
      (iii) the failure of SeaMaster and/or the Selling Shareholder to perform
      any other obligation imposed on such entity or person by this Agreement,
      and (iv) any employee benefit plan or policy maintained by or on behalf of
      SeaMaster and/or the Selling Shareholder at any time prior to the Closing
      Date, regardless of whether such Claim is asserted before or after the
      Closing Date and regardless of when the Claim arose. Provided that the
      aggregate liability of the Selling Shareholder under this Agreement shall
      not exceed US$10,000,000.

            (b) In the event any director, officer, employee, agent or
      representative of the Purchaser ("Purchaser Representative") is subject to
      a Claim which, if asserted against the Purchaser, would entitle the
      Purchaser to indemnification in accordance with Section 8.4.1(a) hereof,
      such Purchaser Representative or, to the extent that such Purchaser
      Representative's liabilities, obligations or costs in connection with such
      Claim have been borne by the Purchaser, then the Purchaser shall be
      indemnified by the Selling Shareholder in accordance with Section 8.4.I
      (a) hereof, provided that a final determination has been made that such
      Purchaser Representative has not intentionally violated law or acted
      outside the scope of his/her authority in connection with such Purchaser
      Representative's duties, in which event neither the Purchaser nor such
      Purchaser Representative, as the case may be, shall be indemnified
      pursuant to this Section 8.4.1(b).

            (c) Purchaser shall not be entitled to indemnification under this
      Section 8.4.1, unless and until the aggregate amount of all Purchaser's
      Claims exceeds an aggregate amount equal to US$100,000 (the "SeaMaster's
      Basket

<PAGE>

      Amount"). If Purchaser's Claims exceed SeaMaster's Basket Amount, then the
      Purchaser shall be entitled to recover the full amount of such Purchaser's
      Claims without regard to SeaMaster's Basket Amount.

            (d) Subject to the insurer's maintaining its right of recourse or
      contribution against a person who has caused an injury or damage, the
      amount of any Claims for which indemnification is provided under this
      Section 8.4.1 shall be net of any amounts recovered or recoverable by the
      Purchaser under insurance policies with respect to such Claim.

            8.4.2 INDEMNIFICATION OF SEAMASTER. (a) Subject to Section 11.8, the
      Purchaser shall indemnify SeaMaster and the Selling Shareholder, as the
      case may be, for and hold them harmless against, any Claim asserted
      against, incurred, or required to be paid by SeaMaster or the Selling
      Shareholder, as the case may be, (regardless of when asserted or by whom),
      associated with or arising, from (i) the failure by the Purchaser to
      discharge any and all of the liabilities, obligations and commitments of
      SeaMaster expressly assumed by the Purchaser pursuant to Section 3.1
      hereof, (ii) any breach by the Purchaser of any representation, warranty,
      obligation or covenant contained in this Agreement, and (iii) the failure
      by the Purchaser to perform any obligation imposed on it by this
      Agreement, related to the foregoing.

            (b) In the event any director, officer, employee, agent or
      representative of SeaMaster ("SeaMaster Representative") is subject to a
      Claim which, if asserted against SeaMaster, would entitle SeaMaster to
      indemnification in accordance with Section 8.4.2(a) hereof, such SeaMaster
      Representative or, to the extent that such SeaMaster Representative's
      liabilities, obligations or costs in connection with such Claim have been
      borne by SeaMaster, then SeaMaster shall be indemnified by the Purchaser
      in accordance with Section 8.4.2(a) hereof, provided that a final
      determination has been made that such SeaMaster Representative has not
      intentionally violated law or acted outside the scope of his/her authority
      in connection with such SeaMaster Representative's duties, in which event
      neither SeaMaster nor such SeaMaster Representative, as the case may be,
      shall be indemnified pursuant to this Section 8.4.2(b).

            (c) SeaMaster shall not be entitled to indemnification under this
      Section 8.4.2, unless and until the aggregate amount of all SeaMaster's
      Claims exceeds an aggregate amount equal to US$100,000 (the "Purchaser's
      Basket Amount"). If SeaMaster's Claims exceed the Purchaser's Basket
      Amount, then SeaMaster shall be entitled to recover the full amount of
      such SeaMaster's Claims without regard to the Purchaser's Basket Amount.

            8.4.3 DEFENSE OF CLAIMS. Each party (including the Purchaser
      Representative or SeaMaster Representative) entitled to indemnification
      under this Agreement (the "Indemnified Party") shall give written notice
      to the party required to provide indemnification (the "Indemnifying
      Party") promptly after

<PAGE>

      such Indemnified Party has actual knowledge of any Claim as to which
      indemnity may be sought, and shall permit the Indemnifying Party (at its
      expense) to assume the defense of any Claim or any litigation resulting
      therefrom, provided that counsel for the Indemnifying Party, who shall
      conduct the defense of such Claim or litigation, shall be reasonably
      satisfactory to the Indemnified Party, and the Indemnified Party may
      participate in such defense, but only at such Indemnified Party's expense,
      and provided, further, that the failure by any Indemnified Party to give
      notice as provided herein shall not relieve the Indemnifying Party of its
      indemnification obligations under this Agreement except to the extent that
      the Indemnifying Party is damaged or otherwise prejudiced as a result of
      the failure to give notice. No Indemnifying Party, in the defense of any
      such Claim or litigation, shall, without the prior written consent of each
      Indemnified Party, consent to entry of any judgment or enter into any
      settlement which imposes any operational restriction on the SeaMaster's
      Logistics Business or does not include as an unconditional term thereof
      the giving by the claimant or plaintiff to such Indemnified Party of a
      release from all liability with respect to such Claim or litigation.

            8.4.4 COOPERATION AND ASSISTANCE. SeaMaster and the Selling
      Shareholder shall cooperate fully with the Purchaser and make available to
      the Purchaser as the Purchaser may reasonably request, such of SeaMaster's
      employees who are familiar with, and such of SeaMaster's files and records
      directly relating to, matters described in Section 8.4.2 hereof for use by
      the Purchaser in connection with the investigation and defense thereof.

      8.5 ACCOUNTS RECEIVABLE. The Selling Shareholder shall use their
reasonable efforts to collect all accounts receivable that will be reflected on
the Closing Balance Sheet. Based upon the audited Closing Balance Sheet, the
parties agree that upon delivery of the final determination of the Closing
Balance Sheet, a net accounts receivable equal to accounts receivable as set
forth on such balance sheet less the allowance for doubtful accounts as set
forth thereon will be calculated (the "Net Receivables"). Within 105 days after
the fifth (5th) anniversary (the "Collection Period"), amounts received by the
Purchaser will be applied to the specific invoice designated by the customer
remittance. In applying any payment made by an account debtor, such payment
shall be applied to any account receivable to which it clearly relates by reason
of the amount thereof, and otherwise, as shall be specified by the customer at
the time of the making thereof or upon subsequent inquiry by the Purchaser. If
any dispute exists, the amount will be applied to the oldest outstanding
invoice. No invoices that existed on the fifth (5th) anniversary will be written
off as aged accounts during this period.

      8.6 NON-COMPETITION AGREEMENTS. In consideration of the Purchaser agreeing
to enter into this Agreement, the Selling Shareholder and its principal agree
that during the six-year period commencing on the Closing Date, and in the
geographic area of North America and China, the Selling Shareholder and its
principal shall not:

      (a) establish, acquire or otherwise engage in, directly or indirectly, any

<PAGE>

business substantially similar to the SeaMaster's Logistics Business;

      (b) solicit or attempt to solicit any customers of the SeaMaster's
Logistics Business who were such on the Closing Date with respect to services of
the SeaMaster's Logistics Business; or

      (c) solicit or attempt to solicit any salaried employees employed in the
SeaMaster's Logistics Business to seek employment other than with the Purchaser.

      8.7 BROKERS AND FINDERS. Neither SeaMaster nor the Selling Shareholder,
nor any officer, director or employee of SeaMaster, has engaged, consented to or
authorized any broker, investment banker or third party to act on its behalf,
directly or indirectly, as a broker or finder in connection with the
transactions contemplated by this Agreement.

      8.8 CERTAIN EMPLOYEES. The Purchaser agrees that it will employ Mr. Peter
Stone at the SeaMaster's Logistics Business, on terms and conditions mutually
agreeable to the Purchaser and such employee, as set forth in his employment
agreement (the "Employment Agreement"). Mr. Stone will also be responsible for
overseeing non-SeaMaster offices and activities and locations in Asia and India
owned by the Company.

      8.9 ACCESS TO INFORMATION, CONFIDENTIAL TREATMENT. SeaMaster shall give to
the Purchaser and its representatives, from and after the date of execution of
this Agreement, during normal business hours on prior notice, reasonable access
from time to time to all of the properties (including warehouses and other
leasehold interests), books, contracts, documents and records of the SeaMaster's
Logistics Business, and shall furnish to the Purchaser and its representatives
all additional existing financial and other information with respect to the
business and affairs of the SeaMaster's Logistics Business that the Purchaser
may reasonably request. The Purchaser shall treat, and shall cause its counsel,
accountants and other representatives to treat, all information that it has
received under this Section 8.9, if not in the public domain, as confidential
and, if the Closing shall not occur as provided herein, the Purchaser shall
return to SeaMaster on demand all written information (and all copies thereof)
received by the Purchaser relating to the Purchased Assets or the SeaMaster's
Logistics Business. For a period of seven (7) years after the Closing Date, the
Purchaser shall maintain and give to SeaMaster and its representatives, during
normal business hours on prior notice, reasonable access from time to time to
all books, contracts, documents and records relating to the operations of the
SeaMaster's Logistics Business prior to the Closing. SeaMaster shall retain
possession of any such records which it is required to retain under applicable
law, further, provided, however, that SeaMaster shall, for a period of seven (7)
years after Closing, maintain and give to the Purchaser and its representatives
during normal business hours on prior notice reasonable access (including the
right to photocopy such retained records at the Purchaser's expense) from time
to time to such retained records.

      8.10 CHANGE-IN-CONTROL. In the event that 50% or more of the Common Stock
of the Company or convertible debt of the Company is sold that is equivalent to
the sale of 50% of the Common Stock of the Company or substantially all of the
assets of the

<PAGE>

Company are sold, or any similar transaction effecting a change in control
occurs ("Change in Control"), then any unpaid earn-out (in shares or cash),
outstanding principal amount and interest under the Post-Closing Shareholder
Loan as provided herein and thereunder and other incurred expenses owing to the
Selling Shareholder shall be immediately due and payable and all share transfer
restrictions in relation to the SeaMaster Restricted Stock shall lapse and be
void; provided, however, the Selling Shareholder shall receive from the
Purchaser no later than 45 days after the date of consummation of the Change in
Control (in case the date of consummation of the Change in Control falls before
the third anniversary of Closing) [*] (in case the date of consummation of the
Change in Control falls on or after the third anniversary of Closing) at a
minimum the aggregate share and cash value equal to 6 times the Actual Three
Year Average EBITDA of SeaMaster for the three years immediately preceding the
third anniversary of Closing, plus the outstanding principal amount of the
Post-Closing Shareholder Loan, plus accrued interest of the Post-Closing
Shareholder Loan at USD 3-month LIBOR plus two percent (2%) based on the actual
number of days elapsed from the day on which the loan was advanced until
repayment(the "Sale Amount'). Subject to minimum amounts as aforesaid, the
Selling Shareholder shall receive the same price per share paid to purchase the
Common Stock of the Company as the other public shareholders.

      8.11 NO SHOP; STANDSTILL. SeaMaster and the Selling Shareholder shall
refrain from taking, directly or indirectly, any action to encourage, initiate,
solicit or continue any discussions or negotiations with, or any other offers
from, any other Person concerning a sale of assets or stock, a merger or any
similar transaction concerning SeaMaster which would affect the business of
SeaMaster or any portion thereof.

      8.12 REAL PROPERTY LEASES. The Selling Shareholder shall use their best
efforts to transfer the real property leases (if any) to the Purchaser.

      8.13 PRO FORMAS. SeaMaster shall deliver to the Purchaser the preliminary
financial statements consisting of unaudited balance sheets of SeaMaster and its
subsidiaries, including SeaMaster China and the related statement of operations
without any auditor's report or any disclosures for the same periods required of
the Financial Statements (the "SeaMaster Pro Forma").

      8.14 COOPERATION. The Purchaser, SeaMaster and the Selling Shareholder
agree to use their reasonable best efforts to cooperate, negotiate in good faith
and mitigate any damages associated with this Agreement. The Purchaser,
SeaMaster and the Selling Shareholder agree to use reasonable best efforts to
effect the transfer of all transferable governmental permits and to secure all
new permits in place of non-transferable governmental permits in accordance with
all applicable laws, rules, regulations, codes and guidelines, whether or not
having the force of law.

      8.15 ACCOUNTS PAYABLE. SeaMaster shall furnish to the Purchaser lists of
accounts payable and accrued expenses of the SeaMaster's Logistics Business as
follows:

<PAGE>

(i) the accounts payable and settlement register (subject to month end
adjustments) of SeaMaster on the date hereof, and (ii) delivered to the
Purchaser on the Finance Closing Date reflecting the accounts payable and
settlement register subject to month-end adjustments of SeaMaster on such date.

      8.16 REGISTRATION OF SHARES. The Purchaser shall procure the Company shall
file a registration statement with the Securities and Exchange Commission on
Form SB or other appropriate form to register the resale of SeaMaster Restricted
Stock issued at the Finance Closing Date.

      8.17 [*]

      8.18 VOTING AGREEMENT AND SEAMASTER LOCKUP AGREEMENT. The Selling
Shareholder shall execute the Voting Agreement and Lockup Agreement as of the
Closing Date and deliver the same to the Purchaser.

      8.19 [*]

<PAGE>

[*]

                                   ARTICLE IX

                   CONDITIONS TO OBLIGATIONS OF THE PURCHASER

      The obligation of the Purchaser to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment at or prior
to the Closing of each of the following conditions:

      9.1 REPRESENTATIONS AND WARRANTIES. All representations and warranties of
SeaMaster and the Selling Shareholder contained in this Agreement shall be true
and correct in all material respects at and as of the Closing, with the same
force and effect as though made at and as of the Closing except for such
representations and warranties which speak to a date other than the Closing
Date.

      9.2 COVENANTS. All covenants in favor of the Purchaser, are in full force
and effect as of the date hereof and as of the Closing and SeaMaster and the
Selling Shareholder know of no reason that such covenants can not be fully
complied with by SeaMaster and/or the Selling Shareholder in accordance with the
terms of this Agreement.

      9.3 PERFORMANCE; NO DEFAULT. SeaMaster and the Selling Shareholder shall
have performed, observed and complied with all the obligations and conditions
required by this Agreement to be performed, observed or complied with by it at
or prior to the Closing in all material respects.

      9.4 COMPLIANCE CERTIFICATE. SeaMaster shall have delivered to the
Purchaser their certificate, dated the Closing Date, executed on its behalf by
their respective duly authorized representatives, as to the fulfillment of the
conditions set forth in Sections 9.1 and 9.2 hereof.

      9.5 OPINION OF COUNSEL. The Purchaser shall have received an opinion dated
the date of Closing from counsel for the Selling Shareholder with respect to the
laws of Hong Kong, in a form satisfactory to Purchaser.

      9.6 PERMITS, ETC. All consents, approvals, permits, estoppel certificates
and/or waivers from governmental authorities and all other Persons necessary to
effectuate the transactions contemplated by this Agreement to permit the
continuation in effect of all transferable governmental permits shall have been
obtained.

      9.7 NO MATERIAL ADVERSE CHANGE. No material adverse change in the
business, properties or assets or in the financial condition of SeaMaster shall
have occurred from the date of this Agreement through the date of the Closing.

<PAGE>

      9.8 ABSENCE OF LITIGATION. There shall be no pending or threatened claim,
action, litigation, suit or other proceeding, either judicial or administrative
against the Purchaser, SeaMaster or the Selling Shareholder for the purpose of
enjoining or preventing the consummation of this Agreement or otherwise claiming
that this Agreement or its consummation is improper or which would materially
adversely affect the benefit to the Purchaser of the transactions contemplated
by this Agreement.

      9.9 DUE DILIGENCE. Representatives of the Purchaser shall have been
allowed to visit with the owners and/or managers of entities which are parties
to this Agreements in a manner reasonably satisfactory to the Purchaser and
conduct such additional due diligence relating to material issues of SeaMaster
and their businesses including but not limited to environmental matters, which
the Purchaser shall have elected to undertake and such due diligence shall have
been completed to the Purchaser's satisfaction and the Purchaser shall not have
elected in its sole discretion to terminate this Agreement.

      9.10 The Selling Shareholder shall have delivered to Purchaser:

            (i) SHARE CERTIFICATES. Share certificates duly endorsed in
      appropriate form for transfer and the related contract notes, instruments
      of transfer and other instruments and documents as Brown Rudnick Berlack
      Israels LLP, attorneys for Purchaser, may reasonably require as necessary
      or desirable for transferring and assigning to Purchaser good and
      marketable title to the Shares to be conveyed hereunder, free of all
      mortgages, liens, pledges, security interests, claims and encumbrances of
      any nature.

            (ii) CORPORATE BOOKS OF SEAMASTER. Original minute books (including
      certified copies of the constitutional documents and all amendments
      thereto), membership/share certificate books and ledgers, corporate seals
      and all other books of SeaMaster.

            (iii) RESIGNATIONS. Resignations of all directors and officers of
      SeaMaster.

            (iv) LETTERS REGARDING MONEY BORROWED. A letter from each person,
      entity, bank or other financial institution from which SeaMaster or any
      subsidiary of its SeaMaster has borrowed money, dated the Closing date,
      stating the amount of their indebtedness to it on the Closing date.

            (v) CERTIFICATES. (i) copies, certified as true and complete by an
      officer of SeaMaster of the constitutional documents thereof; and (ii)
      certificate of the Secretary of SeaMaster certifying that the Selling
      Shareholder legally and beneficially owns all of the issued and
      outstanding share capital of SeaMaster.

      9.11 FINANCIAL STATEMENTS. The Financial Statements and SeaMaster Pro
Formas are delivered in form and substance satisfactory to Purchaser.

<PAGE>

      9.12 [*]

      9.13. [*]

      9.14 SEAMASTER LOCKUP AGREEMENT AND VOTING AGREEMENT. The Selling
Shareholder shall have received the executed SeaMaster Lockup Agreement and the
Voting Agreement dated as of the Finance Closing Date.

      9.15 [*]

                                    ARTICLE X

                     CONDITIONS TO OBLIGATIONS OF THE SELLER

      The obligation of SeaMaster and the Selling Shareholder to consummate the
transactions contemplated by this Agreement shall be subject to the fulfillment
at or prior to the Closing of each of the following conditions:

      10.1 REPRESENTATIONS AND WARRANTIES. All representations and warranties of
the Purchaser contained in this Agreement shall be true and correct in all
material respects at and as of the Closing, with the same force and effect as
though made at and as of the Closing except for such representations and
warranties which speak to a date other than the Closing Date.

      10.2 PERFORMANCE, NO DEFAULT. The Purchaser shall have performed, observed
and complied with all the obligations and conditions required by this Agreement
to be performed, observed or complied with by it at or prior to the Closing.

      10.3 COMPLIANCE CERTIFICATE. The Purchaser shall have delivered to the
Selling Shareholder and SeaMaster its certificate, dated the Closing Date,
executed on its behalf by Chief Financial Officer and Senior Vice President, as
to the fulfillment of the conditions set forth in Sections 10.1 and 10.2 hereof.

      10.4 OPINION OF COUNSEL. The Selling Shareholder and SeaMaster shall have
received a favorable opinion from counsel for the Purchaser, dated the Closing
Date, and in all respects satisfactory to counsel for the Selling Shareholder.

      10.5 GOVERNMENTAL APPROVAL, ETC. All authorizations, consents or approvals
of any and all governmental regulatory authorities necessary in connection with
the consumption of the Closing shall have been obtained and be in full force and
effect.

<PAGE>

                                   ARTICLE XI

                                  MISCELLANEOUS

      11.1 AMENDMENT. The Selling Shareholder, SeaMaster and the Purchaser may
amend or modify this Agreement only by a written instrument executed by all
parties hereto.

      11.2 WAIVER. The Purchaser may waive compliance by the Selling Shareholder
and/or SeaMaster with any of the conditions set forth in Section 9 hereof, and
the Selling Shareholder and/or SeaMaster may waive compliance by the Purchaser
with any of the conditions set forth in Section 10 hereof, provided in each case
that any such waiver shall be in writing signed by the party granting such
waiver.

      11.3 TERMINATION. (a) This Agreement may be terminated at any time by the
mutual agreement of the Selling Shareholder, SeaMaster and the Purchaser,
provided such termination is set forth in writing and executed by both parties.
In the event of any such termination, neither party shall have any liability to
the other in respect of this Agreement.

      (b) This Agreement may be terminated by either party in the event of a
material breach by the other party, upon the giving of sixty (60) days prior
written notice setting forth such breach. However, if such breach shall be
cured, or all necessary action to cure such breach shall promptly and diligently
pursued, in the sole judgment of the non-breaching party, within such sixty (60)
day period, then such notice shall be deemed withdrawn and of no further effect.

      11.4 BEST EFFORTS. Each of the parties shall use its reasonable best
efforts to fulfill as soon as practicable after the date hereof the conditions
specified in Sections 9 and 10 hereof applicable to such party which are
dependent upon such party's action or forbearance.

      11.5 SUBMISSION TO JURISDICTION. The parties hereby irrevocably and
unconditionally submit to the exclusive jurisdiction of any court of the State
of New York or Federal court of the United States of America sitting in New York
County, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and parties hereby
irrevocably and unconditionally agree that all claims in respect of any such
action or proceeding may be heard and determined in such New York State or, to
the extent permitted by law, in such Federal court. The parties agree that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Subject to the foregoing and to the paragraph below, nothing in
this Agreement shall affect any right that any party may otherwise have to bring
any action or proceeding relating to this Agreement against the other party in
the courts of any jurisdiction. The parties hereby irrevocably and
unconditionally waive, to the fullest

<PAGE>

extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement in any New York State or Federal court
sitting in New York County and the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court and any immunity from
jurisdiction of any court or from any legal process with respect to the party or
its property. The parties agree that service of process may be made on it by
personal service of a copy of the summons and complaint or other legal process
in any such suit, action or proceeding, or by registered or certified mail
(postage prepaid) to its address specified in Section 11.7, or by any other
method of service provided for under the applicable laws in effect in the
applicable jurisdiction. THE PARTIES IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

      11.6 EXPENSE. Except as provided elsewhere in this Agreement, each party
hereto shall assume and bear all expenses, costs and fees incurred or assumed by
such party in the preparation and execution of this Agreement, whether or not
the transactions contemplated hereby shall be consummated.

      11.7 NOTICES. Any notice to a party hereto pursuant to this Agreement
shall be given by personal delivery or mailed via certified or registered mail,
return receipt requested, addressed,

                   (i)    if to the Purchaser:

                          SeaMaster Logistics Inc.
                          547 Boulevard
                          Kenilworth, New Jersey
                          Attention: Robert A. Agresti

                          with a copy to:

                          Brown Rudnick Berlack Israels LLP
                          7 Times Square
                          New York, NY 10036
                          Attn: Raymer W. McQuiston

                   (ii)   if to SeaMaster:

                          c/o SeaMaster Logistics (Hong Kong) Limited
                          China Insurance Group Building
                          141 Des Voeux Road Central
                          Hong Kong
                          Attn: Peter Stone

<PAGE>

                   (iii)  If to the Selling Shareholder:

                          Protex Holdings Limited
                          China Insurance Group Building, Rooms 2102-3
                          141 Des Voeux Road Central
                          Hong Kong
                          Attn: Peter Stone

                          with a copy to:

                          Wilkinson & Grist
                          Prince's Building, 6th Floor
                          Charter Road, Central
                          Hong Kong
                          Attn: Raymond Chan

and shall be deemed delivered when actually received if personally delivered or
five days after having been placed in the mails so addressed with postage
prepaid. The parties shall hereafter notify the other in accordance herewith of
any change of address to which notice is required to be mailed.

      11.8 SUCCESSORS SURVIVAL. This Agreement shall inure to the benefit of,
and be binding on and enforceable against, the successors and assigns of the
respective parties hereto. All rights and obligations of any parties hereto
under this Agreement which are required to be performed or observed, or are
capable to be so performed or observed after Closing, shall survive Closing
without limit in time, provided that any representations and warranties made by
the Purchaser, SeaMaster and the Selling Shareholder shall survive the Closing
and continue for only four years.

      11.9 ASSIGNMENT. This Agreement may not be assigned by either party hereto
without the prior written consent of the other party, provided that the
Purchaser may assign this Agreement to a company controlled by, under common
control with, or in control of, the Purchaser upon the giving of written notice
of such assignment to SeaMaster. Following any assignment the assignor shall
have no further liability or obligation to SeaMaster.

      11.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts which together shall constitute one and the same document.

      11.11 GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of New York.

      11.12 HEADINGS. The section headings contained in this Agreement are
intended

<PAGE>

solely for convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.

      11.13 PUBLICITY. No publicity release or announcement concerning this
Agreement or the transactions contemplated hereby shall be made without advance
approval thereof by SeaMaster and the Purchaser, except for the press release
required by the Finance Closing.

      11.14 CONFIDENTIALITY. The parties will not use or disclose, and will use
their reasonable best efforts to prevent their respective employees, agents or
representatives from using or disclosing, to any third parties (except to the
extent publicly-available or obtainable from independent sources) any trade
secrets or proprietary information obtained from the other party in connection
with the negotiation of, and the performance under, this Agreement; provided,
however, Purchaser may disclose all information, including this Agreement and
SeaMaster China Acquisition Agreement, to investors bound by the terms of a
confidentiality agreement, to investors in connection with the financing of
Purchaser and the Securities and Exchange Commission.

      11.15 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.

      11.16 NO THIRD PARTY BENEFICIARIES. No provision of this Agreement shall
create nor confer upon any person and third party beneficiary rights or
otherwise.

                [REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]

<PAGE>

      IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers as of the day and year first above written.

MARITIME LOGISTICS US HOLDINGS INC.            SEA MASTER LOGISTICS (HOLDING),
                                               LIMITED

By: _______________________________            By: _____________________________
    Name:                                      Name:
    Title:                                     Title:

PROTEX HOLDING LIMITED

By: _______________________________
    Name:
    Title:

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